Dorsch v HEAD Oceania Pty Ltd (Penalty)

Dorsch v HEAD Oceania Pty Ltd involved a dispute over the failure to pay accrued annual leave upon termination of employment, with the Fair Work Act 2009 (Cth) providing the statutory backdrop. The respondent, HEAD Oceania, was found to have contravened section 90(2) of the Fair Work Act by not paying Mr Dorsch the amount payable for his accrued but untaken annual leave upon the employment ending, and subsequently paid the amount owing three months later. The court was required to determine the appropriate pecuniary penalty under section 545(6) of the Fair Work Act.

The court considered the deliberateness of the contravention, the need for specific and general deterrence, and the effect of the delay on Mr Dorsch. Mr Dorsch argued for a penalty of 40–55% of the maximum, considering his loss and the need for deterrence. HEAD Oceania argued for a penalty in the lower range, citing factors such as unfamiliarity with Australian law, relatively modest loss, and contrition. The court found that while the contravention was deliberate, the penalty should reflect the mitigating factors and the need for deterrence. Consequently, the court determined that the appropriate penalty was $17,000, which is approximately 25% of the maximum penalty.

The court awarded Mr Dorsch $10,000 in compensation for the distress he suffered from the delay in making the payment. The court considered the limited evidence of distress and financial strain resulting from the delay. The penalty decision balanced the need for deterrence with the mitigating factors presented by HEAD Oceania. The court concluded that a penalty of $17,000 appropriately served the objectives of deterrence and compensation.