Fair Work Ombudsman v Big Daddy's Pty Ltd

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Federal Circuit and Family Court of Australia

(DIVISION 2)

Fair Work Ombudsman v Big Daddy’s Pty Ltd [2022] FedCFamC2G 786

File number(s): MLG 3345 of 2021
Judgment of: JUDGE LAING
Date of judgment: 23 September 2022
Catchwords: FAIR WORK – where the first respondent engaged in two contraventions of s 716(5) of the Fair Work Act 2009 (Cth) – where the second respondent was involved, within the meaning of s 550(2) of the Fair Work Act 2009 (Cth), in the first respondent's contraventions – appropriate penalties
Legislation: Fair Work Act 2009 (Cth) ss 3(b), 545(1), 546(1), 546(3)(a), 550(1), 550(2), 550(2)(c), 716(2), 716(5)
Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; 262 CLR 157

Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 399 ALR 599

Fair Work Ombudsman v Corinthian Capital Pty Ltd [2022] FedCFamC2G 309

Fair Work Ombudsman v Extrados Solutions Pty Ltd [2014] FCCA 815

Fair Work Ombudsman v Hess [2021] FCCA 1883

Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor (No.2) [2019] FCCA 2144

Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301; 275 IR 148

Fair Work Ombudsman v Schneider [2022] FedCFamC2G 478

Fair Work Ombudsman v Statewide Security (WA) Pty Ltd [2022] FedCFamC2G 194

Fair Work Ombudsman v Sun Sea Equity Pty Ltd [2021] FCCA 104

Fair Work Ombudsman v Tester [2021] FCCA 771

Fair Work Ombudsman v Upper East Side Bondi [2021] FedCFamC2G 354

Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290; (2016) 68 AILR ¶102–690

Mason v Harrington Corporation Pty Ltd [2007] FMCA 7

Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR 41-076
Division: Division 2 General Federal Law
Number of paragraphs: 61
Date of hearing: 18 August 2022
Place: Sydney
Solicitor for the Applicant Mr B. Adams (HWL Ebsworth) appeared in person
Counsel for the First and Second Respondents Mr J. McLean (Counsel) appeared in person
Solicitor for the First and Second Respondents Codex Lawyers

ORDERS

MLG 3345 of 2021

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

FAIR WORK OMBUDSMAN

Applicant
AND:

BIG DADDY'S PTY. LTD. (ACN 082 830 984)

First Respondent

ELIAS DANNAOUI

Second Respondent

order made by:

JUDGE LAING

DATE OF ORDER:

23 SEPTEMBER 2022

BY CONSENT, THE COURT DECLARES THAT:

1.The First Respondent engaged in two contraventions (Contraventions) of section 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with each of the two compliance notices given to it on 3 March 2021 (Compliance Notices), each of which related to one of its former employees, Mr Andres Plazas and Ms Marta Valencia.

2.The Second Respondent was involved, within the meaning of section 550(2) of the FW Act, in the First Respondent's Contraventions, and is taken by section 550(1) of the FW Act to also have committed the same Contraventions.

BY CONSENT, THE COURT ORDERS…

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Details
Case
[2022] FedCFamC2G 786
Decision Date

CaseChat Overview and Summary

Fair Work Ombudsman v Big Daddy's Pty Ltd concerned the contraventions of sections 716(5) and 550(2) of the Fair Work Act 2009 (Cth) by Big Daddy's Pty Ltd and its director, Mr. Dannaoui. The Fair Work Ombudsman (FWO) alleged that Big Daddy's did not pay its employees, Mr. Plazas and Ms. Valencia, the correct wages and entitlements as required under the Fast Food Industry Award 2010. This led to the issuance of Compliance Notices by the FWO, which Big Daddy's failed to comply with. The matter was brought before the court to determine the appropriate penalties for these contraventions.

The central legal issues involved the interpretation and application of sections 716(5) and 550(2) of the Fair Work Act. The court had to determine whether Big Daddy's had indeed contravened these provisions and, if so, what penalties should be imposed. Specifically, the court needed to consider whether a discount should be applied to the proposed penalties due to partial compliance or other mitigating factors.

The court considered the evidence and submissions from both parties. It noted that Big Daddy's did not comply with the Compliance Notices by failing to pay the required wages and entitlements to Mr. Plazas and Ms. Valencia. The court assessed the severity of the contraventions and the culpability of the parties involved. It took into account the totality of the contraventions and the need to deter future non-compliance. After evaluating the proposed penalties and any mitigating factors, the court decided that a penalty of $20,000 for Big Daddy's and $4,000 for Mr. Dannaoui was appropriate.

The final orders of the court included penalties of $20,000 for Big Daddy's and $4,000 for Mr. Dannaoui. The court also mandated that the parties' proposed orders be implemented, ensuring that the penalties were paid as determined.

Orders

Orders of the court

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Background

Background to the litigation

I say “at most” in relation to the respondent’s submissions because those submissions were filed prior to the hearing of this matter. At the hearing, there was some discussion regarding a discount proposed to be applied on account of certain payments having been made by Big Daddy’s. Over the course of the hearing, revised numbers were provided by the FWO in writing confirming that its proposed penalties were in the range described above. Whilst no such document was provided on behalf of the respondents, I had understood their Counsel to embrace a further discount to that effect being applied. Therefore, it may be fair to assume that the respondents contended that the amounts they had proposed (referred to in the paragraph above) should similarly be reduced. BACKGROUND The following factual summary is taken from the Agreed Facts which has been prepared by the parties. Big Daddy's operates a take away food outlet located in the food court of the Alfred Hospital, in Melbourne (the Business). Mr Dannaoui has been the sole director and company secretary of Big Daddy's since 1 June 1998. Following a request for assistance made to the FWO by Mr Andrew Plazas and Ms Marta Valencia on 17 December 2020, the FWO commenced an investigation into Big Daddy's (Investigation). As a result of the Investigation, the Fair Work Inspector involved formed a reasonable belief that Big Daddy’s had contravened various provisions of the Fast Food Industry Award 2010 (Award) by not paying amounts to which Mr Plazas and Ms Valencia were entitled. On this basis, two Compliance Notices were issued pursuant to s 716(2) of the FW Act on 3 March 2021. One was issued in relation to the contraventions concerning Mr Plazas (Plazas Contraventions). The other was issued in respect of contraventions concerning Ms Valencia (Valencia Contraventions). The Compliance Notices required Big Daddy's to:(a)take the following specified actions to remedy the direct effects of the Plazas Contraventions and the Valencia Contraventions by 28 April 2021 by (Specified Action):(i)calculating and paying Mr Plazas and Ms Valencia, as applicable, the difference between the amount they were paid and the amount they should have been paid in respect of each relevant entitlement; (ii)making a record of the information and amounts calculated under the Compliance Notices (Payment Information Schedules); and(iii)calculating and paying any additional superannuation contributions required by clause 21.2 of the Award in respect of the amounts owed to Mr Plazas and Ms Valencia; and(b)produce reasonable evidence to the FWO of its compliance with the Compliance Notices by 12 May 2021, by producing the Payment Information Schedules and proof that full payment was made to each of Mr Plazas and Ms Valencia as required. Big Daddy’s did not take the Specified Action set out in the Compliance Notices by 28 April 2021. Nor did it provide to the FWO reasonable evidence of compliance with the Compliance Notices by 12 May 2021.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The FWO proposed a “totality discount” of 10%. Overall, however, I have assessed fixing penalties in the amount of $20,000 in respect of Big Daddy’s and $4,000 in respect of Mr Dannaoui as appropriate. CONCLUSION I will make orders in accordance with those which have been proposed by the parties by consent. Additionally, I have determined that orders should be made specifying the quantum of penalties to be paid in accordance with my reasoning set out above.

Ratio Decidendi

Legal Principle Established

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