Fair Work Ombudsman v Bean Away Pty Ltd
[2022] FedCFamC2G 887
Federal Circuit and Family Court of Australia
(DIVISION 2)
Fair Work Ombudsman v Bean Away Pty Ltd [2022] FedCFamC2G 887
File number(s): BRG 95 of 2022 Judgment of: JUDGE VASTA Date of judgment: 27 October 2022 Catchwords: INDUSTRIAL LAW – breach of the Fair Work Act 2009 (Cth) – employer not paying out entitlements – assessment of pecuniary penalties – agreed penalties ordered Legislation: Fair Work Act 2009 (Cth): s 117(2)(b), s 550(2), s 716(5) 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: 19 Date of last submission/s: 29 September 2022 Date of hearing: In Chambers Place: Brisbane Solicitor for the Applicant: Fair Work Ombudsman Solicitor for the Respondents: Nyst Legal ORDERS
BRG 95 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: BEAN AWAY PTY LTD (ACN 152 362 199)
First Respondent
GREGORY MATTHEW
Second Respondent
order made by:
JUDGE VASTA
DATE OF ORDER:
27 OCTOBER 2022
THE COURT DECLARES THAT:
A.The First Respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the Compliance Notice issued on 1 September 2021.
B.The Second Respondent was involved, within the meaning of s 550(2) of the FW Act, in the contravention by the First Respondent of s 716(5) of the FW Act at paragraph A above.
THE COURT ORDERS THAT:
1.The penalty hearing listed for 2:15pm on 26 October 2022 be vacated.
BY CONSENT THE COURT ORDERS THAT:
2.Pursuant to section 546(1) of the FW Act:
(a)the First Respondent pay pecuniary penalties of $11,988.00 in respect of the contraventions declared in A above;
(b)the Second Respondent pay pecuniary penalties of $1,998.00 for his involvement in the contraventions declared in B above;
(c)all pecuniary penalties be paid within 28 days to the Consolidated Revenue Fund of the Commonwealth.
3.The Applicant have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
THE COURT NOTES:
A.The parties consent to the matter being determined without oral submissions, on the basis of the filed material.
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
The employee, Cheryl Homewood, was employed by the First Respondent, Bean Away Pty Ltd, from 18 February 2019 to 11 March 2021 in three different capacities. From 18 February 2019 to 26 July 2019, the employee was employed on a casual basis. From 27 July 2019 to 2 February 2020, she was employed on a part-time basis and from February 2020 to 11 March 2021, she was employed on a full-time basis. The guiding mind of the First Respondent was the Second Respondent, Gregory Michael Matthew.
The employment of the employee was terminated on 11 March 2021 and she was paid her entitlements. However, she had not been given adequate notice nor her proper payment in lieu of notice given to her.
The employee asked the Applicant, Fair Work Ombudsman (“FWO”) for assistance.
The Investigation
The complaint of the employee was investigated by a Fair Work Inspector. The Inspector determined that there had been a contravention of s 117(2)(b) of the Fair Work Act 2009 (Cth) by failing to pay the employee her full payment in lieu of notice entitlement.
On 1 September 2021, the Inspector served the First Respondent with a compliance notice in respect of this contravention. The notice required the First Respondent to take action to remedy the effects of the contravention and to rectify the underpayment. The First Respondent had until 29 September 2021 to comply with the notice, and until 6 October 2021 to produce reasonable evidence of that compliance to the FWO.
The First Respondent did not comply, in any way, with the compliance notice by those dates. The First Respondent did not query or ask for a review of the compliance notice. There were no reasonable excuses for failing to comply with the compliance notice.
Aftermath
This meant that the First Respondent had contravened s 716(5) of the FW Act and that the Second Respondent was involved, within the meaning of s 550(2) of the FW Act in the contravention by the First Respondent of s 716(5) of the FW Act.
On 7 March 2022, the Applicant commenced these proceedings against the First and Second Respondents for failing to comply with the compliance notice.
On 12 June 2022, the First Respondent made a payment of $2,153.84 to the employee and provided the FWO with reasonable evidence of the payment. This means that there is no amount outstanding and payable by the First Respondent to the employee in respect of the compliance notice.
Nevertheless, the First Respondent and the Second Respondent contravened the FW Act and it is for this Court to now assess the appropriate pecuniary penalties.
Assessment of pecuniary penalties
The law in relation to assessment of pecuniary penalties has really been laid down quite comprehensively. The High Court, in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3, said, at paragraph 116 of that judgment:
As has been observed, the principal object of an order that a person pay a pecuniary penalty under s 546 is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners. According to orthodox sentencing conceptions as they apply to the imposition of civil pecuniary penalties, specific deterrence inheres in the sting or burden which the penalty imposes on the contravener. Other things being equal, it is assumed that the greater the sting or burden of the penalty, the more likely it will be that the contravener will seek to avoid the risk of subjection to further penalties and thus the more likely it will be that the contravener is deterred from further contraventions; likewise, the more potent will be the example that the penalty sets for other would-be contraveners and therefore the greater the penalty's general deterrent effect. Conversely, the less the sting or burden that a penalty imposes on a contravener, the less likely it will be that the contravener is deterred from further contraventions and the less the general deterrent effect of the penalty. Ultimately, if a penalty is devoid of sting or burden, it may not have much, if any, specific or general deterrent effect, and so it will be unlikely, or at least less likely, to achieve the specific and general deterrent effects that are the raison d'être of its imposition.
The High Court reaffirmed that principle very recently in the matter of Australian Building and Construction Commissioner v Pattinson [2022] HCA 13. The High Court said, at paragraph 46:
[46]It is important to recall that an “appropriate” penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case. …
[47]The penalty that is appropriate to protect the public interest by deterring future contraventions of the Act may also be moderated by taking into account other factors … where those responsible for a contravention of the Act express genuine remorse for the contravention, it might be considered appropriate to impose only a moderate penalty because no more would be necessary to incentivise the contravenors to remain mindful of their remorse and their public expressions of that remorse to the court. Similarly, where the occasion in which a contravention occurred is unlikely to arise in the future because of changes in the membership of an industrial organisation, a modest penalty may be appropriate having regard to the reduced risk of future contraventions.
[48]It is not necessary to multiply examples further. It is sufficient to say that a court empowered by section 546 to impose an “appropriate” penalty must act fairly and reasonably for the purpose of protecting the public interest by deterring future contraventions of the Act.
In Mason v Harrington Corporation Proprietary Limited t/as Pangaea Restaurant & Bar [2007] FMCA 7, which is known as the Pangaea case, the Court went through, in effect, a number of factors the Court should be mindful of when imposing pecuniary penalties. One must be careful, though, in looking at the Pangaea case (Supra), that one does not simply look at those matters as some form of checklist to see whether or not the facts of the case with the particular factors either aggravate or mitigate the penalty. As such, the list compiled in Pangaea (Supra) is extremely useful, but it should not be a formula used by the Court to slavishly come up with some sort of almost mathematical guide for the imposition of penalties.
Notwithstanding what the High Court has said in Pattinson (supra), the factors listed in the Pangaea case (supra) are still matters for the court to take into consideration.
Discussion
Deterrence, both specific and general, looms large in this matter. The Court must strike a balance to deter the nonchalant and dismissive behaviour of the Respondents without imposing an oppressive penalty.
In this case, there has been a great deal of cooperation. The FWO did not ever prepare for a trial and the Respondents paid the outstanding money to the employee soon after these proceedings commenced. The business of the First Respondent is to be sold and the Second Respondent does not have any present inclination to begin another business.
The FWO have accepted that the remorse and contrition of the Second Respondent (and therefore the First Respondent) is genuine.
The most telling aspect of the cooperation is that the parties have agreed to the penalties that ought be imposed. Those penalties are $11,988.00 in respect of the First Respondent and $1,998,00 for the Second Respondent.
Conclusion
Having regard to all of the matters before me, I am satisfied that these penalties are appropriate. I will make the orders that the parties have asked me to make.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Vasta. Associate:
Dated: 27 October 2022
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