INDUSTRIAL LAW – multiple contraventions of a civil penalty provision – application of s 556 of the Fair Work Act 2009 (Cth) – application of s 557 of the Fair Work Act 2009 (Cth) – application of the “one transaction” principle – application of the “totality” principle – appeal allowed – re-assessment of penalties
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Fair Work Ombudsman v Ho [2024] FCAFC 111
Case
[2024] FCAFC 111
Decision Date
CaseChat Overview and Summary
Fair Work Ombudsman v Ho involved the Fair Work Ombudsman's appeal against the penalties imposed on Ms Ho for multiple contraventions of the Fair Work Act 2009 (Cth). The primary judge had treated Ms Ho's eight contraventions as one contravention under s 557 of the Act, which the Ombudsman argued was incorrect. The legal issues before the court were whether the primary judge's application of s 557 of the Act was correct and whether the penalty imposed was appropriate.
The Full Court found that the primary judge erred in treating Ms Ho's eight contraventions as one contravention, as s 557 applies only to breaches of the same award term. The court held that each contravention constituted a separate offence, as they involved different award terms. This interpretation was consistent with previous case law. Consequently, the court allowed the appeal and determined that Ms Ho committed eight separate contraventions. The court then reassessed the penalty to be imposed on Ms Ho, considering factors such as cooperation, contrition, corrective action, and the need for general deterrence. The court found that the specific deterrence for Ms Ho was reduced as she was no longer involved in commercial operations.
The court concluded that Ms Ho should pay pecuniary penalties totalling $27,720.00. The court extended the time for the respondent to file a notice of contention and set aside the penalty order made by the primary judge. The court's reassessment was based on the principles of specific and general deterrence, as well as the factors outlined in the Act.
Orders
Orders of the court
1. The time within which the respondent is to file a notice of contention be extended to 26 April 2024.
2. The appeal is allowed.
3. Order 3 of the primary judge made on 11 August 2023 be set aside.
4. The respondent pay pecuniary penalties totalling $27,720.00 to the Commonwealth within 28 days.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
In our view, the findings of Bromwich J in Lohr supported the Ombudsman’s position before the primary judge in this case that Ms Ho’s eight contraventions of s 45 of the Act should not have been taken to constitute one contravention. Conclusions on the notice of appeal As described above, Ms Ho concedes the primary judge was wrong to treat her eight contraventions of s 45 as one contravention by operation of s 557 of the Act. It was proper for her to do so. As the Full Court in Rocky Holdings determined, s 557 operates only on breaches of the same award term. Section 557 does not treat contraventions of different award terms as one contravention. Accordingly, Ms Ho’s eight breaches of different Award terms, and resulting eight contraventions of s 45, could not be treated as constituting one contravention. This conclusion is also consistent with the holding of Bromwich J in Lohr which is correct and results from a construction of the expression “2 or more contraventions of a civil remedy provision” contained in the chapeau to s 557. This construction applies whatever the outcome of s 557(1)(a) and (b) and applies to both primary contravenors and accessories. In all of those circumstances, ground 1 is made out and the appeal is allowed. In place of the primary judge’s findings, this Court determines that Ms Ho committed eight contraventions of s 45 of the Act.Consequences of the error Having found error, it is necessary to reassess the penalty to be imposed on Ms Ho. The parties in their written submissions proceeded on the basis that the matter would be remitted to the primary judge for the reassessment of penalty. However, at the hearing the parties, in response to questions from the Court, agreed that the Full Court is able to conduct any reassessment and that that course is more efficient than a remittal. This Court considers it appropriate that it reassess the penalties to be imposed on Ms Ho. This course is consistent with s 37M of the Federal Court of Australia Act 1976 (Cth) which provides that the overarching purpose of civil practice and procedure is to facilitate the just resolution of disputes as quickly, inexpensively and efficiently as possible. This is especially so where the total range of penalties to be imposed on Ms Ho is relatively modest. To facilitate this course a timetable was agreed for the provision of further submissions on penalty after the hearing of the appeal. The timetable provided for the appellant to file and serve submissions on penalty by 7 June 2024, the respondent by 14 June 2024, and the appellant in reply by 28 June 2024. This Court addresses those submissions and reassesses the penalty below. NOTICE OF CONTENTION As set out above, when the respondent filed her submissions in the appeal on 26 April 2024, she sought an extension of time to file a notice of contention. The proposed notice of contention provided:1. By operation of s 556 of the Fair Work Act 2009 (Cth) (FW Act) the Court is precluded from imposing more than one penalty on the Respondent by reason of her involvement in the contraventions of Polytrade Employment Services Pty Ltd (PES) arising from her conduct in approving and/or processing payroll, and/or failing to ensure that PES complied with its minimum payment obligations under the FW Act. 2. Further or in the alternative the Court should affirm the judgment against the Respondent on the basis that it is a just outcome having regard to the character of the Respondent’s conduct and the distinction between that conduct and the conduct of PES as primary contravenor.
Ratio Decidendi
Legal Principle Established
The primary judge concluded that Ms Ho has not previously been found to have contravened a civil remedy provision of the Act: J[157]. His Honour found that was also so for each of the other respondents: J[156]–[157], [165]. Reassessment is undertaken on this basis.Co-operation, contrition and corrective action The primary judge addressed the considerations of co-operation, contrition and corrective action. At J[83] his Honour concluded that PES “(perhaps together with Polytrade)” appeared to have acted responsibly once conscious of the need to address the underpayments and that PES “facilitated that appellant’s efforts to ascertain the extent of the Relevant Employees’ underpayment and agreed to admit the contraventions that were later alleged against it”. His Honour also found, “more significantly, that PES took measures of its own to correct the underpayments before proceedings were commenced”. As to the corrective action and contrition of PES, the primary judge found at J[84] that “[a]udit processes were established and maintained to ensure that Award non-compliance would not repeat” and that those measures “reflect an acceptance on the part of PES (at the least) that what occurred ought not to have”. Dealing particularly with Ms Ho, the primary judge was not able to determine what role Ms Ho played in remediating PES’s contraventions, but was satisfied “that she showed an equivalent degree of cooperation (which the applicant acknowledges), and I accept that she possesses an equivalent acceptance that her conduct was wrong”: J[156]. None of those conclusions of the primary judge were challenged before this Court and are relied upon in this reassessment. Specific and general deterrence The primary judge determined on the evidence before him that PES was “no longer operating at the two relevant sites” and accordingly that the “need specifically to deter PES from further Award contraventions does not loom as largely as might otherwise be the case”. However, his Honour found that the “need to deter other employers generally in that regard very much does [loom large]”: J[85]. As to Ms Ho, the primary judge again found that specific deterrence did not “loom as largely” as it might in other matters because of his conclusions that:Ms Ho is no longer (or will soon no longer be) involved in “commercial operations generally”. She deposed to the “process [having] taken its toll on [her]” and to having no desire to ever “have the burden of such responsibilities again”. The Ombudsman complains, and this Court accepts, that there is no evidence to confirm that Ms Ho did in fact cease involvement. However, Ms Ho’s evidence before the primary judge was that her business involvement would cease on the sale of Polytrade’s business. She was not cross-examined on that evidence. There was evidence that that sale occurred on 1 June 2022. Account is taken of this evidence and the reduced need for specific deterrence.