Danaratna v Arunatilaka (Penalty)

The decision in Danaratna v Arunatilaka [2024] FCA 918 (penalty judgment or PJ) concerns the determination of civil penalties for contraventions of the Fair Work Act 2009 (Cth) by Ms Arunatilaka, the former Sri Lankan Deputy High Commissioner in Australia. Ms Danaratna, the applicant, was awarded compensation for unpaid employee entitlements in the sum of $374,151.90 in a previous judgment. The penalty judgment addresses the appropriate pecuniary penalty for Ms Arunatilaka's contraventions of the Fair Work Act, which included failures to pay Ms Danaratna in full, on time, and by the specified methods, as well as failures to provide a pay slip, pay annual leave, and comply with various terms of a modern award.

The Court was required to determine the appropriate pecuniary penalty for Ms Arunatilaka's contraventions of the Fair Work Act, considering the primary purpose of deterrence in the determination of such penalties. The Court had to weigh various factors, including the seriousness and nature of the contraventions, the degree of culpability, and the need to deter the contravener and others from engaging in similar conduct. Notably, Ms Arunatilaka did not participate in any of the Court’s processes, which was considered in determining the appropriate penalty. The Court also had to balance the need for deterrence with the potential impact on Ms Arunatilaka, while ensuring the penalty was proportionate to the contraventions.

In determining the penalty, the Court considered the seriousness and nature of the contraventions, which involved systematic failures to comply with multiple provisions of the Fair Work Act and the modern award. The Court found that the contraventions were deliberate and not due to any honest misunderstanding or oversight. Given the high degree of culpability and the need to deter Ms Arunatilaka and others from similar conduct, the Court awarded a pecuniary penalty of $117,028.80. This amount was deemed sufficient to achieve the objectives of deterrence and denunciation, while also taking into account the potential impact on Ms Arunatilaka.

The Court ordered that Ms Arunatilaka pay the pecuniary penalty of $117,028.80 to Ms Danaratna within 60 days. This penalty is intended to ensure compliance with the Fair Work Act and to deter future contraventions by Ms Arunatilaka and others in similar positions. The penalty judgment concludes that this amount appropriately reflects the seriousness of the contraventions and serves the purpose of deterrence.