Fair Work Ombudsman v Hess

The applicant, the Fair Work Ombudsman, sought declarations of contravention and the imposition of pecuniary penalties against the respondent for alleged breaches of the Fair Work Act 2009 (Cth) and the Pastoral Award 2010. These proceedings arose from investigations conducted by the applicant in 2018 and 2019, which revealed underpayment of wages, failures in record-keeping, and the non-provision of pay slips. Despite being provided with guidance and issued with a Letter of Caution in 2018, the respondent subsequently failed to comply with a notice to produce documents and a compliance notice issued in 2020, which required rectification of underpayments and the provision of evidence of compliance.

The court was required to determine whether the respondent had contravened the Fair Work Act and the Pastoral Award in relation to wage underpayments, record-keeping, and the issuance of pay slips. Additionally, the court needed to consider the appropriate pecuniary penalty to be imposed, taking into account the objectives of deterrence, both specific and general, as the principal purpose of penalties under the Act. The court also had to assess the significance of the respondent's partial compliance with a notice to produce and his failure to comply with a compliance notice within the stipulated timeframe.

Jarrett J reasoned that pecuniary penalties under the Fair Work Act are primarily intended for deterrence, not retribution or denunciation. The court considered the maximum penalties prescribed by the Act and Regulations as an indication of the legislature's view of the seriousness of such conduct. The judge noted that the compliance notice regime is designed for efficient rectification of contraventions, and the respondent's failure to comply with the notice, including the delayed back-payment of wages, were significant factors. The court found that the respondent's failures in record-keeping and issuing pay slips deprived the employee of essential information. The court concluded that the respondent's contraventions were serious, deliberate, and repeated, and that the applicant had provided ample opportunity for rectification before commencing proceedings.

The court ordered an aggregate penalty of $17,500 for the three contraventions, finding this amount to be an appropriate response to the respondent's conduct and not oppressive.