Fair Work Ombudsman v Hamel

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Hamel [2023] FedCFamC2G 783

File number(s): SYG 669 of 2022
Judgment of: JUDGE GIVEN
Date of judgment: 31 August 2023 
Catchwords: FAIR WORK - Assessment of civil pecuniary penalty for contravention of s 716(5) of the Fair Work Act – contraventions in context of COVID-19 – no contention of need for specific deterrence – where Fair Work Ombudsman did not provide updated information of corrective action taken before penalty hearing
Legislation:

Crimes Act 1914 (Cth) s 4AA

Fair Work Act 2009 (Cth) ss 90, 546, 687, 700, 701, 716

Cases cited:

Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68

Australian Building and Construction Commissioner v Pattinson & Anor [2021] HCATrans 90

Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450

Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254

Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640

Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Anor (2015) 258 CLR 482

Fair Work Ombudsman v Absynthe Restaurant Pty Ltd [2015] FCCA 58

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

Fair Work Ombudsman v Hiyi Pty Ltd [2016] FCCA 1634

Fair Work Ombudsman v NSH North Pty Ltd t/a New Shanghai Charlestown (2017) 275 IR 148

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

Jordan v Mornington Inn Pty Ltd (2007) 166 IR 33

Kelly v Fitzpatrick (2007) 166 IR 14

Pattinson v Australian Building and Construction Commissioner (2020) 282 FCR 580

Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249

Trade Practices Commission v CSR Ltd [1990] FCA 521
Division: Division 2 General Federal Law
Number of paragraphs: 52
Date of last submission/s: 3 March 2023
Date of hearing: 27 February 2023
Place:  Sydney
Solicitor for the Applicant: Mr T Ahmed of the Fair Work Ombudsman
The Respondent:  In person

ORDERS

SYG 669 of 2022

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

FAIR WORK OMBUDSMAN

Applicant
AND:

DAVID ALLAN HAMEL

Respondent

ORDER MADE BY:

JUDGE GIVEN

DATE OF ORDER:

31 AUGUST 2023

BY CONSENT, THE COURT DECLARES THAT:

1.Mr David Allan Hamel (respondent) contravened s 716(5) of the Fair Work Act 2009 (Cth) (Act) by failing to comply with a compliance notice issued to him by the Fair Work Ombudsman on 27 October 2021.

THE COURT ORDERS THAT:

1.Consequent upon the declaration made by the Court on 31 August 2023, and pursuant to s 546(1) of the Act, the respondent must pay a pecuniary penalty fixed in the sum of $1,500, within 60 days of the date of this order.

2.Pursuant to s 546(3) of the Act, the penalty referred to in order 1 is to be paid to the Commonwealth.

3.The applicant has liberty to apply on seven days’ notice in the…

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Details
Case
[2023] FedCFamC2G 783
Decision Date

CaseChat Overview and Summary

In the case of Fair Work Ombudsman v Hamel, the Fair Work Ombudsman (FWO) sought to enforce compliance and impose penalties on Mr Hamel for breaches of workplace laws. The dispute arose from an investigation into the employment practices of Mr Hamel and his co-trustee, Lemah Management Pty Ltd (deregistered), who operated a hotel. The investigation found that two employees, Mr Rupesh Mainali and Ms Teegan McLean, were owed unpaid accrued annual leave and leave loadings upon termination of their employment. Mr Hamel was issued a compliance notice requiring him to rectify these breaches, which he ultimately did.

The legal issues before the court included whether the FWO had standing to bring the proceedings, whether Mr Hamel had contravened the relevant workplace laws, and if so, the appropriate penalty for those contraventions. The court had to consider the nature and extent of the contraventions, the capacity of Mr Hamel to pay a penalty, his contrition, cooperation, and corrective actions, and other relevant factors in determining the penalty.

The court determined that the FWO had standing to bring the proceedings and that Mr Hamel had indeed contravened the workplace laws. In assessing the penalty, the court considered Mr Hamel's financial capacity, his genuine remorse, and his cooperation and corrective actions. While the court acknowledged that Mr Hamel's contraventions could have been avoided through earlier cooperation, it accepted his expressions of remorse and the fact that he had paid the employees in full by the time of the penalty hearing. The court also noted the FWO's oversight in not verifying corrective actions sooner, which required additional work and submissions.

In conclusion, the court imposed a penalty on Mr Hamel, taking into account the factors mentioned. The specific penalty amount was determined based on the totality of the circumstances, including the nature and extent of the contraventions, Mr Hamel's financial situation, and his overall conduct throughout the proceedings. The court's decision balanced the need for deterrence with the individual circumstances of the case.

Orders

Orders of the court

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Background

Background to the litigation

The background to this matter is not in dispute between the FWO and Mr Hamel, having been derived from an agreed statement of facts (agreed facts) which was filed for the parties on 6 July 2022. At all relevant times, the FWO is, and was:(a)a statutory appointee of the Commonwealth appointed by the Governor-General of Australia by written instrument pursuant to s 687(1) of the Act; (b)a Fair Work Inspector pursuant to s 701 of the Act; and (c)a person with standing to bring these proceedings and apply for orders for contraventions of civil remedy provisions pursuant to s 539(2) of Act. At all material times, Mr Hamel was: (a)a natural person capable of being sued; (b)a co-trustee for the Hamel Family Trust (Trust), together with Lemah Management Pty Ltd (deregistered) (Company) until its deregistration by the Australian Securities and Investments Commission on 9 January 2022; and (c)in his capacity as co-trustee for the Trust, jointly and severally the operator of the Hotel (with the Company). At all relevant times, Fair Work Inspector Warren (FWI Warren) is and was a Fair Work Inspector appointed by the FWO under s 700 of the Act. In or around August 2021, FWI Warren commenced an investigation compliance with Commonwealth workplace laws (investigation) by the Company and Mr Hamel. That investigation was commenced following requests for assistance made to the FWO by Mr Rupesh Mainali and Ms Teegan McLean (employees), who had been employed by the Company and Mr Hamel (as co-trustees for the Trust), to work in the Hotel. The employees were employed under the Hospitality Industry (General) Award (2020) (Award). As a result of the investigation, FWI Warren formed a belief that:(a)Mr Mainali was employed to work in the Hotel on a permanent full-time basis between 4 December 2019 and 20 June 2021; (b)Ms McLean was employed to work in the Hotel on a permanent full-time basis between 30 September 2020 and 9 August 2021; (c)at the time Mr Mainali’s employment ended he was owed, but not paid, 216.8270 hours in accrued (but untaken) annual leave entitlements, including amounts payable for leave loading in accordance with cl 30.3 of the relevant Award; and (d)at the time Ms McLean’s employment ended she was owed, but not paid, 128.80 hours in accrued (but untaken) annual leave entitlements, including amounts payable for leave loading in accordance with cl 30.3 of the relevant Award. By reason of the matters agreed in [7] above, FWI Warren formed a reasonable belief, within the meaning of s 716(a) of the Act, that the Company and Mr Hamel had contravened s 90(2) Act by failing to pay accrued but untaken annual leave to each of the employees when their employment with the Hotel ceased (contraventions). On 27 October 2021, FWI Warren issue a compliance notice to the Company and Mr Hamel, in respect of the contraventions pursuant to s 716(2) of the Act (Compliance Notice). The Compliance Notice required that the Company and Mr Hamel take specified action to remedy the effects of the contraventions by 10 December 2021, being that they:(a)calculate the full amount of accrued annual leave owed to each of the employees at the time their respective employment ended; (b)make a payment to each of the employees for the annual leave and the annual leave loading owed with respect to the calculation referred to in (a) above; and(c)make a record of the information and amounts referred to in (a) and (b) above (rectification information).(specified actions).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Although the capacity of a respondent to pay a pecuniary penalty is of less relevance when determining penalty than the objective of deterrence (see Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254 at [9] per Merkel J and Mornington Inn at [99]), I accept in relation to this factor that Mr Hamel’s assertions can be given only limited weight when considering the overall recommended penalty. Mr Hamel has had ample opportunity to contextualise the contravention by demonstrating his financial circumstances. Contrition, cooperation, corrective action and previous conduct Having read the correspondence between the parties[16] and also heard Mr Hamel’s submissions[17] at the penalty hearing, the Court accepts Mr Hamel feels genuine remorse for his contraventions and, in particular the effect that it had on the employees. He also holds the employees in high regard. [16] For example Exhibit “1R” being an email from Mr Hamel to the FWO (copied to the Court) dated 8 November 2022[17] Albeit not the subject of formal evidence At hearing, Mr Hamel described Mr Mainali as being:[18] …probably one of the greatest chefs I’ve ever worked with and someone who I respect quite highly.[18] Transcript 27 February 2023 at T18.8 to 9 Mr Hamel also made submissions at the penalty hearing that he considered his employees to be “family”[19] and acknowledged that his contraventions of the Act had caused the employees hardship. A familial atmosphere in a workplace does not absolve employers of adhering to their legal obligations in a professional manner. However, the Court accepts Mr Hamel’s assertions that he was not intending to be cavalier about his obligations as an employer, and that he is genuinely remorseful at his failure to have paid the employees the amounts owed to them at the requisite time. [19] Transcript 27 February 2023 at T18.25 It is accurate to say that the need for these proceedings could have been obviated by earlier cooperation, concessions and corrective actions by Mr Hamel. However, I reject the suggestion that he has been relatively uncooperative with the FWO. I also take into consideration that by the time of the penalty hearing, Mr Hamel had taken corrective action and paid the employees the relevant amounts in full (see [21] above). It is relevant to observe again that the FWO did not take steps to ascertain whether corrective action had been taken by Mr Hamel from November 2022 until February 2023 and, even then, only did so when prompted by the Court. To the extent that this required additional work on the part of the FWO to file additional submissions addressing corrective action, the responsibility for that oversight lies exclusively with the FWO. This oversight by the FWO has not been not taken into consideration in respect of the assessment of penalty. It is only relevant to the chronology and conduct of the proceedings. By entering into the statement of agreed facts in a relatively timely fashion, these proceedings were able to be expedited toward a penalty hearing and saved the parties the time and expense, and the Court’s resources, necessary for a contested liability hearing. The Courts have recognised that such utilitarian admissions are of value and should be reflected in penalties to be imposed, and I will do so.[20] [20] Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 [163] to [165] per Dowsett, Greenwood and Wigney JJ. Nature and extent of loss