Fair Work Ombudsman v Ausinko Pty Ltd - [2018] FCCA 3524

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v AUSINKO PTY LTD & ORS

[2018] FCCA 3524

Catchwords:
INDUSTRIAL LAW – Commonwealth – Compliance and enforcement – Civil remedies – Pecuniary penalty orders – Assessing penalty – Deterrence.

INDUSTRIAL LAW – Commonwealth – Compliance and enforcement – Civil remedies – Pecuniary penalty orders – Amount of penalty – Course of conduct.

INDUSTRIAL LAW – Commonwealth – Compliance and enforcement – Civil remedies – Pecuniary penalty orders – Amount of penalty – Totality and proportionality.

Legislation:

Crimes Act 1914 (Cth), s.4AA
Evidence Act 1995 (Cth), s.191
Fair Work Act 2009 (Cth), ss.45, 325(1), 340(1), 536(1), 540(1), 541, 539(2), 550(1), 557, 557(1), 557(2)
Vehicle Manufacturing Repair Services And Retail Award 2010, cls.A.2.5, A.5.4, A.6.4, A.7.3, 41.1, 43.3, 43.4

Cases cited:

Commonwealth of Australia v Director Fair Work Building Industry Inspectorate (2015) 254 CLR 482
Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128
Fair Work Ombudsman v Amritsaria Four Pty Ltd & Anor [2016] FCCA 968
Fair Work Ombudsman v Australia Sales Pty Ltd [2016] FCCA 2804
Fair Work Ombudsman v Hiyi Pty Ltd [2016] FCCA 1634
Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd [2012] FMCA 258

Murrihy v Betezy.com.au Pty Ltd (No 2) (2013) 221 FCR 118

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

AUSINKO PTY LTD

Second Respondent:

RICHARD SANG KYUN KIM

Third Respondent:

CHAO LIU

File Number:

BRG 577 of 2016

Judgment of:

Judge Jarrett

Hearing date:

14 December 2016

Date of Last Submission:

14 December 2016

Delivered at:

Brisbane

Delivered on:

30 November 2018

REPRESENTATION

Counsel for the Applicant:

Mr Seck

Solicitors for the Applicant:

Office of the Fair Work Ombudsman

No appearance by the First Respondent

Counsel for the Second Respondent:

Mr Alexander

Solicitors for the Second Respondent:

Emmanuel Lawyers

Counsel for the Third Respondent:

Mr Curran

Solicitors for the Third Respondent:

DWF (Australia)

ORDERS

Within seven days hereof, the applicant bring in orders consistent with these reasons.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 577 of 2016

FAIR WORK OMBUDSMAN

Applicant

And

AUSINKO PTY LTD

First Respondent

RICHARD SANG KYUN KIM

Second Respondent

CHAO LIU

Third Respondent

REASONS FOR JUDGMENT

These reasons relate to the penalties to be imposed upon the second and third respondents because of their involvement in contraventions of the Fair Work Act 2009 (Cth) committed by the first respondent. The first respondent is now in liquidation and the applicant does not seek to proceed against it. The applicant does, however, seek to proceed against the second and third respondents who were, for the purposes of s.550(1) of the Fair Work Act, involved in the contraventions committed by the first respondent.
The second and third respondents raised as a preliminary matter, the standing of the applicant to apply for an order to give effect to a safety net contractual entitlement arising under a contract, rather than arising under a modern award. The issue arises in this case because as set out later in these…

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: [2018] FCCA 3524
Decision Date: 30 November 2018

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) brought proceedings against Ausinko Pty Ltd in the Federal Circuit and Family Court of Australia concerning alleged contraventions of the *Fair Work Act 2009* (Cth). The dispute centred on Ausinko's failure to comply with a number of enterprise agreements and awards, leading to underpayments of wages and entitlements to its employees. The FWO sought pecuniary penalty orders against the company.

The primary legal issue before Judge Jarrett was the appropriate assessment of pecuniary penalties for Ausinko's contraventions. This involved considering the nature and extent of the breaches, the company's conduct, and the need for deterrence, both specific to Ausinko and general to the wider employer community. The court was required to determine a penalty that was proportionate to the offending conduct and reflected the seriousness of the breaches.

In assessing the penalty, Judge Jarrett considered the totality of Ausinko's conduct, noting that the contraventions were not isolated incidents but rather a course of conduct that persisted over a significant period. The court applied principles of deterrence, emphasising that penalties must be sufficient to discourage future non-compliance by the employer and others in similar positions. The assessment also took into account the need for proportionality, ensuring that the penalty reflected the gravity of the breaches and the impact on the affected employees. The court ultimately ordered Ausinko Pty Ltd to pay a pecuniary penalty.

Orders