Fair Work Ombudsman v ESR Group Pty Ltd

Link copied
Case Copied 43 min read

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v ESR Group Pty Ltd [2024] FedCFamC2G 1311

File number(s): SYG 722 of 2023
Judgment of: JUDGE MANOUSARIDIS
Date of judgment: 29 November 2024
Catchwords: INDUSTRIAL LAW - admitted contraventions of s 716(5) and s 536(1) of the Fair Work Act 2009 (Cth) – declarations and orders made to give effect to admitted contraventions – assessment of pecuniary penalties.
Legislation:

Crimes Act 1914 (Cth), s 4AA

Evidence Act 1995 (Cth), s 191

Fair Work Act 2009 (Cth), ss 12, 90(2), 99, 536(1), 539, 545(1), 546(1),(2), 547(2), 550, 557(1),(2), 700, 716(2),(5), 793(1)

Vehicle Repair, Services and Retail Award 2020, cl 16.2, cl 21.2, cl 29.4

Cases cited:

 Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563

Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8

Contin v The Queen [2012] VSCA 247

Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59

Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301

Fair Work Ombudsman v Viper Industries Pty Ltd [2015] FCCA 492

Fair Work Ombudsman v VS Investment Group Pty Ltd & Anor [2013] FCCA 208

Kelly v Fitzpatrick [2007] FCA 1080

Mason v Harrington Corporation Pty Ltd [2007] FMCA 7

Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70

Royer v The State of Western Australia [2009] WASCA 139

R v Holder & Johnston [1983] 3 NSWLR 245

Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd [1980] FCA 47; (1980) 44 FLR 149; (1980) ATPR 40-161

Division: Fair Work
Number of paragraphs: 85
Date of hearing: 27 March 2024
Place: Sydney
Solicitor for the Applicant: Ms F Parekh of Office of the Fair Work Ombudsman
Solicitor for the Respondents: Mr A Sahay of Thornton + King Pty Ltd
Table of Corrections
11    December 2024

In paragraph 3 of the Orders, “paragraph 1” has been replaced with “sub paragraphs 1(a) and (b)”.

In paragraph 11 of the Orders,

(i)         “and” was added at the end of subparagraph (b);

(ii)       “(c) pay a pecuniary penalty of $5,394.60 for his involvement in the contravention referred to in declaration 1(c); and” was deleted;

(iii)      “d” was replaced with “c”.

The words “the sole director of ESR”, which appeared in paragraph 1 of the reasons for judgment, have been replaced with the words “the manager of ESR”.

ORDERS

SYG 722 of 2023

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

FAIR WORK OMBUDSMAN

Applicant
AND:

ESR GROUP PTY LTD (ACN 164 780 830)

First Respondent

PAUL SILVESTRO

Second Respondent

ORDER MADE BY:

JUDGE MANOUSARIDIS

DATE OF ORDER:

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Fair Work Ombudsman v ESR Group Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2024] FedCFamC2G 1311
Decision Date

CaseChat Overview and Summary

In the Fair Work Commission, the Fair Work Ombudsman (FWO) filed a case against ESR Group Pty Ltd, a company that operated a smash repairs business. The FWO alleged that ESR had contravened sections 716(5) and 536(1) of the Fair Work Act 2009 (Cth), involving the failure to provide payslips to four employees during specific periods. The respondents admitted to these contraventions, prompting the FWO to seek declarations, orders, and pecuniary penalties to enforce compliance and deterrence.

The central legal issues in this case were the assessment of pecuniary penalties for the admitted contraventions of sections 716(5) and 536(1) of the Fair Work Act. The FWO argued that the penalties should reflect both specific and general deterrence, given the seriousness of the contraventions and the need to uphold the obligations under the Fair Work Act. The court needed to determine the appropriate level of penalties to ensure compliance and deter future non-compliance by ESR and its representative, Mr. Silvestro.

The Fair Work Commissioner found that the contraventions were serious and deliberate, warranting significant pecuniary penalties. The court noted that ESR and Mr. Silvestro had cooperated by admitting the contraventions and engaging legal representation, which warranted a 10% discount on the penalties. The primary focus was on ensuring general deterrence to prevent other employers from similar misconduct. Consequently, the court assessed the penalties at 75% of the maximum allowable amount, resulting in $49,950 for ESR and $9,990 for Mr. Silvestro. After applying the discount, the final penalties ordered were $44,955 for ESR and $8,991 for Mr. Silvestro, payable to the Commonwealth within 28 days of the pronouncement of orders. The court also made declarations and orders to enforce compliance with the Fair Work Act.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

In this section of my reasons, I set out the facts stated in the SAF, and the contraventions of s 716(5) and s 536(1), which the SAF records the respondents admit.Background ESR is and was at all relevant times a company that operated a smash repairs business. [1] In the course of that business, ESR employed the following individuals (Employees):[2] (a)Mr Andrew Stannard, from 9 November 2020 until 16 March 2021 (Stannard Period); (b)Mr Charalambos Aristodimou, from 5 May 2021 until 29 September 2021 (Aristodimou Period); (c)Mr Craig McNeill, from 4 October 2021 until 1 December 2021 (McNeill Period); and (d)Mr Geoffrey Loader, from 5 March 2020 until on or around 15 November 2021 (Loader Period). [1] SAF, [10(e)][2] SAF, [11] Mr Silvestro made representations to the Employees that he was the manager of ESR, and that he was responsible for the overall operation and control of ESR.[3] In those circumstances, Mr Silvestro engaged in the conduct referred to below on behalf of ESR within the scope of his apparent authority and, for that reason, his conduct is taken to be the conduct of ESR pursuant to s 793(1) of the FW Act.[4][3] SAF, [13(b)-(c)][4] SAF, [13(e)]First Investigation On around April 2021 Ms Jambekar (FWI Jambekar), a Fair Work Inspector (FWI) appointed by the FWO under s 700 of the FW Act, began an investigation into ESR’s business after the FWO received a request for assistance (RFA) from Mr Stannard. Based on the information obtained from the investigation, from around 9 August 2021 FWI Jambekar formed the following beliefs:[5](a)ESR employed Mr Stannard during the Stannard Period; (b)the Vehicle Repair, Services and Retail Award 2020 (Award) covered and applied to Mr Stannard; and (c)when Mr Stannard’s employment ended, ESR failed to pay his accrued but untaken annual leave and annual leave loading. (d)As a result of the matters stated in paragraph 20, on about 9 August 2021 FWI Jambekar formed a reasonable belief that ESR contravened s 90(2) of the FW Act by failing to pay Mr Stannard his accrued but untaken annual leave when his employment ended, including annual leave loading under cl 29.4 of the Award (Stannard Contravention).[6][5] SAF, [15][6] SAF, [16]First Compliance Notice On 10 August 2021 FWI Jambekar gave ESR a compliance notice (First Compliance Notice) pursuant to s 716(2) of the FW Act. FWI Jambekar gave the First Compliance Notice to ESR by express post to ESR’s registered office (Registered Office); and also sent a copy to the email address of Mr Silvestro (Email Address).[7][7] SAF, [17]-[18] The First Compliance Notice required ESR to take the following actions by 17 September 2021:[8][8] SAF, [19](a)calculate the number of hours of annual leave Mr Stannard had accrued when his employment ended; (b)calculate the full amount Mr Stannard should have been paid for the hours of accrued, but used, annual leave when his employment ended; (c)calculate the amount Mr Stannard should have been paid for annual leave loading under cl 29.4 of the Award;(d)make a payment to Mr Stannard for the amounts referred to in paragraphs (b) and (c); (e)make a record of the information and amounts referred to in paragraphs (a)- (d); and(f)furnish reasonable evidence to the FWO of compliance with the First Compliance Notice by 24 September 2021 by producing: (i)a schedule that sets out the calculations and amounts owed to Mr Stannard; and (ii)proof of full payment to Mr Stannard such as a bank transfer showing payment.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The pecuniary penalties should also incorporate a significant element for general deterrence. The pecuniary penalties should be set to deter employers generally from engaging in the contravening conduct in which ESR and Mr Silvestro have engaged in. I refer to what Judge Jarrett said in Fair Work Ombudsman v VS Investment Group Pty Ltd:[56]The failure to comply with a notice properly issued by the applicant in the course of its investigations and the discharge of its statutory functions is serious. Recipients of such notices should be left under no misapprehension about their obligations to comply with those notices.[56] Fair Work Ombudsman v VS Investment Group Pty Ltd & Anor [2013] FCCA 208, at [51]Contrition, co-operation, and corrective action It is the case that ESR and Mr Silvestro have co-operated to the extent that they engaged a lawyer, and admitted their contraventions. I propose to give this some, but not much, weight by applying a 10% discount to the pecuniary penalties I will assess. The respondents’ admissions have not been met by action, and in particular, they have not done that which the Compliance Notices required them to do, which included paying money to the Employee their entitlements.Assessment before adjustments I propose to assess the pecuniary penalties as follows: The contravention consisted of ESR not issuing a payslip to four employees during the following periods: That manifests a persistent intentional action, and a complete disregard of s 536(1) of the FW Act. These matters point to the penalty being assessed on the higher end of the scale. For the reasons I have given in relation to ESR’s contraventions of s 716(5), specific deterrence and general deterrence must be reflected in the assessment of a pecuniary penalty. Further, what I have said about contrition, co-operation, and corrective action in relation to ESR’s contraventions of s 716(5) apply to ESR’s contraventions of s 536(1) of the FW Act. I am satisfied that 75% of the maximum amount of the pecuniary penalty is an appropriate assessment of the amount of the pecuniary penalties ESR and Mr Silvestro should be ordered to pay before adjustment, namely, $49,950 and $9,990 respectively.Adjustments As I have already noted I propose to allow a discount of 10% to reflect the respondents having admitted their contraventions. I am satisfied that no other adjustment is warranted, either under the one transaction principle, or under the totality principle. I therefore propose to order that ESR and Mr Silvestro pay the following pecuniary penalties. I propose to make declarations and orders substantially to the effect of the declarations and orders the parties have requested I make to give effect to the matters agreed to in the SAF. I will also order that the respondents pay pecuniary penalties in the amounts I have assessed; that they pay these amounts to the Commonwealth; and that they do so within 28 days after the date I pronounce orders.