FEDERAL COURT OF AUSTRALIA
Fair Work Ombudsman v Devine Marine Group Pty Ltd [2015] FCA 370
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- Case
- [2015] FCA 370
- Decision Date
CaseChat Overview and Summary
The Court found that each contravention was a form of underpayment, but the minimum hourly rates and weekend penalty rates were separate parts of the safety net established by the FW Act and the Award. The court emphasised the importance of minimum wage rates as a base entitlement and the appropriateness of penalty rates for weekend work, as affirmed by the Full Bench of the Fair Work Commission. The Court concluded that DMG, at the instigation of Capt Devine, engaged in a deliberate strategy to obtain labour at a lower cost by bringing Fijian workers to Australia under the guise of a training program. The Court further found that Capt Devine had acknowledged that DMG could not afford to engage workers as employees due to regulatory burdens. The Court assessed the culpability of Capt Devine for these contraventions, taking into account the totality of the conduct. In light of the findings, the Court imposed a penalty of $4,000 for the contravention of clause 24.1(a) of the Award, and penalties of $2,000 each for the contraventions of clauses 40.7 and 40.8. The pecuniary penalties were ordered to be paid to the affected employees, Mr Alopisia Kouka and Mr Andrew James. The claim against Arthur Boucaut-Jones was dismissed, and the proceedings were otherwise dismissed with no order as to the costs of the proceedings.
Orders
Orders of the court
2. A penalty of $4,000 be imposed on the Second Respondent in respect of the contravention of cl 24.1(a) of the Award.
3. Penalties of $2,000 be imposed on the Second Respondent in respect of each of the contraventions of cll 40.7 and 40.8 of the Award.
4. Pursuant to s 546(3) of the FW Act, the pecuniary penalties imposed under the above orders be paid by payments to Mr Alopisia Kouka and Mr Andrew James of $4,000 each.
5. The claim against the Third Respondent, Arthur Boucaut‑Jones be dismissed.
6. The proceedings otherwise be dismissed.
7. There be no order as to the costs of the proceedings.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
The Court is to determine an appropriate penalty in each case by a process of instinctive synthesis after taking into account all relevant factors: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, (2008) 165 FCR 560 at [27], [55]; Markarian v The Queen [2005] HCA 25, (2005) 228 CLR 357 at [37]‑[39]. The need for deterrence, both personal and general, is usually a prominent consideration in the determination of penalty.Consideration of penalty It can be said that each contravention was a form of underpayment so that to that extent they have a commonality. However, I accept the submission of the FWO that the minimum hourly rates and weekend penalty rates are separate parts of the safety net established by the FW Act and the Award. A guaranteed minimum rate of pay for all hours of work is central to the Australian workplace relations system. It is the base entitlement of employees. Weekend penalty rates compensate employees for the disadvantages of working on weekends. The Full Bench of the Fair Work Commission has recently affirmed the appropriateness of penalty rates for weekend work. In Modern Awards Review 2012‑Penalty Rates [2013] FWCFB 1635 at [218] the Full Bench held that the continuation of penalty rates for weekend work was appropriate as “there are disabilities associated with work at unsociable times”. The higher rate for Sunday work reflects the greater disadvantages in working on Sundays. Thus, in Restaurant and Catering Association Victoria [2014] FWCFB 1996, the Full Bench referred to the “contemporary general assessment of the disabilities associated with working on Sundays as compared to other days of the week” as supporting the continuation of penalty rates for Sunday work. Although that conclusion was expressed in relation to an industry quite different from that in which DMG operated, it is reasonable to suppose that the same considerations underpin the prescription in the Award for all work performed on Sundays. Thus, as the FWO submitted, cll 24.1(a), 40.7 and 40.8 serve separate and distinct purposes. This understanding should underpin the assessment of the culpability of Capt Devine for the contraventions. It is evident that DMG, at the instigation of Capt Devine, engaged in a deliberate strategy by which to obtain labour at less cost. I repeat in this respect part of my finding at [195] in the principal reasons:… DMG, controlled by Capt Devine, had arranged to bring the Fijians, and in particular Mr James and Mr Kouka, to Australia as apparent participants in a training program when, in reality, it intended that they should carry out productive work. The evident purpose of the strategy was to avoid DMG having to pay the rates which would otherwise be applicable to the performance of that work by local employees. The FWO also referred to the evidence of Capt Devine that DMG could not afford to engage workers as employees and, instead, preferred to engage them as contractors “because of WorkCover, Fair Work and over regulation of this country … in the Marine Industry in particular.”