Crawford v Geocore Pty Ltd (No 2)

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Crawford v Geocore Pty Ltd (No 2) [2024] FedCFamC2G 656

File number: MLG 1412 of 2023
Judgment of: JUDGE FORBES
Date of judgment: 7 August 2024 
Catchwords:

FAIR WORK –- application for imposition of civil penalties for contraventions of the Fair Work Act 2009 (Cth) – consideration of relevant factors – where conduct appears deliberate or recklessly indifferent – need for deterrence - totality – penalties ordered

FAIR WORK - application for costs – applicant seeks indemnity costs – where applicant forced to commence proceedings to enforce contraventions – where respondents have not engaged in any proceedings – consideration of conduct of the respondents – whether indemnity costs appropriate – where non-participation of respondents meant that applicant met with no resistance – respondent to pay costs on scale

Legislation: Fair Work Act 2009 (Cth) s 44, 336, 340, 527, 570
Cases cited:

Augusta Ventures Ltd v Mt Arthur Coal Pty Ltd [2020] FCAFC 194

Australian Building and Construction Commissioner v Pattinson [2022] HCA 13

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157

Australian and International Pilots Association v Qantas Airways Ltd (No 3) [2007] FCA 879

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8

Commonwealth of Australia v Construction, Forestry, Mining and Energy Union [2003] FCAFC 115

Crawford v Geocore Pty Ltd [2024] FedCFamC2G 176

Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301

Fair Work Ombudsman v Raimondi Investments Pty Ltd [2016] FCCA 1398

Fair Work Ombudsman v WCH Services Pty Ltd & Anor [2018] FCCA 1876

Kambouridis v L.R. Reed City Pty Ltd [2020] FCCA 1484

Kelly v Fitzpatrick [2007] FCA 1080

Meadley v Sort Worx Pty Ltd [2013] FCA 1012

Murdock v Virgin Australia Airlines Pty Ltd (No 3) [2024] FCA 227

Payne v Secure Melbourne Protective Services Pty Ltd (No 2) [2023] FCA 1579

Ryan v Primesafe [2015] FCA 8

Rybinski v Geocore Pty Ltd [2024] FedCFamC2G 177

Rybinski v Geocore Pty Ltd (No 2) [2024] FedCFamC2G 644

Saxena v PPF Asset Management Ltd [2011] FCA 395

Schell v Ensign Australia Pty Ltd [2015] FWC 8825

Trade Practices Commission v CSR Ltd [1990] FCA 521

Trustee for The MTGI Trust v Johnston (No 2) [2016] FCAFC 190

Umoona Tjutagku Health Service Aboriginal Corporation v Walsh [2019] FCAFC 32

Division: Division 2 General Federal Law
Number of paragraphs: 64
Date of hearing: On the papers
Place: Melbourne
Solicitor for the Applicant: Mr Sherr & Mr Jackson, Sparke Helmore Lawyers
Respondents: No appearance

ORDERS

MLG 1412 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

ELIZABETH CRAWFORD

Applicant

AND:

GEOCORE PTY LTD

First Respondent

AMANDA BROWN

Second Respondent

ORDER MADE BY:

JUDGE FORBES

DATE OF ORDER:

7 AUGUST 2024

THE COURT ORDERS THAT:

1.Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the First Respondent pay a pecuniary penalty of $75,000 for its contraventions…

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Details
Case
[2024] FedCFamC2G 656
Decision Date

CaseChat Overview and Summary

In the case of Crawford v Geocore Pty Ltd (No 2), the Fair Work Court was asked to consider the imposition of civil penalties against the respondents, Geocore Pty Ltd and Ms Brown, for contraventions of the Fair Work Act 2009 (Cth). The applicant, Ms Crawford, sought penalties for the respondents’ failure to comply with orders of the Fair Work Commission, as well as for contraventions of specific sections of the Fair Work Act. The legal issues before the court were whether the penalties proposed by the applicant were appropriate and proportionate, considering the totality of the contravening conduct and the financial capacity of the respondents. Additionally, the court was asked to determine whether the applicant was entitled to indemnity costs for being forced to commence proceedings to enforce the contraventions.

The court examined the nature and extent of the contraventions, noting that the respondents’ conduct appeared deliberate and recklessly indifferent. The court acknowledged the importance of deterrence and the need to protect the applicant’s ability to enforce the minimum standards of employment. However, the court also had to ensure that the penalties imposed were not crushing or oppressive. Given that there was no evidence regarding the financial circumstances of the respondents, the court had to exercise caution in determining the appropriate level of penalty. The court found that while the penalties sought by the applicant were not excessive, the total penalties, when combined with those in a previous case, Rybinski (No 2), might indeed be crushing or oppressive. The court concluded that the penalties should be reduced to ensure they were proportionate and not oppressive.

The court ordered that Geocore Pty Ltd pay a penalty of $120,000 and Ms Brown pay a penalty of $21,000, which represented a significant reduction from the penalties initially sought by the applicant. Additionally, the court determined that the applicant was entitled to costs on the scale, but not to indemnity costs, as the respondents had not engaged in any proceedings and had not displayed any remorse or contrition for their actions. The court’s decision underscored the need to balance the objectives of deterrence and protection of employment standards with the necessity of ensuring that penalties are fair and proportionate.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The purpose of the FW Act is to provide a guaranteed set of fair, relevant and enforceable terms and conditions of employment and protect the applicant’s ability to enforce these standards. Ms Crawford contends that the respondents’ failure to comply with the FWC order goes against the basic concept of the rule of law[15], and the respondents should be penalised appropriately. The payment in lieu of notice contravention also goes against “longstanding minimum standards”[16]. [15] Fair Work Ombudsman v Raimondi Investments Pty Ltd [2016] FCCA 1398 at [29][16] Fair Work Bill 2008 Explanatory Memorandum at [469]Conclusion on penalty The applicant seeks penalties in the range of $181,500 to $214,500 for the first respondent and $36,300 to $42,900 for the second respondent for contravening ss 44, 340 and 527. This amounts to an overall penalty of 55-65% of the maximum available penalties. In determining the penalties to be ordered against Geocore, this Court must have regard to the totality of the contravening conduct to ensure that any penalty ordered is not crushing or oppressive[17].[17] Pattinson at [110] The applicant submits that the proposed penalty is appropriate in circumstances were there is no evidence before the Court as to the respondents’ financial capacity, and therefore no way of assessing what might be crushing or oppressive to the respondents. Objectively, the contraventions are serious and the conduct of the respondents appears calculated and intended to deny the applicant the entitlement of her appointment. The attempt to unilaterally change the character of Ms Crawford’s employment from full-time to casual is particularly egregious as is the respondents failure to comply with orders of the Fair Work Commission. The conduct is deserving of a significant penalty to achieve the objective of deterrence. I agree with the applicant that the contraventions do not arise out of a single course of action and are not readily grouped. That does expose the respondents to a very high maximum. However, as I explained in Rybinski (No 2), I consider the penalties sought by the applicant to be excessive. While not excusing its conduct, the first respondent is a small business and it has no prior history of having contravened the FW Act. There is no evidence before the court regarding the financial circumstances of either of the respondents and therefore there is no way of knowing what level of penalty might be crushing or oppressive. Nonetheless the penalties sought by the applicant in this case (which amount to nearly $250,000), coupled with the penalty in Rybinski (No 2), may well cross that threshold. The court is required to impose a final review of the aggregate penalty is to determine whether it is an appropriate and proportionate response to the conduct which led to the contraventions. Even allowing for a mid-range assessment, the penalties to be imposed would amount to more than $160,000 for Geocore and more than $30,000 for Ms Brown. These penalties are too high and risk injustice.

Ratio Decidendi

Legal Principle Established

There is no direct evidence before the Court regarding the size of the business, but I accept that Geocore is relatively small in size.Corrective action and cooperation As mentioned above, Geocore and Ms Brown have failed to engage in proceedings and have not taken any steps to correct the contraventions. They have not displayed any remorse or contrition for their actions.Compliance with minimum standards The purpose of the FW Act is to provide a guaranteed set of fair, relevant and enforceable terms and conditions of employment and protect the applicant’s ability to enforce these standards. Ms Crawford contends that the respondents’ failure to comply with the FWC order goes against the basic concept of the rule of law[15], and the respondents should be penalised appropriately. The payment in lieu of notice contravention also goes against “longstanding minimum standards”[16]. [15] Fair Work Ombudsman v Raimondi Investments Pty Ltd [2016] FCCA 1398 at [29][16] Fair Work Bill 2008 Explanatory Memorandum at [469]Conclusion on penalty The applicant seeks penalties in the range of $181,500 to $214,500 for the first respondent and $36,300 to $42,900 for the second respondent for contravening ss 44, 340 and 527. This amounts to an overall penalty of 55-65% of the maximum available penalties. In determining the penalties to be ordered against Geocore, this Court must have regard to the totality of the contravening conduct to ensure that any penalty ordered is not crushing or oppressive[17].[17] Pattinson at [110] The applicant submits that the proposed penalty is appropriate in circumstances were there is no evidence before the Court as to the respondents’ financial capacity, and therefore no way of assessing what might be crushing or oppressive to the respondents. Objectively, the contraventions are serious and the conduct of the respondents appears calculated and intended to deny the applicant the entitlement of her appointment. The attempt to unilaterally change the character of Ms Crawford’s employment from full-time to casual is particularly egregious as is the respondents failure to comply with orders of the Fair Work Commission. The conduct is deserving of a significant penalty to achieve the objective of deterrence. I agree with the applicant that the contraventions do not arise out of a single course of action and are not readily grouped. That does expose the respondents to a very high maximum. However, as I explained in Rybinski (No 2), I consider the penalties sought by the applicant to be excessive. While not excusing its conduct, the first respondent is a small business and it has no prior history of having contravened the FW Act. There is no evidence before the court regarding the financial circumstances of either of the respondents and therefore there is no way of knowing what level of penalty might be crushing or oppressive. Nonetheless the penalties sought by the applicant in this case (which amount to nearly $250,000), coupled with the penalty in Rybinski (No 2), may well cross that threshold.