Federal Circuit and Family Court of Australia
(DIVISION 2)
Fair Work Ombudsman v Darrell Crouch & Associates Pty Ltd [2023] FedCFamC2G 80
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- Case
- [2023] FedCFamC2G 80
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the Court were whether the penalties proposed by the FWO were appropriate and whether the respondents had a reasonable excuse for their non-compliance with the Compliance Notice. The Court considered the submissions of both parties, the Statement of Agreed Facts, and relevant evidence, including affidavits and the transcript of the hearing. The Court also examined the FWO’s compliance with its obligations under the FW Act and the effect of an error in communication on the respondents' liability.
The Court found that the penalties proposed by the FWO were not crushing or otherwise inappropriate. The Court rejected the respondents' argument that the FWO's error in sending the Compliance Notice to the wrong email address excused their non-compliance. The Court held that the respondents had opportunities to address concerns about the FWO's investigation before the Compliance Notice was issued and that the respondents had admitted contravening the FW Act. The Court also found that the respondents did not have a reasonable excuse for their non-compliance, as they made a conscious decision to "let it expire." The Court concluded that the penalties proposed by the FWO were appropriate and ordered the company and Mr Crouch to pay the specified pecuniary penalties.
In conclusion, the Court ordered Darrell Crouch & Associates Pty Ltd to pay a pecuniary penalty to the Commonwealth for its contravention of the FW Act, and Darrell Crouch to pay a pecuniary penalty for his involvement in the contravention. The Court also granted the FWO liberty to apply for enforcement if the orders were not complied with. The Court considered the nature and extent of the conduct leading to the breach, the respondents' opportunities to address concerns about the FWO's investigation, and the effect of the FWO's error in communication on the respondents' liability in reaching its decision.
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 reply, the FWO submitted that:(a)the Respondents’ submissions raise allegations about the FWO up until the time that it issued the Compliance Notice on 22 January 2021. They contend, in effect, that the unintentional issuing of an email to the incorrect recipient caused the Respondents to fail to comply with the Compliance Notice and has led to these proceedings, and rely on it to argue that the Respondents should receive either no penalty or a nominal penalty of $1: Respondents’ Submissions at [51];(b)the above contentions are speculative, ignore agreed and admitted facts about what the Respondents actually did, and would lead to the Court imposing a penalty that is manifestly inadequate;(c)the quoted passage by the Respondents from the Compliance and Enforcement Policy relied upon by the Respondents should not be read in isolation, but in the context of the remainder of the relevant paragraph which describes the FWO’s functions: Casey Affidavit p 21, as follows: •monitoring compliance with the FW Act and fair work instruments;•inquiring into and investigating any act or practice that may be contrary to the FW Act, a fair work instrument or a safety net contractual entitlement;•commencing proceedings in a Court (or in limited circumstances making an application to the Fair Work Commission) to enforce the FW Act, a fair work instrument or a safety net contractual entitlement; and•referring matters to other relevant authorities where appropriate. (d)in commencing these proceedings, the FWO is fulfilling the functions given to the FWO under s 682 of the FW Act, as described in the Compliance and Enforcement Policy;(e)the Error does not constitute a breach of the Compliance and Enforcement Policy (which does not impose any legal obligation), nor does it negate the FWO’s obligations to fulfil its functions under the FW Act. It also does not provide the Respondents with an excuse for failing to pay the Employee his entitlements provided for by the National Employment Standards (which is admitted by the Respondents);(f)the Respondents did have opportunities to address concerns raised about the FWO’s investigation before the Compliance Notice was issued. Those opportunities included:(i)FWI Spencer telephoning Mr Crouch on 11 January 2021, an admitted and agreed fact: Statement of Agreed Facts at [12]; and(ii)Mr Arnold telephoning Mr Crouch on 8 December 2020, another admitted and agreed fact: Statement of Agreed Facts at [10];(g)the Respondents have admitted that they contravened s 716(5) of the FW Act by failing to comply with the Compliance Notice: Statement of Agreed Facts at [1]-[2]. On 5 July 2021 they signed (while having the benefit of legal representation) a Statement of Agreed Facts admitting matters about their contravention. There is no scope for the Respondents to now claim within this proceeding that FWI Casey did not have the requisite Reasonable Belief to issue the Compliance Notice;(h)the FWO rejects the Respondents’ submission that the FWO did not provide the Respondent with an opportunity to provide information and that it did not properly engage with the Respondents. The contention that the Compliance Notice would not likely have been issued is speculative and should be rejected, particularly because on 11 January 2021 (prior to the issuing of the Compliance Notice), Mr Crouch had informed the FWO that his position was that the former Employee had received his full entitlement, an admitted and agreed fact: Statement of Agreed Facts [12];(i)the Respondents were clearly informed of the remedies available to them if they wished to challenge the Compliance Notice. The FWO refers to:(i)page 2 of the cover letter to the Compliance Notice: Casey Affidavit p 10, which states:(A)the Compliance Notice provides DC & Associates with a further opportunity to rectify the contravention;(B)the Compliance Notice sets out a number of actions that DC & Associates is required to take on or before 19 February 2021;(C)complying with the Compliance Notice is not an admission (nor does it constitute a finding) that DC & Associates has contravened the FW Act: see also paragraph 4 of the Compliance Notice: Casey Affidavit p 12 at [4];(D)if DC & Associates fails to comply with the Compliance Notice by 19 February 2021, it may contravene s 716(5) of the FW Act, unless it has a reasonable excuse: see also paragraph 1 of the Compliance Notice: Casey Affidavit p 12 at [1]. In those circumstances, the FWO may (without further notice) commence legal action against DC & Associates and/or individuals involved in DC & Associates’ failure to comply with the Compliance Notice: see also paragraph 2 of the Compliance Notice: Casey Affidavit p 12 at [2], and that a court may impose penalties of up to $6,660 in respect of an individual or $33,300 in respect of a body corporate for each failure to comply with a Compliance Notice; and(E)alternatively, DC & Associates may apply to a court for a review of the Compliance Notice on either or both of the grounds that DC & Associates did not commit the contravention set out in the Compliance Notice or the Compliance Notice does not comply with s 716(2) or 716(3) of the FW Act: see also paragraph 5 of the Compliance Notice: Casey Affidavit p 12 at [5];(j)the Respondents do not have a reasonable excuse for failing to take notice of the Compliance Notice, and (as they accept: Respondents’ Submissions at [28]) made a conscious decision to simply “let it expire”;(k)the Respondents incorrectly refer to an employer being “guilty” of a legislative contravention or “guilty of wrongdoing” when a FWI forms a reasonable belief under s 716 of the FW Act and issues a Compliance Notice. Section 716(4B) of the FW Act expressly states that a person who complies with a compliance notice in relation to a contravention of a civil remedy provision is not taken to have admitted to contravening the provision or to have been found to have contravened the provision. The effect of this subsection was explained in the cover letter to the Compliance Notice and the Compliance Notice itself;(l)the Respondents admitted contravening s 716(5) of the FW Act at the time the Statement of Agreed Facts was filed by the parties on 6 July 2021. That the Respondents knew of the Error prior to this admission is clear from the Statement of Agreed Facts at [10] which expressly states “Mr Arnold had inadvertently sent the email intended for Mr Crouch to the Employee. Mr Crouch therefore did not receive Mr Arnold’s email”;(m)despite the Error, the FWO did engage with the Respondents; and(n)the length of time from the issuing of the Compliance Notice until the Compliance Notice was complied with by DC & Associates was from 22 January 2021 until June 2021: Casey Affidavit pp 49-50.Consideration - Nature and extent and circumstances of the conduct which led to the breach