FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Clarke Allied Work Pty Ltd [2024] FedCFamC2G 922
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- Case
- [2024] FedCFamC2G 922
- Decision Date
CaseChat Overview and Summary
The Court found that the agreed penalty of $7,992 was appropriate. This conclusion was based on the understanding that the penalty was sufficient to provide effective deterrence, both general and specific. The penalty was also within the permissible range of likely penalties that could have been imposed had the matter not been resolved by agreement. Additionally, the penalty was acceptable to the Fair Work Ombudsman as a regulatory body. The Court noted that the agreement between the parties regarding the penalty was consistent with the role of the Commonwealth, in this case the Fair Work Ombudsman, as a model litigant.
Having considered all the circumstances and the principles concerning penalty, the Court was satisfied that the agreed penalty of $7,992 was appropriate. The Court granted the declarations and orders sought by consent, including a declaration that Clarke Allied Work Pty Ltd contravened section 716(5) of the Fair Work Act by failing to comply with the compliance notice, and an order that Clarke Allied Work Pty Ltd pay a pecuniary penalty of $7,992 to the Commonwealth. The Court also granted the Fair Work Ombudsman liberty to apply for enforcement if the penalty was not paid within the specified timeframe. The Court considered the agreed penalty to be a fair and appropriate resolution of the matter.
In summary, the Court accepted the agreed penalty of $7,992 as appropriate, taking into account the principles of penalty assessment and the relevant considerations. The Court granted the declarations and orders as sought by consent, providing effective deterrence and ensuring compliance with the Fair Work Act.
Orders
Orders of the court
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Background
Background to the litigation
Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
In Fair Work Ombudsman v Anastasio [2023] FedCFamC2G 827; (2023) 381 FLR 331 (“Anastasio”) at [1] per Judge Lucev the Court found in penalty hearings in fair work proceedings that conferral between the parties with respect to penalty was consistent with the role of the Commonwealth (there, and here, the Fair Work Ombudsman (“FWO”)) as a model litigant. In these proceedings the FWO and the respondent, Clarke Allied Work Pty Ltd (“Clarke Allied”) have conferred and reached agreement as to penalty, and also that the matter be dealt with on the papers. The matter concerns a contravention of s 716(5) of the Fair Work Act 2009 (Cth) (“FW Act”) by reason of Clarke Allied having failed to comply with a compliance notice (“Compliance Notice”) issued by the FWO on 29 September 2022 (“Contravention”).DECLARATION AND ORDERS SOUGHT BY CONSENT By consent the parties seek a declaration and orders in the following terms:Declarations by consent that:1.The Respondent contravened section 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the compliance notice given to the Respondent on 29 September 2022.Orders that:2.Pursuant to section 546(1) of the FW Act, the Respondent pay a pecuniary penalty to the Commonwealth Consolidated Revenue Fund with respect to the contravention of section 716(5) of the FW Act in the amount of $7,992 within 28 days of this order.3.The Applicant have liberty to apply on 7 days’ notice if the preceding order is not complied with.4. Such further orders as the Court considers appropriate. The parties have agreed to a penalty of $7,992 for the Contravention, being 30% of the maximum with a 20% discount for cooperation and rectification..ISSUE The primary issue for the Court is whether the agreed penalties are appropriate penalties. This involves:(a)a consideration of the principles concerning the approach to be taken by the Court where an agreed penalty is proposed; and(b)an assessment of whether the penalty proposed is appropriate having regard to relevant considerations.STATEMENT OF AGREED FACTS A Statement of Agreed Facts (“SOAF”) was filed on 7 June 2024, and is in the following terms:This Statement of Agreed Facts (SOAF) is made by the Applicant and the Respondent for the purposes of section 191 of the Evidence Act 1995 (Cth).A. ADMITTED CONTRAVENTION1.On the basis of the facts set out below, the Respondent, Clarke Allied Work Pty Ltd, admits that it contravened section 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing without reasonable excuse to comply with a compliance notice given to it on or around 29 September 2022 (Compliance Notice) in relation to alleged contraventions of the FW Act in respect of its employment of Phillip (Ziyi) Li (Employee).B. THE PARTIESThe Applicant2. The Applicant, the Fair Work Ombudsman, is and was at all relevant times:(a)a statutory appointee of the Commonwealth appointed by the Governor-General by written instrument pursuant to section 687(1) of the FW Act;(b)a Fair Work Inspector (FWI) pursuant to section 701 of the FW Act; and(c)a person with standing to bring these proceedings and to apply for orders for contraventions of civil remedy provisions pursuant to section 539(2) of the FW Act.3.FWI Sevda Keremelevski (FWI Keremelevski) is and was at all relevant times a FWI appointed by the Applicant under section 700 of the FW Act.The Respondent4. The Respondent is and was at all relevant times:(a)a company incorporated under the Corporations Act 2001 (Cth) and registered since 11 May 2020;(b)a “constitutional corporation” within the meaning of section 12 of the FW Act;(c)a “national system employer” within the meaning of section 14 of the FW Act;(d)operating a dietitian business in South Australia and trading as “The Innovative Dietitian”; and(e)required to comply with the FW Act in respect of the employment of the Employee, as referred to in paragraph 6(a) below.5. CONTRAVENTION OF SECTION 716(5) OF THE FW ACTThe Investigation5.On or about 9 August 2022, FWI Keremelevski commenced an investigation into the Respondent’s compliance with the FW Act (Investigation).6.Based on the information obtained during the Investigation, FWI Keremelevski formed a reasonable belief that:(a) the Respondent employed the Employee from:(i)10 August 2020 to 2 May 2021 on a part-time basis as a Dietitian;(ii)from 3 May 2021 to 10 June 2022 on a full-time basis as a Principal Dietitian;(b)the Health Professionals and Support Services Award 2020 (Award) covered and applied to the Respondent in relation to the Employee’s employment;(c)from 3 May 2021 to 10 June 2022, the Employee was classified as a Health Professional employee – Level 2 pursuant to the Award;(d)the Employee was not paid for ordinary hours of work pursuant to the Award from 23 May 2022 to 10 June 2022 (Underpayment Period); and(e)the Employee was not paid for accrued but untaken annual leave and annual leave loading on the termination of his employment.7.By reason of the matters at paragraph 6 above, FWI Keremelevski formed a reasonable belief, within the meaning of section 716(1) of the FW Act, that in respect of the Employee’s employment, the Respondent contravened:(a)clause 17 of the Award by failing to pay the Employee the minimum rate; and(b)section 90(2) of the FW Act, a provision of the National Employment Standards, by failing to pay accrued but untaken annual leave on termination of employment,(collectively, Contraventions).Compliance Notice8.On or around 29 September 2022, FWI Keremelevski gave the Respondent a notice in respect of the Contraventions pursuant to section 716(2) of the FW Act (Compliance Notice) by posting the Compliance Notice to the Respondent’s registered office, being 239 Magill Road, Maylands, SA, 5069 (Registered Office).9.Pursuant to section 716(2) of the FW Act, the Compliance Notice required the Respondent to:(a)by 27 October 2022, take specified action to remedy the direct effects of the Contraventions (Specified Action) including:(i)calculating and paying the outstanding amounts owed to the Employee in respect of the Contraventions;(ii)calculating and paying to the Employee’s chosen superannuation fund any additional superannuation required to be paid in respect of the amounts referred to in paragraph 9(a)(i); and(b)by 3 November 2022, produce reasonable evidence to the Applicant of the Respondent’s compliance in carrying out the Specified Action set out in the Compliance Notice by preparing and producing calculations and evidence that the amounts owed had been paid to the Employee.10. The Compliance Notice met the requirements of section 716(3) of the FW Act.Failure to comply with the Compliance Notice11. The Respondent admits it did not:(a)take the Specified Action set out in the Compliance Notice by 27 October 2022; or(b)produce to the Applicant reasonable evidence of compliance in carrying out the Specified Action set out in the Compliance Notice by 3 November 2022;(c)apply to have the Compliance Notice reviewed by an eligible court under section 717 of the FW Act.12. The Respondent admits that it:(a) failed to comply with the Compliance Notice;(b)did not have a reasonable excuse for failing to comply with the Compliance Notice; and(c) as a result, contravened section 716(5) of the FW Act.Amount under the Compliance Notice13. During the Underpayment Period, the Employee:(a)was not paid for 106.5 ordinary hours of work pursuant to the Award (Underpayment Hours); and(b)pursuant to clause 17.3 of the Award, was entitled to be paid $3,487.87 for the Underpayment Hours.14. At the conclusion of his employment, the Employee:(a)had 177.37 hours of accrued but untaken annual leave (Outstanding Annual Leave Hours);(b) was not paid for the Outstanding Annual Leave Hours; and(c)pursuant to section 90(2) of the FW Act, was entitled to be paid $6,899.72 for the Outstanding Annual Leave Hours.15.By reason of the matters set out at paragraphs 13 and 14, the Respondent would have paid the Employee $10,387.59 (Underpayment Amount) if it had taken the Specified Action.16.After the time for compliance with the Compliance Notice had expired, the Respondent paid to the Employee:(a) $3,487.87 gross in respect of the Underpayment Hours; and(b)$6,899.72 gross in respect to the Outstanding Annual Leave Hours totalling an amount of $10,387.59 gross.17.In addition to the payments made by the Respondent to the Employee at paragraph 16 above the Respondent has paid to the Employee’s nominated superannuation fund, Host Plus, an additional amount of $1,085.99.18.By reason of the matters set out at paragraphs 13 to 17 above the Respondent has paid the Employee the Underpayment Amount, plus additional superannuation contributions of $1,085.99.D. RECOMMENDED RELIEFDeclaration19.By consent the parties seek a declaration that the Respondent contravened section 716(5) of the FW Act by failing to comply with the Compliance Notice.Orders20. By consent the parties seek orders that:(a)pursuant to section 546(1) of the FW Act, the Respondent pay a pecuniary penalty to the Commonwealth with respect to the contravention agreed in paragraph 19;(b)the Applicant have liberty to apply on 7 days’ notice if the preceding order is not complied with; and(c) such further orders as the Court considers appropriate.RELEVANT PRINCIPLES CONCERNING AGREED PENALTY