Fair Work Ombudsman v ABMENG Pty Ltd (No 2)

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v ABMENG Pty Ltd (No 2) [2024] FedCFamC2G 1287

File number: MLG 2298 of 2023
Judgment of: JUDGE LADHAMS
Date of judgment: 27 November 2024
Catchwords: INDUSTRIAL LAW – Fair Work – where the first respondent admitted contraventions of ss 716(5) and 712(3) of the Fair Work Act 2009 (Cth) – where the second respondent admitted he was involved, within the meaning of s 550 of the Fair Work Act, with those contraventions – determination of the appropriate penalty in respect of the contraventions.
Legislation:

Corporations Act 2001 (Cth) s 440

Crimes Act 1914 (Cth) s 4AA

Fair Work Act 2009 (Cth) ss 90, 539, 545, 546, 550, 712, 716

Workplace Relations Act 1996 (Cth)

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 9.04

Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157; [2018] HCA 3

Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450; [2022] HCA 13

Fair Work Ombudsman v ABMENG Pty Ltd [2024] FedCFamC2G 636

Fair Work Ombudsman v Klinsic Constructions Pty Ltd (No 2) [2023] FedCFamC2G 283

Fair Work Ombudsman v Mai Pty Ltd [2016] FCCA 1481

Fair Work Ombudsman v NSN Pty Ltd (t/as New Shanghai Charlestown) (2017) 275 IR 148; [2017] FCA 1301

Fair Work Ombudsman v Pure Telecom Pty Ltd [2024] FedCFamC2G 664

Inspector Zeljko Kovacevic v Pareker Engineering Corporation (Australia) Pty Ltd (unreported, Magistrate AJ Chambers, Magistrates Court at Melbourne, 18 February 2009)

Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080

Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70

Trade Practices Commission v CSR Ltd [1991] ATPR 41-076; [1990] FCA 762

Division: Division 2 General Federal Law
Number of paragraphs: 77
Date of hearing: Determined on the papers with a short hearing on 26 November 2024
Place: Perth (via Microsoft Teams)
Counsel for the Applicant: Ms K Ruhl
Solicitor for the Applicant: Office of the Fair Work Ombudsman
Respondents: The second respondent on behalf of the respondents

ORDERS

MLG 2298 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

FAIR WORK OMBUDSMAN

Applicant
AND:

ABMENG PTY LTD (ACN 617 448 512)

First Respondent

JAY PARKER

Second Respondent

ORDER MADE BY:

JUDGE LADHAMS

DATE OF ORDER:

27 NOVEMBER 2024

BY CONSENT THE COURT DECLARES THAT:

1.The first respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (Fair Work Act) by failing to comply with the Compliance Notice given to the first respondent on 18 August 2022.

2.The first respondent contravened s 712(3) of the Fair Work Act by failing to comply with the Notice to Produce issued on 17 November 2021.

3.The second respondent was involved, within the meaning of s 550(2) of the Fair Work Act, in the contraventions by the first respondent declared at orders 1 and 2 above.

BY CONSENT THE…

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Details
Case
[2024] FedCFamC2G 1287
Decision Date

CaseChat Overview and Summary

The case involves a legal dispute between the Fair Work Ombudsman and ABMENG Pty Ltd, with a second respondent, Mr Parker, being the sole director and shareholder of ABMENG. The dispute centres on the contraventions of sections 712(3) and 716(5) of the Fair Work Act 2009 (Cth). ABMENG Pty Ltd admitted to these contraventions, and Mr Parker admitted to being involved with these contraventions within the meaning of section 550 of the Fair Work Act. The primary issue before the Court was to determine the appropriate penalty for these contraventions.

In addressing the penalty, the Court considered several factors, including the totality principle, the financial circumstances of the businesses, and the history of non-compliance. The Court noted that ABMENG had not rectified the non-compliance, and Mr Parker had a previous history of workplace law contraventions. The Court also considered the cooperation and contrition displayed by the respondents, noting that while they had made admissions and agreed facts, they had not taken meaningful corrective action to pay the outstanding amounts to the employees. The Fair Work Ombudsman submitted that a penalty with sufficient 'sting or burden' was necessary to deter future contraventions.

The Court determined that a penalty at the higher end of the recommended range was appropriate. It imposed a penalty of $56,000 on ABMENG and $11,000 on Mr Parker. The Court considered these penalties appropriate and not oppressive, taking into account the totality principle and the need to deter future contraventions. The Court also agreed with the Ombudsman that any discount for cooperation should be minimal, not exceeding 15%.

In conclusion, the Court was satisfied that the proposed declarations and orders, with minor modifications, were appropriate. The Court also found it appropriate to require ABMENG to pay a pecuniary penalty of $56,000 and Mr Parker to pay a penalty of $11,000 for their involvement in the contraventions.

Orders

Orders of the court

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Background

Background to the litigation

The documents before the Court for the purpose of this judgment are:(a)the application and statement of claim filed on 20 December 2023;(b)the statement of agreed facts filed on 4 July 2024;(c)an affidavit of Chelsea Diane Hannaford filed on behalf of the Ombudsman on 4 July 2024;(d)a further affidavit of Chelsea Diane Hannaford filed on behalf of the Ombudsman on 16 August 2024;(e)an affidavit of Yolanda Joy Sutton filed on behalf of the Ombudsman on 16 July 2024; and(f)the signed consent order provided to the Court on 2 October 2024.RELEVANT FACTS ABMENG is a company incorporated under the provisions of the Corporations Act which operates a business that engages in instrument calibration, high voltage testing, electrical/instrumentation, procurement, sales and integrity non-destructive testing. Mr Parker is and was at all material times the sole director and shareholder of ABMENG and the person with actual or apparent responsibility for the operation, management and control of ABMENG, including the day-to-day operations of the business, and responsible for ensuring that ABMENG complied with its obligations under the Fair Work Act. The Ombudsman commenced an investigation into ABMENG in August 2021 following a request for assistance by an employee of ABMENG. Fair Work Inspector Rebecca Williams (FWI Williams), who is and was at all relevant times a Fair Work Inspector appointed by the Ombudsman under s 700 of the Fair Work Act, had primary carriage of the investigation. The Notice to Produce On 17 November 2021, pursuant to s 712(1) of the Fair Work Act, FWI Williams issued a Notice to Produce to ABMENG. The Notice to Produce was, on 19 November 2021, delivered to ABMENG at an address that was, at that time, the address of its registered office and was sent to Mr Parker by email on 22 November 2021. The Notice to Produce required ABMENG to produce by 3.00pm AEDT on 13 December 2021 the following documents in respect of three identified employees:1.All records or documents outlining terms of engagement applying to the Employees, during their Employment Periods, including but not limited to:(a) employment agreements(b) employment contracts(c) letters of offer2.All records or documents outlining the duties and/or position description of the Employees, engaged to work during their respective Employment Periods. 3.All records or documents identifying where the Employees had competency at the existing level, including certification, qualifications, or recognized level of competency documents to appropriately classify the Employees in accordance with the classification definitions within the Awards. 4.All records or document that evidence or record the hours worked by the Employees, during their respective Employment Periods (including but not limited to dates, start times, finish times and any meal breaks or recalls), including:(a) rosters(b) timesheets(c) attendance records(d)any record or document that recorded or notified the Employee of corrections, alterations, adjustments or changes to records of the Employees’ hours of work or pay.5.All records or documents that detail or relate to, all payments made by ABM to the Employees for wages paid, during each pay period falling within their respective Employment Periods, including but not limited to, pay slips, which contain any of the following information:(a) rates of pay (either hourly or weekly) and/or salaries(b) details of pay period and dates paid(c) gross amounts and net amounts paid per pay period(d) superannuation fund details and superannuation contributions(e)the payment of bonuses, loadings, allowances, overtime and penalty rates, incentive-based payment, or separately identifiable entitlements under the Award. 6.All records or documents that evidence annual leave taken by the Employees (where applicable) during their respective Employment Periods including:(a) the start date of leave(b) the end date of leave(c) leave accrued(d)leave entitlements paid (including on termination of employment).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

I consider a penalty at the higher end of the range recommended by the Ombudsman to be appropriate and I therefore impose a penalty of $56,000 on ABMENG and $11,000 on Mr Parker. I have considered these amounts in accordance with the totality principle and consider the total amount payable to be appropriate and not oppressive. CONCLUSION For the reasons indicated above, I am satisfied that it is appropriate for the Court to make the declarations and orders that the parties propose be made by consent, with minor modifications. I am also satisfied that it is appropriate to require ABMENG to pay a pecuniary penalty of $56,000 in respect of the declared contraventions of ss 712(3) and 716(5) of the Fair Work Act and to require Mr Parker to pay a pecuniary penalty of $11,000 in respect of his involvement in those contraventions.

Ratio Decidendi

Legal Principle Established

I accept the submission of the Ombudsman that in the light of ABMENG’s continued operation and Mr Parker’s continued involvement in companies, that the non-compliance with the Compliance Notice has not been rectified, and in the light of Mr Parker’s previous involvement in contraventions of workplace laws, the penalty imposed in this matter must contain sufficient ‘sting or burden’ that the respondents will ‘seek to avoid the risk of future penalties’ and be deterred from future contraventions: see Australian Buildingand Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157; [2018] HCA 3 at [116]. Cooperation, contrition and corrective action A discount can be available to a respondent who accepts wrongdoing and makes suitable expressions of regret, or who otherwise indicates a willingness to facilitate the course of justice. As Stone and Buchanan JJ said in Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70 (Mornington Inn) at [76]:[A] discount should not be available simply because a respondent has spared the community the cost of a contested trial. Rather, the benefit of such a discount should be reserved for cases where it can be fairly said that an admission of liability: (a) has indicated an acceptance of wrongdoing and a suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate the course of justice. In the present case, both respondents have made admissions and agreed facts, including agreeing that they contravened ss 712(3) and 716(5) of the Fair Work Act. I give this some weight in assessing penalty. While this litigation has been on foot, ABMENG has paid $2,696.28 to the employees, although this is a small portion of the total outstanding and ABMENG has not paid the amounts owing under the Compliance Notice. There have been many expressed intentions to pay the employees the amounts outstanding under the Compliance Notice since the contravention, but with little meaningful action following the expressed intentions. Since prior to the commencement of this proceeding, Mr Parker and/or the respondents’ lawyer made a number of representations that payment would be made in full within a few weeks. The respondents’ intention to pay was also recorded in the Order made by Judge Kirton on 24 January 2024. Despite the repeated representations, only a small portion of the outstanding amount under the Compliance Notice has been paid. The representations that payment will be made in full have had the effect of delaying this proceeding, with minimal benefit to the employees who are owed money by ABMENG. I give no weight in determining whether to apply a discount to penalty to the various agreements and representations by or on behalf of the respondents that the outstanding amounts will be paid in full to the employees within a few weeks. I agree with the Ombudsman submission that any discount in this matter should be small, and no more than 15%. Size and financial circumstances of the business