Fair Work Ombudsman v Beil

Case [2022] FedCFamC2G 737

Federal Circuit and Family Court of Australia

(DIVISION 2)

Fair Work Ombudsman v Beil [2022] FedCFamC2G 737   

File number(s): BRG485/2021
Judgment of: JUDGE TONKIN
Date of judgment: 5 September 2022
Catchwords:  INDUSTRIAL LAW –Appropriate civil penalties to be paid by the Respondents pursuant to section 546 of the Fair Work Act 2009 (Cth).
Legislation:

 Crimes Act1914 (Cth)

Fair Work Act 2009 (Cth)

Fair Work Regulations 2009

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021
Cases cited:

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

Carr v CEPU [2007] FMCA 1526

Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Anor [2015] 258 CLR 482

CPSU, The Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228

Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 407

Fair Work Ombudsman v Blu Hornsby Pty Ltd [2016] FCCA 1150

Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557

Fair Work Ombudsman v Jetstar Airways Ltd [2014] FCA 33

Fair Work Ombudsman v NSH North Pty Ltd [2017] FCA 1301

Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70

Ponzio v B&P Caelli Constructions Pty Ltd (2007) 158 FCR 543
Division: Division 2 General Federal Law
Number of paragraphs: 53
Date of hearing: 5 September 2022
Place: Brisbane
Solicitor for the Applicant: Office of the Fair Work Ombudsman
Solicitor for the Applicant: No Appearance made by the Respondent

ORDERS

BRG485/2021

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

FAIR WORK OMBUDSMAN

Applicant
AND:

ALLAN JAMES BEIL

First Respondent

BROOKE BEIL

Second Respondent

order made by:

JUDGE TONKIN

DATE OF ORDER:

5 SEPTEMBER 2022

THE COURT DECLARES:

1.The first respondent Allan James Beil contravened:

(a)Section 716 (5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the compliance notice issued by Fair Work Inspector Adam Corn on 6 July 2021;

(b)Section 536 (1) of the FW Act by failing to give pay slips to Ms Clews within one working day of paying amounts to her in relation to the performance of her work.

2.The second respondent Brooke Beil was involved within the meaning of section 550 (2) of the FW Act in the contravention by Allan Beil of section 536 (1) of the FW Act.

THE COURT ORDERS:

3.Pursuant to section 545 (1) of the FW Act Mr Beil take the steps that were required by the Compliance Notice within 28 days from the date of this order by:

(a)Calculating and paying the outstanding entitlements to Ms Clews including any superannuation; and

(b)Preparing and producing to the applicant a schedule outlining its calculations of the outstanding entitlements required to be paid to Ms Clews and providing proof that the outstanding entitlements were rectified.

4.Pursuant to section 547 (2) of the FW Act Mr Beil pay to Ms Clews interest on the amounts owed to her…

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AGLC
Fair Work Ombudsman v Beil [2022] FedCFamC2G 737
Case
[2022] FedCFamC2G 737
Decision Date

CaseChat Overview and Summary

The case of Fair Work Ombudsman v Beil involves the Fair Work Ombudsman (FWO) taking legal action against Mr. Beil and Ms. Beil for contravening various provisions of the Fair Work Act 2009 and the General Industry Retail Award 2010. The FWO alleged that Mr. Beil underpaid Ms. Clews, who worked at Woolshed Bakery in Tara, Queensland, for night shift allowances and weekend shift penalty rates during her employment from March 6 to May 6, 2020. Furthermore, Mr. Beil was accused of failing to comply with a Compliance Notice issued by the FWO in July 2021. The primary legal issues in this case were whether Mr. and Ms. Beil contravened the mentioned provisions and, if so, what penalties should be imposed. The court had to consider the principles of deterrence, proportionality, and totality when determining the appropriate penalties.

The court examined the contraventions separately and then considered whether they should be aggregated. The court found that the contraventions arising from the underpayment and the failure to comply with the Compliance Notice should be treated as a single contravention for penalty purposes. The court also considered the appropriate penalty range proposed by the FWO, taking into account the nature and circumstances of the contraventions, and ensuring that the penalties imposed were proportionate and served the purpose of deterrence. The court concluded that the penalties proposed by the FWO were appropriate and proportionate to the conduct of the respondents.

In conclusion, the court found that Mr. Beil contravened the provisions of the General Industry Retail Award 2010 and failed to comply with the Compliance Notice. The court imposed a penalty of $8,057 on Mr. Beil and a penalty of $3,776 on Ms. Beil. The court based its decision on the principles of deterrence, proportionality, and totality and considered the submissions of the FWO and the agreed statement of facts. The penalties imposed by the court are intended to promote compliance with the minimum standards to which all national employers and award-covered employees are entitled.

Orders

Orders of the court

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Background

Background to the litigation

The FWO relied on the Court Book filed on 1 August 2022 which included:(a)Agreed Statement of Facts of 15 March 2022;(b)Applicant filed 28 October 2021;(c)Statement of Claim filed 28 October 2021; (d)Affidavit of Adam Charles Douglas Corn filed 5 May 2022 and(e)Applicant’s submissions on penalty filed 5 May 2022. Background Mr Beil employed Ms Clews to work in the business from 6 March 2020 to 4 May 2020 (Contravention period).[6] [6] SOAF 6 In about September 2020 an investigation into Mr Beil commenced in respect of Ms Clews employment.[7][7] SOAF 8; Affidavit of Mr Corn [5], [7] and Annexure AC2 On 30 November 2020 an Infringement Notice dated 27 November 2020 was issued to Mr Beil for his failure to issue pay slips to Ms Clews, under section 536(1) of the FW Act.[8][8] Affidavit of Mr Corn [11] Annexure AC5 Mr Beil failed to pay the penalty amount specified in the Infringement Notice by 4 January 2021 the due date.[9] The Infringement Notice was later withdrawn when the FWO commenced proceedings against Mr Beil for contravening section 536(1) of the FW Act.[9] Affidavit of Mr Corn [12] Mr Beil was originally put on notice regarding matters contained in the Compliance Notice issued in July 2021 by way of two earlier Compliance Notices issued to Mr Beil on 30 November 2020 and 9 April 2021 by Fair Work Inspector Margot Pidgeon.[10] The initial Compliance Notices were withdrawn by the FWO due to administrative errors. The FWO contends that Mr Beil’s failure to comply with two earlier notices is relevant.[11][10] Affidavit of Mr Corn [11] and [17] Annexure AC5 and AC10[11] Affidavit of Mr Corn [12] and [18] On 6 July 2021, FW Inspector Corn in July 2021 issued Mr Beil with a Compliance Notice.[12] Before doing so, FW Inspector Corn formed a reasonable belief that, during the Contravention Period, Mr Beil had contravened various provisions of the General Industry Retail Award 2010 (“Award”) in respect of Ms Clews, by underpaying her the payment of night shift allowance and weekend shift work penalty rates for casual baking production employees.[13] [12] SOAF 11; Affidavit of Mr Corn [22] Annexure AC 13[13] SOAF 9; Affidavit of Mr Corn [22] The Compliance Notice was personally served on Mr Beil by a process server, who left a copy of the Notice with an employee of Mr Beil at his business 38 Day Street, Tara Queensland.[14] The Notice required Mr Beil to rectify alleged contraventions by 10 August 2021 and provide proof of doing so to the FWO by 17 August 2021. Mr Beil did not take either of those steps by the due dates.[15] [14] SOAF 12; Affidavit of Mr Corn [23] [15] SOAF 15; Affidavit of Mr Corn [25] On 18 August 2021 the applicant sent correspondence to Mr Beil headed “Failure to Comply with Compliance Notice”.[16] [16] Affidavit of Mr Corn [26]; Annexure AC15 On 1 September 2021 the applicant sent Mr Beil correspondence headed “Final Opportunity to Rectify Non-Compliance with the Compliance Notice”.[17][17] Affidavit of Mr Corn [28]; Annexure AC17

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Ms Beil admitted to being involved in Mr Beil’s contravention of section 536 of the FW Act. Ms Beil had actual or apparent responsibility for the operation, management and control of the Business, and for ensuring that Mr Beil complied with his legal obligations under the FW Act.[46] Ms Beil did not appear at the hearing of the matter listed on 3 August 2022 however she provided the FWO’s solicitor an explanation that she had suffered a recent bereavement as the reason she did not appear at the hearing of the matter. [46] SOAF 5Conclusion as to penalty The imposition of a penalty under the FW Act is designed fundamentally to serve the public interest in acting as a deterrent to employers such as the Respondents from engaging in the offending conduct. Finkelstein J in CPSU, The Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228; [2001] FCA 1364 at [25]- [28] said:it cannot be doubted that employer and employee organisations play a legitimate and important role in seeing that there is compliance with the provisions of the Workplace Relations Act…an individual employee will rarely have the ability to fund a proceeding for a contravention. If unions do not bring such proceedings, contraventions will go unpunished. Given the failure of the respondents to take any further steps following their admissions regarding contraventions had the FWO not brought these proceedings it is likely the Respondents would have gone unpunished. The ability of an individual to bring proceedings in circumstances where an employee has been significantly underpaid acts as a deterrent to employers contemplating ignoring the requirements of the FW Act and applicable Awards are a reminder that should an employer fail to comply with the FW Act they risk incurring a pecuniary penalty. With respect to penalty the High Court said “what is required is that there be ‘some reasonable relationship between the theoretical maximum and the final penalty imposed. That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of section 546: the deterrence of future contraventions of a like kind by the contravenor and by others.” The FWO provided the Table below to support the range contended for: With respect to the contravention by Mr Beil of section 716 (5) of the FW Act where the maximum penalty is $6600 I am satisfied that an appropriate penalty is 65% of the maximum or $4290. With respect to the contravention of section 536 I am satisfied that the appropriate penalty is 35% of the maximum of $13,320 being $4196. The total amount $8952 I discount by 10% due to the early admission by Mr Beil where he conceded liability and impose a penalty of $8057. With respect to the contravention by Ms Beil of section 536 I am satisfied that the appropriate penalty is 35% of the maximum of $13,320 being $4196. I discount that amount by 10% as she too conceded liability and impose a penalty of $3776.

Ratio Decidendi

Legal Principle Established

The applicant sought a penalty at a meaningful level to promote compliance with the minimum standards to which all national employers and Award covered employees are entitled. While any penalty imposed by the Court must strike a reasonable balance between deterrence and oppressive severity the applicant argued the appropriate range of $7,160.40 to $8,953.20 for Mr Beil and $3,596.40 to $4,795.20 for Ms Beil, as calculated were penalties proportionate to the conduct of the respondents and the circumstances of the case and achieve the required balance.Consideration In Fair Work Ombudsman v NSH North Pty Ltd [2017] FCA 1301 at [36], Bromwich J summarised the approach to be taken when determining an appropriate penalty:(1) Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.(2) Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.(3) Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.(4) Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.(5) Consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO (as permitted by Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (CFMEU Civil Penalties Case) at [64]) and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary: See Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14 at [30]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560 at [23]. [71] and [102]. In Carr v CEPU [2007] FMCA 1526 where the parties had agreed on penalty the Court observed at [6]: (a)the Court bears the ultimate responsibility for penalty, is not bound by the parties agreement and must consider for itself what constitutes an appropriate penalty;(b)determining the quantum of an appropriate penalty is not an exact science and within a permissible range a particular figure is not necessarily more appropriate than another figure;…(e)in determining an appropriate penalty the Court will examine all the circumstances including an agreed statement of facts and if appropriate may act on that statement… I adopt the submissions of the FWO as discussed above. Mr Beil contravened the provisions of the General Industry Retail Award 2010 (“Award”) in respect of Ms Clews who worked in Woolshed Bakery in Tara, Queensland between 6 March and 6 May 2020 by underpaying her the payment of night shift allowance and weekend shift work penalty rates for casual baking production employees.[45] In addition Mr Beil admitted contravening section 716 (5) in failing to comply with the Compliance Notice issued in July 2021. I am satisfied that the two contraventions should be taken as a single contravention with respect to the imposition of penalty. [45] SOAF 9; Affidavit of Mr Corn [22]