Fair Work Ombudsman v Ambient Transport Pty Ltd
[2021] FedCFamC2G 129
•5 October 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Ambient Transport Pty Ltd [2021] FedCFamC2G 129
File number(s): SYG 1281 of 2020 Judgment of: JUDGE HUMPHREYS Date of judgment: 5 October 2021 Catchwords: INDUSTRIAL LAW – Fair Work – default judgment – pecuniary penalty sought – single breach – reduction due to principle of totality – reduction not applied – pecuniary penalty imposed Legislation: Corporations Act 2001 (Cth), s 601AB
Fair Work Act 2009 (Cth), ss 546, 716
Federal Circuit and Family Court (Division 2) (General Federal Law) Rules 2021 (Cth), r 9.04
Cases cited: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46
Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor (No. 2) [2019] FCCA 2144
Fair Work Ombudsman v NoBrace Centre Pty Ltd (In Liquidation) & Ors (No.2) [2019] FCCA 2970
Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301
Fair Work Ombudsman v Tester [2021] FCCA 771
Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Division: Division 2 Number of paragraphs: 22 Date of last submission/s: 5 October 2021 Date of hearing: 5 October 2021 Place: Parramatta Counsel for the Applicant: Ms Davies Solicitor for the Respondent: Mr Jensen (Company Director) appeared on behalf of the Respondent ORDERS
SYG 1281 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2) BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: AMBIENT TRANSPORT PTY LTD ACN 633 156 662
Respondent
ORDER MADE BY:
JUDGE HUMPHREYS
DATE OF ORDER:
5 OCTOBER 2021
THE COURT ORDERS THAT:
1.Grant leave for Mr Jensen to appear on behalf of the Respondent Company, Ambient Transport Pty Ltd ACN 633 156 662, pursuant to r 9.04 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
2.Pursuant to s 546 (1) of the Fair Work Act 2009 (Cth) the Respondent pay pecuniary penalties to the Commonwealth in respect of the contravention of s 716 (5) of the Fair Work Act 2009 (Cth) as contained in order 2 of the orders of this Court dated 5 March 2021, in the amount of $25,200.00 within 120 days of the date of this order.
THE COURT NOTES THAT:
3.Mr Jenson has indicated that he will take steps to ascertain the amounts owing to each of the employees that were underpaid and he has indicated there is an amount of $5000.00 that might be payable within 28 days.
4.The Court further notes that if Mr Jensen does not comply with that, then that is a matter that might call into account his fitness to be a Director of a company.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
(As Revised From Transcript)JUDGE HUMPHREYS
This is judgment of the matter of Fair Work Ombudsman v Ambient Transport PTY Limited, ACN 633 156 662 (“the Respondent”).
INTRODUCTION
The Respondent operated a transport business under the name of Ambient Transport. The Respondent provided passenger services in the nature of hire cars. In around April 2019, a Fair Work inspector, Ms Kylie Murtagh conducted an investigation into the Respondent. At all material times, Mr Christian Jensen was the sole Director of the Respondent. Mr Jensen appeared in Court on this day, and leave has been granted for him to appear on behalf of Ambient Transport Pty Ltd (ACN 633156 662), pursuant to r 9.04 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (“the Rules”)
On 12 December 2019, the Respondent was issued with a compliance notice, with the Applicant having formed the view that the Respondent was in breach of various clauses of the Passenger Vehicle Transportation Award 2020 (“the Award”). That notice required the Respondent to take action to remedy the contraventions, and produce evidence of that action by 16 January 2020. No evidence was produced then, nor has it been subsequently. It has been conceded by Mr Jensen that no action has been taken by him in the intervening period, up to and including today, in relation to the calculation of the amounts that are owing to his employees and payment of them. On 27 May 2020, the Applicant commenced proceedings in this Court, seeking, inter alia, a declaration to respond to the contravened s 716 (5) of the Fair Work Act 2009 (Cth) (“the Act”), and that a pecuniary penalty be imposed pursuant to s 546(1) of the Act.
On 5 March 2021, the Court default judgment against the Respondent, pursuant to
r 13.03B(2)(c) of the then Federal Circuit Court Rules 2001 (Cth) (“the FCC Rules”) , by reason of the Respondent’s default, pursuant to r 13.03A(2) of the FCC Rules, to appear at a directions hearing and defend the proceedings with due diligence. The Court notes that in communication with chambers on the morning of 5 March 2021, Mr Jensen stated that:
I am writing as the director of Ambient Transport Limited. Legal representation is financially beyond the company; as such, I cannot appear. In any event, I consent to orders being sought by the FWO as regards default judgment.
The issue for the Court to determine, is the appropriate pecuniary penalty to be imposed.
THE LAW
The Court has a broad discretion as to penalty. Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 at [36] summarised how the discretion is to be approached as follows:
1) Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.
2) Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.
3) Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.
4) Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
5) Consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO (as permitted by Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (CFMEU Civil Penalties Case) at [64]) and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary: see Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14 at [30]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560 at [23], [71] and [102].
The purpose of a civil penalty is primarily, if not wholly, that of promoting public interest in compliance with the laws that have been contravened, and it does not engage principals of retribution or rehabilitation: (see; Fair Work Ombudsman v NoBrace Centre Pty Ltd (In Liquidation) & Ors (No.2) [2019] FCCA 2970 (“NoBrace”) per Kelly J at [65]). As the principles of retribution or rehabilitation are not involved in the determination of a civil penalty:
…this intensifies the focus of a civil penalty determination upon issues of specific and general deterrence: (see; NoBrace at [66]).
In Mason v Harrington Corporation Pty Ltd [2007] FMCA 7, Mowbray FM set out what is now a well-accepted set of factors relevant to assessing a pecuniary penalty. They are as follows:
(a)The nature and extent of the conduct which led to the breaches;
(b)The circumstances in which the conduct took place;
(c)The nature and extent of any loss sustained as a result of those breaches;
(d)Whether there has been any similar previous conduct by the respondent;
(e)Whether the breaches were properly distinct or arose out of one course of conduct;
(f)The size of the business enterprise involved;
(g)Whether or not the breaches were deliberate;
(h)Whether senior management was involved in the breaches;
(i)Whether the party committing the breaches exhibited contrition;
(j)Whether the party committing the breaches have taken corrective action;
(k)Whether the party committing the breaches cooperated with enforcement authorities;
(l)The need to ensure compliance with minimum standards by provision of an effective means for the investigation and enforcement of entitlements; and,
(m)The need for specific and general deterrence.
APPLICANT SUBMISSIONS
As only a single contravention is alleged, it was submitted that the first, fourth, and fifth steps of the approach by Bromwich J, as outlined above, are relevant in this matter. There was one contravention of s 716(5) of the Act. Under s 539 (2) and 546 (2) of the Act, the maximum penalty payable for such a contravention is $31,500. It was submitted that the primary purpose of civil penalties is to promote the public interest in compliance, and attempt to put a price on a contravention that is sufficiently high to deter repetition by the contravener, and others who might be tempted to contravene the legislation: (see; Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, at [55]).
The issuing of a compliance notice was introduced into the Act to provide a mechanism to address non-compliance with certain employment obligations arising out of the Act as an alternate to commencing litigation for each underlying contravention. Courts have recognised the compliance notice provides a mechanism for the efficient and cost-effective rectification of identified contravention of the Act, including underpayments to employees: (see; Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor (No. 2) [2019] FCCA 2144 at [19]).
After issuing a compliance notice, the Applicant attempted to contact the Respondent on numerous occasions, but the Respondent did not engage with the Applicant. It was submitted that the Respondent’s conduct in failing to comply with a compliance notice, coupled with its failure to properly engage in these proceedings, demonstrates a deliberate disregard for its obligations under the Act, and the authority of the applicant as a regulator of Commonwealth workplace laws. It was submitted that it is well-established that the size and financial circumstances of an employer do not exculpate contraventions of workplace laws: (see; Kelly v Fitzpatrick [2007] FCA 1080 at [30]).
Further, no financial information has been provided by the Respondent as regards to the Respondent’s financial circumstances other than some uncorroborated oral material given by Mr Jensen on this morning. In relation to corrective action and cooperation, it was submitted that the Respondent has not cooperated with the Applicant, and has indeed not taken any steps to rectify the noncompliance or engage with the Courts in a meaningful way in these proceedings. The Respondent’s failure to comply with the compliance notice undermines the Act’s enforcement framework, and the safety net of entitlement, it is designed to protect: (see; Fair Work Ombudsman v Tester [2021] FCCA 771 at [27]).
The efficacy of statutory notice such as compliance notice will be hindered if recipients perceive that a failure to comply carries no meaningful consequences: (see; Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor (No.2) [2019] FCCA 2144 at [40]). In terms of general deterrents, it was submitted this must serve a purpose such as that the penalties are not seen by others as just “a cost of doing business”: (see; Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290 at [27]). It is noted that the Respondent is currently subject to an application for deregistration, initiated by the Australian Securities Investment Commission (“ASIC”) under s 601AB(1) of the Corporations Act 2001 (Cth).
In relation to specific deterrence, the conduct of the Respondent and its failure to comply was, it was submitted, deliberate and demonstrated a disregard for employer obligations under workplace laws. Accordingly, specific deterrence was a relevant consideration. Based on the above factors, the Applicant submitted that the proposed penalty should be 80 per cent of the maximum or $25,200. It was submitted that a reduction in the amount of 10 per cent should be applied with reference to the principle of totality. Accordingly, the Applicant submits that the penalty should be in the amount of $22,680, being a 10 per cent reduction from the amount of $25,200.
Mr Jensen indicated that the firm had only recently been set up, and he was not familiar with the relevant awards and that this led to the breaches. Whilst the Court accepts Mr Jensen’s submission, ignorance of what is the appropriate payment regime under the law is not an excuse. Further, Mr Jensen submitted that the company has been significantly affected by the COVID-19 outbreak and the restrictions on travel. Whilst the Court accepts Mr Jensen’s submissions, the fact is they are not an excuse for the lack of initial engagement with the Fair Work Commission.
There is no excuse for the failure to work out the amounts that are properly payable, and there was no excuse for the fact that the Respondent has taken no action to even make a partial payment in relation to the amounts that are payable to the various workers who were underpaid. The Court, on numerous occasions, has indicated that the underpayment of workers amounts to wage theft. It has a pernicious effect not only on the particular workers concerned, but it also means that those companies which are decent and honest and pay workers their award entitlements, are robbed of a financial advantage by a company which is able to undercut them in terms of prices.
The Court has considered the matters put by Mr Jensen by way of mitigation. Mr Jensen did not make any further submissions and the Court is satisfied that there was no previous conduct by the Respondent. The breaches arose out of a single course of conduct in that there was only one breach, but that arose out of an underpayment of various workers. The Court has taken account of the impact of COVID-19. The Court has taken into account that there has been a lack of real contrition, and there has been no corrective action even up until today. There has further been no cooperation with enforcement authorities, and indeed, to a large extent, with this Court in its capacity to effectively and quickly resolve the matter.
In the circumstances, the Court is of the view that the amount of 80 per cent of the maximum is the appropriate penalty to be enforced, that is, an amount of $25,200. The Court does not propose to reduce that on the basis of totality, bearing in mind the fact that there is only a single breach. The Court proposes, unlike the submission put by the Applicant, to allow a time period of 120 days for the payment of that amount. The Court notes that Mr Jensen has indicated that some money may well be payable in respect of the various employees. The Court will reasonably expect that Mr Jensen will now, given the fact that the Court has allowed an extended period of time for the payment of the pecuniary penalty, to now apply himself to the issue of what money is payable and to at least make some part-payment, noting he has indicated that an amount of $5000 could well be available. Mr Jensen indicated to the Court that that could well be available within 28 days.
If Mr Jensen complies with that, then that will indicate a belated level of contrition and cooperation. If Mr Jensen does not comply with what he told the Court he would do, in the Court’s view, this would seriously call into account his suitability and fitness to be a Director of a company. Whilst it is not a matter for the Court to determine, and it is a matter for others, if Mr Jensen does not comply with what he said he would do then that will be a matter that, in the Courts view, would count seriously against him in relation to his continued fitness to be company Director.
CONCLUSION
Accordingly, the orders of the Court are as follows:
1.The Court grants leave for Mr Jensen to appear on behalf of the Respondent Company, Ambient Transport Pty Ltd ACN 633 156 662, pursuant to r 9.04 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
2.That, pursuant to section 546(1) of the Fair Work Act 2009 (Cth), the Respondent pay pecuniary penalties to the Commonwealth in respect of the contravention of s 716(5) of the Fair Work Act2009 (Cth) as contained in order 2 of the Court orders of this Court dated 5 March 2021 in the amount of $25,200 within 120 days of this order.
The Court notes that Mr Jensen has indicated that he will take steps to ascertain the amounts owing to each of his employees that were underpaid, and that he has indicated there is an amount of $5000 that might be payable within 28 days.
The Court further notes that if Mr Jensen does not comply with that, then that is a matter that might call into account his fitness to be a Director of a company.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Humphreys. Deputy Associate:
Dated: 5 October 2021
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