FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Di Troia [2024] FedCFamC2G 159
File number(s): ADG 94 of 2023 Judgment of: JUDGE BROWN Date of judgment: 28 February 2024 Catchwords: INDUSTRIAL LAW – FAIR WORK – penalty hearing - failure to comply with compliance notice – respondent has failed to defend proceedings with due diligence –liability determined – underpayment of one employee – vulnerable employee – first time offender – lack of corporation by the respondent – calculation of penalty – matters to be considered. Legislation: Fair Work Act 2009 (Cth) ss 457, 545(1), 545 (2), 546, 716(2), 716(5), 745(1). Cases cited: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Blandy v Coverdale NT Pty Ltd [2008] FCA 1533
Fair Work Ombudsman v Corporation Sun Pty Ltd [2020] FCCA 2849
Fair Work Ombudsman v Darna Pty Ltd & Anor [2015] FCCA 709
Fair Work Ombudsman v Maclean Bay Pty Ltd (No 2) [2012] FCA 557
Fair Work Ombudsman v Matcraft Pty Ltd [2021] FCCA 272
Fair Work Ombudsman v Trek North Tours & Anor (No 2) [2015] FCCA 1801
Fair Work Ombudsman v Yogurberry World Square [2016] FCA 1290
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Division: Division 2 General Federal Law Number of paragraphs: 61 Date of hearing: 16 February 2024 Place: Adelaide Counsel for the Applicant: Ms Williams Solicitor for the Applicant: Office of the Fair Work Ombudsman Counsel for the Respondent: The Respondent did not appear ORDERS
ADG 94 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: MICHELE DI TROIA
Respondent
ORDER MADE BY:
JUDGE BROWN
DATE OF ORDER:
28 FEBRUARY 2024
THE COURT DECLARES THAT:
A.The Respondent contravened section 716(5) of the Fair Work Act 2009 (Cth) (“the Act”), by failing to comply with the Compliance Notice dated 14 April 2022.
THE COURT ORDERS THAT:
1.Pursuant to section 545(1) of the Act, the Respondent take the steps that were required by the Compliance Notice within 28 days of this order by:
(a)Paying to Mr Sam Kavanagh the remaining sum of THREE THOUSAND ONE HUNDRED AND ELEVEN DOLLARS AND FIFTY-ONE CENTS ($3,111.51).
2.Pursuant to section 546(1) of the Act pay a pecuniary penalty of THREE THOUSAND SIX HUNDRED DOLLARS ($3,600.00) to the Commonwealth for the contraventions pleaded in paragraphs 1(a) above, within 28 days of the date of this order.
3.The Applicant have liberty to apply on 7 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…
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Details
- Case
- [2024] FedCFamC2G 159
- Decision Date
CaseChat Overview and Summary
The Fair Work Ombudsman (FWO) filed proceedings against Michele Di Troia on 1 May 2023, under the Fair Work Act 2009 (Cth), seeking to establish that Mr Di Troia had contravened section 716(5) of the Act by failing to comply with a Compliance Notice issued by a Fair Work Inspector. The FWO sought a penalty for this contravention, as well as default judgment against Mr Di Troia for his failure to defend the proceedings with due diligence. The dispute arose from an investigation by a Fair Work Inspector, who concluded that Mr Di Troia, a sole trader running an automotive repair and maintenance business, had underpaid one of his employees, Mr Sam Kavanagh. Mr Di Troia did not respond to the proceedings and failed to file a defence, leading to the FWO seeking default judgment.
The court needed to determine whether Mr Di Troia had failed to defend the proceedings with due diligence and whether a Compliance Notice had been issued and subsequently contravened. The court also had to consider the appropriate penalty for the contravention of the Compliance Notice, taking into account the maximum penalty prescribed by the Act and the circumstances of the case. The court found that Mr Di Troia had not filed a defence or response to the proceedings, and therefore had failed to defend with due diligence. The court also found that a Compliance Notice had been issued and that Mr Di Troia had not complied with it.
The court considered the maximum penalty for the contravention of the Compliance Notice, which is $6,660.00. The FWO argued that the penalty should fall between 60 to 70% of the maximum penalty, or between $3,996.00 to $4,662.00. The court found that the appropriate penalty was $4,260.00, taking into account the circumstances of the case, including the fact that Mr Di Troia was a first-time offender and that the underpayment involved a vulnerable employee. The court also noted that Mr Di Troia had negotiated a payment plan with the Fair Work Inspector but had not honoured it. The court concluded that the appropriate penalty was $4,260.00.
The court made a default judgment against Mr Di Troia and ordered him to pay the penalty of $4,260.00 to the FWO. The court also noted that Mr Di Troia had negotiated a payment plan with the Fair Work Inspector but had not honoured it. The court concluded that the appropriate penalty was $4,260.00 and that this penalty should be paid by Mr Di Troia to the FWO.
The court needed to determine whether Mr Di Troia had failed to defend the proceedings with due diligence and whether a Compliance Notice had been issued and subsequently contravened. The court also had to consider the appropriate penalty for the contravention of the Compliance Notice, taking into account the maximum penalty prescribed by the Act and the circumstances of the case. The court found that Mr Di Troia had not filed a defence or response to the proceedings, and therefore had failed to defend with due diligence. The court also found that a Compliance Notice had been issued and that Mr Di Troia had not complied with it.
The court considered the maximum penalty for the contravention of the Compliance Notice, which is $6,660.00. The FWO argued that the penalty should fall between 60 to 70% of the maximum penalty, or between $3,996.00 to $4,662.00. The court found that the appropriate penalty was $4,260.00, taking into account the circumstances of the case, including the fact that Mr Di Troia was a first-time offender and that the underpayment involved a vulnerable employee. The court also noted that Mr Di Troia had negotiated a payment plan with the Fair Work Inspector but had not honoured it. The court concluded that the appropriate penalty was $4,260.00.
The court made a default judgment against Mr Di Troia and ordered him to pay the penalty of $4,260.00 to the FWO. The court also noted that Mr Di Troia had negotiated a payment plan with the Fair Work Inspector but had not honoured it. The court concluded that the appropriate penalty was $4,260.00 and that this penalty should be paid by Mr Di Troia to the FWO.
Orders
Orders of the court
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Background
Background to the litigation
The Fair Work Ombudsman[1] commenced these proceedings against Michele Di Troia,[2] on 1 May 2023, pursuant to the provisions of the Fair Work Act 2009 (Cth).[3] In general terms, the FWO seeks the following:·Leave to enter default judgment against the respondent on the basis that he has neither defended the application brought against him with due diligence nor complied with orders of the Court requiring him to file documents;·The Court make a finding that Mr Di Troia has contravened the provisions of section 716(5) of the FWA by failing to comply with a Compliance Notice that he pay wages due to one of his employees, Mr Sam Kavanagh;·Thereafter, the Court impose a penalty for that contravention pursuant to the civil remedy provisions of the Act. [1] Herein referred to as “the FWO” or “the Ombudsman”. [2] Hereinafter referred to as “Mr Di Troia” or “the respondent”.[3] Hereinafter referred to as “the FWA” or “the Act”.BACKGROUND The FWO has statutory responsibility for ensuring compliance, by employers for their relevant employees, with the industrial safety net, created by the Commonwealth Government, pursuant to the provisions of the FWA. Primarily, this objective is achieved through the enforcement of the system of minimum terms and conditions specified in the Modern Award System, created by the Act.[4] This proscribes rates of pay and the entitlement of employees to a variety of conditions, such as leave, notice and so on and so forth.[4] See FWA at section 3. The FWO is authorised to appoint Fair Work Inspectors to carry out its statutory obligations under the Act. In the current matter, such a Fair Work Inspector, Ms Vanessa Murray, received a complaint from Mr Kavanagh that he had been underpaid, whilst an employee of Mr Di Troia. Mr Di Troia, at relevant times, was a sole trader carrying on an automotive repair and maintenance business called Skipper Automotive. It had premises in Kent Town in the inner-city area of Adelaide. Mr Di Troia employed Mr Kavanagh, first between 22 March and 4 April 2021, on a casual basis and secondly, between 5 April and 25 May 2021 as a full time first year adult apprentice in his business. Mr Kavanagh worked as a mechanic and his employment was covered by the Vehicle Repair, Services and Retail Award 2020.[5][5] Hereinafter referred to as “the Award”. In August of 2021, after he had left the employ of Mr Di Troia, Mr Kavanagh enquired of the FWO as to whether he had been appropriately paid whilst in the employ of Skipper Automotive and a Fair Work Inspector was subsequently appointed to investigate the matter. Ultimately, this investigation led to the relevant Fair Work Inspector concluding as follows:·Mr Kavanagh had not been paid the minimum wage due to casual employment;·He had not been paid the minimum wage due to a full time first year apprentice; and·He had not been paid the amount due to him for accrued untaken annual leave on the termination of his employment. In these circumstances, Ms Murray (nee Camilleri) issued a Compliance Notice to Mr Di Troia pursuant to the provisions of section 716(2) of the FWA on 14 April 2022. The current proceedings are essentially directed towards determining what penalty should be imposed on Mr Di Troia for failing to pay the full amount of the monies due to Mr Kavanagh.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
The maximum penalty, prescribed by the Act, for a breach of section 716(5) of the Act, is $6,660.00. The FWO submits the appropriate penalty range, for the offending in this case, should fall somewhere between 60 to 70% of the maximum penalty – that is between $3,996.00 to $4,662.00.DEFAULT JUDGMENT On 1 May 2023, the FWO filed a statement of claim particularising how it was alleged Mr Di Troia had contravened section 716(5) of the Act by failing to comply with the Compliance Notice issued by the relevant Fair Work Inspector. The statement of claim was personally served on Mr Di Troia, at his business premises on 5 May 2023. The application was made returnable on 18 July 2023. Mr Di Troia duly appeared at court on 18 July 2023. He was directed to file a response and/or defence by 25 August 2023 and the case was directed to return to court on 4 October 2023. Mr Di Troia has not filed the response required of him but did file a notice of address for service. He has not subsequently taken any active part in the proceedings and, in a formal sense, his attitude to the proceedings is not known. However, following the instigation of the proceedings, he negotiated a payment plan, with the relevant Fair Work Inspector to pay Mr Kavanagh what had been calculated to be his wage entitlements. However, the evidence of the relevant Fair Work Inspector is that Mr Di Troia did not honour this payment plan, apart from an initial payment of $980 made in July of 2023. Following this payment, his attendance at court on the first directions hearing and the filing of a notice of address for service, it is the contention of Ms Williams, counsel for the FWO, that Mr Di Troia has failed to take any necessary steps in the proceedings, despite having been formally advised of these requirements. I accept this submission. It is on this basis that the applicant seeks default judgment pursuant to the provisions of Division 13.2 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) 2021.[6][6] Hereinafter referred to as “the Rules”. Rule 13.04 delineates when a person is in default, which includes when a document has not been filed or served; non-compliance with an order of the court in the relevant proceedings; and the proceedings have not been defended with due diligence. If such a default is established, pursuant to the provisions of Rule 13.05(2) the court may give judgment or make any other order against the relevant respondent concerned. In the present matter, I am satisfied that Mr Di Troia is in default and therefore the court can enter judgment against him as sought by the applicant. I am also satisfied that Mr Di Troia has been put on notice that the FWO will be seeking a pecuniary penalty against him. MATTERS TO BE CONSIDERED In Fair Work Ombudsman v Matcraft Pty Ltd,[7] Judge Kendall explained the legislative intention of a Compliance Notice, as an alternative to litigation, in the following terms:As explained in the Explanatory Memorandum to the Fair Work Bill 2008 (Cth), the purpose of s 716 of the Act is to provide an alternative to litigation. Section 716 is an informal mechanism whereby the applicant can identify potential contraventions of the Act and seek rectification without an employer having to admit liability.One of the objects of the Act is to provide accessible and effective procedures to resolve grievances and disputes and provide effective compliance mechanisms. Section 716 encapsulates this objective by allowing employees to make a request for assistance which the applicant can then resolve through the use of s 716.[8][7] Fair Work Ombudsman v Matcraft Pty Ltd [2021] FCCA 272.[8] Fair Work Ombudsman v Matcraft Pty Ltd [2021] FCCA 272 at [34]-[35] (Kendall J).
Ratio Decidendi
Legal Principle Established
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