Fair Work Ombudsman v Harris Group Co Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Harris Group Co Pty Ltd [2025] FedCFamC2G 574

File number(s): MLG 1138 of 2023
Judgment of: JUDGE J YOUNG
Date of judgment: 23 April 2025
Catchwords: INDUSTRIAL LAW – Applicant seeks declaration of contraventions of the Fair Work Act 2009 (Cth) – contravention of civil remedy provisions – penalties sought – consideration of factors relevant to penalty – where respondents cooperated by signing a statement of agreed facts – where underpayment has not been rectified – where conduct demonstrates deliberate disregard for obligations under the Act – penalties ordered pursuant to s 546(1).
Legislation:

Corporations Act 2001 (Cth)

Fair Work Act 2009 (Cth) ss 12, 14, 90(2), 539(2), 545(1), 546, 547(2), 550(1), 550(2), 687(1), 700(1), 701, 716(1)

716(5), 793(1)

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 13.06(1)(e)

Road Transport and Distribution Award 2020 cll 10.1, 21.1, 23.1, 24.4, sch B

Cases cited:

Australian Building and Construction Commissioner v Pattinson [2022] HCA 13

Australian Building and Construction Commissioner v Pattinson [2019] FCA 1654

Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCA 8

CFMMEU v ABCC [2018] FCAFC 97

Fair Work Ombudsman v Yogurberry World Square [2016] FCA 1290

Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; (2018) 260 FCR 68

Jordan v Mornington Inn Pty Ltd [2007] FCA 1384

Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357

Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65

The Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482

Trade Practices Commission v CSR Ltd [1990] FCA 762

Wong v The Queen [2001] HCA 64; (2001) 207 CLR 582

Division: Division 2 General Federal Law
Number of paragraphs: 53
Date of hearing: 11 February 2025
Place: Melbourne
Solicitor for the Applicant: Ms Stolzenhain of the Fair Work Ombudsman
Solicitor for the Respondents: Did not participate

ORDERS

MLG 1138 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

FAIR WORK OMBUDSMAN

Applicant

AND:

HARRIS GROUP PTY LTD

First Respondent

MATTHEW HARRIS

Second Respondent

ORDER MADE BY:

JUDGE J YOUNG

DATE OF ORDER:

23 APRIL 2025

THE COURT DECLARES THAT:

1.The First Respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the Compliance Notice issued to the First Respondent on 21 April 2022.

2.The Second Respondent was involved, within the meaning of s 550(2) of the FW Act, in the First Respondent’s contravention of s 716(5) of the FW Act declared at Order 1 herein and is taken to have contravened that provision.

THE COURT ORDERS THAT:

3.Pursuant to s 545(1) of the FW Act, the First Respondent take the steps that were required by the Compliance Notice within 28 days of this Order by:

(a)calculating and paying…

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Details
Case
[2025] FedCFamC2G 574
Decision Date

CaseChat Overview and Summary

In the Federal Circuit Court of Australia, the Fair Work Ombudsman (FWO) brought an application against Harris Group Co Pty Ltd (First Respondent) and its sole director and company secretary, the Second Respondent, for penalties relating to the underpayment of wages to an employee, Paul Fogarty, who worked for the company during the period of 14 September 2021 to 4 January 2022. The case was determined based on agreed facts that highlighted the First Respondent's failure to pay the employee the required overtime rates, Saturday penalty rates, and accrued annual leave entitlements as per the Road Transport and Distribution Award 2020. The legal issues before the court revolved around the appropriate penalty for these breaches, taking into account factors such as the company's financial situation, its cooperation with the FWO, and the need for general and specific deterrence.

The court considered the First Respondent's size and financial circumstances, noting that these factors do not absolve the company of its obligations under the Fair Work Act 2009 (Cth). The First Respondent's lack of corrective action and failure to rectify the underpayment, despite having been provided with assistance from the FWO, were significant in the court's assessment. Additionally, the lack of an apology or evidence of contrition further influenced the penalty decision. The court emphasised the importance of compliance with the statutory framework, highlighting that failure to comply with notices issued by the FWO undermines the enforcement of the Act. The need for general deterrence, to ensure that penalties serve as a meaningful deterrent to others, was also highlighted. The court concluded that there was a clear need for both general and specific deterrence in this case, given the industry's history of disputes and the demonstrated disregard for legal obligations by the First Respondent.

After careful consideration of the relevant factors, the court ordered that the First Respondent pay a penalty of $15,000 and the Second Respondent pay a penalty of $10,000. The penalties were determined to be sufficient to achieve the necessary deterrence without causing undue hardship to the respondents. The court's decision underscored the importance of compliance with workplace laws and the role of penalties in enforcing the Fair Work Act. The orders were designed to ensure that the respondents understood the seriousness of their breaches and the importance of adhering to their legal obligations in the future.

Orders

Orders of the court

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Background

Background to the litigation

Before the Court is an application by the Fair Work Ombudsman (FWO) for the imposition of penalties in respect of the First and Second Respondent’s contraventions of the Fair Work Act 2009 (Cth) (Act).BACKGROUND The relevant facts are agreed and summarised in the following paragraphs. The Applicant is the Fair Work Ombudsman (FWO). The FWO is and was at all material times:(a)a statutory appointee of the Commonwealth appointed by the Governor General 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 to apply for orders for contraventions of civil remedy provisions pursuant to s 539(2) of the Act. The First Respondent is and was at all relevant times:(a)a company incorporated under the Corporations Act 2001 (Cth) and registered since 7 June 2021;(b)a “constitutional corporation” within the meaning of s 12 of the Act;(c)a “national system employer” within the meaning of s 14 of the Act;(d)a company that operated a furniture delivery business, trading as “Harris Trucking” (Business);(e)a company with a registered office of 4 Kilkenny close, Traralgon VIC 3844 (Registered Office); and(f)by reason of the matters pleaded in paragraphs 4(a) to 4(d) above, covered by the Act in respect of its employees. The Second Respondent is and was at all relevant times:(a)a natural person capable of being sued;(b)the sole director and company secretary of the First Respondent since 7 June 2021;(c)a person with the actual or apparent responsibility for:(i)the operation, management and control of the First Respondent; and(ii)ensuring the First Respondent complied with its legal obligations under the Act;(d)a person who corresponded with the Applicant by telephone;(e)a person whose conduct (engaged in on behalf of the First Respondent and within the scope of his actual or apparent authority) is taken to be that of the First Respondent pursuant to s 793(1) of the Act. In or around February 2022, the FWO commenced an investigation into the First Respondent’s compliance with the Act in respect of its employment of Paul Fogarty (Employee). The investigator, Fair Work Inspector James Roberts (FWO Inspector) is, and was at all material times, appointed under s 700(1) of the Act. As a result of the FWO investigation, it was determined that the Employee was employed by the First Respondent during the period of 14 September 2021 to 4 January 2022 (Employment Period) and that the Road Transport and Distribution Award 2020 (Award) applied to the First Respondent in respect of the Employee and the relevant Employment Period. Further, as a result of the FWO investigation it was determined that the Employee was at all relevant times during the Employment Period:(a)a Transport Worker Grade 3 as defined in Schedule B to the Award; and(b)a part-time employee, within the meaning of clause 10.1 of the Award; and(c)not paid amounts sufficient to satisfy his entitlement for overtime rates, Saturday penalty rates, and for accrued, but untaken, annual leave when his employment ended.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

JUDGE J

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Ratio Decidendi

Legal Principle Established

Established by: JUDGE J

In any event, the size and financial circumstances of an employer do not excuse an employer of its obligations to comply with workplace laws: Jordan v Mornington Inn Pty Ltd [2007] FCA 1384 at [99]. Corrective action, cooperation with the FWO and contrition As set out above, the underpayment has not been calculated or rectified by the Respondents. The Respondents have spared some cost and complexity by working with the FWO to submit two statements of agreed facts where full admissions are made. The Respondents have not provided an apology or any evidence indicating contrition and compliance with the Notice remains outstanding. This is despite the FWO providing the Respondents with assistance on more than one occasion to undertake the calculations required by the Notice. Compliance with the minimum standards An important consideration in this case is the need for compliance with the statutory framework. The statutory framework concerning compliance notices is an important mechanism for an inspector to deal with non-compliance with minimum entitlements in the Act as an alternative to commencing litigation. It also provides a means of early resolution and rectification without penalty. The failure to comply with a statutory notice issued by the FWO is serious and such conduct ultimately undermines the Act’s enforcement framework and the safety net of entitlements it is designed to protect. Deterrence General deterrence must serve a purpose such that the penalty is not seen by others as just “the cost of doing business”: Fair Work Ombudsman v Yogurberry World Square [2016] FCA 1290, [27]. In order to be useful as a general deterrent, a penalty “should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by likeminded persons or organisations’: Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65, [93] (Lander J). In my view, there is a need for general deterrence in this matter, to emphasise the importance of an effective compliance framework and at a sufficient level to impress upon other employers the importance of complying with the legal obligations owed to their employees. Further, the FWO Industry Profile for the period July 2021 to June 2024 provides that the Road Freight Transport Industry has a moderate dispute rate and is the third highest industry in total dispute count involving the FWO for the 2022-2023 period. I also consider this is a case where there is a need for specific deterrence. Although there is no evidence of whether the First Respondent currently employs any employees, it is still a registered business and the Respondents have demonstrated a disregard for their obligations under the Act by failing to comply with the Notice, despite being provided with assistance from the FWO and numerous opportunities to take the necessary action to comply. Further, the Second Respondent remains the current director and company secretary of the First Respondent.THE APPROPRIATE PENALTY