Fair Work Ombudsman v Azman

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Azman [2022] FedCFamC2G 198

File number(s): SYG 1860 of 2021
Judgment of: JUDGE MANOUSARIDIS
Date of judgment: 25 March 2022
Catchwords: INDUSTRIAL LAW – assessment of pecuniary penalty for admitted contravention of s 716(5) of the Fair Work Act 2009 (Cth).
Legislation:

Crimes Act 1914 (Cth) s 4AA

Fair Work Act 2009 (Cth) ss 90(2), 539(1), 539(2), 546, 557A, 700, 716(2), 716(5), 717

Timber Industry Award 2010 cls 17.2, 26.2, 30.1(a)
Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563

Bevis v VA Holdings Pty Ltd trading as Granton Homes & Ors [2020] FCCA 2082

Fair Work Ombudsman v Viper Industries Pty Ltd [2015] FCCA 492

Fair Work Ombudsman v VS Investment Group Pty Ltd [2013] FCCA 208

Kelly v Fitzpatrick [2007] FCA 1080

Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Division: Fair Work
Number of paragraphs: 35
Date of hearing: 15 March 2022
Place: Sydney
Solicitor for the Applicant: Ms C Leach of the Office of the Fair Work Ombudsman, by video
Solicitor for the Respondent: Mr J O’Shaughnessy of Wright Law ILP, by video

ORDERS

SYG 1860 of 2021

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

FAIR WORK OMBUDSMAN

Applicant
AND:

RAMAZAN AZMAN

Respondent

ORDER MADE BY:

JUDGE MANOUSARIDIS

DATE OF ORDER:

25 MARCH 2022

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 a compliance notice given to the respondent on 25 March 2021 pursuant to s 716(2) of the FW Act.

THE COURT ORDERS THAT:

2.Pursuant to s 546(1) of the FW Act the respondent pay a pecuniary penalty in the sum of $2,664 in relation to the contravention identified in declaration 1.

3.The respondent pay the pecuniary penalty referred to in order 2 to the Commonwealth by 22 April 2022.

4.The parties have liberty to apply within 7 days’ notice in relation to any question that may arise concerning the implementation of these orders.

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

  1. The applicant (FWO) applies under s 546 of the Fair Work Act 2009 (Cth) (FW Act) for an order that the respondent, Mr Azman, pay a pecuniary penalty because of his admitted contravention of s 716(5) of the FW Act. The FWO also claims a declaration that reflects Mr Azman’s admitted contravention of the FW Act.

  2. I will…

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Details
Case
[2022] FedCFamC2G 198
Decision Date

CaseChat Overview and Summary

In the matter of Fair Work Ombudsman v Azman, the Fair Work Ombudsman (FWO) brought proceedings against Mr. Azman, a sole trader operating a kitchen manufacturing and installation business in New South Wales, for non-compliance with the Fair Work Act 2009 (FW Act) and the Timber Industry Award 2010. The FWO alleged that Mr. Azman failed to provide his employee, Mr. Yucel Gungor, with appropriate wages and superannuation contributions, and subsequently did not comply with a Compliance Notice issued by the FWO. Mr. Azman admitted to the contraventions and has since made full payment to the affected employee. The court was tasked with determining the appropriate penalty for Mr. Azman's contravention of section 716(5) of the FW Act, considering factors such as contrition, corrective action, and cooperation.

The legal issues before the court involved assessing the appropriate penalty for Mr. Azman's contravention of the FW Act and deciding whether a discount should be applied based on his admissions, cooperation, and steps taken to rectify the situation. The court considered the seriousness of the contravention, the delay in payment, and the measures taken by Mr. Azman to rectify the situation and prevent future issues. The FWO argued for a mid to high range penalty with a 20% discount, while Mr. Azman's solicitor noted the court's discretion to reduce the penalty based on admissions and cooperation.

The court accepted the FWO's submission for a 20% discount on account of Mr. Azman's admissions and cooperation. After considering all relevant factors, the court assessed the penalty at 50% of the maximum amount, which was $3,330. Applying a 20% discount, the court ordered Mr. Azman to pay a pecuniary penalty of $2,664 to the Commonwealth within 28 days of the pronouncement of orders. The court made a declaration that Mr. Azman contravened section 716(5) of the FW Act and ordered the payment of the penalty.

Orders

Orders of the court

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Background

Background to the litigation

I will begin by setting out the relevant admitted facts,[1] the provision of the FW Act Mr Azman admits he contravened, and the contraventions themselves. [1] These are contained in a Statement of Agreed Facts filed on 26 November 2021ADMITTED FACTS AND CONTRAVENTIONS Mr Azman is and was at all relevant times a sole trader holding an Australian Business Number and operating a kitchen manufacturing and installation business trading as “Award Kitchens” in New South Wales. At all relevant times Mr Azman was required to comply with the FW Act in relation to his employees. In or around December 2020, the FWO commenced an investigation into Mr Azman’s compliance with Commonwealth workplace laws after receiving a request for assistance from Mr Yucel Gungor (Employee) on or around 3 December 2020. At all relevant times, Mr Meehan, a Fair Work Inspector appointed under s 700 of the FW Act, had carriage of the investigation. As a result of the investigation, Mr Meehan formed the belief that: the Employee was employed by Mr Azman in the period 9 July 2018 to 6 August 2020 (Employment Period); the Timber Industry Award 2010 (Award) covered and applied to the Employee’s employment; the Employee worked full-time; the Employee was entitled to be classified as a “Level 1 Timber Furniture Production Employee”; the Employee was paid flat hourly rates of pay, which did not meet his minimum hourly rate or overtime entitlements; and at the end of the Employment Period, the Employee was not paid anything by Mr Azman for his accrued untaken annual leave. Because of the matters referred to in paragraph 5, Mr Meehan formed a reasonable belief that Mr Azman contravened cl 17.2 of the Award, cl 30.1(a) of the Award, and s 90(2) of the FW Act (Contraventions). Compliance Notice On 25 March 2021, Mr Meehan gave a notice to Mr Azman pursuant to s 716(2) of the FW Act (Compliance Notice). The Compliance Notice was sent via express post to Mr Azman’s last known business address. The Compliance Notice required Mr Azman to: (a)take action (Specified Action) to remedy the direct effects of the Contraventions by 30 April 2021 by: (i)calculating and paying to the Employee the amounts owing in respect of the Contraventions; (ii)in respect of the amounts paid to the Employee in compliance with the Compliance Notice, calculating additional superannuation contributions required by cl 26.2 of the Award and paying such contributions to the Employee’s superannuation fund; and(b)produce to the FWO reasonable evidence of the steps taken by Mr Azman to comply with the Compliance Notice by 7 May 2021, including:(i)details of Mr Azman’s calculations; and (ii)proof of full payment of the amounts described in paragraph 9(a)(i) and 9(a)(ii) above. Mr Azman admits that he failed to take the Specified Action by 30 April 2021, and he failed to produce evidence of compliance with the Compliance Notice by 7 May 2021. Mr Azman admits that, because of the matters referred to in paragraphs 5 to 10 above, he failed to comply with the Compliance Notice, and for that reason contravened s 716(5) of the FW Act. Rectification of underpayment

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The Employee was entitled to be paid $21,026.27, and superannuation contributions of $1,030.79. Mr Azman, however, has paid the amount in full. The FWO submits that the delay in the Employee receiving his wages and the significance of the entitlements is a relevant loss flowing from Mr Azman’s contravention.[15] These amounts are significant, and the delay in Ms Azman paying the Employee the amounts due to him constitute a significant loss. [15] Applicant’s Submissions on Penalty, [41]Contrition, corrective action, and cooperation Mr Azman admitted his contravention and, as I have noted, Mr Azman has paid the amount owing to the Employee, although he did not pay all of the amounts he owed to the Employee until after the FWO commenced this proceeding. In his affidavit Mr Azman says he has consulted with his “accountant and [his] legal representative” and has “taken steps to prevent any future issues from arising”.[16][16] Affidavit of Mr Azman 09.02.2022, [13] The FWO submits that Mr Azman should be afforded a 20% discount on account of his admissions and cooperation. I accept the FWO’s submission.Assessment The FWO submits that, it would be appropriate to impose mid to high range penalties (60%-70%) with a discount of 20% for Mr Azman’s admitted contravention of s 716(5) of the FW Act. Mr Azman’s solicitor notes that the Court has the discretion to reduce the penalty to be ordered if a person admits the contraventions and cooperates with the Court process. In my opinion, it would be appropriate to assess penalty at 50% of the maximum amount ($3,330) and apply to that a 20% discount ($2,664).DISPOSITION I will make a declaration that Mr Azman contravened s 716(5) of the FW Act; and I will order that Mr Azman pay a pecuniary penalty in the amount of $2,664 to the Commonwealth within 28 days after the day on which I pronounce my orders.