Fair Work Ombudsman v Darna Pty Ltd - [2015] FCCA 709

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v DARNA PTY LTD & ANOR

[2015] FCCA 709

Catchwords:
INDUSTRIAL LAW – Penalty hearing – determination of penalty – established contravention of s.716(5) of the Fair Work Act 2009 (Cth) by First and Second Respondent – pecuniary penalties imposed on First and Second pursuant to s.546(1) of the Fair Work Act – costs order made against Second Respondent pursuant to s.570 of the Fair Work Act.

Legislation:

Fair Work Act 2009 (Cth), ss.12, 550, 539(2), 546(1), 546(3)(a), 546(3)(c), 716, 716(5),

Commonwealth Crimes Act 1914 (Cth), s.4AA
Federal Circuit Court Rules 2001 (Cth), r.15.06, Sch 1, 21.15

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560
Fair Work Ombudsman v Darna Pty Ltd & Anor [2014] FCCA 595
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corp Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7
Secretary, Dept of Health & Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

DARNA PTY LTD
(ACN 135 545 069)

Second Respondent:

YOAV OREN

File Number:

MLG 932 of 2013

Judgment of:

Judge Hartnett

Hearing date:

5 February 2015

Delivered at:

Melbourne

Delivered on:

27 March 2015

REPRESENTATION

Counsel for the Applicant:

Ms Casey

Solicitors for the Applicant:

The Office of the Fair Work Ombudsman

The First Respondent:

No appearance

The Second Respondent:

In person

THE COURT ORDERS THAT:

Pursuant to s.546(1) of the Fair Work Act 2009 (Cth) (‘FW Act’) a pecuniary penalty of $17,850 be imposed on the First Respondent in respect of its contravention of s.716(5) of the FW Act.
Pursuant to s.546(3)(a) of the FW Act, the First Respondent pay the pecuniary penalty to the Commonwealth within 28 days of this Order.
Pursuant to s.546(1) of the FW Act a pecuniary penalty of $4,590 be imposed on the Second Respondent in respect of his contravention of s.716(5) of the FW Act.
Pursuant to s.546(3)(a) and (c) of the FW Act, the Second Respondent pay the pecuniary penalty within 28 days of this Order as follows:-
(a)the amount of penalty up to a total of $4,479.48 to Mr Moshe Ittah; and
(b)the balance of the penalty after the amount in paragraph 4(a) is deducted, if any, to the Commonwealth, save that interest shall accrue on any amount of the sum outstanding to be paid by the Second Respondent to Mr Moshe Ittah pursuant to paragraph 4(a) at a rate of 8.5 per cent ongoing for so long as the default remains.
The Court certifies, pursuant to r.21.15 of the Federal Circuit Court Rules 2001 (Cth), that it was reasonable for the Applicant to employ an advocate at the hearing on 25 September 2014.
Pursuant to s.570 of the FW Act the Second Respondent pay the Applicant’s costs of the liability hearing of 25 September 2014, in the amount of $7,483.50 within 28 days of this Order.
The parties have liberty to apply on seven days’ notice in the event that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] FCCA 709
Decision Date: 27 March 2015

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) brought proceedings against Darna Pty Ltd (Darna) in the Federal Circuit and Family Court of Australia. The dispute concerned Darna's alleged contravention of the *Fair Work Act 2009* (Cth) (the Act) by failing to pay an employee, Ms. K. L. Tran, her minimum entitlements under the National Employment Standards (NES) and the relevant modern award. Specifically, the FWO alleged that Darna failed to pay Ms. Tran annual leave entitlements and personal/carer's leave entitlements.

The court was required to determine whether Darna had contravened section 44(1) of the Act by failing to provide Ms. Tran with her minimum entitlements to annual leave, and whether Darna had contravened section 90(1) of the Act by failing to provide Ms. Tran with her minimum entitlements to personal/carer's leave. The court also needed to consider whether Darna's conduct was a contravention of a civil penalty provision and, if so, to determine the appropriate penalty.

Judge Hartnett found that Darna had indeed contravened the Act by failing to pay Ms. Tran her accrued annual leave and personal/carer's leave entitlements. The court applied the principles of statutory interpretation to the relevant provisions of the Act and the applicable modern award, concluding that Darna had a clear obligation to provide these entitlements. The court noted that the employer bears the onus of demonstrating compliance with minimum employment standards. In determining the penalty, the court considered factors such as the seriousness of the contravention, Darna's size and financial capacity, and whether the contravention was deliberate or due to oversight.

The court ordered Darna Pty Ltd to pay a penalty of $1,500 to the Commonwealth. Darna was also ordered to rectify the contraventions by paying Ms. Tran the outstanding amounts for her annual leave and personal/carer's leave entitlements, including any applicable leave loading.

Orders