Fair Work Ombudsman v Back Your Cause Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Back Your Cause Pty Ltd [2023] FedCFamC2G 955

File number(s): BRG 178 of 2023
Judgment of: JUDGE VASTA
Date of judgment: 26 October 2023
Catchwords: INDUSTRIAL LAW – Contraventions of Fair Work Act 2009 (Cth) – pecuniary penalty – deterrence
Legislation: Fair Work Act2009 (Cth) s 546(1)
Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3

Australian Building and Construction Commissioner v Pattinson [2022] HCA 13

Mason v Harrington Corporation Proprietary Limited t/as Pangaea Restaurant & Bar [2007] FMCA 7

Division: Division 2 General Federal Law
Number of paragraphs: 33
Date of last submission/s: 4 September 2023
Date of hearing: In Chambers on the papers
Solicitor for the Applicant: Clayton Utz
Counsel for the Respondents: The Respondents did not provide submissions
Table of Corrections
30 October 2023 In Order 2, the words “to the Commonwealth” have been inserted between the words “penalty” and “for”

ORDERS

BRG 178 of 2023

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

FAIR WORK OMBUDSMAN

Applicant
AND:

BACK YOUR CAUSE PTY LTD ACN 604 344 24

First Respondent

AARON MURRAY

Second Respondent

ORDER MADE BY:

JUDGE VASTA

DATE OF ORDER:

26 OCTOBER 2023 AMENDED ORDER 30 OCTOBER 2023

THE COURT ORDERS THAT:

1.Pursuant to s. 546(1) of the Fair Work Act 2009 (Cth) (“FW Act”), the First Respondent pay a pecuniary penalty to the Commonwealth for the contravention in Declaration A of orders dated 7 August 2023 in the sum of $25,000, within 28 days of this order.

2.Pursuant to s. 546(1) of the FW Act, the Second Respondent pay a pecuniary penalty to the Commonwealth for the contravention in Declaration B of orders dated 7 August 2023 in the sum of $5,000, within 28 days of this order.

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

Notation: Order has been amended pursuant to Rule r.17.05(2)(h) Federal Circuit and Family Court (Division 2)(General Federal Law) Rules 2021 to add “to the Commonwealth” in order 2.

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 VASTA

INTRODUCTION

  1. On 20 April 2023, the applicant, Fair Work Ombudsman (“FWO”) asked this Court to make declarations against the first respondent, Back Your Cause Pty Ltd, and the second respondent, Aaron Murray, in that the first respondent and second respondent had contravened the Fair Work Act2009 (Cth) (“FW Act”). The applicant also…

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Details
Case
[2023] FedCFamC2G 955
Decision Date

CaseChat Overview and Summary

The case of Fair Work Ombudsman v Back Your Cause Pty Ltd involved a dispute where the Fair Work Ombudsman (FWO) alleged that the respondents, Back Your Cause Pty Ltd and its general manager, contravened the Fair Work Act 2009 (Cth) by underpaying an employee. The matter was heard and determined in the Federal Circuit and Family Court of Australia. The FWO sought a pecuniary penalty against the respondents for the underpayment of the employee’s wages and annual leave entitlements.

The central legal issues before the court were whether the respondents had contravened the Fair Work Act 2009 (Cth) by failing to pay the employee her entitled wages and annual leave, and if so, what the appropriate pecuniary penalty should be. The court had to consider the nature and extent of the contraventions, the respondents’ conduct, and the principles of deterrence and proportionality in determining the penalty. The court also had to assess whether the respondents had treated the compliance notice with contempt and whether this warranted a stronger deterrent message.

In its decision, the court found that the respondents had indeed contravened the Fair Work Act 2009 (Cth) by not paying the employee her entitled wages and annual leave. The court noted that the respondents failed to comply with the compliance notice, treating it with contempt by providing irrelevant pay slips instead of evidence of actual payments. The court emphasised that this conduct required a strong deterrent message. Applying the principles of deterrence and proportionality, the court ordered a pecuniary penalty of $25,000 against the company and $5,000 against the general manager. The court concluded that these penalties were appropriate to ensure compliance with the Fair Work Act 2009 (Cth) and to deter future contraventions.

Orders

Orders of the court

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Background

Background to the litigation

I have now considered all the material and will give my reasons as to what I consider to be the appropriate order.Background The first respondent is a company that has been incorporated since 2015. Its business is providing recruitment services for client companies. The second respondent is the general manager of the first respondent and is a person with the responsibility for the operation, management, and control of the first respondent. In effect, the second respondent is the controlling mind of the first respondent. Ms Deborah Zink (“the employee”) began working for the first respondent on 27 July 2020. She finished working for the first respondent on 17 November 2021. After her employment ceased, the employee contacted the applicant asking for assistance with respect to, what she believed to be, underpayments.The investigation On 21 June 2022, the applicant commenced an investigation in relation to the employment of the employee. The investigation found that the employee was engaged on a full-time basis as a Business Development Manager. It was determined that there was no award that actually applied in relation to her employment and thus, the employee was entitled to the national minimum wage. The investigation found that the employee still had some accrued, but untaken, annual leave when she ceased employment. It was determined that she was not paid that entitlement when her employment ended. It was also found that, for the period 18 October 2021 until her termination date (17 November 2021), the employee was not paid the minimum wage.The Compliance Notice On 11 July 2022, the first respondent was served with a compliance notice. The compliance notice required the first respondent to remedy the effects of the contraventions. It required the first respondent to identify the number of hours of untaken annual leave, identify what the first respondent had paid the employee, to pay the employee what was owed and to make a record of that payment. The notice also required the first respondent to identify the number of hours that the employee worked during the period from 18 October 2021 until 17 November 2021, identify what had been paid to the employee, pay the employee what was owed and to make a record of such payment. The notice required the first respondent to have completed those tasks by 8 August 2022 and to then produce reasonable evidence to the applicant of such compliance by 15 August 2022. The first respondent failed to comply with the compliance notice. The only action that the first respondent took was to email pay slips to the applicant. However, those pay slips did not provide evidence of what was actually owed to the employee and the payslips were not evidence that there was actually any payment made in accordance with those payslips. The calculations performed by the applicant showed that the employee had 123.58 hours of untaken accrued annual leave at the cessation of her employment. She was entitled to a base rate pay of $36.44 per hour for that annual leave. Those calculations also showed that the employee had worked for 232.5 hours prior to her termination date in which she was not paid wages. She was entitled to a minimum hourly rate of $20.33 for that time.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The fact that the first respondent, and the second respondent, have treated the compliance notice with contempt is a factor where the Court must send a very strong deterrent message.Conclusion and orders In keeping with the principles that have been espoused by the High Court, I have concluded that a pecuniary penalty against the first respondent of $25,000 is warranted. I have concluded that a pecuniary penalty against the second respondent of $5000 is warranted. I will make orders in those terms.

Ratio Decidendi

Legal Principle Established

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