Fair Work Ombudsman v Ella Group (NSW) Pty Ltd (No 2)
[2025] FedCFamC2G 1429
•3 September 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Ella Group (NSW) Pty Ltd (No 2) [2025] FedCFamC2G 1429
File number(s): SYG 397 of 2024 Judgment of: JUDGE GIVEN Date of judgment: 3 September 2025 Catchwords: FAIR WORK – Assessment of civil pecuniary penalty for contravention of s 716(5) of the Fair Work Act by failing to comply with a compliance notice given to it by the Fair Work Ombudsman – where second respondent knowingly involved in contravention – no corrective action or contrition – no antecedent conduct Legislation: Crimes Act 1914 (Cth) s 4AA
Fair Work Act 2009 (Cth) ss 12, 539, 546, 550, 557, 716
Children’s Services Award 2010
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157
Australian Building and Construction Commissioner v Pattinson (2022) 399 ALR 599
Australian Competition and Consumer Commission v Employsure Pty Ltd (2023) 407 ALR 302
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560
Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128
Fair Work Ombudsman v Althaus Homes Pty Ltd [2021] FCCA 126
Fair Work Ombudsman v ASGBRIS Pty Ltd & Anor [2020] FCCA 553
Fair Work Ombudsman v Blu Hornsby Pty Ltd [2016] FCCA 1150
Fair Work Ombudsman v Ella Goup (NSW) Pty Ltd [2024] FedCFamC2G 1207
Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor (No.2) [2019] FCCA 2144
Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301
Fair Work Ombudsman v Soma Kitchen Pty Ltd & Anor (No 2) [2020] FCCA 2583
Fair Work Ombudsman v Soma Kitchen Pty Ltd & Anor (No2) [2020] FCCA 2583
Fair Work Ombudsman v Tester [2021] FCCA 771
Fair Work Ombudsman v VS Investment Group Pty Ltd & Anor [2013] FCCA 208
Kelly v Fitzpatrick (2007) 166 IR 14
Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412
Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249
Trade Practices Commission v CSR Ltd [1990] FCA 521
Division: General Federal Law Number of paragraphs: 57 Date of hearing: 21 November 2024 Place: Sydney Solicitor for the Applicant: Ms R Miguntenna, Fari Work Ombudsman The First Respondent: No appearance The Second Respondent: No appearance ORDERS
SYG 397 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: THE ELLA GROUP (NSW) PTY LTD (ACN 625 545 520)
First Respondent
LOUISE RAMONA YAACOUBIAN
Second Respondent
ORDER MADE BY:
JUDGE GIVEN
DATE OF ORDER:
3 SEPTEMBER 2025
THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (Act) the first respondent must pay a pecuniary penalty fixed in the amount of $28,875 for the contravention declared by order 2(a) of the Orders dated 19 September 2024.
2.Pursuant to s 546(1) of the Act the second respondent must pay a pecuniary penalty fixed in the amount of $5,775 for the contravention declared by order 2(b) of the Orders dated 19 September 2024.
3.Pursuant to s 546(3)(a) of the Act, the pecuniary penalties referred to in orders 1 and 2 above are to be paid by the respondents to the Consolidated Revenue Fund of the Commonwealth of Australia, within 28 days of the date of these orders.
4.The applicant has liberty to apply 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 typographic, clerical or grammatical errors (r 24.04(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth) (Rules), or to record a variation to the order pursuant to r 24.04(h) of the Rules.
REASONS FOR JUDGMENT
JUDGE GIVEN:
On 19 September 2024, the Court delivered reasons for entry of a default judgment: see Fair Work Ombudsman v Ella Goup (NSW) Pty Ltd [2024] FedCFamC2G 1207 (default judgment) and made orders and declarations (September Orders). By order 4 of the September Orders, the proceedings were adjourned to 10:15am on 21 November 2024 for further hearing in respect of civil pecuniary penalties sought by the Fair Work Ombudsman (FWO) in relation to the contraventions declared in the September Orders, consequent upon the default judgment (penalty hearing).
Pursuant to s 546(1) of the Fair Work Act 2009 (Act) seeks the imposition of pecuniary penalties against The Ella Group (NSW) Pty Ltd (first respondent) and Louise Ramona Yaacoubian (second respondent), in respect of the contraventions set out below.
At the time default judgment was entered the Court made, inter alia, orders to the following effect:
(a)that, upon admissions taken to have been made, declarations be made that:
(i)the first respondent contravened s 716(5) of the Fair Work Act 2009 (Act) by failing to comply with a compliance notice dated 27 February 2023 (Compliance Notice); and
(ii)the second respondent was involved, within the meaning of s 550(2)(c) of the Act, in the first respondent’s contravention of s 716(5) of the Act and, by reason of s 550(1) of the Act, was taken to have contravened s 716(5) of the Act;
(b)the first respondent was required to take the steps notified by the Compliance Notice within 28 days of the order, namely by:
(i)calculating and paying to the FWO the outstanding entitlement it was required to pay to Amal Chami (employee) under the Compliance Notice (outstanding amount);
(ii)calculating and paying to the employee’s nominated superannuation account the additional superannuation contributions in respect of the outstanding amount;
producing to the FWO a schedule outlining its calculations and evidence of payment; and
(c)the first respondent pay interest to the FWO on the outstanding amount within 28 days of the order.
In respect of the penalty phase of these proceedings, the FWO relies upon the following documents filed in these proceedings:
(a)Application and Statement of Claim (SOC) filed on 8 March 2024;
(b)Affidavits of Joseph Khoury filed on 12 June 2024 and 12 June 2024 (Khoury Affidavits);
(c)Affidavits of Ruby Rashika Miguntenna filed on:
(i)12 June 2024 (First Miguntenna Affidavit);
(ii)10 July 2024 (Second Miguntenna Affidavit);
(iii)30 August 2024 (Third Miguntenna Affidavit);
(iv)4 September 2024 (Fourth Miguntenna Affidavit); and
(d)Affidavit of Fair Work Inspector Hala Hani Youssef Abu Hijleh (the Fair Work Inspector) filed on 23 October 2024 (Hijleh Affidavit).
As at the date of the penalty hearing, the first respondent had still not taken the steps required by the September Orders, or otherwise engaged with the proceedings.
BACKGROUND
The background to the conduct the subject of these proceedings is predominantly derived from the written submissions and the Affidavit evidence of the FWO.
The first respondent is a company which operates a childcare centre.[1]
[1] SOC at [3(e)]
The second respondent is, and was at all material times, the sole director, secretary and shareholder of the first respondent.[2] She was also the person who communicated with the FWO on behalf of the first respondent and, based on the content of those communications, the person who was responsible for the first respondent’s compliance with the Compliance Notice.[3] It is apparent from those communications that the second respondent had authority to compel the first respondent to comply with the Compliance Notice, including by referring the matter to the accountant and negotiating a payment plan.[4]
[2] SOC at [4(b)] and Hijleh Affidavit at [23] and Annexure “HH-17” thereto
[3] Hijleh Affidavit at [10], [13], [16] and [19] and Annexures “HH-04”, “HH-07”, “HH-10” and “HH-13” thereto
[4] SOC at [4(d) to [4(f)]
Compliance Notice
In or around October 2022, the FWO commenced an investigation into the first respondent’s employment of the employee.[5]
[5] SOC at [5] and Hijleh Affidavit at [7]
Based on the information obtained during the investigation, the Fair Work Inspector formed a reasonable belief within the meaning of s 716(1) of the Act that the first respondent had contravened cl 10.5(a) of the Children’s Services Award 2010 by failing to pay the employee the hourly rate payable for a full-time employee, plus casual loading of 25%.[6]
[6] SOC at [6] to [7]
On 27 February 2023, the Fair Work Inspector gave the Compliance Notice to the first respondent pursuant to s 716(2) of the Act.[7]
[7] SOC at [8]
The Compliance Notice required the first respondent to calculate and rectify the underpayment to the employee by 3 April 2023, and to produce reasonable evidence of its compliance to the FWO by 12 April 2023.[8]
[8] SOC at [9]
The first respondent did not take the action specified in the Compliance Notice by 12 April 2023, or at all.[9]
[9] SOC at [12]
PRINCIPLES FOR ASSESSING PENALTY
Pursuant to s 546 of the Act, the Court may order a person to pay a pecuniary penalty which it considers appropriate if the Court is satisfied that the person has contravened a civil remedy provision. Section 716(5) of the Act is a civil remedy provision (see s 539 of the Act).
Section 12 of the Act provides that a penalty unit has the meaning given by s 4AA of the Crimes Act 1914 (Cth). The value of a penalty unit in April 2023, being the time of the contravention, was $275. Pursuant to s 539 of the Act, the maximum penalty for a contravention of s 716(5) that occurred in April 2023 is $41,250 for a body corporate (being 150 penalty units) and $8,250 for an individual (being 30 penalty units).
The principles for determining such penalties are well settled. Following the High Court’s decision in Australian Building and Construction Commissioner v Pattinson (2022) 399 ALR 599 (Pattinson), the purpose of a civil penalty “is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act”: see Pattinson at [9] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ.
In determining what is reasonably necessary to achieve specific and general deterrence, regard may be had to the non-exhaustive list of the factors identified in Trade Practices Commission v CSR Ltd [1990] FCA 521 (see also Pattison (supra) at [18]; Australian Competition and Consumer Commission v Employsure Pty Ltd (2023) 407 ALR 302 at [50] per Rares, Stewart and Abraham JJ).
However, those factors do not form a “rigid catalogue of matters for attention” (see Pattinson at [19]). The Court has a broad discretion to assess the appropriate penalty, adopting an approach of “instinctive synthesis”: see Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 (Merringtons[10]) at [27] to [28] per Gray J and [55] and [78] per Graham J.
[10] The appellant was a corporation, trading under the name “Merringtons”
The process of determining the appropriate penalty having regard to these principles may be approached in these steps:
(a)identify the separate contraventions involved;
(b)consider whether each of the contraventions constitute a single course of conduct within the meaning of s 557(1) of the Act;
(c)consider the extent to which two or more of the contraventions have common elements to ensure the penalties imposed for each contravention are an appropriate response to the conduct (that is, ‘common law course of conduct’);
(d)consider the appropriate penalty for each contravention or group of contraventions; and
(e)assess whether the overall penalty is an appropriate response to the conduct which led to the contraventions (that is, the ‘totality principle’): see Kelly v Fitzpatrick (2007) 166 IR 14 (Kelly) at [30] per Tracey J and Merringtons at [23] per Gray J and [71] per Graham J and [102] per Buchanan J.
In determining the appropriate penalties to be imposed, I consider the following factors to be relevant to determining penalty given the facts and circumstances of the instant case.
Deterrence
The purpose of civil penalties is to promote the public interest in compliance and attempt to put a price on a contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the same legislation. To this end, the Court should fix a penalty that “it considers fairly and reasonably to be appropriate to protect the public interest from future contraventions of the [Act]”: see Pattison at [71].
Any penalty imposed should be fixed at a level that will not be regarded as “an acceptable cost of doing business”: see Pattison at [17] citing Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249 at [62] per Keane CJ, Finn and Gilmour JJ. The penalty should have a “sting or burden” necessary to secure the specific and general deterrent effects that are the reason for its imposition: see Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157 at [116] per Keane, Nettle and Gordon JJ.
Specific Deterrence
Specific deterrence is directed towards ensuring that a contravener is not prepared to embark upon the risk of engaging in similar contravening conduct in the future: see Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128 at [50] per Gilmour J.
There is a particular need to specifically deter the respondents from engaging in similar contravening conduct in future in circumstances where:
(a)prior to the commencement of proceedings, they repeatedly and deliberately failed to comply with the Compliance Notice (see [28] to [35] below);
(b)even following the commencement of these proceedings, the respondents have failed to comply with the Compliance Notice in accordance with the Court’s Orders (see [38] to [41] below);
(c)the first respondent is still a registered corporation with the Australian Securities and Investments Commission (ASIC)[11] and, as far as the evidence suggests, continues to trade.[12] The solicitor for the FWO gives evidence that she telephoned the childcare centre twice in June 2024 and spoke with individuals who appeared to be working at the childcare centre. As set out in the Khoury Affidavits, the process server attended a particular address which was recorded as being the principal place of business of the first respondent on numerous occasions in March, April and June 2024. Mr Khoury deposes that on the first of those occasions when he attended the address in question, he “found it to be a business called Funtime Childcare”, and further that on all occasions he attended that address he spoke with employees who were present; and
(d)the second respondent remains the sole director, director and shareholder of the first respondent and, further, has another Australian Business Number registered with ASIC (associated with the trading name “Thats Lovely Cleaning Services”)[13].
[11] Hijleh Affidavit at [23] and Annexure “HH-17” thereto
[12] First Miguntenna Affidavit at [10] and “RRM-04” thereto and Second Miguntenna Affidavit at [22] and Annexure “RRM -17” thereto
[13] Hijleh Affidavit at [23] to [24] and Annexures “HH-17” and “HH-18” thereto
General Deterrence
In order to be useful as a general deterrent, a penalty:[14]
should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like-minded persons organisations.
[14] Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [93] per Marshall, Lander and Jessup JJ; see also Fair Work Ombudsman v ADADN Pty Ltd [2021] FCCA 756 at [39]
In determining an appropriate penalty, general deterrence is a significant factor and the Courts consider its use ‘important to send a clear signal to the community at large, and specifically to employers, regarding the importance of complying with Australian workplace laws.’[15]
[15] Fair Work Ombudsman v Lifestyle SA Pty Ltd [2014] FCA 1151 at [156]
General deterrence is of particular importance in this matter given:
(a)the efficacy of statutory notices such as compliance notices will be hindered if recipients perceive that a failure to comply carries no meaningful consequences (see [45] to [49] below);
(b)the respondents operate in the “child care services” industry, which has a high degree of disputes;[16] and
(c)the respondents repeatedly and deliberately ignored their obligations (see [29] to [37] below), and it is important that others be deterred from behaving in a similar manner.
[16] Hijleh Affidavit at [25], Annexure “HH-19” thereto
Nature, circumstances and deliberateness of the conduct
The respondents’ contraventions of s 716(5) of the Act occurred in circumstances where I am satisfied, that they were aware of the Compliance Notice, were given multiple opportunities to comply with it, and yet, deliberately failed to do so as detailed below.
Over a period of approximately two months, the Fair Work Inspector and Senior Compliance Notice Officer Melissa Qutami (the SCNO) made numerous attempts to communicate with the respondents in relation to the Compliance Notice. Those included six emails, three telephone calls and a formal letter outlining the failure of the first respondent to comply with the Compliance Notice and providing them with an opportunity to explain why there had been no compliance.[17]
[17] Hijleh Affidavit at [9] to [12], [14] to [15], [17] to [18], [20] to [21] and Annexures “HH-03” to “HH-09” (inclusive), “HH11” to “HH-12” and “HH-14” to “HH-15” thereto
While the second respondent did reply to some of the communications from the Fair Work Inspector and SCNO, she did not at any time include the requisite calculations or proof of having rectified the underpayment, nor demonstrated that she was taking any other material action. Instead, the second respondent:
(a)Claimed that it was it was difficult for her to speak to the SCNO because she was working, yet did not take up the SCNO’s invitation to call her back;[18]
(b)sought to have her accountant or pay roll officer discuss the matter, but then failed to respond to the SCNO’s request for the accountant’s contact details;[19]
(c)asked for “an indication of what is expected” of her (after the SCNO had already made numerous attempts to explain this), but did not respond to the SCNO’s email explaining what was required and attaching a template to assist with calculations; and [20]
(d)informed the SCNO that she “…would like to negotiate a payment plan” but did not respond to the SCNO’s request for specified information to justify that request for a payment plan.[21]
[18] Hijleh Affidavit at [10] to [11] and Annexures “HH-04” and “HH-05” thereto
[19] Hijleh Affidavit at [13] to [14] and Annexures “HH-07” and “HH-08” thereto
[20] Hijleh Affidavit at [19] to [21] and Annexures “HH-13” to “HH-15” (inclusive) thereto
[21] Hijleh Affidavit at [19] to [21] and Annexures “HH-13” to “HH-15” (inclusive) thereto
I accept that the aforementioned communications show not only the second respondent’s awareness of the Compliance Notice but a lack of any serious intention to comply with it. The varied nature of the second respondent’s replies, combined with the lack of follow-through, suggest they were not genuine attempts at compliance and, further, indicative of a dismissive attitude towards the regulator. That view is cemented by the respondents’ failure to reply to a letter sent a few months later by the FWO providing them with a further and final opportunity to comply with the Compliance Notice and foreshadowing that legal action might otherwise be commenced.[22]
[22] Hijleh Affidavit at [22] and Annexure “HH-16” thereto
The FWO afforded the respondents ample time and opportunities to comply with the Compliance Notice and thereby avoid litigation. Despite this, they failed to do so. As a result, the FWO brought these proceedings to seek orders compelling compliance.
The respondents’ conduct in repeatedly and deliberately failing to comply with the Compliance Notice demonstrates a serious and deliberate disregard for its obligations under the Act and the authority of regulator. This in turn heightens the need for specific deterrence.
Corrective action, contrition and cooperation
The respondents have not exhibited any contrition, nor have they taken any corrective action to remedy the first respondent’s contraventions, even after these proceedings were brought.
In addition to the first respondent’s failure to comply with the Compliance Notice prior to the commencement of these proceedings, the respondents have not engaged with the proceedings at all. Despite numerous attempts by the FWO to communicate with the respondents in relation to the proceedings they have failed to:
(a)comply with the Orders requiring rectification of the first respondent’s non-compliance with the Compliance Notice;[23] and
(b)file the required documents with the Court, attend any Court dates and defend the proceedings with due diligence (resulting in their subsequent default).
[23] Hijleh Affidavit at [28]-[29], Annexures “HH-22” and “HH-23” thereto
Relevantly, in Fair Work Ombudsman v Soma Kitchen Pty Ltd & Anor (No 2) [2020] FCCA 2583 at [35] it was held that:
…the respondents’ rather nonchalant approach to the Notice and their failure to participate in these proceedings [demonstrate] a complete disregard for their legal obligations.
The respondents’ conduct in failing to comply with the Orders or otherwise engage in the proceedings signals its disregard for Court processes, which in turn heightens the need for specific deterrence in this matter.
Nature and extent of the loss
The respondents’ conduct in this matter deprived the employee of the benefit of the actions the respondents were required to take under the Compliance Notice. In particular, the employee has been deprived of receiving the applicable hourly rate, inclusive of casual loading, for a level 3.4 employee under the Children’s Services Award 2010.
To date, the respondents have not complied with the Court’s orders requiring the first respondent to calculate and pay the amount owed to the employee under the Compliance Notice. As a result, the employee has still not received the amount owed to her under the Compliance Notice, two years and five months after the date for compliance specified in the Compliance Notice.[24]
[24] SOC at [12], Hijleh Affidavit at [28] and [29] and Annexures “HH-22” and “HH-23” thereto
This takes on particular significance in circumstances where the employee was performing relatively low-paid work, and the underpayment spanned the duration of her employment (being a period of approximately 2.5 years).
The failure to comply with a statutory notice also causes public loss. The FWO submits that the legislature has set penalties for non-compliance with a Compliance Notice because a failure to comply will cause (as can be seen in these proceedings) the workplace regulator to spend time and public funds dealing with civil remedy proceedings which would not have been required had compliance occurred: see Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor (No.2) [2019] FCCA 2144 (Nobrace) per Judge Blake at [19] and Fair Work Ombudsman v ASGBRIS Pty Ltd & Anor [2020] FCCA 553 per Tonkin J at [36].
As observed in Fair Work Ombudsman v Soma Kitchen Pty Ltd & Anor (No2) [2020] FCCA 2583 per Judge Kendall at [39], the loss occasioned by a failure to comply with a compliance notice is:
…the frustration and stultification of the statutory purpose behind s.716 of the Act… As noted above, the purpose of s.716 is to provide an alternative to litigation. That is, it is designed to prevent litigation. Litigation is timely and expensive. It is also not controversial that Court resources are limited and this Court actively promotes alternative resolution methods in order to reduce unnecessary expenditure. Here, that purpose has been systematically undermined.
I accept those submissions, considering the consequences of the respondents’ failure to comply with the Compliance Notice, it is important that others be deterred from behaving in a similar manner.
Minimum standards in relation to compliance notices
The power of a Fair Work Inspector to issue a compliance notice was introduced to the Act to provide a mechanism to address non-compliance with certain employment obligations arising under the Act, as an alternative to commencing litigation for each underlying contravention.[25]
[25] Fair Work Bill 2008, Explanatory Memorandum at [2673]
The Courts have recognised that compliance notices provide a mechanism for the efficient and cost-effective rectification of identified contraventions of the Act, including underpayments to employees: see Nobrace at [19] per Judge Blake and Fair Work Ombudsman v Blu Hornsby Pty Ltd [2016] FCCA 1150 at [29] per Judge Smith.
If the first respondent had complied with the Compliance Notice:
(a)the FWO would have been prevented from bringing civil remedy proceedings against it in respect of the underlying contraventions pursuant to s 716(4A) of the Act; and
(b)the first respondent would not be taken to have contravened the civil remedy provisions in respect of the underlying contraventions, pursuant to s 716(4B) of the Act.
The respondents failed to comply with the Compliance Notice in circumstances where numerous attempts were made by the FWO to facilitate that compliance. The FWO says that a consequence, it “had no choice” but to bring these proceedings. Despite the absolute nature of that submission, the election to commence the proceedings was discretionary. However, I accept that these proceedings were necessary (in an attempt) to further compel compliance by the respondents.
The FWO says that the failure of the respondents to comply undermine the enforcement framework of the Act and the safety net of entitlements it is designed to protect, citing Fair Work Ombudsman v Tester [2021] FCCA 771 (Tester) per Judge Jarrett at [27]. I accept that failure to comply with a notice properly issued by the FWO is serious: see Tester at [28] and Fair Work Ombudsman v VS Investment Group Pty Ltd & Anor [2013] FCCA 208 per Judge Jarrett at [51]. The efficacy of statutory notices such as compliance notices with be hindered if recipients perceive that a failure to comply carries no meaningful consequences: Nobrace (supra) at [40].
The FWO submits that penalties for non-compliance should be set at a level which demonstrates there are serious consequences for failing to comply with a compliance notice. I accept that submission and that by so doing other parties will be deterred from failing to comply with compliance notices.
Similar previous conduct and corporate culture
There is no evidence before the Court to suggest that the respondents have engaged in previous similar conduct. By itself, this weighs in their favour. However, the evidence shows that the second respondent is not only the sole director and secretary of the first respondent at all material times, but also the person responsible for the first respondent’s compliance with the Compliance Notice. The FWO submits, the penalties should reflect the seniority of the second respondent in the context of the first respondent. I accept that submission.
Size and financial circumstances of the first respondent
As at the time of the penalty hearing was heard, the respondents had not filed any evidence of the size and financial circumstances of the first respondent. In any event, even if evidence were to be filed with the Court that the first respondent is experiencing financial difficulties, it is well established that the size and financial circumstances of an employer do not exculpate contraventions of workplace laws, and that the capacity to pay a penalty will be of less relevance than the objective of general deterrence: Kelly at [28] and Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412 at [27].
That said, the size and financial circumstances of a respondent may be relevant considerations in determining penalty where appropriate evidence is put forward, but needs to be weighed against the need for general deterrence: Fair Work Ombudsman v Althaus Homes Pty Ltd [2021] FCCA 126 at [35] per Judge Jarrett and Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 per Bromwich J at [105] to [106].
In the present case I take the relatively small size of the first respondent into account.
DETERMINATION OF PENALTY IN THIS CASE
Based on the factors outlined above, the applicant submits that the following penalties are appropriate:
(a)first respondent: $33,000 being 80% of the maximum penalty; and
(b)second respondent: $6,600 being 80% of the maximum penalty.
Having regard to all the foregoing factors, I am of the view that the appropriate penalty for each of the respondents should be 70% of the maximum penalty. While accepting many of the submissions made for the FWO, I take into account the size of the first respondent, and that there is no evidence of prior contravening conduct by either of the respondents. Relevant to the principles of deterrence (both specific and general), I am satisfied that the following penalties will serve as an appropriate measure to secure compliance of the respondents in future:
(a)the first respondent must pay $28,875 being 70% of the maximum penalty for its contravention of s 716(5) of the Act by failing to comply with a compliance notice given to it on 27 February 2023; and
(b)the second respondent: $5,775 being 70% of the maximum penalty for her involvement, within the meaning of s 550(2)(c) of the Act, in the first respondent’s contravention of s 716(5) of the FW Act.
The FWO seeks orders that the penalties be paid to the Commonwealth. At hearing I enquired as to what benefit such an order would have to the employee and was informed that any penalties paid by the respondents to the Commonwealth would be remitted by the FWO to the employee. By an email sent to the Court immediately following the hearing, to which the respondents were copied, the solicitor for the applicant clarified that such an order was not sought because the FWO did not have sufficient information to precisely determine how much the employee ought to have been paid until the steps required by the Compliance Notice had been undertaken.
Pursuant to s 546(3)(a) of the Act, the pecuniary penalties be paid by the respondents to the Consolidated Revenue Fund of the Commonwealth of Australia.I am satisfied that this is the appropriate course and I will so order including that such payment must be made within 28 days of the date of these orders.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Given. Associate:
Dated: 3 September 2025
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