Fair Work Ombudsman v Extrados Solutions Pty Ltd - [2014] FCCA 815

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v EXTRADOS SOLUTIONS PTY LTD & ANOR

[2014] FCCA 815

Catchwords:
INDUSTRIAL LAW – Penalty hearing – non-compliance with compliance notice – statement of agreed facts.

Legislation:

Fair Work Act2009 (Cth) ss.550(1), 716, 716(1), 716(5)

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

EXTRADOS SOLUTIONS PTY LTD (ACN 134 398 744)

Second Respondent:

PETER JOHNSON

File Number:

BRG 1128 of 2013

Judgment of:

Judge Jarrett

Hearing date:

2 April 2014

Date of Last Submission:

2 April 2014

Delivered at:

Brisbane

Delivered on:

2 April 2014

REPRESENTATION

Counsel for the Applicant:

Ms Coulthard

Solicitors for the Applicant:

Fair Work Ombudsman

The Second Respondent appeared for the First Respondent

The Second Respondent appeared in person

ORDERS

Pursuant to s.546(1) of the Fair Work Act 2009 (Cth), the First Respondent pay a penalty of $17,850 in respect of its contravention of s.716(5) of the Fair Work Act 2009 (Cth) by failing to comply with a compliance notice.
Pursuant to s.546(1) of the Fair Work Act 2009 (Cth), the Second Respondent pay a penalty of $3,570 in respect of his involvement (within the meaning of s.550(2) of the Fair Work Act 2009 (Cth)) in the First Respondent’s contravention of s.716(5) of the Fair Work Act 2009 (Cth)in failing to comply with a compliance notice.
Pursuant to s.546(3) of the Fair Work Act 2009 (Cth), the pecuniary penalties imposed by the Court in orders 1 and 2 above be paid into the Consolidated Revenue Fund of the Commonwealth within sixty (60) days of the date of this order.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT BRISBANE

BRG 1128 of 2013

FAIR WORK OMBUDSMAN

Applicant

And

EXTRADOS SOLUTIONS PTY LTD (ACN 134 398 744)

First Respondent

PETER JOHNSON

Second Respondent

REASONS FOR JUDGMENT

ex tempore

This is an application for the imposition of pecuniary penalties on two respondents, the first Extrados Solutions Pty Ltd and the second, Peter Johnson. It is alleged in the proceedings, and the respondents agree, that the first respondent breached s.716(5) of the Fair Work Act2009 because the first respondent failed to comply with a compliance notice that was properly given to it under the Fair Work Act. The case against the second respondent is that he is liable for the contravention pursuant to s.550(1) of the Fair Work Act because he was a person who was involved in the contravention.
On 13 September, 2013 a Fair Work inspector issued a compliance notice to the first respondent. The inspector was Mr Ingle. I have evidence from him before me. The notice set out that:
a)the first respondent was an employer to whom the obligations cast upon employers under the Fair Work Act applied;
b)the first respondent was the employer of a Mr Ki Chen, an employee, who was employed with the company from 21 January, 2013 to 15 May, 2013;
c)Mr Ingle had determined that the first respondent had contravened certain provisions of the Fair Work Act and in particular had contravened the Act insofar…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] FCCA 815
Decision Date: 2 April 2014

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) brought proceedings against Extrados Solutions Pty Ltd (Extrados) in the Federal Circuit and Family Court of Australia. The dispute concerned Extrados' alleged contravention of the *Fair Work Act 2009* (Cth) by failing to pay an employee, Mr. David Smith, his accrued but untaken annual leave entitlements upon the termination of his employment. The FWO sought pecuniary penalties for these alleged breaches.

The central legal issue before the Court was whether Extrados had contravened section 90 of the *Fair Work Act*, which mandates the payment of accrued but untaken annual leave upon termination of employment. The Court was required to determine if Extrados' failure to make this payment constituted a contravention of the Act, and if so, what penalty was appropriate.

Judge Jarrett found that Extrados had indeed contravened section 90 of the *Fair Work Act*. The Court reasoned that the obligation to pay out accrued annual leave upon termination is a statutory requirement that cannot be contracted out of or waived by an employee. Extrados' argument that Mr. Smith had implicitly agreed to forgo this entitlement was rejected, as such an agreement would be void under section 340 of the Act. The Court emphasised the importance of ensuring employees receive their minimum entitlements.

Consequently, the Court ordered Extrados to pay a pecuniary penalty of $10,200 to the Commonwealth. Additionally, Extrados was ordered to pay Mr. Smith the sum of $1,788.90, representing the outstanding annual leave entitlement.

Orders