Fair Work Ombudsman v Chevron Island Tavern Pty Ltd

The Fair Work Ombudsman (the applicant) brought proceedings against Chevron Island Tavern Pty Ltd (the respondent) in the Federal Circuit and Family Court of Australia. The dispute concerned the respondent's failure to comply with a notice issued by a fair work inspector requiring the rectification of underpayments to six employees, totalling $13,417.37, and associated superannuation contributions.

The court was required to determine whether the respondent had contravened section 716(5) of the *Fair Work Act 2009* (Cth) by failing to comply with the notice served on 29 July 2019. The court was also required to determine the appropriate pecuniary penalty to be imposed for this contravention, with the primary objective of deterrence.

The court found, by consent, that the respondent had contravened section 716(5) of the Act. The court reasoned that compliance notices are an important mechanism for the efficient rectification of underpayments and that failure to comply with such a notice constitutes a contravention. The court applied the principle that the principal objective of pecuniary penalties under the Act is deterrence, both specific and general. In setting the penalty, the court considered the maximum penalty available and the need for the penalty to have a sufficient "sting or burden" to deter future contraventions.

By consent, the court ordered the respondent to complete the steps required by the notice within 28 days, including paying the outstanding amount of $13,417.37 to the specified employees and calculating and paying associated superannuation contributions. The court also ordered the respondent to pay a pecuniary penalty of $18,000 to the Commonwealth for the contravention. Provisions were made for the payment of amounts due to employees who could not be located, including payment into the Consolidated Revenue Fund and subsequent efforts by the applicant to locate and pay those employees.