Fair Work Ombudsman v Design Wolf Solutions Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Design Wolf Solutions Pty Ltd [2023] FedCFamC2G 589

File number(s): BRG 459 of 2022
Judgment of: JUDGE VASTA
Date of judgment: 6 July 2023
Catchwords: INDUSTRIAL LAW – Contraventions of Fair Work Act 2009 (Cth) – pecuniary penalty – deterrence
Legislation: Fair Work Act 2009 (Cth): ss 90(2), 546, 550(2), 716(5)
Cases cited:

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

Australian Building and Construction Commissioner v Pattinson [2022] HCA 13

Mason v Harrington Corporation Proprietary Limited t/as Pangaea Restaurant & Bar [2007] FMCA 7
Division: Division 2 General Federal Law
Number of paragraphs: 40
Date of last submission/s: 29 May 2023
Date of hearing: In Chambers on the papers
Place: Brisbane
Solicitor for the Applicant: HWL Ebsworth Lawyers
Counsel for the Respondents: The Respondents did not provide submissions

ORDERS

BRG 459 of 2022

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

FAIR WORK OMBUDSMAN

Applicant
AND:

DESIGN WOLF SOLUTIONS PTY LTD

First Respondent

BRENTON JOHN BOUND

Second Respondent

order made by:

JUDGE VASTA

DATE OF ORDER:

6 JULY 2023

THE COURT ORDERS THAT:

1.Pursuant to s. 546(1) of the Fair Work Act 2009 (Cth) (“FW Act”), the First Respondent pay a pecuniary penalty to the Commonwealth for the declared contraventions set out in Court order dated 17 April 2023 in the sum of $25,000, within 28 days of this order.

2.Pursuant to s. 546(1) of the FW Act, the Second Respondent pay a pecuniary penalty for his involvement within the meaning of s. 550(2) of the FW Act in the declared contraventions by Design Wolf Solutions Pty Ltd as set out in Court order dated 17 April 2023 in the sum of $5,000, within 28 days of this order.

3.The Applicant have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT

JUDGE VASTA

Introduction

  1. On 17 April 2023, the Court made a declaration that the first respondent, Design Wolf Solutions Pty Ltd, had contravened s. 716(5) of the Fair Work Act 2009 (Cth) (“FW Act”) by failing to comply with a compliance notice dated 14 September 2021. The Court also declared that the second respondent, Brenton John Bound, was involved in the contravention of the first respondent within the meaning of s. 550(2) of the FW Act.

  2. The Court adjourned the matter to give the applicant, who is the…

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Details
Case
[2023] FedCFamC2G 589
Decision Date

CaseChat Overview and Summary

The matter before the court involves the Fair Work Ombudsman (the applicant) suing Design Wolf Solutions Pty Ltd (the first respondent) and one of its directors, Billy Hill (the second respondent), for non-payment of accrued annual leave to an employee, Billy Hill. The employee had worked for the first respondent from August 2020 until May 2021 under the Building and Construction General On-site Award. The employee was entitled to 71 hours and 34 minutes of accrued annual leave, along with annual leave loading, upon termination. The employee claimed he was not paid these entitlements. The applicant investigated and found that the employee had not been paid his accrued annual leave as required by section 90(2) of the Fair Work Act 2009 (FW Act).

The court had to decide whether the first respondent breached its duty to pay the employee his accrued annual leave and annual leave loading, and whether the second respondent, as a director, was liable for these breaches. The applicant issued a compliance notice to the first respondent, requesting it to remedy the effects of the contravention by identifying the amount of untaken leave hours due to the employee, the amount actually paid, and to calculate and rectify the outstanding amount owed. The first respondent failed to comply with the notice, leading to the applicant seeking a court order to enforce compliance. The court also needed to determine whether the compliance notice was validly issued and whether the first respondent's failure to comply justified the enforcement of the notice by the court.

The court found that the first respondent failed to pay the employee his accrued annual leave and annual leave loading, breaching section 90(2) of the FW Act. The compliance notice was validly issued and the first respondent failed to comply with it. The court held that the second respondent, as a director, could be held liable for the first respondent's failure to comply with the compliance notice. The court ordered that the first respondent pay the employee the outstanding amount of $3,973.84 within 14 days. The court also ordered that if the first respondent failed to comply with the order, the second respondent would be personally liable for the amount owed to the employee.

Orders

Orders of the court

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Background

Background to the litigation

The respondents did not file their material and so I have determined the matter on the papers.Background The first respondent is a company that operates a construction and home maintenance business. The second respondent is a director of the first respondent and was responsible for the overall operation, management and control of the first respondent. A person by the name of Billy Hill (“the employee”) worked for the first respondent from 10 August 2020 until 14 May 2021. He was employed under the Building and Construction General On-site Award on a full-time basis. When the employee was terminated, he had an entitlement to, and a balance of, 71 hours and 34 minutes of accrued annual leave. Upon termination, the employee was entitled to be paid out that accrued annual leave and annual leave loading. He claimed that he was not paid his entitlements. The employee asked the applicant for assistance. The applicant began an investigation. That investigation found that the employee had not been paid in accordance with s. 90(2) of the FW Act, in that he had not been paid his accrued annual leave.Compliance notice Whilst it was in the purview of the applicant to begin litigation against the first respondent for that failure to pay the proper entitlements to the employee, the applicant instead took advantage of the compliance notice provisions of the FW Act. This is a proper alternative to litigation. By issuing a compliance notice, the applicant informs an employer that there is a reasonable belief that the employer has breached their duty to properly pay their employee/s. The notice gives the employer the opportunity to rectify that breach and, if the employer does so, there are no lasting consequences. This means that there are no declarations made by Court and it also means that there can be no action taken against the employer for the contravention of the National Employment Standards. It also means that the employee is properly remunerated. If an employer wishes to dispute the substance of the compliance notice, there are remedies available to that employer.Chronology The applicant gave the first respondent (through the second respondent) a compliance notice on 14 September 2021. The notice requested the first respondent to remedy the effects of the contravention in respect of the employee by identifying the amount of untaken leave hours due to the employee at the time of termination of his employment. The notice also asked the employer to identify the actual amount that the employer had paid to the employee on the termination of his employment. The notice requested the employer to calculate and rectify the outstanding amount owed to the employee and to make a record of the information and amounts. These tasks had to be completed by the employer by 14 January 2022. The notice also required the employer to produce reasonable evidence to the applicant of its compliance with the notice by 21 January 2022. The applicant did not hear from the first respondent, or the second respondent, despite the issuing of the compliance notice. On 12 January 2022, the compliance officer of the applicant contacted the second respondent. The second respondent advised that he was no longer an authorised representative of the first respondent. The officer then called the second respondent on his mobile number and left a voicemail message noting the due date for compliance with the compliance notice and offering assistance with understanding its requirements.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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