Fair Work Ombudsman v Anastasio
[2023] FedCFamC2G 827
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Anastasio [2023] FedCFamC2G 827
File number(s): ADG 256 of 2022 Judgment of: JUDGE LUCEV Date of judgment: 11 September 2023 Catchwords: INDUSTRIAL LAW – Contraventions – failure to comply with compliance notice – agreed statement of facts and admissions – agreed penalty – relevant principles concerning agreed penalty – factors for assessment of whether agreed penalty proposed is appropriate. Legislation: Crimes Act 1914 (Cth) s 4AA
Fair Work Act 2009 (Cth) ss 12, 539, 546, 716
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union and Another [2018] HCA 3; (2018) 262 CLR 157; (2018) 92 ALJR 219; (2018) 273 IR 211; (2018) 351 ALR 190; (2018) 70 AILR 102-917
Australian Building and Construction Commissioner v Pattinson & Anor [2022] HCA 13; (2022) 274 CLR 450; (2022) 96 ALJR 426; (2022) 314 IR 301; (2022) 399 ALR 599
Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2002] FCA 619
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560; (2008) 246 ALR 35; (2008) 60 AILR 100-809
Fair Work Ombudsman v 3 Rundle Mall Pty Ltd [2022] FedCFamC2G 354
Fair Work Ombudsman v ADADN Pty Ltd [2021] FCCA 756
Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128
Fair Work Ombudsman v Al Hilfi [2016] FCA 193
Fair Work Ombudsman v Althaus Homes Pty Ltd [2021] FCCA 126
Fair Work Ombudsman v Hiyi Pty Ltd & Ors [2016] FCCA 1634
Fair Work Ombudsman v HSCC Pty Ltd [2020] FCA 655
Fair Work Ombudsman v Mai Pty Ltd [2016] FCCA 1481
Fair Work Ombudsman v Metro Northern Enterprises Pty Ltd [2013] FCCA 1323
Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301
Fair Work Ombudsman v Pioneer Personnel Pty Ltd [2017] FCCA 3223
Fair Work Ombudsman v Rum Runner Pty Ltd & Anor [2018] FCCA 1129
Fair Work Ombudsman v Soma Kitchen Pty Ltd & Anor (No 2) [2020] FCCA 2583
Fair Work Ombudsman v Syndicate Group Pty Ltd [2015] FCCA 2847
Fair Work Ombudsman v Viper Industries Pty Ltd [2015] FCCA 492
Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290
Jordan v Mornington Inn Pty Ltd [2007] FCA 1384; (2007) 116 IR 33; (2007) 60 AILR 100-744
Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14
Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993
Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383; (2008) 171 IR 455; (2008) 247 ALR 714
Patrick Stevedores Holdings Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCA 492
Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543; (2007) 162 IR 444; (2007) 59 AILR 100-669
The Commonwealth of Australia v Director, Fair Work Building Inspectorate and Others [2015] HCA 46; (2015) 258 CLR 482; (2015) 90 ALJR 113; (2015) 255 IR 87; (2015) 326 ALR 476; (2015) 67 AILR 102-494
Division: Division 2 General Federal Law Number of paragraphs: 36 Date of last submission/s: 11 August 2023 Date of hearing: 11 August 2023 Place: Adelaide Counsel for the Applicant: Mr A Vas Counsel for the Respondent: Ms L Marrone ORDERS
ADG 256 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: ANTONIO ANASTASIO (ABN 27 302 456 829)
Respondent
ORDER MADE BY:
JUDGE LUCEV
DATE OF ORDER:
14 AUGUST 2023
BY CONSENT, THE COURT DECLARES THAT:
1.The Respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the compliance notice issued on 21 February 2022 (Compliance Notice).
BY CONSENT, THE COURT ORDERS THAT:
2.Pursuant to s 545(1) of the FW Act, the Respondent, within 60 days of this order:
(a)pay to the Employees the outstanding amounts the Respondent was required by the Compliance Notice to pay (agreed to be $1,110.32 to Mr Ngor Mapor and $1,987.28 to Mr Ross Hicks) (Outstanding Amounts); and
(b)prepare and produce to the Applicant a schedule outlining the Outstanding Amounts and providing proof that these amounts have been paid.
3.Pursuant to section 547(2) of the FW Act, the Respondent, within 60 days of this order, pay interest on the Outstanding Amounts to the Employees at the applicable prejudgment interest rate (agreed to be $85.11 to Mr Ngor Mapor and $128.90 to Mr Ross Hicks).
4.Pursuant to s 546(1) of the FW Act, that the Respondent pay a pecuniary penalty to the Applicant of $3,330 for the declared contravention in paragraph 1 above within 180 days of this order.
5.The Applicant has liberty to apply on seven days' notice.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).REASONS FOR JUDGMENT
JUDGE LUCEV
ORDERS MADE AT HEARING ON 11 AUGUST 2023
At the outset of the penalty hearing of this matter on 11 August 2023 the Court enquired as to whether there had been any conferral between the parties with respect to penalty, and, in particular, given the small amount involved, with respect to an agreed penalty. The Court is of the view that such conferral is, as it said at the penalty hearing, consistent with the role of the Commonwealth (here the Fair Work Ombudsman ("FWO")) as a model litigant.
Following a short adjournment the parties proposed, and the Court agreed, that orders ought to be made (and were made) as follows:
1.The parties file consent orders in the terms of the orders agreed by them and read in Court today, by 4:00pm on 14 August 2023.
2.The Reasons for Judgment in relation to the parties consent orders be published from Chambers at a later date.
The following are the Reasons for Judgment referred to in order 2 of the orders made on 11 August 2023.
CONSENT DECLARATION AND ORDERS MADE ON 14 AUGUST 2023
On 14 August 2023 the parties provided to the Court, and the Court made, a consent declaration and consent orders as follows:
BY CONSENT, THE COURT DECLARES THAT:
1. The Respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the compliance notice issued on 21 February 2022 (Compliance Notice).
BY CONSENT, THE COURT ORDERS THAT:
2. Pursuant to s 545(1) of the FW Act, the Respondent, within 60 days of this order:
(a) pay to the Employees the outstanding amounts the Respondent was required by the Compliance Notice to pay (agreed to be $1,110.32 to Mr Ngor Mapor and $1,987.28 to Mr Ross Hicks) (Outstanding Amounts); and
(b) prepare and produce to the Applicant a schedule outlining the Outstanding Amounts and providing proof that these amounts have been paid.
3. Pursuant to section 547(2) of the FW Act, the Respondent, within 60 days of this order, pay interest on the Outstanding Amounts to the Employees at the applicable prejudgment interest rate (agreed to be $85.11 to Mr Ngor Mapor and $128.90 to Mr Ross Hicks).
4. Pursuant to s 546(1) of the FW Act, that the Respondent pay a pecuniary penalty to the Applicant of $3,330 for the declared contravention in paragraph 1 above within 180 days of this order.
5. The Applicant has liberty to apply on seven days' notice.
The consent declaration and consent orders were prefaced by a “Penal Notice” which it is unnecessary to set out for present purposes.
ISSUES
The primary issue for the Court is whether the agreed penalties are appropriate penalties. This involves:
(a)a consideration of the principles concerning the approach to be taken by the Court where an agreed penalty is proposed; and
(b)an assessment of whether the penalty proposed is appropriate having regard to relevant considerations.
STATEMENT OF AGREED FACTS
A Statement of Agreed Facts (“SOAF”) was filed on 4 April 2023, and is in the following terms:
A.This Statement of Agreed Facts (SOAF) is made by the Applicant, the Fair Work Ombudsman, and the Respondent, Antonio Anastasio, for the purposes of s 191 of the Evidence Act 1995 (Cth).
B.The Respondent admits that it contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with a compliance notice dated 21 February 2022 issued by Fair Work Inspector (FWI) Marie-Anne Higgins (FWI Higgins) pursuant to s 716(2) of the FW Act.
A. PARTIES
The Applicant
1.The Applicant has standing and authority to bring these proceedings and seek orders under section 539 of the FW Act.
The Respondent
2. The Respondent is and was at all relevant times:
(a) a natural person capable of being sued;
(b)a “national system employer” within the meaning of section 14 of the FW Act, as extended by section 30D(1) of the FW Act;
(c)a sole trader holding the Australian Business Number … [number deleted] and operating a business involving motor vehicle repair and detailing services under the registered business name ‘SA Dents & Detailing’ (Business);
(d)operating the Business from 4 Bridge Road, Payneham in the State of South Australia (Business Address);
(e)by reason of the matters pleaded in paragraphs 2(a), 2(b) and 2(c) above, covered by the FW Act in respect of his employees.
B. ADMITTED CONTRAVENTION OF S 716(5) OF THE FW Act
Background
3.FWI Higgins is and was at all relevant times a FWI appointed by the Applicant under section 700 of the FW Act.
4.In or around February 2021, FWI Higgins commenced an investigation into the Respondent in respect of Mr Ross Hicks (Mr Hicks) and Mr Ngor Mapor (Mr Mapor), together (the Employees);
5.Based on the information obtained during the investigation, FWI Higgins formed a belief that:
(a)the Vehicle Repair, Services and Retail Award 2020 (Award) covered and applied to the Respondent in respect of the Employees;
(b)between 12 October 2020 and 15 January 2021 (Employment Period), the respondent employed the Employees as:
(i)Vehicle Industry Repair Services & Retail (RS&R) employees, Level 1 (entry) R1 classification, as defined in Schedule A of the Award, performing car detailing duties; and
(ii) casual employees:
(A)for Mr Hicks, between 12 October 2020 and 18 November 2020;
(B)for Mr Mapor, between 8 January 2021 and 15 January 2021; and
(c)during the Employment Period, the Respondent failed to pay the Employees the minimum hourly rate of pay and the applicable loading for the work performed (Casual Minimum Rates Entitlements), as required under the Award.
6.By reason of the matters pleaded in paragraph 5 above, FWI Higgins formed a reasonable belief, within the meaning of section 716(1)(b) of the FW Act, that by failing to pay the Casual Minimum Rates Entitlements the Respondent contravened the following terms of the Award in respect of the Employees:
(a) the casual minimum rates clause; and
(b) the casual loading clause,
(together, the Contraventions).
Compliance Notice
7.On or about 21 February 2022, FWI Higgins gave a notice to the Respondent pursuant to section 716(2) of the FW Act in respect of the Contraventions (Compliance Notice), by sending it to the Business Address by express post.
8.On or about 22 February 2022, FWI Higgins sent an electronic copy of the Compliance Notice to the email address … [email address deleted], being the email address of the Respondent from which the Respondent had corresponded with the Applicant during the Investigation (Respondent’s Email Address).
9.Pursuant to section 716(2) of the FW Act, the Compliance Notice required the Respondent to:
(a)take the following actions by 28 March 2022, in respect of the Employees, to remedy the direct effects of the Contraventions (Specified Action):
(i)calculate the full amount of wages owed to the Employees for the Employment Period in respect of the Contraventions; and
(ii)make full payment to the Employees in respect of their outstanding Casual Minimum Rates Entitlements; and
(b)produce reasonable evidence to the Applicant of the Respondent’s compliance with the Compliance Notice, by 4 April 2022, by preparing and producing a record of calculations and payments and evidence that the amounts owed, including additional superannuation contributions, had been paid to the Employees and their chosen superannuation funds.
10.The Compliance Notice met the requirements of section 716(3) of the FW Act.
Failure to comply with the Compliance Notice
11.The Respondent failed to:
(a)take the specified action set out in the Compliance Notice by 28 March 2022, or at all prior to the commencement of this proceeding; and
(b)produce to the Applicant reasonable evidence of compliance with the Compliance Notice by 4 April 2022, or at all prior to the commencement of this proceeding.
12. By reason of the matters agreed in paragraphs 3 to 11 above, the Respondent:
(a) failed to comply with the Compliance Notice; and
(b) contravened section 716(5) of the FW Act.
C. AGREED RELIEF
13.The parties seek the declarations set out below:
(a)a declaration that the Respondent contravened s716(5) of the FW Act by failing to comply with the Compliance Notice issued on 21 February 2022.
14. The Parties agree to the following orders:
(a)pursuant to section 545(2) of the FW Act, the Respondent take the steps that were required by the Compliance Notice within 28 days from the date of this order, by:
(i)calculating and paying to the Employees the outstanding amounts the Respondent was required by the Compliance Notice to pay (Outstanding Amounts); and
(ii)preparing and producing to the Applicant a schedule outlining the Outstanding Amounts and providing proof that these amounts have been paid.
(b)pursuant to section 547(2) of the FW Act, the Respondent pay interest on the Outstanding Amounts to the Employees, pursuant to paragraph 14(a)(i) above, at the applicable pre-judgment interest rate to the Employees within 28 days of this order;
(c)pursuant to section 546(1) of the FW Act the Respondent pay a pecuniary penalty to the Commonwealth for his contravention set out at paragraph 13(a) above, within 28 days of this order;
(d)the Applicant have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with; and
(e) such further orders as the Court considers appropriate.
RELEVANT PRINCIPLES CONCERNING AGREED PENALTY
In dealing with proposed agreed penalties under Commonwealth legislation the Federal Court has developed certain principles for guidance. They include:
(a)that the court bears ultimate responsibility for penalty, is not bound by the parties agreement, and must consider for itself what constitutes an appropriate penalty: Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993 at [53(i)], [56] and [79] per Branson, Sackville and Gyles JJ (“Mobil Oil”);
(b)determining penalty quantum is not an exact science, and within a permissible range a particular figure is not necessarily more appropriate than another figure: Mobil Oil at [53(ii)] per Branson, Sackville and Gyles JJ;
(c)promoting settlement of litigation is in the public interest, and where the parties agree on facts and penalty, they may present a statement of agreed facts, including a view as to the effect of those facts, and submissions on penalty: Mobil Oil at [53(iii)] per Branson, Sackville and Gyles JJ;
(d)the view of the regulatory body is relevant, particularly where the view concerns matters within the regulator’s expertise, but is not determinative of penalty: Mobil Oil at [53(iv)] per Branson, Sackville and Gyles JJ;
(e)in determining appropriate penalty the court will examine all the circumstances, including an agreed statement of facts, and, if appropriate, may act on that statement: Mobil Oil at [53(v)] per Branson, Sackville and Gyles JJ; and
(f)a jointly proposed penalty will not be rejected simply because the court might have chosen a different figure: it is sufficient if the jointly proposed penalty is “within the permissible range”: Mobil Oil at [53(vi)] per Branson, Sackville and Gyles JJ. or “broadly speaking” within that range: Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2002] FCA 619 at [24] per Weinberg J.
In The Commonwealth of Australia v Director, Fair Work Building Inspectorate and Others [2015] HCA 46; (2015) 258 CLR 482; (2015) 90 ALJR 113; (2015) 255 IR 87; (2015) 326 ALR 476; (2015) 67 AILR 102-494 (“Agreed Penalties Case”) the High Court held that the principles applicable to agreed penalty submissions in a civil penalty proceeding remain those articulated in Mobil Oil: at [32] and [47]-[50] per French CJ, Kiefel, Bell, Nettle and Gordon JJ and [68] per Gageler J.
In Patrick Stevedores Holdings Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCA 492 at [15]-[17] per Katzmann J the Federal Court observed that:
15Where penalties are agreed, the principles set out in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 and Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; ATPR ¶41-993 apply: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (Agreed Penalties Case). These principles were recently summarised by the Full Court in Volkswagen Aktiengesellschaft v Australian Competition and Consumer Commission [2021] FCAFC 49 (VW) at [125]-[129] (Wigney, Beach and O'Bryan JJ). They are as follows.
16Despite the parties' agreement, the Court must be persuaded that the penalty proposed is appropriate. Subject to the Court being “sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences” and that the proposed penalty is “an appropriate remedy in the circumstances” (emphasis in original), it is both consistent with principle and “highly desirable” for the Court to accept the parties' proposal: Agreed Penalties Case at [58]. The desirability of accepting the parties' proposal principally derives from the public policy interest in promoting the predictability of outcome in civil penalty proceedings which encourages contraveners to acknowledge their wrongdoing and thereby avoid a lengthy trial: Agreed Penalties Case at [46]. Determining penalty is not an exact science. There is “no single appropriate penalty” but “a permissible range of penalties”: VW at [127]. An agreed and jointly proposed penalty may be considered an appropriate penalty if it falls within the permissible range. That said, however, “it does not follow that the Court's task can be said to amount to no more than determining whether the proposed penalty falls within the permissible range … . Nor can it be said that the Court is bound to start with the proposed penalty and to then limit itself to considering whether that penalty is within the permissible range … ”: VW at [128]. Finally, the Court should generally recognise that the agreed penalty is most likely the result of compromise and pragmatism, including the regulator's consideration of the penalty necessary to achieve deterrence and the risks and expense of the litigation had the matter not been settled: VW at [129], Agreed Penalties Case at [109]. The Court must be “wary of the possibility that the agreed penalty may be the product of excessive pragmatism on the part of the regulator”: VW at [129].
17The principles to be applied in the assessment of penalties in a civil case are also uncontroversial. Deterrence, both general and specific, is recognised as the principal, if not sole, object. Thus, the penalty must be fixed at a level sufficient to deter both the contravener and others with a view to ensuring that the penalty is not regarded as an acceptable cost of doing business: Agreed Penalties Case at [55] (French CJ, Kiefel, Bell, Nettle and Gordon JJ), [110] (Keane J). But the penalty must be proportionate to the nature and gravity of the contravening conduct: Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177; 384 ALR 75; 299 IR 404 at [98], [197], [201] (Allsop CJ, White and Wigney JJ); [226]-[231] (Besanko and Bromwich JJ). The Court should have regard to the nature and extent of the conduct giving rise to the contraventions, whether the conduct in question was deliberate; the circumstances in which the conduct occurred; whether senior management was involved; the nature and extent of any loss or damage that ensured; any similar previous conduct; the size of the Union; and the extent of any mitigating factors such as contrition or corrective action, or cooperation with the prosecutor.
ASSESSMENT OF APPROPRIATE PENALTIES
In assessing whether the proposed penalty is appropriate the Court must have regard to the primary purpose of the imposition of civil penalties under the Fair Work Act 2009 (Cth) (“FW Act”).
The High Court has explained the primary purpose of the imposition of civil penalties. In the Agreed Penalties Case the High Court stated “…whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd [(1991) ATPR 41-076; [1990] FCA 762], is primarily if not wholly protective in promoting the public interest in compliance…”: at [55] per French CJ, Kiefel, Bell, Nettle and Gordon JJ. More recently the High Court has further explained, in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union and Another [2018] HCA 3; (2018) 262 CLR 157; (2018) 92 ALJR 219; (2018) 273 IR 211; (2018) 351 ALR 190; (2018) 70 AILR 102-917 (“ABCC v CFMEU”) at [116] per Keane, Nettle and Gordon JJ, that the “principal object” of deterrence depends on a penalty having the necessary “sting or burden” to secure the specific and general deterrent effects that are the raison d’être of its imposition. That purpose has been reinforced by the judgment of the High Court in Australian Building and Construction Commissioner v Pattinson & Anor [2022] HCA 13; (2022) 274 CLR 450; (2022) 96 ALJR 426; (2022) 314 IR 301; (2022) 399 ALR 599 (“Pattinson”) where at [9] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ the purpose of the civil remedy regime in the FW Act was described by the majority as being the promotion of the public interest in compliance with the provisions of the FW Act by way of deterrence of further contravention. In Pattinson at [66] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ the High Court expressed the view that s 546 of the FW Act had, as its underlying theory, the notion that the financial disincentive imposed by way of pecuniary penalty will be such as to encourage compliance with the law by ensuring that contraventions are viewed by the contravener, and others, “as an economically irrational choice”. The High Court further observed that the function of the court imposing a penalty was to give effect to the intention of the FW Act in this regard, and that the courts must do what they can to deter noncompliance with the FW Act.
In determining what penalty to impose the Court must assess the seriousness of the offending subject to the alleged contravention in the context of all the factual circumstances that arise. In that regard the Court has long had regard to a series of considerations, which are not fixed and which are not a check-list: Pattinson at [18] and [68] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ; Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 (“Kelly”) at [14] per Tracey J; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560; (2008) 246 ALR 35; (2008) 60 AILR 100-809 at [91] per Buchanan J. Those considerations include the following:
(a)the nature and extent of the conduct which led to the breach;
(b)the circumstances in which the conduct took place;
(c)the nature and extent of any loss or damage sustained as a result of the breach;
(d)whether there has been similar previous conduct by the alleged contravener;
(e)whether the breach was properly distinct or arose out of one course of conduct;
(f)the size of the business enterprise involved;
(g)whether or not the breach was deliberate;
(h)the involvement of senior management in the breach;
(i)whether the party committing the breach had shown contrition;
(j)whether the party committing the breach has taken corrective action;
(k)whether the party committing the breach has cooperated with regulatory authorities;
(l)the need to ensure compliance with minimum standards by the provision of an effective means for investigation and enforcement of employee entitlements; and
(m)the need for specific and general deterrence.
FACTUAL BACKGROUND
The relevant factual background is sufficiently set out in the SOAF and the affidavits of:
(a)Marie-Anne Higgins of 12 May 2023 (“Higgins May 2023 Affidavit”), 14 July 2023 and 1 August 2023; and
(b)Mr Anastasio’s Affidavits of 30 June 2023 and 11 August 2023.
To the extent necessary the above affidavit material is referred to in the penalty considerations set out below.
PENALTY CONSIDERATIONS
Nature and extent of and circumstances in which the conduct which led to the contravention took place
The admitted contravention occurred against a backdrop where:
(a)Mr Anastasio employed Mr Hicks between 12 October 2020 and 18 November 2020 and employed Mr Mapor between 8 January 2021 and 15 January 2021: Higgins May 2023 Affidavit at [6], [11] and Annexure MH-4;
(b)Mr Hicks worked 102 hours over 12 shifts, and Mr Mapor worked 62 hours over 8 shifts: Higgins May 2023 Affidavit at Annexures MH-4 and MH-5;
(c)there is an email trail between Mr Anastasio and the relevant recruitment agency in December 2020, where Mr Anastasio wrote, “I’m hoping to be paid by Ford before Xmas so I can then pay Ross [Hicks] too”: Higgins May 2023 Affidavit at [6] and Annexure MH-4;
(d)FWI Higgins spoke to Mr Anastasio on 8 April 2021, and during this conversation he confirmed that he did not pay the Employees because they were (allegedly) on trial: Higgins May 2023 Affidavit at [10] and Annexure MH-7;
(e)Mr Anastasio was given the Compliance Notice on 21 February 2022: Higgins Affidavit at [13] and Annexure MH-8. The Compliance Notice clearly set out the requirements for him to:
(i)pay the Employees their outstanding entitlements under the Compliance Notice by 28 March 2022; and
(ii)provide evidence of payment to FWI Higgins by 4 April 2022: SOAF at [9].
This is an instance of a single failure to comply with a compliance notice. The underlying facts concern relatively small amounts (albeit that they might be significant to the employees concerned) for two employees who were underpaid over a relatively short period of time. Of more concern, is the failure to comply with the Compliance Notice itself. Overall, it is clear that the nature and extent of conduct engaged in by Mr Anastasio, and the circumstances in which the conduct has taken place are such as to engage the pecuniary penalty regime under the FW Act, and although the contravention is a single one, it remained unremedied until the hearing was imminent, and thus there is little in the nature and extent of the conduct or the circumstances in which the conduct took place which ameliorates Mr Anastasio’s conduct.
Deterrence
In ABCC v CFMEU at [116] per Keane, Nettle and Gordon JJ it was said that “the principal object of an order that a person pay a pecuniary penalty under section 546 is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners”; see also Pattinson at [9] and [66] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ (referred to at [12] above).
General deterrence must serve a purpose such that the penalty is not seen by others as just “the cost of doing business”: Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290 at [27] per Flick J; Fair Work Ombudsman v HSCC Pty Ltd [2020] FCA 655 at [5] per Flick J. In order to be useful as a general deterrent, a penalty “should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like-minded persons or organisations”; Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543; (2007) 162 IR 444; (2007) 59 AILR 100-669 at [93] per Lander J; Fair Work Ombudsman v ADADN Pty Ltd [2021] FCCA 756 at [39] per Judge Jarrett.
In Fair Work Ombudsman v 3 Rundle Mall Pty Ltd [2022] FedCFamC2G 354 at [56] per Judge Brown this Court explained that s 716 of the FW Act ought to be of assistance to an errant employer, and therefore when dealing with persons who have contravened s 716 of the FW Act it is necessary for the Court to “consider a significant penalty as a matter of both general and specific deterrence, given the interest the community has in ensuring that there is compliance with relevant legislation, and protecting the rights of employees to be paid what they are entitled”.
The efficacy of statutory notices such as compliance notices will be hindered if recipients perceive that a failure to comply carries no meaningful consequences. Given the importance of the power to issue a compliance notice as an enforcement tool available to Fair Work Inspectors, and that compliance with such notices avoids the need for litigation or the imposition of any penalties: Fair Work Ombudsman v Syndicate Group Pty Ltd [2015] FCCA 2847 at [27] per Judge Hartnett, penalties for non-compliance should be set at a level which demonstrates there are serious consequences for failing to comply with a compliance notice. In doing so, the Court will deter other parties from failing to comply with compliance notices.
Mr Anastasio operated in the automotive body, paint and interior repair industry (“Industry”). As set out in the FWO’s Industry profile for the period of July 2019 to December 2022, and young workers (15 to 25 years of age) accounted for 33% of completed disputes in the Industry: Higgins May 2023 Affidavit at [20]-[21]. Mr Hicks was a young worker: Higgins May 2023 Affidavit at MH-2, page 14 (Mr Hicks was 22 years of age when the underlying contraventions occurred). It has been recognised that there is a higher need for general deterrence in industries that attract young workers: Fair Work Ombudsman v Al Hilfi [2016] FCA 193 at [38] per Besanko J, in the context of young workers in the trolley collection industry. This supports the need for a penalty in this matter which will achieve the purpose of general deterrence.
In this case, it suffices to observe that the penalty to be set will need to be set at a level which having regard to the importance and relevance of general deterrence as a consideration, acts as a warning to other employers generally, and in the Industry particularly, not to engage in the conduct of contravening compliance notices.
Specific deterrence is directed at ensuring that a contravener is not prepared to embark upon the risk of engaging in the same contravening conduct in the future: Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128 at [50] per Gilmour J. In this matter, there is a need for specific deterrence because Mr Anastasio has demonstrated a disregard for his obligations under the FW Act and as an employer under Commonwealth workplace laws, and although Mr Anastasio appears to have divested himself of his business responsibilities it is still appropriate to have regard to the fact that he may re-engage in business in the future and that a penalty in this case might operate as a specific deterrent in relation to future conduct.
A penalty should therefore be fixed at a level which specifically deters Mr Anastasio from engaging in further contravening conduct in the future.
Nature and extent of loss
The failure to comply with a statutory notice gives rise to a significant public loss, because the FWO is required to bring proceedings before the Court to enforce compliance: Fair Work Ombudsman v Viper Industries Pty Ltd [2015] FCCA 492 at [42] per Judge Emmett. As was observed in Fair Work Ombudsman v Soma Kitchen Pty Ltd & Anor (No 2) [2020] FCCA 2583 at [39] per Judge Kendall, the loss occasioned by a failure to comply with a compliance notice is:
… the frustration and stultification of the statutory purpose behind s.716 of the Act. As noted above, the purpose of s.716 is to provide an alternative to litigation. That is, it is designed to prevent litigation. Litigation is timely and expensive. It is also not controversial that Court resources are limited and this Court actively promotes alternative resolution methods in order to reduce unnecessary expenditure. Here, that purpose has been systematically undermined.
The failure to comply with the Compliance Notice therefore results in it being necessary for the Commonwealth to fund the proceedings instituted by the FWO and the time and resources expended by this Court in hearing and determining the proceedings (albeit that ultimately both the facts and penalty are agreed). Compliance with the Compliance Notice by Mr Anastasio would have obviated those losses.
Mr Anastasio’s failure to comply with the Compliance Notice also occasioned a loss to the Employees, who were deprived of their entitlements for a considerable period of time.
In short, in the circumstances of this case, Mr Anastasio has done little until the last moment to alleviate the losses suffered by the Employees as a consequence of the contravening conduct, and save for his agreement with respect to facts and the quantum of penalty, little to remedy the losses suffered at an institutional level.
Size and financial resources of the contravener
It is well-established that, regardless of size and financial circumstances, an employer is not exculpated from contraventions of workplace laws: Fair Work Ombudsman v Hiyi Pty Ltd & Ors [2016] FCCA 1634 at [46] per Judge Jones; Fair Work Ombudsman v Rum Runner Pty Ltd & Anor [2018] FCCA 1129 at [102] per Judge Jones; Kelly at [28] per Tracey J. Size and financial circumstances may however be relevant considerations in determining penalty where appropriate evidence is put forward, but this needs to be weighed against the need for general deterrence: Fair Work Ombudsman v Althaus Homes Pty Ltd [2021] FCCA 126 at [35] per Judge Jarrett; Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 at [105]-[106] per Bromwich J. In other words, “capacity to pay is of less relevance than the objective of general deterrence”: Jordan v Mornington Inn Pty Ltd [2007] FCA 1384; (2007) 116 IR 33; (2007) 60 AILR 100-744 at [99] per Heerey J. As a statement of principle, this was described on appeal as “unimpeachable”: Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383; (2008) 171 IR 455; (2008) 247 ALR 714 at [69] per Stone and Buchanan JJ.
Mr Anastasio’s evidence, such as it is, would indicate that the business was not a large one, but there is no sufficient evidence to establish the financial position of the business that he conducted, nor is there any sufficient evidence of his own personal financial position. There is certainly no evidence which would indicate that he would be unable to pay an appropriate penalty, bearing in mind that the maximum penalty is only $6,660.
Cooperation and corrective action
The FWO acknowledges that Mr Anastasio has cooperated in these proceedings by making full admissions and thereby saving the Court’s and the FWO’s resources and time. At the time of hearing Mr Anastasio had only just paid the outstanding entitlements owed to the Employees. This Court has places more weight on cooperation which is meaningful, active or early: Fair Work Ombudsman v Pioneer Personnel Pty Ltd [2017] FCCA 3223 at [47] per Judge McNab; Fair Work Ombudsman v Mai Pty Ltd [2016] FCCA 1481 at [145] per Judge Jarrett; Fair Work Ombudsman v Metro Northern Enterprises Pty Ltd [2013] FCCA 1323 at [43] per Judge Barnes. It is fair to observe that in this case such cooperation as has been exhibited by Mr Anastasio has, it can be inferred, been brought about by the initiation of the proceedings by the FWO, and, more recently, by the imminence of the hearing of the matter in this Court.
Whether prior contraventions
There is no evidence that Mr Anastasio has a record of prior contraventions, and this is a fact which to some extent must ameliorate any penalty imposed, albeit within the primary context of the overriding requirement for appropriate deterrence.
APPROPRIATE PENALTY
The Court notes that pursuant to ss 539(2) – Item 33 and 546(2) of the FW Act, the maximum penalty that the Court may impose on Mr Anastasio for the admitted contravention is $6,660 (calculated on the basis of a penalty unit amount of $222 which applied at the time of the admitted contravention: FW Act, s 12, which provides that the penalty unit has the same meaning as s 4AA of the Crimes Act 1914 (Cth)).
The agreed penalty in this case ($3,330) is 50% of the maximum penalty. Having regard to all of the circumstances and the considerations in relation to penalty as set out above the Court is satisfied that that penalty is appropriate, and sufficient to operate to give rise to effective deterrence, both general and specific. It is also within a permissible range of likely possible penalties had the matter not been agreed, and is also a penalty to which the FWO as a regulatory body was prepared to agree.
CONCLUSION
For the above reasons the Court was satisfied that it was appropriate to make the declarations and orders made on 14 August 2023, which are set out at [4] above.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Lucev. Associate:
Dated: 11 September 2023
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