Fair Work Ombudsman v Duncan trading as Paddock to Platter
[2024] FedCFamC2G 165
•6 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Duncan trading as Paddock to Platter [2024] FedCFamC2G 165
File number(s): SYG 1094 of 2023 Judgment of: JUDGE STREET Date of judgment: 6 March 2024 Catchwords: FAIR WORK – non-compliance with s 716 notice – duties compliance – payment of amount outstanding - penalty Legislation: Fair Work Act 2009 (Cth) Cases cited: Trade Practices Commission v CRS Limited [1990] FCA 521; (1991) ATPR 41-076 Division: Division 2 General Federal Law Number of paragraphs: 22 Date of hearing: 16 February 2024 Place: Sydney Solicitor for the Applicant: Ms Y Wahabzadah of the Fair Work Ombudsman Respondent: No Appearance ORDERS
SYG 1094 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: SHANNON DUNCAN T/AS PADDOCK TO PLATTER (ABN 61 869 289 572)
Respondent
ORDER MADE BY:
JUDGE STREET
DATE OF ORDER:
16 FEBRUARY 2024 AS SLIP RULE CORRECTED, ON 26 FEBRUARY 2024
THE COURT ORDERS THAT:
1.Directs the applicant file and serve an affidavit as to the estimated calculations of the possible loss by the employee, Ms Maia Van Duin (“Ms Duin”) within seven (7) days and treats that affidavit as being in evidence before the Court.
2.Order 2 of the orders made by Judge Goodchild on 18 October 2023 (Orders) be set aside.
3.Service of the Applicant’s Application in a Proceeding filed on 23 October 2023 and a copy of the Orders was effected upon the Respondent by pre-paid post on 22 January 2024.
4.Default judgment be entered for the Applicant against the Respondent pursuant to Rule 13.05(2)(c) of the Federal Circuit and Family Court of Australia Rules (Division 2) (General Federal Law) Rules 2021 (FCFCOA Rules), by reason of the failure of the Respondent to:
(a)comply with the requirement to give an address for service pursuant to rule 13.04(2)(b)(i) and rule 6.01(1) of the FCFCOA Rules;
(b)comply with the requirement to file a response within 28 days after service of the Originating Application and Statement of Claim pursuant to rule 13.04(2)(b)(ii) and rule 4.03(3) of the FCFCOA Rules;
(c)comply with an order of the Court, being order 1 and order 2 of the orders of Judge Goodchild dated 7 August 2023 and order 1 and order 2 of the orders of Judge Goodchild dated 12 September 2023 pursuant to of rule 13.04(2)(b)(iii) of the FCFCOA Rules; and
(d)defend the proceedings with due diligence pursuant to rule 14.04(2)(b)(vii).
THE COURT DECLARES THAT:
5.Upon the admissions which the Respondent is taken to have made, consequent upon default pursuant to rule 13.04(2) of the FCFCOA Rules, the Court declares that the Respondent contravened section 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the compliance notice with respect to Ms Duin, issued to the Respondent by Fair Work Inspector Byron on 27 April 2022 pursuant to section 716 of the FW Act (Compliance Notice).
THE COURT ORDERS THAT:
6.Pursuant to section 545(2)(b) of the Fair Work Act 2009 (Cth) (FW Act), the Respondent take the steps that were required by the Compliance Notice within 28 days from the date of this order, by paying the amount of $1,103.85 (Underpayment Amount) to Ms Maia Van Duin.
7.Pursuant to section 545(1) of the FW Act, the Respondent take the steps that were required by the Compliance Notice within 28 days from the date of this order, by:
(a)calculating and paying into Ms Van Duin’s nominated superannuation fund any additional superannuation contributions payable on the Underpayment Amount; and
(b)preparing and producing to the Applicant, a schedule outlining its calculations of the additional superannuation contributions required to be paid to Ms Van Duin and providing proof that the Underpayment Amount and additional superannuation contributions were rectified as set out in paragraphs 7 and 8(a) above.
8.Pursuant to section 547(2) of the FW Act, the Respondent pay interest, at the pre-judgement rate, to Ms Van Duin on the amounts paid in accordance with order 6 above.
9.Pursuant to section 546(1) of the FW Act, the Respondent pay a pecuniary penalty of $5,328.00 to the Commonwealth for the declared contravention at order 5 above, within 28 days of the order.
10.Liberty is granted to the parties to apply within seven (7) days notice.
11.The Court reserves its written reasons.
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 STREET
These proceedings were commenced on 7 July 2023 against the respondent, who was a national system employer operating a business trading as Paddock To Platter, and relevantly employed Ms Maia Van Duin (“Ms Van Duin”) from approximately 5 May 2021 to 9 December 2021 in circumstances where she was covered by the Restaurant Industry Award 2020 (“the award”).
An investigator formed a relevant belief under s 716(1) of the Fair Work Act 2009 (Cth) (“the Act”) that during the employment period of Ms Van Duin, she had not been paid in accordance with the minimum hourly rate and casual loading rate, the Saturday penalty rate in respect of the Minimum Rate, and the Sunday penalty rate in respect of the Minimum Rate, and the investigator identified having formed a reasonable belief on contravention of clause 11.2, 11.1, 24.2(c), and 24.2(c) of the award by the respondent. On 27 April 2022, the applicant issued a compliance notice (“the notice”) under s 716(2) of the Act.
That notice relevantly required both the production of relevant information in respect of the evidence to show that the notice has been complied with, and the making of calculations and payment of Underpayment Amounts. The respondent has failed to comply with that notice and has failed to engage in these proceedings. The applicant relied upon an affidavit of service of Tomislav Gajic dated 28 July 2023, the affidavit of Rachael Deborah Seaforth dated 23 October 2023, the affidavit of Scott Nicholas Byron dated 30 November 2023, the affidavit of service of Tomislav Gajic dated 9 February 2024, and the affidavit of service of Matthew James Gough dated 9 February 2024. In addition to the affidavits referred to, the Court also received into evidence exhibit A, relevantly, the applicant’s Court Book. In that bundle, the applicant helpfully provided submissions in respect of the default judgment, and the orders sought. The Court also granted leave for the filing of an affidavit by Scott Byron as to the quantum of the loss of which the Court was informed on 16 February 2024.
This Court had made orders on 8 December 2023 listing the matter for default judgment, and if entered, a hearing on penalty on 16 February 2024. At the commencement of the hearing today there was no appearance by the respondent. The applicant, accordingly, moved for orders vacating the orders made by Goodchild J on 18 October 2023, and confirming service of the application in the proceedings filed on 23 October 23 seeking default judgment pursuant to rule 13.5(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Rules 2021 (Cth) (“the rules”), and seeking orders in relation to admissions consistent with rule 13.05(2)(c) of the rules, and for orders in respect of compliance with a notice, as well as payment of interest on outstanding amounts, and the payment of a pecuniary penalty under s 546 of the Act.
The Court is satisfied that there was relevant default by the respondent having been served with these proceedings, and that the respondent was on notice of the application in a proceeding, and that it was served, and it was appropriate to make orders as sought by the applicant in respect of the default judgment. Given the admissions on the pleading the Court is satisfied that there was a notice validly issues under s716 and a failure to comply with the same by the respondent in relation to both limbs of the notice.
Accordingly the Court finds that there was a contravention as alleged in respect of the notice issued pursuant to s 716 of the Act by the respondent, the Court is satisfied that it is appropriate pursuant to s 545 of the Act to make orders for compliance with that notice by the respondent, and for the payment of the amounts outstanding, including interest under s 547(2) of the Act.
The Court records the history of the matter as set out in paragraphs 4 through to 14 in the applicant’s Statement of Claim in exhibit A.
(1)On or around 11 January 2022, the Applicant commenced an investigation into the Respondent’s compliance with the FW Act in relation to the employment of Maia Van Duin (Investigation).
(2)As a result of the Investigation, FWI Byron formed a belief, within the meaning of section 716(1) of the FW Act, that:
(a)the Respondent employed Ms Duin as a casual employee between 5 May 2021 and 9 December 2021 (Employment Period);
(b)Ms Duin was a national system employee within the meaning of section 13 of the FW Act;
(c)during the Employment Period the Restaurant Industry Award 2020 (Award) covered and applied to the Respondent in respect of Ms Duin’s employment;
(d)by reason of the duties Ms Duin performed during the Employment Period and her Certificate II in Hospitality, she was entitled to be classified as a Level 3 - Food and Beverage Attendant Grade 3 employee as defined in Schedule A of the Award (Classification);
(e)Ms Duin performed work for the Respondent, at the Business located at 342 Keira Street, Wollongong in the state of New South Wales (Principal Place of Business), between Thursdays and Sundays during the Employment Period; and
(f)during the Employment Period, the Respondent failed to pay Ms Duin:
(i)the minimum hourly rate of pay and casual loading of 25%, applicable to her Classification for the ordinary hours of work she performed (Minimum Rate);
(ii)in respect of ordinary hours worked on a Saturday, the penalty rate of 150% (inclusive of the casual 25% loading) of the Minimum Rate (Saturday Penalty Rate); and
(iii)in respect of ordinary hours worked on a Sunday, the penalty rate of 175% (inclusive of the casual 25% loading) of the Minimum Rate (Sunday Penalty Rate).
(3)By reason of the matters pleaded in paragraph 5, FWI Byron formed a reasonable belief, within the meaning of section 716(1) of the FW Act, that the Respondent contravened:
(a)clause 11.2 of the Award by failing to pay Ms Duin the Minimum Rate between 5 May 2021 and 26 September 2021;
(b)clause 11.1 of the Award by failing to pay Ms Duin the Minimum Rate between 27 September 2021 to 9 December 2021;
(c)clause 24.2(c) of the Award by failing to pay Ms Duin the Saturday Penalty Rate during the Employment Period; and
(d)clause 24.2(c) of the Award by failing to pay Ms Duin the Sunday Penalty Rate during the Employment Period.
(collectively, the Contraventions).
(4)On 27 April 2022, FWI Byron gave the Respondent a compliance notice pursuant to section 716(2) of the FW Act in respect of the Contraventions (Compliance Notice) by posting the Compliance Notice to the Principal Place of Business.
(5)On 27 April 2022, FWI Byron also sent the Compliance Notice via email to [email protected], being the email address used by the Respondent.
(6)In accordance with section 716(2), the Compliance Notice required the Respondent to:
(a)by 25 May 2022, take specified action to remedy the direct effects of the Contraventions (Specified Action), including:
(i)calculating and paying the outstanding amounts owed to Ms Duin in respect of the Contraventions (Underpayment Amounts);
(ii)calculating and paying to Ms Duin’s superannuation fund any additional superannuation contributions required by clause 22.2 of the Award in respect of the Underpayment Amounts; and
(iii)making records of the amounts calculated and paid as referred to above (Underpayment Rectification Information); and
(b)by 1 June 2022, produce reasonable evidence to the Applicant of the steps taken to comply with the Compliance Notice by providing a copy of the Underpayment Rectification Information and proof that full payment was made to Ms Duin.
(7)The Compliance Notice met the requirements of section 716(3) of the FW Act.
(8)The Respondent failed to:
(a)take the Specified Action by 25 May 2022 or at all; and
(b)produce to the Applicant any evidence of compliance with the Compliance Notice in relation to the Specified Action by 1 June 2022, or at all.
(9)By reason of the matters pleaded in paragraphs 4 to 11 above, the Respondent failed to comply with the Compliance Notice.
(10)By reason of the matters pleaded in paragraphs 4 to 12 above, the Respondent contravened section 716(5) of the FW Act.
(11)The Applicant seeks a declaration that the Respondent contravened section 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the compliance notice given to the Respondent by Fair Work Inspector Byron on 27 April 2022 pursuant to section 716 of the FW Act (Compliance Notice).
The Court is satisfied this jurisdiction was properly invoked and that it has the power to make the default orders sought by the applicant. The Court made orders on 16 February 2024, which were the subject of a slip rule correction on 26 February 2024 pursuant to rule 17.05(2)(h) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) and reserved its written reasons.
The applicant also put on submissions in relation to penalty, identifying that the maximum penalty for contravention of s 716(5) of the Act is $6,660 in respect of the penalty under s 546 of the Act.
The applicant referred to the broad discretion to assess the appropriate penalty to be imposed, with the penalty ultimately to be determined by way of an instinctive synthesis. The applicant referred to the purpose of the penalty as being to promote public interest in compliance in compliance with the Act, and the significant importance of the compliance notice provision to determine whether there has been compliance with the Act.
The Court has taken into account the proposition that the penalty should be one that the Court considers fairly and reasonably to be appropriate to protect the public interest from future contraventions, and that the deterrent value of the penalty should be assessed by reference to the non-exhaustive list of relevant considerations identified the learned French J in Trade Practices Commission v CRS Limited [1990] FCA 521; (1991) ATPR 41-076. The Court notes that the list is well-settled, but not a rigid catalogue of matters for attention.
The Court must take into account the character of the contravening conduct, and that of the contravener. In the present case, the applicant submitted that the appropriate penalty would be 80 per cent of the above maximum penalty, amounting to $5,328.
The Court has taken into account the issues of specific and general deterrence in determining the primary objective of the civil penalty and the amount of the penalty that should be imposed.
In relation to general deterrence, it is the position that compliance notices under s 716 are an essential and important tool to ensure compliance with the Act. There is a very important need to ensure general deterrence in respect of a failure to comply with a s 716 notice. Notwithstanding on one view that the maximum penalty is currently only an amount of $6,660 this compliance notice regime is essential for determining whether or not there has been compliance with the requirements of the Act and, if relevant, the applicable award by an employer. In those circumstances, there is a very real need for general deterrence in respect of the failure to comply with a notice.
The Court also accepts the applicant’s submissions that there is a need to send a very clear message to employers, including in the café and restaurant industry, that a failure to comply with a compliance notice will be treated as one of considerable gravity because of its key importance in ensuring compliance by employers with the Act. Contravention of a compliance notice is one in which there is a need for strong general deterrence.
Turning to the issue of specific deterrence, the respondent has not engaged with these proceedings and has not identified whether the Paddock to Platter business is still trading or whether there are other employees of the respondent or explained why the respondent has failed to comply with the notice, and in these circumstances, the Court accepts that there is a very real need to ensure specific deterrence of the respondent in the present case.
The Court has taken into account the nature and circumstances and deliberateness of the contravening conduct where the compliance notice was sought to address the underpayment of Ms Van Duin arising from apparent contraventions of the award and the Act by the respondent. The respondent was given the opportunity to rectify the contraventions and failed to do so. The respondent has not taken the opportunity to comply with the notice and has failed to engage in these proceedings. These are aggravating matters in relation to the appropriate penalty in the circumstances of the present case.
The Court also accepts the submission of the applicant that the conduct in the present case should be characterised as deliberate and a serious disregard by the respondent of the obligations under the Act. In relation to the nature and extent of the loss, the Court has the benefit of calculations identifying an estimated failure to pay approximately $1,103.85. Those entitlements remain outstanding, which is a further aggravating factor in relation to the determination of penalty. The calculation was supported by the affidavit of Bryon.
In relation to compliance with minimum standards, part of the purposes of the provisions of the Act is to provide a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions for all employees. The compliance notice is an essential feature of the enforcement of those obligations to ensure compliance with minimum standards and industrial agreements. The failure by the respondent to comply with the notice undermines the enforcement of that framework of the Act and the safety net of entitlements. The Court finds the failure of the respondent to comply with the notice in the present case is a serious disregard by the respondent of compliance with those minimum standards.
In relation to the size and financial circumstances of the respondent’s business, this is a case where the respondent has not chosen to put on any evidence. The Court has had identified that the respondent is the registered owner of two properties in New South Wales. The Court has also taken into account that even if the business is no longer trading or is of small size, it does not exculpate contraventions of workplace laws or remove the importance of a penalty to advance the objectives of general and specific deterrence.
In relation to correction action, cooperation and contrition, this is a case where there has been no contrition by the respondent and no steps taken to cooperate or comply with the obligations. The failure to engage with these proceedings and to comply belatedly with the notice are aggravating factors in determining the amount of the penalty. In the circumstances of the present case, taking into account the above matters, the Court is satisfied that a penalty in the amount of $5,328, representing 80 per cent of the maximum penalty, is appropriate and is fair and reasonable in respect of the contravening conduct by the respondent in the present case.
It is for these reasons the Court has made the orders pronounced on 16 February 2024 as amended under the slip rule 17.05(2)(h) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) on 26 February 2024. The Court also notes that it made orders facilitating the receipt of an affidavit in respect of the calculation of the amount that Ms Van Duin had been deprived of and which the Court has taken into account in the fixing of the said penalty.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Street. Associate:
Dated: 6 March 2024
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