Fair Work Ombudsman v Double Hao International Pty Ltd

In the Federal Circuit and Family Court of Australia, Fair Work Ombudsman v Double Hao International Pty Ltd [2023] FCCAFC 213, the Fair Work Ombudsman (Ombudsman) brought proceedings against Double Hao International Pty Ltd (Double Hao) for failure to comply with a compliance notice. The proceedings also sought penalties, accessorial liability and compensation for an employee, Ms Madeleine Mitchell. The primary issue for the court was to determine the appropriate penalty for Double Hao's failure to comply with the compliance notice and whether an order should be made for Double Hao to compensate Ms Mitchell for the underpayments. The court considered various factors, including the seriousness of the contravention, the need for deterrence, and the impact of the penalty on Double Hao.

The court found that Double Hao's failure to comply with the compliance notice was serious, but not of such gravity that it warranted a penalty in the upper-middle or high range. The court considered the primary objective of civil penalties, which is deterrence, and found that a penalty of 30% of the maximum would achieve the purpose of general and specific deterrence. The court also considered the recent case of Fair Work Ombudsman v Portland Inc [2023] FedCFamC2G 620, where the court refused to exercise its discretion to make an order for compensation due to the lack of a causal nexus between non-compliance with the compliance notice and the 'loss' suffered by the employee. The court held that a compensatory order should not be made on the strength of an inspector's "reasonable belief" where a more exacting and higher standard of proof would have to be met to establish that loss by judicial determination.

The court ordered that Double Hao pay a penalty of $13,320 and refused to make an order for Double Hao to compensate Ms Mitchell for the underpayments. The court found that the penalty imposed would have a meaningful consequence for Double Hao and would deter other employers from failing to comply with compliance notices. The court held that the Ombudsman had not provided sufficient evidence to establish the causal nexus required to make a compensatory order. The court considered the need to balance the objectives of deterrence and proportionality in determining the appropriate penalty.

In summary, the court found that Double Hao's failure to comply with the compliance notice was serious but not of such gravity that it warranted a penalty in the upper-middle or high range. The court ordered that Double Hao pay a penalty of $13,320 and refused to make an order for Double Hao to compensate Ms Mitchell for the underpayments. The court considered the need to balance the objectives of deterrence and proportionality in determining the appropriate penalty. The court held that the penalty imposed would have a meaningful consequence for Double Hao and would deter other employers from failing to comply with compliance notices.