Fair Work Ombudsman v 85 Degrees Coffee Australia Pty Ltd

In the Federal Court, the Fair Work Ombudsman (FWO) brought proceedings against 85 Degrees Coffee Australia Pty Ltd (85 Degrees) for breaches of section 558B(1) of the Fair Work Act 2009 (Cth). 85 Degrees, as a franchisor, was held responsible for failing to maintain accurate records of employment, in contravention of the Fair Work Regulations 2009 (Cth). The court had to determine whether the record-keeping breaches constituted a single contravention under section 557(1) and assess the appropriate penalty for these breaches, taking into account factors such as deterrence, contrition, and admissions by 85 Degrees.

The court examined whether the breaches could be considered a single contravention under section 557(1), referencing the decision in Rocky Holdings Pty Ltd v Fair Work Ombudsman. It concluded that the record-keeping obligations under regulation 3.33 of the Fair Work Regulations could indeed be considered a single contravention. The court also considered the context of non-compliance in the industry, the vulnerability of workers, and the relevance of contrition and admissions in assessing the penalty. The court applied principles of deterrence, recognising the need for general deterrence in a context where compliance was historically poor and workers were vulnerable. The penalty was calculated based on the admitted contraventions and the need for effective deterrence, with a final penalty of $1,440,000 imposed.

The court found that the penalty proposed by the FWO was appropriate, adjusted for cooperation and the single contravention consideration. The court accepted that 85 Degrees' admissions and contrition were relevant to deterrence, both specific and general. The final penalty was further reduced by 15% for cooperation, resulting in a total penalty of $1,440,000. The court ordered 85 Degrees to pay this amount within 60 days of the making of the orders.

The final orders required 85 Degrees to pay penalties to the Commonwealth in the sum of $1,440,000 within 60 days of the making of these orders, or by 3 August 2024, or such later date as may be ordered by the Court. The individual amounts making up that sum were set out in the Schedule to the reasons for judgment.