Fair Work Ombudsman v 63 Racecourse Rd Pty Ltd

The Fair Work Ombudsman brought proceedings against 63 Racecourse Rd Pty Ltd and an individual, Mr. John Michael Gribble, alleging contraventions of the Fair Work Act 2009 (Cth). The dispute concerned the underpayment of entitlements to employees, with additional orders sought for two employees who had not received their due payments. The matter was heard by Judge Jarrett in the Federal Circuit and Family Court of Australia.

The court was required to determine the appropriate pecuniary penalty to be imposed on the respondents for the admitted contraventions. In doing so, it needed to consider the principles governing the assessment of penalties under the Fair Work Act, particularly the objective of deterrence, and how to treat multiple contraventions, including those arising from a single course of conduct. The court also had to consider the maximum penalties prescribed by the Act and Regulations, taking into account the value of a penalty unit.

Judge Jarrett applied the principle that the principal and only objective of pecuniary penalties under the Fair Work Act is deterrence, both specific and general. The penalties must have a sufficient "sting or burden" to achieve this deterrent effect. The court noted that while there were numerous contraventions, section 557(1) of the Act requires multiple contraventions arising from a single course of conduct to be treated as a single contravention for penalty assessment. Where section 557(1) does not apply, the court may still recognise commonality or overlap between contraventions. The parties had agreed on how the contraventions should be treated under section 557(1) and for penalty purposes, an agreement which the court endorsed. The court also considered the respondents' approach to wage payments, where a flat hourly rate was paid irrespective of award requirements, and Mr. Gribble's stated principle of paying employees what they asked for to ensure their happiness, which resulted in rates below the minimum wage for many employees.

The court endorsed the parties' agreement regarding the treatment of contraventions and the calculation of penalties. This agreement, reflected in an annexure, led to maximum potential penalties of $945,000 for the first respondent and $176,400 for the second respondent, based on the number of contraventions after applying section 557(1) and other agreed groupings, and the value of a penalty unit.