Fair Work Ombudsman v Garry Bateman Plumbing Pty Ltd
[2022] FedCFamC2G 283
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Garry Bateman Plumbing Pty Ltd [2022] FedCFamC2G 283
File number(s): SYG 2205 of 2021 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 22 April 2022 Catchwords: INDUSTRIAL LAW – assessment of pecuniary penalty for contravention of s 716(5) of the Fair Work Act 2009 (Cth). Legislation: Crimes Act 1914 (Cth) s 4AA
Fair Work Act 2009 (Cth) ss 12, 90(2), 539(1), 539(2), 546, 550, 557A, 700, 716(2), 716(5)
Plumbing and Fire Sprinklers Award 2010 cls 20.2, 28.2
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Bevis v VA Holdings Pty Ltd trading as Granton Homes & Ors [2020] FCCA 2082
Fair Work Ombudsman v Viper Industries Pty Ltd [2015] FCCA 492
Fair Work Ombudsman v VS Investment Group Pty Ltd [2013] FCCA 208
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Division: Fair Work Number of paragraphs: 22 Date of hearing: 11 April 2022 Place: Sydney Solicitor for the Applicant: Ms A Clemens of the Office of the Fair Work Ombudsman, by telephone The Respondents: No appearance by, or on behalf of, the respondents ORDERS
SYG 2205 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: GARRY BATEMAN PLUMBING PTY LTD (ACN 161 917 219)
First Respondent
GARRY BATEMAN
Second Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
22 APRIL 2022
THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the first respondent pay a pecuniary penalty in the sum of $24,975 for its contravention of s 716(5) of the FW Act as declared in the orders made on 1 March 2022.
2.The first respondent pay the pecuniary penalty referred to in order 1 to the Commonwealth by 20 May 2022.
3.Pursuant to s 546(1) of the FW Act the second respondent pay a pecuniary penalty in the sum of $4,995 for his involvement in the contravention of the first respondent of s 716(5) of the FW Act as declared in the orders made on 1 March 2022.
4.The second respondent pay the pecuniary penalty referred to in order 3 to the Commonwealth by 20 May 2022.
5.The parties have liberty to apply within 7 days’ notice in relation to any question that may arise concerning the implementation of these orders.
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 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
The applicant (FWO) applies under s 546 of the Fair Work Act 2009 (Cth) (FW Act) for orders that the first respondent, Garry Bateman Plumbing Pty Ltd (GBP), and the second respondent, Mr Bateman, pay pecuniary penalties because GBP contravened s 716(5) of the FW Act by failing to comply with the compliance notice given under s 716(2), and because Mr Bateman was involved in GBP’s contravention of s 716(5) of the FW Act, within the meaning of s 550(2) of the FW Act.
PROCEDURAL HISTORY
The FWO commenced this proceeding on 30 November 2021 by filing an application and a statement of claim. The matter came before me for a first court date on 1 February 2022. The respondents, however, did not appear. I nevertheless:
(a)ordered that the respondents each file a response and defence by 15 February 2022;
(b)listed the matter for a directions hearing at 9:30 am on 25 February 2022; and
(c)noted that if the respondents do not file a response and defence as provided for by (a), and otherwise do not appear at the directions hearing referred to in (b), the FWO would be at liberty at that directions hearing to apply for default judgment.
The respondents did not file a response and defence, and neither GBP nor Mr Bateman appeared at the directions hearing on 25 February 2022. On 25 February 2022 I therefore heard the FWO’s application for default judgment and, at the conclusion of the hearing, I reserved judgment and listed the application for default judgment on 1 March 2022. On 1 March 2022, on the basis of reasons for judgment I delivered ex tempore, I made a number of orders, including declarations that GBP contravened s 716(5) of the FW Act by failing to comply with the requirements of the compliance notice dated 18 June 2021, and that Mr Bateman was involved, within the meaning of s 550(2) of the FW Act, in GBP’s contravention. I then set the matter down for hearing on the question of penalty on 11 April 2022.
FACTS
I made the declarations on 1 March 2022 on the basis of the allegations made in the statement of claim which, given the declarations made, are taken to have been admitted by the respondents. Those allegations are as follows:
(a)GBP is and was at all relevant times the operator of a plumbing business in Wagga Wagga, New South Wales (Business).
(b)Mr Bateman is and was at all relevant times: the sole director, secretary and shareholder of GBP; responsible for the overall operation, management, and control of GBP; and responsible for ensuring GBP complies with its legal obligations under the FW Act.
(c)In or around January 2021, Mr Pace (FWI), a Fair Work Inspector appointed under s 700 of the FW Act, commenced an investigation into GBP in relation to the employment of Mr Hare (Investigation).
(d)As a result of the Investigation the FWI formed the belief that: between 13 January 2020 and 31 July 2020 GBP employed Mr Hare to work in the Business (Contravention Period); the Plumbing and Fire Sprinklers Award 2010 (Plumbing Award) covered and applied to GBP in relation to Mr Hare; Mr Hare was employed on a full time basis, employed as an apprentice, and under 21 years of age; GBP did not pay Mr Hare the applicable minimum wage under the Plumbing Award; and GBP did not pay Mr Hare for unused, accrued annual leave on termination of his employment.
(e)As a result of the matters in subparagraph (d), the FWI formed the belief that GBP contravened cl 20.2 of the Plumbing Award, and s 90(2) of the FW Act (Contraventions).
(f)On 18 June 2021, the FWI gave GBP a compliance notice pursuant to s 716(2) of the FW Act in relation to the Contraventions (Compliance Notice).
(g)The Compliance Notice required GBP to do the following:
(i)take the following actions to remedy the direct effects of the Contraventions (Specified Actions) by 20 July 2021:
(A)calculate the amount of accrued annual leave owed to Mr Hare at termination of his employment;
(B)make a payment to Mr Hare in respect of annual leave and annual leave loading;
(C)identify the hours worked by Mr Hare during the Contravention Period (Hours);
(D)identify the amount GBP paid to Mr Hare during the Contravention Period in respect of minimum wages under the Plumbing Award (having regard to the Hours);
(E)calculate the amount GBP should have paid to Mr Hare during the Contravention Period in respect of minimum wages (having regard to the Hours);
(F)make payments to Mr Hare of the difference between the amount referred to in (D) and the amount referred to in (E);
(G)calculate and pay any additional superannuation contributions required by cl 28.2 of the Plumbing Award in respect of the amounts owed to Mr Hare;
(H)make a record of the information and amounts referred to in (A) to (G) and the amount of the payments referred to in (B), (F) and (G); and
(ii)produce reasonable evidence to the FWO of GBP’s compliance with the steps set out in (i) above by 27 July 2021.
(h)GBP did not take the Specified Actions by 20 July 2021, and did not produce reasonable evidence of compliance with the Compliance Notice by 27 July 2021. For these reasons, GBP contravened s 716(5) of the FW Act.
(i)Given the matters referred to in subparagraph (b) Mr Bateman was responsible for ensuring GBP complied with the Compliance Notice.
(j)Given the matters referred to in subparagraphs (b), (f), (h), and (i) Mr Bateman: had actual knowledge of the Compliance Notice that was given to GBP; had actual knowledge that GBP failed to comply with the Compliance Notice; and was an intentional participant in GBP’s failure to comply with the Compliance Notice. For those reasons, Mr Bateman was involved, within the meaning of s 550 of the FW Act, in GBP’s contravention of s 716(5) of the FW Act, and because of s 550(1) of the FW Act, Mr Bateman is taken to have contravened s 716(5) of the FW Act.
The FWO read a number of affidavits at the hearing on penalty. These included an affidavit by Ms Warren, a Fair Work Inspector appointed under s 700 of the FW Act.[1] In her affidavit Ms Warren sets out the circumstances in which the FWI gave the Compliance Notice to GBP, and the emails that passed between an officer of the FWO, Mr Parbery, and GBP and Mr Bateman. The FWO also read an affidavit made by Mr Hare.[2]
PENALTY
[1] Affidavit of E L Warren 22.03.2022
[2] Affidavit of C J Hare 22.03.2022
Power and principles
Subsection 546(1) of the FW Act provides that this Court may, on application, order a person to pay a pecuniary penalty the Court considers is appropriate if the Court is satisfied the person has contravened a “civil remedy provision”.[3] That expression is defined in s 539(1) of the FW Act to include the provisions identified in column 1 of the table to s 539(2) of the FW Act. Subsection 716(5) is in column 1 of the table to s 539(2) of the FW Act.
[3] I repeat in this and the following 4 paragraphs much of what I said in Bevis v VA Holdings Pty Ltd trading as Granton Homes & Ors [2020] FCCA 2082, at [33]-[38]
Subsection 546(2) of the FW Act provides that the pecuniary penalty the Court may impose must not, where the person is an individual, be more than “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)” and, if the person is a body corporate, must not be more than five times “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)”. The maximum penalty units for a contravention of s 716(5) of the FW Act as at 20 July 2021, being the day by which GBP was required to carry out the Specified Actions, are 30 penalty units for an individual, and 150 penalty units for a body corporate. (This excludes “serious contraventions”, as defined in s 557A of the FW Act.) Section 12 of the FW Act provides that “penalty unit” has the meaning given by s 4AA of the Crimes Act 1914 (Cth). The penalty unit provided for by s 4AA of that Act as at 20 July 2021 was $222. Thus, $33,300 is the maximum penalty GBP may be ordered to pay for its contravention of s 716(5) of the FW Act, and $6,660 is the maximum penalty Mr Bateman may be ordered to pay for GBP’s contravention of s 716(5) of the FW Act.
The approach of most judges when assessing penalties for a single contravention of a provision of the FW Act is to take into account the non-exhaustive considerations Tracey J identified in Kelly v Fitzpatrick,[4] which his Honour adopted from the judgment of Mowbray FM in Mason v Harrington Corporation Pty Ltd. [5] Those considerations are:
[4] Kelly v Fitzpatrick [2007] FCA 1080, at [14]
[5] Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
(a)the nature and extent of the conduct which led to the breaches;
(b)the circumstances in which that conduct took place;
(c)the nature and extent of any loss or damage sustained as a result of the breaches;
(d)whether there had been similar previous conduct by the respondent;
(e)whether the breaches were properly distinct or arose out of the one course of conduct;
(f)the size of the business enterprise involved;
(g)whether or not the breaches were deliberate;
(h)whether senior management was involved in the breaches;
(i)whether the party committing the breach had exhibited contrition;
(j)whether the party committing the breach had taken corrective action;
(k)whether the party committing the breach had cooperated with the enforcement authorities;
(l)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
(m)the need for specific and general deterrence.
Although these factors have been identified and applied as relevant to the assessment of penalties, they do not constitute a “rigid catalogue of matters for attention”.[6]
[6] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, at [91] (Buchanan J)
Also relevant is the maximum penalty for the contravention provided for by the FW Act; and here I refer to the following passage from the judgment of Flick J in The BKH Contractors Case (No 2):[7]
In undertaking the task of assessing and quantifying the penalties to be imposed, the maximum penalty prescribed by the Commonwealth legislature for a specific contravention serves as a “yardstick” against which the assessment of penalties is generally to proceed . . . .
[7] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563, at [19]
Nature, extent, circumstances, and deliberateness of the contravening conduct
GBP and Mr Bateman were aware of the Compliance Notice, GBP’s obligation to comply with it, and Mr Bateman’s being in a position to cause GBP to comply with it. GBP and Mr Bateman were also aware that GBP’s failure to comply with the Compliance Notice may lead to the FWO commencing proceedings for civil penalties and orders for compliance. Mr Bateman continued to communicate with the FWO after GBP failed to comply with the Compliance Notice; but I accept the FWO’s submission that Mr Bateman’s communications are “better characterised as attempt[s] to delay indefinitely and/or shift responsibility away”.[8]
[8] Applicant’s Outline of Submissions on Penalty, [28]
The following passage from the judgment of Judge Emmett in Fair Work Ombudsman v Viper Industries Pty Ltd applies to the nature of GBP’s contravention of s 716(5) of the FW Act, and Mr Bateman’s involvement in that contravention.[9]
The Respondents’ intentional failure to comply with a mandatory notice issued by the workplace regulator is “conduct ... [which] undermines the utility and effectiveness of a fundamental object” [of] the FW Act. The failure to comply undermines and frustrates the powers conferred on Fair Work Inspectors, which are conferred for the purposes of providing an effective means of enforcing compliance with lawful minimum entitlements. There is a significant cost to the public by reason of the need to bring this matter before the court to enforce compliance.
[9] Fair Work Ombudsman v Viper Industries Pty Ltd [2015] FCCA 492, at [7]
These matters point to assessing penalty at the higher end of the scale.
Nature and extent of loss occasioned by contravention
Mr Hare has not received any of the amounts the Compliance Notice required GBP to calculate and pay to him. Had GBP complied with the Compliance Notice, Mr Hare estimates GBP would have paid him $3,185.46, being $2,361.32 in relation to minimum third year apprentice rates of pay, and $824.14 in relation to accrued untaken paid annual leave on termination.[10] I accept the FWO’s submission that, because of GBP’s failure to comply with the Compliance Notice, Mr Hare has been “less able” to meet his expenses.[11]
[10] Affidavit of C J Hare 22.03.2022, [11]
[11] Applicant’s Outline of Submissions on Penalty, [36]
These matters point to assessing penalty at the higher end of the scale.
Corrective action and cooperation
GBP has not taken any steps to correct its wrongdoing by complying with the Compliance Notice, and there is no evidence before the Court that GBP has changed its behaviour. Further, the respondents have made no attempt to engage with the Court during the course of this proceeding. Thus, GBP’s correcting its contravening conduct is not available as a factor that might mitigate the assessment of the penalty.
Deterrence
I accept the FWO’s submission that the penalty should reflect an element for specific deterrence. GBP remains registered; and GBP and Mr Bateman have demonstrated a disregard for GBP’s obligations under the FW Act.
As for general deterrence, I refer to what Judge Jarrett said in Fair Work Ombudsman v VS Investment Group Pty Ltd:[12]
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.
[12] Fair Work Ombudsman v VS Investment Group Pty Ltd [2013] FCCA 208, at [51]
The FWO relies on data contained in an industry profile for the “Plumbing Services” industry from July 2017 to June 2021.[13] Ms Clemens, who appeared for the FWO, submitted that it is important to send a message to the plumbing industry, in relation to young workers and apprentices, that a failure to comply with a compliance notice will not be tolerated by the FWO, the community, and the Courts.
[13] Affidavit of Ms E L Warren, [16], annexure ELW-8
The penalty should be set at a level that signals not only to employers in the plumbing services industry, but to all employers that a wilful disregard of a compliance notice issued under s 716(2) of the FW Act will be met with a significant penalty.
Assessment
The FWO submits that GBP and Mr Bateman should each be ordered to pay a pecuniary penalty equal to 75% of the maximum amount. Given the matters to which I have referred, I am satisfied it is appropriate to assess penalties in the amount for which the FWO submits the penalties should be assessed. I therefore find that $24,975 is an appropriate penalty for GBP’s contravention of s 716(5) of the FW Act, and $4,995 is an appropriate penalty for Mr Bateman’s involvement in GBP’s contravention.
DISPOSITION
I propose to order that:
(a)GBP pay a pecuniary penalty of $24,975;
(b)Mr Bateman pay a pecuniary penalty of $4,995;
(c)GBP and Mr Bateman pay the pecuniary penalties to the Commonwealth within 28 days after the day I pronounce my orders; and
(d)the parties have liberty to apply on 7 days’ notice in relation to any question that may arise concerning the implementation of the orders I propose to make.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 22 April 2022
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