Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 8)

In the Federal Circuit and Family Court of Australia, Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 8) addressed the case of Foot & Thai Massage Pty Ltd (FTM) and its directors contravening the Fair Work Act 2009. The Fair Work Ombudsman (FWO) alleged extensive underpayments to employees, primarily migrant workers, over a period of four years. The court was tasked with determining appropriate penalties, compensation, and orders for payment to the affected employees. Additionally, the court examined the implications of a deed of company arrangement (DOCA) on the potential compensation orders and the principles of civil double jeopardy.

The court had to decide whether the FWO could recover underpayments exceeding the amounts paid under the DOCA, considering the policy and purpose of Pt 5.3A of the Corporations Act. It also needed to determine if compensation for non-economic loss was appropriate and whether the proposed penalties were sufficient given the extensive, serious, and deliberate nature of the contraventions. The court further assessed whether the penalties proposed by the FWO were proportionate to the gravity of the breaches and the necessity for deterrence.

The court concluded that the contraventions were severe and deliberate, with no contrition shown by the respondents. The need for substantial penalties was underscored to ensure both specific and general deterrence, particularly given the vulnerability of foreign workers to exploitation. The court found that the DOCA did not bar the compensation claims for underpayments incurred after the administration began, and it did not limit the court's power to impose penalties. The court also determined that compensation for non-economic loss was warranted, given the significant impact on the employees.

In light of these findings, the court ordered that the first and second respondents pay compensation for the underpayments and non-economic loss, with interest accruing from a specific date. The penalties were set at substantial amounts to reflect the seriousness of the contraventions. The court also directed that any unremitted penalties could be remitted to the employees by the FWO, provided leave was obtained. The orders ensured that the employees received compensation and that the court's deterrence objectives were met.