Fair Work Ombudsman v ECJ Group Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v ECJ Group Pty Ltd [2025] FedCFamC2G 228

File number(s): SYG 2053 of 2024
Judgment of: JUDGE LAING
Date of judgment: 21 February 2025
Catchwords: INDUSTRIAL LAW – assessment of a pecuniary penalty for contravention of s 716(5) of the Fair Work Act 2009 (Cth) – liability conceded – question of appropriate penalty to be imposed – penalty determined
Legislation: Fair Work Act 2009 (Cth) ss 90, 539, 545, 546 & 716
Cases cited:

Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 399 ALR 599

Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97; (2018) 264 FCR 155

Fair Work Ombudsman v Althaus Homes Pty Ltd [2021] FCCA 126

Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290; (2016) 68 AILR 102–690

Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7

Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383

Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543

Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR 41-076
Division: Fair Work
Number of paragraphs: 44
Date of last submission/s: 29 January 2025
Date of hearing: Determined on the papers
Place: Sydney
Solicitor for the Applicant: Ms K Ruhl of Fair Work Ombudsman
For the Respondent: Mr E Jamieson (with leave)

ORDERS

SYG 2053 of 2024

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

FAIR WORK OMBUDSMAN

Applicant
AND:

ECJ GROUP PTY LTD (ACN 160 839 967)

Respondent

ORDER MADE BY:

JUDGE LAING

DATE OF ORDER:

21 FEBRUARY 2025

BY CONSENT, THE COURT DECLARES THAT:

1.ECJ Group Pty Ltd contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the Compliance Notice given to it on 1 December 2023.

BY CONSENT, THE COURT ORDERS THAT:

2.Pursuant to s 545(1) of the FW Act, within 60 days of these orders being made, the Respondent pay to Mr Beau Morris’s nominated superannuation fund the amount of $802.38 in respect of superannuation payable in respect of the amount paid to Mr Morris on 27 September 2024.

3.Pursuant to s 546(1) of the FW Act, within 28 days of this order, ECJ Group Pty Ltd pay a pecuniary penalty to the Commonwealth for the contravention declared at order 1.

4.The parties have liberty to apply.

THE COURT FURTHER ORDERS THAT:

5.The quantum of penalty referred to in order 3 be fixed in the amount of $9,250.

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…

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Details
Case
[2025] FedCFamC2G 228
Decision Date

CaseChat Overview and Summary

The Fair Work Ombudsman has brought proceedings against ECJ Group Pty Ltd for contravention of section 716(5) of the Fair Work Act 2009 (Cth), concerning the payment of employee entitlements. The case was heard in the Federal Circuit and Family Court of Australia, where the primary issue was the assessment of a pecuniary penalty for the contravention. ECJ Group conceded liability, and the only issue before the Court was the appropriate penalty to impose.

The central legal issue was determining the appropriate penalty to be imposed on ECJ Group for the contravention, considering factors such as the seriousness of the contravention, the need for general and specific deterrence, and the circumstances of the offender. The Court considered the evidence presented by the Fair Work Ombudsman and ECJ Group, including the latter's level of cooperation, contrition, and corrective action taken, as well as the financial circumstances of ECJ Group. The Court also took into account the need for general and specific deterrence, as well as the importance of ensuring penalties are not seen as "the cost of doing business."

The Court concluded that a penalty in the mid-range of what had been proposed by the Fair Work Ombudsman, applying the 20% discount column of the table, was appropriate. The Court found that ECJ Group had cooperated substantially with the Fair Work Ombudsman in bringing these proceedings to a close and had taken corrective action by making a payment of $19,693.47 in rectification of the underpayment. The Court also considered the need for general deterrence, acknowledging that the penalty imposed should be sufficiently high to impress upon those in positions of responsibility the importance of complying with their legal obligations. The Court ultimately decided that a penalty of $9,250 was appropriate in this case, along with related orders for ECJ Group to pay an amount to the employee's nominated superannuation fund.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Having regard to the above, I consider that a penalty in the mid-range of what has been proposed by the FWO (applying the 20% discount column of the table) is appropriate.CONCLUSION For the foregoing reasons, I will make orders requiring that ECJ Group pay a pecuniary penalty in the amount of $9,250, as well as associated orders that have been sought. The parties seek, by consent, a related order requiring that an amount be paid, pursuant to s 545(1) of the FW Act, to the Employee’s nominated superannuation fund. In circumstances where the parties are in agreement both in relation to the amount said to be owed and the order proposed, I am willing to make the order sought.

Ratio Decidendi

Legal Principle Established

In the present case, the evidence does not establish the size of ECJ’s business or its financial circumstances in any detail. As set out above, there are some indications in Mr Jamieson’s communications with the FWO that the business has experienced financial difficulties. However, no evidence has been provided on behalf of ECJ Group to this effect.Cooperation, contrition and corrective action ECJ Group has filed no affidavit making expressions of contrition. However, this is in circumstances where it has no legal representative in these proceedings and appears to have sought to cooperate substantially with the FWO in bringing these proceedings to a close. There is substance to the adage that, sometimes, actions speak louder than words. The FWO acknowledges that ECJ Group has cooperated with the FWO in these proceedings by making full admissions through the SOAF. ECJ Group has also made a payment of $19,693.47 in rectification of the Underpayment. This is accepted by the FWO as demonstrating a degree of acceptance of wrongdoing. The FWO acknowledges that this has also saved time and resources associated with a contested liability hearing. The FWO submits that a discount of “not more than 20%” should be applied on account of ECJ Group’s actions towards cooperation, contrition and corrective action. I prefer to consider the question of penalty in this matter holistically, rather than by reference to such a percentage. This is in circumstances where there is potential overlap between the considerations that may inform the Court’s reasoning under a number of headings. That said, for the reasons given below, I have accepted that an appropriate penalty falls within a range articulated by the FWO by reference to (inter alia) the percentage proposed.Deterrence It has been repeatedly emphasised in penalty cases that general deterrence must serve a purpose that ensures any penalty imposed is not seen as “the cost of doing business”: see for example Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290; (2016) 68 AILR 102–690 at [27] (Flick J). A penalty should therefore “be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like-minded persons or organisations”: Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [93] (Lander J). I accept the significant role that the need for general deterrence plays in determining penalties. The penalty imposed in this matter should be sufficiently high to impress upon those in positions of responsibility the importance of complying with their legal obligations, and in particular the need to comply with statutory notices from the FWO. I also accept that there is some need for specific deterrence in this case. ECJ remains registered with Mr Jamieson as the sole director: Kelly Affidavit at [29] and Annexure NMK-18. There is evidence of Mr Jamieson admitting that he knowingly prioritised other debts of ECJ Group above payment of the Employee’s entitlements as the latter were perceived not to help the business move forward and he knew the Employee had another job and money coming in: Kelly Affidavit at [17] and Annexure NMK-9.Determination of penalty