Bostan v European Operations Company Pty Ltd (No 4)
[2024] FedCFamC2G 378
•30 April 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Bostan v European Operations Company Pty Ltd (No 4) [2024] FedCFamC2G 378
File number(s): MLG 2218 of 2022 Judgment of: JUDGE O'SULLIVAN Date of judgment: 30 April 2024 Catchwords: FAIR WORK – Application for civil penalty – penalty hearing – defaults by respondents – penalty hearing on the papers – appropriate penalty. Legislation: Fair Work Act 2009 (Cth), ss.323, 539, 340, 351, 352, 546, 550, 557, 557A
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), rr.13.04, 13.05, 13.06, 17.05
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157
Australian Building and Construction Commissioner v Pattinson (2022) 399 ALR 599
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Bostan v European Operations Co Pty Ltd [2023] FedCFamC2G 262
Bostan v European Operations Company Pty Ltd(No 2) [2023] FedCFamC2G 312
Bostan v European Operations Company Pty Ltd(No 3) [2023] FedCFamC2G 1026
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482
Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228 at 230-231
Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39
Fair Work Ombudsman v Commonwealth Bank of Australia [2024] FCA 81
Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No.4) [2023] FCA 341
Fair Work Ombudsman v IE Enterprises Pty Ltd [2020] FCA 848
Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] 275 IR 148
Fair Work Ombudsman v Sushi Bay Pty Ltd (in liq)(No 2) [2024] FCA 76
Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080
Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357
Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543
Rocky Holdings Pty Limited v Fair Work Ombudsman [2014] FCAFC 62
Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4
Division: Division 2 General Federal Law Number of paragraphs: 60 Date of last submission(s): 13 March 2024 Date of hearing: Heard in Chambers on the papers Place: Melbourne Solicitor for the Applicant: Job Watch Inc. Solicitor for the Respondents: No appearance ORDERS
MLG 2218 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: ALEXANDRU-ANDREI BOSTAN
Applicant
AND: THE EUROPEAN OPERATIONS CO. PTY LTD
First Respondent
MARIO DI NARDO
Second Respondent
ORDER MADE BY:
JUDGE O'SULLIVAN
DATE OF ORDER:
30 APRIL 2024
THE COURT ORDERS THAT:
1.Pursuant to s.546(1) of the FW Act the first respondent pay, within 60 days, a pecuniary penalty of $92,124.00 for the contraventions as declared by this Court at paragraphs (1)(a), (b), (c) and (f) of the orders dated 14 April 2023.
2.Pursuant to s.546(1) of the FW Act the second respondent pay, within 60 days, a pecuniary penalty of $18,048 for the contraventions as declared by this Court at paragraph (1)(g) of the orders dated 14 April 2023.
3.Pursuant to s.546(3)(b) of the FW Act, each of the respondents pay their respective penalty amounts to Job Watch Inc within 60 days of the making of these orders.
4.The applicant serve a copy of these orders on the first and second respondents by the same means as specified in order 4 of the orders dated 14 April 2023.
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 is an application for the imposition of penalties for contraventions of the Fair Work Act 2009 (Cth) (‘the FW Act’).
BACKGROUND
The background to these proceedings is set out in Bostan v European Operations Co Pty Ltd [2023] FedCFamC2G 262, Bostan v European Operations Company Pty Ltd(No 2) [2023] FedCFamC2G 312 and Bostan v European Operations Company Pty Ltd(No 3) [2023] FedCFamC2G 1026.
On 14 April 2023 for the reasons set out in Bostan v European Operations Co Pty Ltd [2023] FedCFamC2G 262 (‘the liability judgment’), the Court granted default judgment and made various declarations against the first and second respondents. [1]
[1] As amended under Rules 17.05(2)(f) and/or (h), of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (‘the GFL Rules’) on 26 April 2023 for the reasons in Bostan v European Operations Company Pty Ltd(No.2) [2023] FedCFamC2G 312.
These reasons, in which the parties will be referred to in the same terms, concern the appropriate penalties that should be imposed on the respondents for the contraventions found to have occurred in the liability judgment.
On that occasion, by reason of the respondents’ non-compliance [2] and their failure to attend the default judgment hearing[3], the Court made the following declarations and orders:
[2] See Rule 13.04(2) & 13.05(2)(d) of the GFL Rules.
[3] See Rule 13.06(1)(e) of the GFL Rules.
THE COURT DECLARES THAT:
1.Upon the admissions which the respondents are taken to have made, consequent upon the default/s by the respondents pursuant to Rule 13.04(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Law) Rules 2021 (‘the GFL Rules’):
(a)the first respondent contravened section 340 of the Fair Work Act 2009 (Cth) (“the Act”) in that it took adverse action against the applicant because he had a workplace right by reason that he was able to make a complaint or enquiry to the first respondent in relation to the wages payable during his employment.
(b)the first respondent contravened section 351 of the Act in that it took adverse action against the applicant because of the applicant’s physical disability.
(c)the first respondent contravened section 352 of the Act in that it dismissed the applicant because he was temporarily absent from work because of illness of a kind prescribed by the Fair Work Regulations 2009 (Cth).
(d)the first respondent contravened section 90 of the Act in that it failed to pay the applicant his untaken accrued paid annual leave upon the termination of his employment.
(e)the first respondent contravened section 117 of the Act in that it failed to pay the applicant one week’s pay in lieu of notice upon the termination of his employment.
(f)the first respondent contravened section 323 of the Act in that it failed to pay the applicant his outstanding wages when that payment fell due.
(g)pursuant to section 550 of the Act, the second respondent was involved in the contraventions by the first respondent of sections 340, 351, 352, 90, 117 and 323 of the Act.
THE COURT ORDERS THAT:
2.Pursuant to section 545 of the Act, the respondents pay as compensation to the applicant the amount of $15,874.91 forthwith, comprising:
(a)$4,951.84 – outstanding wages;
(b)$704.32 – accrued annual leave;
(c)$1,826.92 – one week’s pay in lieu of notice;
(d)$7,891.83 – compensation for economic loss arising from the adverse action;
(e)$500.00 – compensation for non-economic loss caused by the adverse action.
3.Pursuant to section 547 of the Act, the respondents pay the applicant pre-judgment interest on the total sum of $15,874.91 in order 2 in the amount of $648.71. …
On 3 November 2023, for the reasons in Bostan v European Operations Company Pty Ltd(No 3) [2023] FedCFamC2G 1026, the Court ordered inter alia that the penalty hearing be relisted to 18 April 2024 and be determined on the papers if the respondents failed to comply with those orders.
The orders for payment made in the liability judgment have not been complied with. The respondents, having been served with those orders, also abjured the opportunity to apply to set aside those orders or file submissions on the issue of penalty. Consequently, and in accordance with the above orders, and at the applicant’s request, the Court vacated the penalty hearing. As a result, and as contemplated in those orders, the appropriate penalty for the conduct in the liability judgment has been determined on the papers. [4]
[4] See Rule 13.04(2)(a)(b)(iii) and Rule 13.05(2)(d) of the GFL Rules.
MATERIAL RELIED ON
The applicant relied on the following evidence:
·the application filed 4 October 2022;
·the affidavits filed 15 February and 3 April 2023;
·the affidavit of Katherine Gamble filed 27 October 2023;
·the affidavit of John O’Hagan filed 13 March 2024;
·the submissions filed 13 March 2024; and
·the affidavit of John O’Hagan filed 14 March 2024.
PENALTY HEARING
The Court has power pursuant to sub-section 546(1) of the FW Act to order that a person pay a pecuniary penalty where it is found that the person has contravened a civil remedy provision of the FW Act. Sections 323, 340, 351 and 352 are all civil remedy provisions pursuant to the table set out in sub-section 539(2) of the FW Act. Given the findings made in the liability judgment and the provisions of s.550 of the FW Act, pecuniary penalties can be imposed on both respondents.
The maximum penalty in the case of an individual is the maximum number of penalty units referred to in the relevant item in column 4 of the table in s.539(2) and five times that amount in the case of a body corporate: FW Act, s.546(2). For a serious contravention, the maximum number of penalty units is 600, for all other contraventions it is 60. The value of a penalty unit during the period the contraventions occurred was $222.00.
Therefore, the maximum penalties for the contraventions that have been found to have occurred are:
(a)for the first respondent:
(i)300 penalty units ($66,600) per contravention;
(ii)3000 penalty units ($666,000) for a serious contravention.
(b)for the second respondent:
(i)60 penalty units ($13,200) per contravention;
(ii)600 penalty units ($133,200) for a serious contravention.
APPLICABLE LEGAL PRINCIPLES
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….
The approach of the Court in determining penalties is well settled. 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[5], 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’.
[5] [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.[6] They include:
[6] CSR at [42]; see also 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”.[7] 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.[8] 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.[9]
[7] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 [91]
[8] Pattinson at [19].
[9] Pattinson at [68].
CONSIDERATION(S)
In written submissions, the applicant took the Court to what were submitted to be the most significant considerations relevant to assessing the appropriate penalty in this case. Those submissions have been taken into account.
The first respondent has been found to have contravened ss.323, 340, 351 and 352 of the FW Act. The second respondent has been found to have been involved in those contraventions by the first respondent and pursuant to s.550 of the FW Act, is deemed to be a contravenor himself. These are the established contraventions. The maximum penalties for those contraventions have been set out above.
Single course of conduct and grouping of breaches
The applicant’s submissions addressed these matters at [7] – [8] of his written submissions filed 13 March 2024.
Section 557 of the FW Act allows for the grouping of multiple contraventions into a single contravention where they arise from the same “course of conduct” such that there is an overlap of the factual and legal elements of the contraventions: Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39 at [39]. However, where the contraventions concern differing obligations under the FW Act, these contraventions cannot be grouped: Rocky Holdings Pty Limited v Fair Work Ombudsman [2014] FCAFC 62 at [17] – [18].
The applicant submitted (and I accept) that the respondents’ conduct can be grouped into two distinct courses of conduct as follows:
(a)dismissal from employment; and
(b)non-payment of entitlements.
Serious contraventions
The applicant’s submissions at paragraphs [15] – [21] sought to contend the matter was one that may engage the Court’s powers in respect of a serious contravention under s.557A of the FW Act (in relation to the non-payment of entitlement contraventions). However, having considered those submissions, the Court is not satisfied that the circumstances of this case engaged the serious contravention provisions under s.557A.
Firstly, the decision of Fair Work Ombudsman v Sushi Bay Pty Ltd (in liq)(No 2) [2024] FCA 76 set out the issues regarding serious contraventions at [347] – [373]. Noting at paragraph [361] that the question for the Court was firstly, whether the corporate respondents in that case knowingly contravened the relevant provisions and secondly, whether the conduct constituting the particular contraventions was part of a systematic pattern of conduct relating to one or more other persons in that matter.
Secondly, the “FWO material”, attached to the affidavit of Mr O’Hagan, of the interactions with the respondents takes the matter only so far, but not far enough.
Thirdly, in this case I am not satisfied that the contraventions are of a kind falling within s.557A of the FW Act, not because there is no knowing contravention but regarding the allegation of a systemic pattern of conduct.[10] So far as the first respondent is concerned, even allowing for the material attached in the affidavit of Mr O’Hagan filed 13 March 2024, the Court’s concern is that there is not sufficient evidence to find a systemic pattern of conduct for the relevant contraventions. Accordingly, the Court is not satisfied that this is an appropriate matter in which to find that they were the serious contraventions alleged.[11]
[10] The circumstances in this matter are different to the circumstances identified in Fair Work Ombudsman v Commonwealth Bank of Australia [2024] FCA 81 at [21] for applying s.557B. This matter concerns findings in relation to one former employee unlike the situation in Fair Work Ombudsman v DTF World Square Pty Ltd (in liq)(No.4) [2023] FCA 341 which concerned findings of contraventions for numerous (at least 17) employees.
[11] The evidence was insufficient to enable findings to be made about the matters referred to in Fair Work Ombudsman v Sushi Bay Pty Ltd (in liq) (No 2) [2024] FCA 76 or Fair Work Ombudsman v IE Enterprises Pty Ltd [2020] FCA 848 at [53].
Finally, for the second respondent to have been found to be engaging in serious contravention, it would have been necessary to have made a finding under s.557A(5A) of the Act that the second respondent knew that the first respondent’s contraventions were ‘serious contraventions’. On the material before the Court there was (even allowing for that) no reason to conclude that the second respondent had such knowledge.
Nature, extent and circumstances of the contravening conduct;
The liability judgment detailed the nature, extent and circumstances of the contravening conduct at paragraphs [9] – [12] and [35] – [50]. The applicant addressed this consideration at [33] to [35] of his written submissions filed 13 March 2024.
Nature and extent of loss or damage sustained as a result of the breaches;
The applicant addressed this consideration at [28] to [32] of his written submissions filed 13 March 2024. As was correctly noted in those submissions (notwithstanding the orders of this Court) the respondents have not paid the applicant the compensation and interest ordered, and the respondents have repeatedly failed to engage meaningfully in these proceedings.
Similar previous conduct by the respondents;
The applicant addressed this consideration at [36] to [41] of his written submissions filed 13 March 2024. The applicant’s submissions seized upon the material attached to Mr O’Hagan’s affidavit filed 13 March 2024 and what was said inter alia to be evidence of “numerous complaints”, “admissions”, “non-compliance” and “evasion” by the respondents.
However, those submissions acknowledged that there had been no “formal finding” against the respondents.
Size and financial circumstances of the business;
The applicant addressed this consideration at [58] to [61] of his written submissions filed 13 March 2024. The material the applicant relied on contained references to claims made by the second respondent about the size and viability of the first respondent. As Tracey J said in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [28]:
No less than large corporate employers, small businesses have an obligation to meet minimum employment standards and their employees, rightly, have an expectation that this will occur. When it does not it will, normally, be necessary to mark the failure by imposing an appropriate monetary sanction. Such a sanction “must be imposed at a meaningful level” (citation omitted).
Similarly, in Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412, the court said at [27]:
Employers must not be left under the impression that because of their size or financial difficulty that they are able to breach an award. Obligations by employers for adherence to industrial instruments arise regardless of their size. Such a factor should be of limited relevance to the Court’s consideration of penalty. …
It is well-established that penalties for workplace contraventions should not be crushing. However, in the present case, the respondents have not deigned to provide any information to the Court about their financial circumstances. It is, therefore, not possible to know if any particular level of penalty would be crushing.
Even accepting that the business of the respondents is not sizeable, it is well established that the size and financial circumstances of an employer does not exculpate breaches of workplace laws, and that capacity to pay a penalty will be of less relevance than the objective of general deterrence.
Whether or not the breaches were deliberate
I am satisfied that the breaches, as identified in this case, cannot be characterised as one of inadvertence or lack of knowledge. The contraventions demonstrate a deliberate disregard for the first respondent’s obligations under the FW Act and hence, I am satisfied in this case that the contraventions were deliberate.
Involvement of senior management in the breaches;
The applicant addressed this consideration at [42] of his written submissions filed 13 March 2024 (which subject to my earlier findings) I accept.
The second respondent was the senior manager of the business as he was in control of the business. This is significant because it means that the blame cannot be shifted to anyone else. As has already been declared, the second respondent was involved in the contraventions by the first respondent.
This warrants imposition of a penalty at a level which reflects his involvement in the contraventions. Further, and as will be considered in respect of deterrence, there is nothing to indicate that there will be other management or control of the first respondent in future. As such, there is a need to ensure that the senior management of the first respondent and the second respondent are deterred from repeating the conduct, the subject of the contraventions in this case.
Corrective action, cooperation and contrition;
The applicant addressed this consideration at [62] of his written submissions filed 13 March 2024.
Given the lack of participation in these proceedings there is no evidence that either respondent has demonstrated any contrition. Indeed, their failure to engage with the proceedings is indicative of disdain for the process of enforcing legal obligations.
There is likewise no evidence that either respondent has undertaken any corrective action, particularly given the orders made on 14 April 2023 set out exactly what needed to be done.
The second respondent has not co-operated with the authorities at all. He has not made any admissions, except by default. The respondents have put the applicant to the expense and inconvenience of pursuing this matter.
The usual discount for admissions, contrition, rectification and co-operation cannot be applied in the present case.
Compliance with minimum standards;
The applicant addressed this consideration at [43] to [45] of his written submissions filed 13 March 2024.
Given the findings in the default judgment, the respondents have breached the applicant’s entitlements and engaged in conduct which did not comply with minimum standards.
The need for specific and general deterrence
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) 326 ALR 476; [2015] HCA 46, French CJ, Kiefel, Bell, Nettle and Gordon JJ 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; (2018) 351 ALR 190; (2018) 92 ALJR 219; (2018) 273 IR 211; [2018] HCA 3, Keane, Nettle and Gordon JJ 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)
The Court must, therefore, impose a penalty that accurately and appropriately reflects the need for both general and specific deterrence.
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. The applicant addressed this consideration at [52] to [57] of his written submissions filed 13 March 2024.
In relation to specific deterrence, Gray J observed in Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; (2008) 177 IR 243; [2008] FCAFC 170 at [37] that:
… Specific deterrence focuses on the party on whom the penalty is to be imposed and the likelihood of that party being involved in a similar breach in the future. Much will depend on the attitude expressed by that party as to things like remorse and steps taken to ensure that no future breach will occur. …
The respondents did not, and have not, complied with the orders made in the liability judgment. The evidence is that the first respondent continues to be registered, and the second respondent continues to be the representative of the first respondent. Therefore, there is the prospect, and it is reasonable to infer that, the respondents may engage in business in the future, and be responsible for the engagement of employees moving forward. A substantial level of specific deterrence is warranted.
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. The applicant addressed this consideration at [46] to [51] of his written submissions filed 13 March 2024.
In relation to general deterrence, Lander J noted in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; (2007) 162 IR 444; [2007] FCAFC 65 at [93]:
… In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty…(citations omitted)
Similarly, in Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228 at 230-231; [2001] FCA 1364, Finkelstein J said:
… even if there be no need for specific deterrence, there will be occasions when general deterrence must take priority, and in that case a penalty should be imposed to mark the law's disapproval of the conduct in question, and to act as a warning to others not to engage in similar conduct ….
The findings made in these proceedings shows that the respondents by their conduct (as found by their defaults) infringed upon the protections in the statutory framework. There should be a meaningful consequence for this, while being mindful of the need to provide general deterrence to dissuade others from copying that behaviour noting the respondents have not complied with the orders made by this Court.
APPROPRIATE PENALTY
Given the Court’s earlier findings at [22] – [25] the applicant’s submissions at paragraphs [63] – [65] call for the following pecuniary penalties to be imposed upon the respondents:
(a)for the dismissal from employment contraventions:
(i)70% of the maximum for the first respondent;
(ii)70% of the maximum for the second respondent.
(b)for the non-payment of entitlements contraventions:
(i)70% of the maximum for the first respondent
(ii)70% of the maximum for the second respondent.
As a result of the above considerations, I find the appropriate pecuniary penalty to be:
(a)for the dismissal from employment contraventions:
(i)$46,062.00 for the first respondent;
(ii)$9,024.00 for the second respondent.
(b)for the non-payment of entitlements contraventions:
(i)$46,062.00 for the first respondent;
(ii)$9,024.00 for the second respondent.
I consider the above to be appropriate in the circumstances discussed above.
To whom penalties should be paid
Subsection 546(3)(c) of the FW Act provides that the Court may order that a pecuniary penalty be paid to a “particular person”. The Federal Court in Sayed v Construction, Forestry, Mining and Energy Union[12] dealt with the policy considerations of s.546(3).
[12] Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4 at [116].
The applicant submits that any pecuniary penalties be paid to the applicant’s lawyers.[13] As the applicant’s lawyers are a community-based employment legal centre, I accept this submission.
[13] See paragraph [6] of submissions filed 13 March 2024.
It is appropriate, and therefore, I propose to make an order under s.546(3)(c) of the FW Act that the penalties be paid to Job Watch Inc within 60 days.
CONCLUSION
Therefore, 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)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 in the beginning of these reasons for decision.
I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment of Judge O'Sullivan. Associate:
Dated: 30 April 2024
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