Fair Work Ombudsman v Hamel
[2023] FedCFamC2G 783
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 event of non-compliance with orders 1 and/or 2 above.
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
JUDGE GIVEN:
By an application to the Court on 6 May 2022, the Fair Work Ombudsman (FWO) seeks orders for the imposition of civil pecuniary penalties on Mr David Allan Hamel (Mr Hamel) for his (now) admitted contravention of s 716(5) of the Fair Work Act 2009 (Cth) (Act). The contravention is constituted by Mr Hamel having failed to comply with a compliance notice which required him, as one of the former operators of a hotel trading as “Crossroads Hotel Narrabri”[1] (Hotel), to pay two employees their accrued annual leave on termination.
[1] In Narrabri, New South Wales
BACKGROUND
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).
The Company and Mr Hamel were required to produce reasonable evidence of compliance with the specified actions, by 17 December 2021, by producing to the FWO:
(a)a schedule setting out the full name of each employee;
(b)the rectification information in relation to each employee; and
(c)proof that full payment had been made to each of the employees.
The Compliance Notice met the requirements of s 716(3) of the Act.
Failure to comply with the Compliance Notice
Mr Hamel agrees that, for his part, he did not take the specified actions by 10 December 2021 (nor provide the requisite information by 17 December 2021) or at all, as at 6 July 2022.[2] As a result Mr Hamel agrees that he failed to comply with the Compliance Notice and thereby contravened s 716 of the Act.
[2] Being the date upon which the statement of agreed facts was signed
On 23 December 2021, Mr Hamel conceded that $4,771 was owed to Ms McLean, and $7,961.627 was owed to Mr Mainali.[3]
[3] Agreed facts at [18(c)(iii)] and Warren Affidavit at [17] and Annexure “ELW-16” thereto
Between 11 April 2022 and 4 May 2022, solicitors engaged on behalf of the FWO corresponded[4] with Mr Hamel in relation to potential instalment plans for payment to the employees.
[4] Agreed facts at [22] to [29])
On 25 May 2022, after the commencement of these proceedings on 6 May 2022, Mr Hamel admitted to contravening the Act by failing to comply with the Compliance Notice. The question of liability having been conceded by Mr Hamel by entering into the statement of agreed facts, the matter was initially listed for a hearing on penalty only on 22 November 2022.
PENALTY HEARING
On the morning of the penalty hearing, Mr Hamel wrote to the Court to say that he was unable to attend Court in person, and requesting that he be able to attend via videolink. At my instruction, my Associates provided a videolink and informed the parties that its provision was for the purpose of making any adjournment application only. Ultimately, I granted Mr Hamel’s adjournment request, and relisted the matter to 27 February 2023 for hearing on penalty.
On 24 February 2023, my Chambers received an email from Mr Hamel attaching “lodgement receipts” which appeared to evidence payments by Mr Hamel to each of Mr Mainali and Ms McLean for amounts of $7,961.65 and $4,771 (respectively). At the penalty hearing, that email chain, and the receipts, were tendered by Mr Hamel as a bundle, and marked Exhibit “1R”.
The solicitor for the FWO was unable to confirm to the Court whether the employees had received the amounts evidenced by Exhibit “1R”. That was because he said he had been absent from his office the preceding Friday, due to illness. However, it transpired after further questions from the Court, that contact had not been made with the employees by the FWO since November 2022, in particular to ascertain prior to the adjourned penalty hearing whether there had been any corrective action by Mr Hamel.
At the conclusion of the hearing, I reserved judgment in anticipation of receiving confirmation from the FWO that the alleged corrective action payments had been received by the employees, and what, if any, impact those payments would have on penalty given that written submissions made for the FWO proceeded on the basis that no corrective action had been taken. As was discussed with the solicitor for the FWO at the penalty hearing, given that corrective action is generally a relevant factor in the consideration of penalty, it is not acceptable that the Court should be left to guess at a penalty hearing whether any corrective action has been taken.
On 3 March 2023, the FWO filed further supplementary submissions on penalty as ordered to accurately complete the information before the Court. By those submissions, the FWO confirmed that Mr Mainali had received payment on 6 February 2023 and Ms McLean on 24 February 2023. The FWO also accepted that those payments received by the employees should be characterised as full rectification of the amount owed under the Compliance Notice. However, the FWO submitted that because full rectification occurred only after the commencement of these proceedings, that the Court construe this as reflecting a “minimal level of cooperation” by Mr Hamel.
Approach to penalty
The Court may impose penalties pursuant to s 546 of the Act if it is satisfied that a person has contravened a civil remedy provision, including s 716 of the Act. Pecuniary penalties may not exceed the maximum number of penalty units referred to in s 539(2) which, for a contravention of s 716, is 30 penalty units. Relevant to the time of the contravention, the maximum penalty that the Court may impose on Mr Hamel, an individual, is $6,600.[5]
[5] Pursuant to s 12 of the Act, a “penalty unit” has the same meaning as that in s 4AA of the Crimes Act 1914 (Cth) (Crimes Act) which at the time of offending in this case was $222.
The principal purpose of a pecuniary penalty order under s 546 is “the promotion of the public interest in compliance” or, in other words, deterrence: see Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Anor (2015) 258 CLR 482 (Cth v FWBII) at [55] per French CJ, Kiefel, Bell, Nettle and Gordon JJ, citing Trade Practices Commission v CSR Ltd [1990] FCA 521 (CSR) at [40] per French J (as his Honour then was) and Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450 (Pattinson) at [9] and [15] to [17] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ.
It is now well-established that the purpose of a pecuniary penalty is to “put a price” on contraventions sufficiently high as to deter repetition by the contravenor, or by others who are in a position to so contravene the legislation: see Cth v FWBII at [55] citing CSR (supra) at [40] and Pattinson at [15] and [17]. The amount of any penalty imposed should be sufficient so as to not be considered an acceptable cost of doing business: see Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249 at [62] to [63] per Keane CJ, Finn and Gilmour JJ cited with approval in Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [66] per French CJ, Crennan, Bell and Keane JJ.
If the Court is minded to fix a penalty, it should in all the circumstances of the case be one which, fairly and reasonably serves to protect the public interest from future contraventions: see Pattinson (supra) at [71] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ. The appropriate deterrent value of a penalty may be assessed by reference to the non-exhaustive list of factors set out in Kelly v Fitzpatrick (2007) 166 IR 14 at [14] per Tracey J. In the present case, the factors which relevantly arise for consideration are addressed as follows.
Deterrence
The FWO says that general deterrence is an important factor in these proceedings, and in particular that, the efficacy of statutory notices such as compliance notices may be undermined if recipients perceive that a failure to comply carries no meaningful consequences. So much can be accepted. In this regard, it was submitted by the FWO that the imposition of a meaningful penalty by the Court, would deter other persons from failing to comply with compliance notices: see Fair Work Ombudsman v Absynthe Restaurant Pty Ltd [2015] FCCA 58 at [47] where Judge Jarrett (as his Honour then was) found as follows:
Ordering penalties at a meaningful level for the failure to comply with a compliance notice will demonstrate that such notices are to be taken seriously. It is important that recipients of such notices understand that they are to be taken seriously and that there are benefits to employers, employees and the community alike if they are treated seriously.
The FWO submitted that there is a need arising from this matter to send a message to employers generally, including those like Mr Hamel who employ workers in the hospitality industry, that failure to comply with a compliance notice will not be tolerated by the FWO, or the Courts.
Specific deterrence
At the penalty hearing, despite making a submission that “both specifical [sic] and general” deterrence were factors relevant to the Court’s determination of penalty in this matter, no oral submissions were made by the solicitor for the FWO in relation to specific deterrence. Similarly, while referring to specific deterrence while setting out general principles, no written submissions were made for the FWO to contend that any penalty in this matter ought be directed specifically to Mr Hamel due to any particular likelihood, or proclivity, he might have to contravene the Act again. The FWO has adduced no evidence to suggest that Mr Hamel has antecedent contraventions and, given the relevance that such antecedents would have to the question of penalty, in the absence of such evidence I infer that he does not.
The absence of any contentions from the FWO in relation to specific deterrence is significant and the Court has taken the lack of need for specific deterrence into account.
Nature and circumstances of the contravening conduct
The FWO says that Mr Hamel’s failure to comply with the Compliance Notice should be considered in the context of the efforts made by the FWO to assist him with his obligations and to avoid the need for litigation.
The FWO says that it liaised with Mr Hamel from 7 to 16 September 2021 before issuing him with the Compliance Notice,[6] in response to which Mr Hamel acknowledged that he had failed to pay each of the employees their minimum entitlements, yet did not rectify the underpayment.[7]
[6] Agreed facts at [16] to [17]
[7] Ibid
At hearing, Mr Hamel sought to give context to the contravening conduct by reference to the impact the COVID-19 pandemic had on the Hotel, and to the hospitality industry in general. The FWO counters this submission by highlighting that there was no specific financial evidence proffered in support of such a contention, to the extent that it also intersects with the consideration of the size and financial resources of Mr Hamel and the Hotel. While in a specific financial context that observation is accurate, the Court can take judicial notice of the fact that the COVID-19 pandemic, and associated lockdowns in NSW, did result in the temporary closure of food and beverage venues in 2020, and again in 2021. To the extent that this gives context to the circumstances in which the contravening conduct occurred, while not excusing the contravention, it remains as a relevant factor to be considered in weighing penalty. It is also relevant to the question of general deterrence given that it reflects an anomalous, unexpected, contextual circumstance not of the contravener’s own making.
However, it is also the case that at the time the FWO issued the Compliance Notice to Mr Hamel, he must be taken to have been aware of his obligations and yet still did not comply.[8] Mr Hamel essentially contended that it was not that he would not comply, but that he could not, absent funds which had entirely dissipated by reason of the impact of the COVID-19 pandemic, and which resulted in him ceasing his business. In this context, the absence of financial evidence becomes relevant.
[8] Warren Affidavit [15] and Annexure “ELW-14” thereto
The FWO records having taken multiple steps to encourage Mr Hamel to comply with the Compliance Notice, including offering to work with him on an instalment plan,[9] and explaining his obligations to him.[10] At the penalty hearing, Mr Hamel made submissions to the effect that he mistakenly thought he was required to make payment to the employees in one sum (see [44] below which is consistent with the way in which he did ultimately pay to employees[11]). It is difficult to reconcile that belief with the fact that the FWO proposed a payment plan to Mr Hamel. I am prepared to accept that Mr Hamel did erroneously think that he should pay the employees in a lump sum, albeit that belief was not reasonably held in the aforementioned circumstances.
[9] Agreed facts at [18(b)] and Warren Affidavit [16] and Annexure “ELW-15” thereto
[10] Warren Affidavit Annexure “ELW-15”
[11] See [18] above
The FWO also made submissions to the effect that once these proceedings had been commenced, Mr Hamel “did not respond meaningfully to the Applicant’s offers”.[12] The corollary of Mr Hamel’s non-compliance was that the FWO was required to use public resources to commence and prosecute these proceedings. However, despite this submission, by reference to the date upon which the proceedings were commenced and the date upon which Mr Hamel entered into the statement of agreed facts, the period is relatively short.
[12] Applicant’s written submissions filed on 15 September 2022
Overall, the nature and circumstances of the contravening conduct is lamentable and, to a certain extent, was beyond Mr Hamel’s control. While, as noted above, this does not excuse the contravention it does go some way to explaining it. It can be accepted that Mr Hamel was not the architect of the lockdown circumstances which might have impacted the Hotel business, but is not in dispute that Mr Hamel did have control over how those circumstances were managed.
Size and financial resources of the Hotel
As the FWO correctly observes, the obligation to comply with the Act applies to small corporations and individuals, just as it does to large employers: see Fair Work Ombudsman v Extrados Solutions Pty Ltd [2014] FCCA 815 at [10] per Judge Jarrett (as his Honour then was). While the size and financial circumstances of a respondent do not exculpate conduct contravening employers (see Fair Work Ombudsman v Hiyi Pty Ltd [2016] FCCA 1634 at [47] per Judge Jones), the FWO conceded that they are factors relevant to the consideration of appropriate penalty, where appropriate evidence is put forward: see Fair Work Ombudsman v NSH North Pty Ltd t/a New Shanghai Charlestown (2017) 275 IR 148 at [105] to [106] Bromwich J.
The FWO acknowledges that Mr Hamel made contemporaneous assertions to FWI Warren that the Hotel had ceased operating due to the COVID-19 pandemic,[13] that he was by then himself unemployed, and experiencing financial difficulties.[14] However, the FWO says that the evidence demonstrating Mr Hamel’s financial circumstances is limited and that Mr Hamel did not provide the FWO with any further evidence, despite repeated invitations to do so.[15] Nor has any material been put before the Court to corroborate the claimed financial circumstances as a specific factor mitigating penalty. I accept that it is for Mr Hamel to make good any mitigating argument that “financial hardship might mitigate what would otherwise be an appropriate penalty”: see Jordan v Mornington Inn Pty Ltd (2007) 166 IR 33 at [99] per Heerey J (Mornington Inn).
[13] Agreed facts at [16(b)], [17(b)], [18(a)(i)], Warren Affidavit at [15] and Annexure “ELW-14” thereto at 71
[14] Agreed facts at [18(a)(ii)], [18(a)(iv)], Warren Affidavit at [15] and Annexure “ELW-14” at 71
[15] Agreed facts at [18(b)(i)], [24], [26], [28] and [32]
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
Mr Hamel’s failure to comply with the Compliance Notice had the effect of denying the employees the benefit of their statutory entitlements for a period of time.
FWI Warren gives evidence, which Mr Hamel did not seek to challenge, that each of the employees recounted to him having suffered personal financial hardship as a result of Mr Hamel’s failure to comply with the Compliance Notice. Mr Mainali says he was required to borrow money from a friend, and Ms McLean said had a large debt that she did not owe prior to the termination of her employment which she could not repay.[21] The evidence is that Ms McLean says that during her employment, she suffered a significant eye injury, rendering her unable to work as a chef, and that Mr Hamel’s failure to comply with the Compliance Notice exacerbated her financial difficulties.[22] While Mr Hamel made assertions from the Bar table to express his understanding that Ms McLean had since obtained work again as a chef, there has undoubtedly been some hardship experienced by the employees, as a direct result of the failure of Mr Hamel to comply with his obligations.
[21] Warren Affidavit at [25]
[22] Warren Affidavit at [25(b)]
Need to ensure compliance with minimum standards
The FWO submitted that the failure of Mr Hamel to comply with minimum standards is an important consideration in assessing penalty. Section 3 of the Act indicates that one of the Act’s objectives is preservation of an effective safety net of fair, relevant and enforceable minimum terms and conditions through modern awards. The FWO submits that penalties set by the legislature for contraventions of the Act demonstrate the importance that Parliament places on compliance, by employers, with their minimum obligations.
It can be readily accepted that failure to comply with a statutory notice properly issued by the FWO is serious, and that recipients of such notices should clearly observe such notices and comply with them: see Fair Work Ombudsman v VS Investment Group Pty Ltd [2013] FCCA 208 at [51] per Judge Jarrett (as his Honour then was). The FWO submits that Mr Hamel’s failure to comply with the Compliance Notice undermined the Act’s enforcement framework and reflected a prioritisation of Mr Hamel’s interests over his responsibilities as an employer. Given the findings in relation to the nature and circumstances in which the contravention occurred, and Mr Hamel’s genuine expressions of contrition, I reject that submission. At most, the FWO can ask that such an inference be drawn. However, there is no evidence as to how (or what) Mr Hamel prioritised in the period in question and, against the circumstances already outlined above, it is not an inference I am prepared to make.
AWARD OF PENALTY
I am satisfied that Mr Hamel has contravened a civil penalty remedy provision. I am also of the view that in this matter it is appropriate to impose a pecuniary penalty on him for that can contravention. Against the maximum available penalty of $6,600 (see [22] above), the FWO submits that a penalty ranging between $3,564 to $4,158 is appropriate on the following bases:
(a)the objective seriousness of a failure by Mr Hamel to comply with a statutory notice, undermining the Act’s enforcement framework and the safety net of entitlements it is designed to protect, particularly where that notice was specifically designed to provide an option for employers to rectify the matters in the notice and avoid court proceedings through compliance;
(b)the financial hardship suffered by the affected employees as a result of Mr Hamel’s failure to comply with the Compliance Notice. However, this submission must be understood as having been made in submissions filed on 6 October 2022 which were not updated nor was the underlying fact of a lack corrective action later updated or confirmed (see [20] above). By the supplementary submissions filed on 3 March 2023, the FWO submitted that the fact of corrective action having been taken did not demonstrate a significantly lessened need for deterrence, nor that the proposed penalties would be crushing or oppressive on Mr Hamel;
(c)the allegedly “minimal level of co-operation” from Mr Hamel,[23] in circumstances where the FWO offered to discuss an instalment plan for payments and provided an opportunity to address the contravention prior to issuing proceedings; and
(d)the need for general deterrence, especially among the hospitality industry, in which Mr Hamel employed workers.
[23] See [21] above
Having taken into account all the factors addressed from [26] above onwards, the Court is of the view that the appropriate penalty in this matter is $1,500, taking the following into particular account:
(a)the need for a general deterrent in this case must be understood against the circumstances in which the contravention occurred, and that such circumstances are unlikely to regularly present themselves (see [32] above);
(b)the lack of any specific deterrence called for by the FWO in the present case and the apparent lack of antecedents on Mr Hamel’s part (see [28] above); and
(c)the undisputed hardship caused to the employees, balanced with the fact that the corrective action rectified the underpayment in full and while being forthcoming at a relatively late stage, the circumstances in which Mr Hamel misapprehended the need to pay in a lump sum.
Pursuant to s 546(3) of the Act, it is appropriate that the penalty be paid to the Commonwealth and, in all the circumstances of this case, I will allow 60 days for Mr Hamel to make the payment.
I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Given. Associate:
Dated: 31 August 2023
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