Fair Work Ombudsman v Harris Group Co Pty Ltd
[2025] FedCFamC2G 574
•23 April 2025
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 the outstanding amounts owed to the Employee in respect of the Compliance Notice (Outstanding Amounts);
(b)calculating any relevant superannuation contributions payable on the Outstanding Amounts in accordance with the steps set out in the Compliance Notice and paying such contributions into the Employee’s nominated superannuation fund; and
(c)preparing and producing to the Applicant:
(i)a schedule setting out the calculation of the Outstanding Amounts and the superannuation contributions with the information required by the Compliance Notice; and
(ii)evidence that the Outstanding Amounts and the additional superannuation contributions referred to at subparagraphs 3(a) and 3(b) above have been paid to the Employee.
4.Pursuant to s 547(2) of the FW Act, the First Respondent pay interest on the Outstanding Amounts calculated in accordance with the applicable pre-judgment interest rate prescribed by the Federal Court of Australia within 28 days of this Order.
5.Pursuant to s 546(1) of the FW Act, the First Respondent pay a pecuniary penalty in the amount of $9,990 to the Commonwealth within 28 days of the date of these Orders.
6.Pursuant to s 546(1) of the FW Act, the Second Respondent pay a pecuniary penalty in the amount of $1,998 to the Commonwealth within 28 days of the date of these Orders.
7.The Applicant have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
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 J YOUNG
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.
On 21 April 2022, the FWO Inspector gave a compliance notice (Notice) to the First Respondent, having formed a reasonable belief that for the purposes of s 716(1) of the Act that the First Respondent had contravened the following clauses:
(a)clause 21.1 of the Award for failing to pay the overtime rate for the first two hours of overtime worked;
(b)clause 21.1 of the Award for failing to pay the overtime rate for overtime after the first two hours of overtime worked;
(c)clause 23.1 of the Award for failing to pay the Saturday penalty rates for ordinary hours worked on a Saturday; and
(d)s 90(2) of the Act by failing to pay the Employee the full amount that would have been payable to him had he not taken his accrued annual leave when his employment ended, including annual leave loading under clause 24.4 of the Award,
(collectively, the Contraventions).
The Notice was sent to the First Respondent’s Registered Office via express post and a copy of the Notice was sent to [email protected], the Second Respondent’s email address.
The Notice required the First Respondent, by 20 May 2022, to take an array of actions to calculate and remedy the direct effects of the Contraventions and keep a record of the same. The Notice also required the First Respondent, by 27 May 2022, to provide evidence to the FWO of compliance with the actions required by the Notice, including proof of payment to the Employee.
The First Respondent failed to comply with the Notice.
On 28 June 2023 proceedings were commenced by way of Application and a Statement of Claim.
On 30 April 2024 and 22 August 2024 respectively, the parties filed a Statement of Agreed Facts and a Further Statement of Agreed Facts which, amongst other things, provided that:
(a)at all relevant times the Second Respondent used the email address [email protected];
(b)the First Respondent contravened s 716(5) of the Act by failing to comply with the Notice issued to the First Respondent on 21 April 2022;
(c)the Second Respondent was involved, within the meaning of s 550(2) of the Act in the First Respondent’s contravention of s 716(5) of the Act and pursuant to s 550(1) of the Act is taken to have contravened s 716(5);
(d)by consent the parties seek declarations that:
(i)the First Respondent contravened s 716(5) of the Act by failing to comply with the Notice;
(ii)the Second Respondent was involved, within the meaning of s 550(2) of the Act, in the First Respondent’s contravention of s 716(5) of the Act in both failing to take the specified action set out in the Notice and failing to produce reasonable evidence to the FWO;
(e)by consent the parties seek orders that:
(i)pursuant to s 545(1) of the Act, the First Respondent take the steps that were required by the Notice within 28 days of this order; and
(ii)pursuant to s 547(2) of the Act, the First Respondent pay interest on the underpayments calculated in accordance with the applicable pre-judgment interest rate prescribed by the Federal Court of Australia within 28 days of this order.
DOCUMENTS RELIED UPON
The FWO relies upon the following documents:
(1)the Application filed on 28 June 2023;
(2)the Statement of Claim filed on 28 June 2023;
(3)the Statement of Agreed Facts filed on 30 April 2023;
(4)the Further Statement of Agreed Facts filed on 22 August 2024;
(5)the affidavit of the FWO Inspector Mr Kim Woodhead filed on 26 September 2024; and
(6)the FWO’s written submissions filed on 13 December 2024.
The Respondents did not file any submissions, attend the hearing on 11 February 2025 nor communicate with the Court in any way after 28 August 2024. I am satisfied that the Respondents were fully on notice of the hearing and chose not to participate. In those circumstances, I considered it appropriate to proceed in their absence in default of their appearance: r 13.06(1)(e) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
THE CONTRAVENTIONS
Sections 716(5) and 550(1) of the Act are civil remedy provisions.
A fair work inspector may apply to this Court for orders in relation to contraventions of ss 716(5) and 550(1): s 539(2). The Court may make any order it considers appropriate if satisfied that a person has contravened a civil remedy provision: s 545(1). The Court may also make a pecuniary penalty order for such contraventions: s 546.
I am satisfied that the Statement of Claim filed in this matter and upon which the FWO relies, complies with the rules of pleading and properly pleads a cause of action that supports the grant of relief. In particular, I am satisfied that the facts alleged in the Statement of Claim and the admissions of the Respondents in the Statement of Agreed Facts and Further Statement of Agreed Facts establish that the First Respondent contravened s 716(5) by failing to comply with the Notice and that the Second Respondent was involved, pursuant to s 550(1), and within the meaning of s 550(2) of the Act, in the First Respondent’s contravention of s 716(5) by failing to comply with the Notice.
The Court has wide discretion to make declarations. Having regard to the admissions of the Respondents and in the particular circumstances of this case, I am satisfied that this is an appropriate case for declaratory relief.
DETERMINATION OF PENALTIES
The Court’s power to impose pecuniary penalties resides in s 546(1) of the Act.
Section 546(1) permits the Court to impose a pecuniary penalty “that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.”
As a result of the Statement of Agreed Facts and Further Statement of Agreed Facts and the admissions of the Respondents made therein, that state of satisfaction exists. It falls to determine what level of penalty (if any) is appropriate as against the Respondents in light of the established Contraventions.
The single contravention of s 716(5) by the First Respondent, being a corporation, attracts a maximum penalty of $33,300 (calculated based on the penalty unit amount which applied at the time of the contravention). The Second Respondent also engaged in a single contravention by their involvement pursuant to s 550(1) and as an individual also attracts a maximum penalty of $6,660: ss 546(2)(a) and 539(2).
The FWO submitted that an appropriate total penalty is:
(a)$16,650.00 for the First Respondent’s contravention (50% of the maximum penalty); and
(b)$3,330.00 for the Second Respondent’s contravention (50% of the maximum penalty).
Factors relevant to the Court’s discretion
As affirmed by the High Court of Australia, the purpose of a civil penalty under the regime provided by the Act is primarily, if not wholly, protective in the promotion of the public interest in compliance with the provisions of the Act and in deterrence of further contraventions: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, [15]-[16] (Pattinson) citing the plurality in The Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (“the Agreed Penalties Case”) and French J in Trade Practices Commission v CSR Ltd [1990] FCA 762 (CSR). An “appropriate” penalty being one that “strikes a reasonable balance between oppressive severity and the need for deterrence in a particular case”: Pattinson, [41].
The task of assessing what amount to impose involves the selection of a figure taking into account all factors relevant to the particular case: Wong v The Queen [2001] HCA 64; (2001) 207 CLR 582, 611, [75] (Gaudron, Gummow and Hayne JJ); Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357, 373-375, [37] (Gleeson CJ, Gummow, Hayne and Callinan JJ); Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; (2018) 260 FCR 68, 84, [55] (Allsop CJ, Davies and Wigney JJ); Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25, 36 [44] (Jagot, Yates and Bromwich JJ) as cited by Snaden J at [26] in Australian Building and Construction Commissioner v Pattinson [2019] FCA 1654. The oft cited decision of French J in CSR at [42] listed those factors relevant to an overall assessment of penalty, and were restated by the Full Court in CFMMEU v ABCC [2018] FCAFC 97 at [20] as follows:
...the nature, character and seriousness of the conduct; the loss and damage caused; the circumstances in which the conduct took place; the size of the contravener and its degree of power; the deliberateness of the conduct and the time over which it occurred; the degree of involvement of senior officials or management; the culture of the organisation as to compliance or contravention; and, any co-operation with the regulator and contrition.
This is not an exhaustive list. Further, each case warrants an “idiosyncratic” approach and a careful analysis of all relevant circumstances, as was stated in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCA 8 at [12] (Graham J):
Penalties are not a matter of precedent. The choice of penalty must be dictated by the individual circumstances of a case, not by a line by line comparison with another case.
Nature of the conduct
The relevant conduct in the present case is the First Respondent’s failure to comply with the Notice and the Second Respondent’s involvement in that non-compliance, having been responsible to ensure that the First Respondent complied with its obligations under the Act at the relevant times. Compliance with the Notice required the First Respondent to prepare certain calculations and take specific remedial action by 20 May 2022 and provide reasonable proof of this to the FWO by 27 May 2022. The Respondents did not comply with the Notice. The subject matter of the Notice was the underpayment of one former Employee for contraventions of the Award in relation to payment of overtime, penalty rates, annual leave and annual leave loading upon termination.
The evidence of FWO Inspector Woodhead is that on 16 August 2021 the Second Respondent contacted the FWO’s Infoline and sought information regarding an employer’s obligations to pay employees in the removalist and local transport industry. FWO Inspector Woodhead’s further evidence is that on that date the Fair Work Customer Service Delivery Team provided to the Second Respondent extracts of the Award and a link to it.
The FWO submits that it made considerable efforts to engage with and assist the Respondents even after the date of compliance for the purposes of seeking the First Respondent to rectify the Contraventions identified in the Notice, including:
(a)providing guidance to the Respondents regarding their obligations to comply with the Notice on multiple occasions; and
(b)assessing a set of calculations provided by the Respondents in respect of the amounts owed under the Notice and providing the Respondents with a further opportunity to provide a revised set of calculations prior to instituting court proceedings.
I accept those submissions. FWO Inspector Woodhead attests to those matters. The Respondents have not provided any explanation for why the Notice was not complied with. I consider, as submitted by the FWO, that the Respondents’ conduct demonstrates a disregard for its obligations under the Act and the authority of the FWO as a regulator of Commonwealth workplace laws.
Loss
In this case, the underpayment has been neither calculated nor rectified. As a result of the First Respondent’s failure to comply with the Notice, the Employee has not received amounts owing to him under clause 21.1 and 23.1 of the Award in relation to overtime and Saturday penalty rates, nor payment for accrued but unused annual leave and leave loading on termination of employment, in excess of three years after he ceased employment with the First Respondent and almost three years since the date specified in the Notice. In addition, superannuation has been neither calculated nor paid into the Employee’s superannuation fund.
I consider the absence of the Employee receiving their lawful entitlements to overtime, penalty rates, annual leave and annual leave loading and superannuation is a relevant loss flowing from the contravention. There is also the wastage of public resources in pursuit of this matter, including the commencement of this litigation. These are all factors to be taken into consideration of the penalty in the present case.
Deliberateness
On 21 April 2022, the FWO Inspector sent by registered post a copy of the Notice to the First Respondent’s Registered Office. On the same day, a copy of the Notice was emailed to the Second Respondent’s email address. I am satisfied that the Respondents were aware of the Notice and the obligation to comply with it, including that failure to comply may lead to the FWO commencing proceedings seeking civil penalties and orders for compliance.
It is an agreed fact that the Second Respondent, as the person responsible for ensuring the First Respondent’s compliance with the Notice, had actual knowledge of the Notice, that the First Respondent was required to comply with the Notice in the timeframe provided, that the First Respondent had failed to comply with the Notice and was an intentional participant in the First Respondent’s failure to comply with the Notice.
As out in paragraph [31] above, prior to the issuing of the Notice the Second Respondent had been provided with information regarding an employer’s obligation under the Award and a link to the Award. Further, as also set out in paragraph [32] above, the FWO made considerable efforts to engage with and assist the Respondents even after the date of compliance to rectify the Contraventions identified in the Notice. Accordingly, despite being given ample time and multiple opportunities by the FWO to comply with the Notice and avoid litigation, the First Respondent failed to comply by the required date in the Notice or at all.
In all of those circumstances, I accept the FWO’s submission that the First Respondent’s failure to comply with the Notice and the Second Respondent’s involvement is deliberate.
Size of the business, management involvement and financial circumstances
There is no evidence before the Court as to the size of the First Respondent’s business or the financial circumstances of the Respondents.
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
When all of the above factors are considered, I am satisfied that it is appropriate to impose a pecuniary penalty on the First Respondent for its contravention of s 716(5) and on the Second Respondent for their involvement in that contravention pursuant to s 550(1) of the Act.
Weighing all of the above factors, I consider it is appropriate to fix the penalty at 30% of the maximum for both the First Respondent and the Second Respondent, in the amounts of $9,990 and $1,998, respectively.
In my view, this is a proportionate response to the respective contraventions of ss 716(5) and 550(1) and strikes a reasonable balance between oppressive severity and the need for both general and specific deterrence in this particular case.
The FWO sought an order that the penalty be payable to the Commonwealth of Australia within 28 days of these orders.
For the reasons set out above, I make the orders set out at the commencement of this judgment.
I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment of Judge J Young. Associate:
Dated: 23 April 2025
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