Fair Work Ombudsman v Al Hilfi - [2016] FCA 193

FEDERAL COURT OF AUSTRALIA
Fair Work Ombudsman v Al Hilfi [2016] FCA 193

File numbers: SAD 27 of 2012
SAD 109 of 2012

Judge: BESANKO J

Date of judgment: 4 March 2016

Catchwords: INDUSTRIAL LAW – penalty hearing – where respondents involved in contravention of civil remedy provision –where failure to pay minimum wages and entitlements prescribed by Fair Work Act 2009 (Cth) and Cleaning Services Award 2010 – where failure to provide pay slips and maintain employment records – where default judgment entered against respondents – consideration of relevant factors in determining level of penalty – where contraventions are serious – where industry low paid – where workers vulnerable – where underpayments significant – consideration of effect of bankruptcy on imposition of pecuniary penalties.

Legislation:
Bankruptcy Act 1966 (Cth) ss 58, 60, 82

Corporations Act 2001 (Cth)

Fair Work Act 2009 (Cth) ss 3, 44, 45, 90, 535, 536, 539, 546, 550, 557

Fair Work Regulations 2009 (Cth)

Cases cited:
Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560

Cotis v MacPherson (2007) 169 IR 30

Fair Work Ombudsman v Al Hilfi [2015] FCA 313

Fair Work Ombudsman v Bundy Market Meats Pty Ltd (2009) 190 IR 180

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

Mathers and Another v Commonwealth (2004) 134 FCR 135

Date of hearing: 3 July 2015

Registry: South Australia

Division: Fair Work Division

National Practice Area: Employment & Industrial Relations

Category: Catchwords

Number of paragraphs: 88

Counsel for the Applicant: Mr N Healy

Solicitor for the Applicant: Office of the Fair Work Ombudsman

Counsel for the First Respondent
SAD 27 of 2012: The First Respondent did not appear

Counsel for the First Respondent
SAD 109 of 2012: The First Respondent did not appear

Counsel for the Second and Third Respondents: The Second and Third Respondents did not appear

ORDERS

SAD 27 of 2012

BETWEEN:
FAIR WORK OMBUDSMAN

Applicant

AND:
AHMAD HAMID MOHAMMED AL HILFI

First Respondent

NIDAL ALBAROUKI

Second Respondent

CLENCY FERRIERE

Third Respondent

JUDGE:

BESANKO J

DATE OF ORDER:

4 MARCH 2016

THE COURT ORDERS THAT:
1.Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) (“FW Act”), the second respondent pay pecuniary penalties in the total amount of $44,550 in respect of the following contraventions:
(a)pursuant to section 550 of the FW Act, contraventions of section 45 of the FW Act by failing to pay:
(i)minimum weekly wages to the Employees for work performed during ordinary hours pursuant to clause 16.1 of the Cleaning Services Award 2010 (Modern Award) (penalty $4,950);
(ii)a part time loading to Ramnik Singh and Bhola Singh pursuant to clause 12.4(b) of the Modern Award (penalty $4,950);
(iii)shiftwork penalty rates to the Employees pursuant to clause 27.1 of the Modern Award (penalty $4,950);
(iv)weekend penalty rates to the Employees pursuant to clause 27.2 of the Modern Award (penalty $4,950);
(v)penalty…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2016] FCA 193
Decision Date: 4 March 2016

CaseChat Overview and Summary

In the matter of Fair Work Ombudsman v Al Hilfi, the Fair Work Ombudsman brought an action against the second and third respondents for contraventions of the Fair Work Act 2009 (Cth) and the Cleaning Services Award 2010. The respondents were found to have failed to pay minimum wages and entitlements, provide pay slips, and maintain employment records, among other breaches. The case involved a default judgment against the respondents, and the court was tasked with determining the appropriate level of pecuniary penalties.

The primary legal issues centred on the assessment of penalties for the identified contraventions under the Fair Work Act. The court considered the seriousness of the contraventions, the industry's low pay rates, and the vulnerability of the workers. It also took into account the effect of the respondents' bankruptcy on the imposition of penalties. The court was required to balance these factors to determine an appropriate penalty that would serve as a deterrent while also considering the respondents' financial circumstances.

In its reasoning, the court acknowledged the gravity of the contraventions, noting the significant underpayments and the failure to provide essential records and pay slips. The court highlighted that the employees were in a low-paid industry and were particularly vulnerable, which warranted a robust penalty. However, the respondents' bankruptcy was also considered, and while this did not exempt them from penalties, it did influence the court's decision. The court concluded that the penalties imposed, totaling $44,550 for each respondent, were appropriate given the circumstances and would serve as a deterrent to future contraventions.

The final orders required the second and third respondents to pay the specified penalties within 28 days and granted the Fair Work Ombudsman the right to apply for enforcement if the orders were not complied with.

Orders

Orders of the court

1. Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) (“FW Act”), the second respondent pay pecuniary penalties in the total amount of $44,550 in respect of the following contraventions:

(a) pursuant to section 550 of the FW Act, contraventions of section 45 of the FW Act by failing to pay:

(i) minimum weekly wages to the Employees for work performed during ordinary hours pursuant to clause 16.1 of the Cleaning Services Award 2010 (Modern Award) (penalty $4,950);

(ii) a part time loading to Ramnik Singh and Bhola Singh pursuant to clause 12.4(b) of the Modern Award (penalty $4,950);

(iii) shiftwork penalty rates to the Employees pursuant to clause 27.1 of the Modern Award (penalty $4,950);

(iv) weekend penalty rates to the Employees pursuant to clause 27.2 of the Modern Award (penalty $4,950);

(v) penalty rates on public holidays to the Employees pursuant to clause 27.3 of the Modern Award (penalty $4,950);

(vi) overtime rates to the Employees pursuant to clause 28 of the Modern Award (penalty $4,950);

(b) pursuant to section 550 of the FW Act, a contravention of section 45 of the FW Act by failing to make superannuation contributions to the Employees pursuant to clause 23.2 of the Modern Award (penalty $4,950);

(c) pursuant to section 550 of the FW Act, a contravention of sub-section 44(1) of the FW Act by failing to pay annual leave entitlements to the Employees in relation to sub-section 90(2) of the FW Act and clause 29.4(a) of the Modern Award (penalty $4,950);

(d) pursuant to section 550 of the FW Act, a contravention of sub-section 536(1) of the FW Act by failing to provide pay slips to the Employees (penalty $2,475);

(e) pursuant to section 550 of the FW Act, a contravention of sub-section 535(1) of the FW Act by failing to make and keep records of the kind prescribed by Subdivision 1 of Division 3 of Part 3-6 of the Fair Work Regulations 2009 (Cth) (“Regulations”) in relation to the Employees (penalty $2,475).

2. Pursuant to section 546(1) of the FW Act, the third respondent pay pecuniary penalties in the total amount of $44,550 in respect of the following contraventions:

(a) pursuant to section 550 of the FW Act, contraventions of section 45 of the FW Act by failing to pay:

(i) minimum weekly wages to the Employees for work performed during ordinary hours pursuant to clause 16.1 of the Modern Award (penalty $4,950);

(ii) a part time loading to Ramnik Singh and Bhola Singh pursuant to clause 12.4(b) of the Modern Award (penalty $4,950);

(iii) shiftwork penalty rates to the Employees pursuant to clause 27.1 of the Modern Award (penalty $4,950);

(iv) weekend penalty rates to the Employees pursuant to clause 27.2 of the Modern Award (penalty $4,950);

(v) penalty rates on public holidays to the Employees pursuant to clause 27.3 of the Modern Award (penalty $4,950);

(vi) overtime rates to the Employees pursuant to clause 28 of the Modern Award (penalty $4,950);

(b) pursuant to section 550 of the FW Act, a contravention of section 45 of the FW Act by failing to make superannuation contributions to the Employees in relation to clause 23.2 of the Modern Award (penalty $4,950);

(d) pursuant to section 550 of the FW Act, a contravention of sub-section 536(1) of the FW Act by failing to provide pay slips to the Employees (penalty $2,475);

(e) pursuant to section 550 of the FW Act, a contravention of sub-section 535(1) of the FW Act by failing to make and keep records of the kind prescribed by Subdivision 1 of Division 3 of Part 3-6 of the Regulations in relation to the Employees (penalty $2,475).

3. Pursuant to subsection 546(3)(a) of the FW Act, the second and third respondents pay their respective penalty amounts to the Commonwealth, within 28 days of this order.

4. The applicant have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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File numbers:	SAD 27 of 2012 SAD 109 of 2012
Judge:	BESANKO J
Date of judgment:	4 March 2016
Catchwords:	INDUSTRIAL LAW – penalty hearing – where respondents involved in contravention of civil remedy provision –where failure to pay minimum wages and entitlements prescribed by Fair Work Act 2009 (Cth) and Cleaning Services Award 2010 – where failure to provide pay slips and maintain employment records – where default judgment entered against respondents – consideration of relevant factors in determining level of penalty – where contraventions are serious – where industry low paid – where workers vulnerable – where underpayments significant – consideration of effect of bankruptcy on imposition of pecuniary penalties.
Legislation:	Bankruptcy Act 1966 (Cth) ss 58, 60, 82 Corporations Act 2001 (Cth) Fair Work Act 2009 (Cth) ss 3, 44, 45, 90, 535, 536, 539, 546, 550, 557 Fair Work Regulations 2009 (Cth)
Cases cited:	Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 Cotis v MacPherson (2007) 169 IR 30 Fair Work Ombudsman v Al Hilfi [2015] FCA 313 Fair Work Ombudsman v Bundy Market Meats Pty Ltd (2009) 190 IR 180 Kelly v Fitpatrick [2007] FCA 1080; (2007) 166 IR 14 Mathers and Another v Commonwealth (2004) 134 FCR 135
Date of hearing:	3 July 2015
Registry:	South Australia
Division:	Fair Work Division
National Practice Area:	Employment & Industrial Relations
Category:	Catchwords
Number of paragraphs:	88
Counsel for the Applicant:	Mr N Healy
Solicitor for the Applicant:	Office of the Fair Work Ombudsman
Counsel for the First Respondent SAD 27 of 2012:	The First Respondent did not appear
Counsel for the First Respondent SAD 109 of 2012:	The First Respondent did not appear
Counsel for the Second and Third Respondents:	The Second and Third Respondents did not appear