Fair Work Ombudsman v Ie Enterprises Pty Ltd
[2019] FCCA 2952
•16 October 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v IE ENTERPRISES PTY LTD & ANOR | [2019] FCCA 2952 |
| Catchwords: INDUSTRIAL LAW – Allegations of serious contraventions of the Fair Work Act 2009 (Cth) – penalty proceedings – whether proceedings are more appropriate for the Federal Court of Australia. |
| Legislation: Fair Work Act 2009 (Cth), ss.550, 557A, 557C, 557B Federal Circuit Court of Australia Act 1999 (Cth), s.39 Federal Circuit Court Rules 2001 (Cth), r.8.02 |
| Cases cited: Van Efferen v CMA Corporation Limited [2008] FMCA 875 Fair Work Ombudsman v Ecosway Pty Ltd [2015] FCA 102 Munaretti v ASC Fountain Gate [2019] FCA 949 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | IE ENTERPRISES PTY LTD |
| Second Respondent: | EYAL ISRAEL |
| File Number: | MLG 1560 of 2019 |
| Judgment of: | Judge O'Sullivan |
| Hearing date: | 16 October 2019 |
| Date of Last Submission: | 16 October 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 16 October 2019 |
REPRESENTATION
| Counsel for the Applicant: | Ms Knowles |
| Solicitors for the Applicant: | Fair Work Ombudsman |
| Counsel for the First Respondent: | No appearance |
| Solicitors for the First Respondent: | No appearance |
| Counsel for the Second Respondent: | No appearance |
| Solicitors for the Second Respondent: | No appearance |
ORDERS
Pursuant to section 39 of the Federal Circuit Court of Australia Act1999 (Cth), these proceedings be transferred to the Federal Court of Australia to be listed with such priority as that Court deems appropriate.
The applicant is to personally serve the respondents with a copy of these orders within 21 days.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1560 of 2019
| FAIR WORK OMBUDSMAN |
Applicant
And
| IE ENTERPRISES PTY LTD |
First Respondent
| EYAL ISRAEL |
Second Respondent
REASONS FOR JUDGMENT
Introduction
On 20 May 2019, the Fair Work Ombudsman (“the applicant”) commenced proceedings in the Fair Work Division of the Court against IE Enterprises Pty Ltd (“the first respondent”) and Eyal Israel (“the second respondent”).
In the statement of claim filed 20 May 2019, which accompanied the initiating application, the applicant alleged that the first respondent operated a number of pop up toy stores in suburban shopping centres at Ringwood, Hoppers Crossing, Preston, Frankston, Narre Warren, Cheltham and Wanturna South and underpaid eight, temporary visa employees for work performed by them between October 2017 and February 2018.
The applicant alleged the second respondent (as director of the first respondent) was involved in the contraventions of the Fair Work Act 2009 (Cth) (“the FW Act”) by the first respondent within the meaning of s.550 and that a number of these amounted to “serious contraventions” within the meaning of s.557A of the FW Act thus each attracting a possible maximum penalty of $630,000.00 and $126,000.00 for the first and second respondents respectively.
Finally, the applicant also alleged that given the timing of the alleged contraventions, the provision of s.557C of the FW Act applied which would require the first respondent to disprove the underpayment allegations where it was contended that it had failed to comply with its time and wages records and pay slip obligations under the FW Act.
Given the issues raised on the face of the statement of claim and that the provisions in s.557A and s.557C of the FW Act had not been the subject of any consideration in the Federal Court, the parties were advised by correspondence dated 12 August 2019 that they may be called to address the question of whether the proceedings should be transferred to the Federal Court of Australia pursuant to s.39 of the Federal Circuit Court of Australia Act 1999 (Cth).
The proceedings had a first Court date of 16 August 2019 by which time the application and statement of claim had been served on the first and second respondents in accordance with Part 6 of Chapter 1 of the Federal Circuit Court Rules 2001 (“the Rules”).
At the first Court date, Ms Knowles of Counsel appeared on behalf of the applicant and there was no appearance by or on behalf of the first or second respondents. As such, the following orders were made:
“THE COURT ORDERS THAT:
1.The matter be adjourned to 16 October 2019 at 10.00am.
2.The Applicant have 14 days to personally serve the First Respondent and the Second Respondent with a copy of these orders and any submissions on the issue of whether these proceedings should be transferred to the Federal Court of Australia pursuant to s.39 of the Federal Circuit Court of Australia Act 1999.
3.The First Respondent and the Second Respondent file and serve a Notice of Address for Service forthwith upon service being effected in accordance with order 2.
4.The First Respondent and the Second Respondent file and serve a Response to the Applicant’s Application and a Defence to the Applicant’s Statement of Claim by 30 September 2019.
5.The First Respondent and the Second Respondent file and serve any submissions on whether the proceedings be transferred to the Federal Court of Australia pursuant to s. 39 of the Federal Circuit Court of Australia Act 1999 by 10 October 2019.
AND THE COURT NOTES THAT:
A.In the event of non-compliance by any party with the orders, directions, Rules or Regulations of this Court relating to:
(i)the filing of documents;
(ii)the payment of any applicable filing, setting down, mediation or enforcement fee or fees; and/or
(iii)any other procedural issues,
the application may be struck out, the proceedings may be directed to proceed undefended or the trial date may be vacated and the Court may direct that a further date not be fixed until all parties have complied with the said orders, directions, Rules and Regulations.
B.To the extent that it is or may be practicable to do so, a compliance check is to be carried out by an Associate or Deputy Associate of the trial Judge, or by another appropriate court officer, shortly prior to the adjourned date.”
On 28 August 2019, the applicant filed submissions in accordance with the above orders. Ultimately, those submissions did not oppose the matter being transferred to the Federal Court. It is important to note that the first and second respondents have not filed any material in these proceedings.
On 16 October 2019, Ms Knowles of Counsel appeared on behalf of the applicant. There was no appearance by or on behalf of either the first or second respondents.
The applicant had filed affidavits on 14 October 2019 indicating that the first and second respondent had been served with the orders made on 16 August 2019, had notice of the proceedings and had the opportunity to file material but had not done so. In the circumstances, and in the absence of any application for default judgment, the Court proceeded to deal with the issue of transfer in the absence of the respondents.
Transfer to the Federal Court
The making of an order to transfer proceedings from this Court to the Federal Court is discretionary and can be made on the Court’s own initiative pursuant to s.39(2)(b) of the Federal Circuit Court of Australia Act 1999 (Cth). There are, however, factors in which it is mandatory for the Court to take into account under s.39(3)(a)-(d) of the Federal Circuit Court of Australia Act 1999 (Cth), which provide as follows:
“(a)any Rules of Court made for the purposes of subsection 40(2); and
(b)whether proceedings in respect of an associated matter are pending in the Federal Court; and
(c)whether the resources of the Federal Circuit Court are sufficient to hear and determine the proceeding; and
(d) the interests of the administration of justice.”
Rule 8.02(4)(a)-(e) of the Rules provides for other factors to be considered as follows:
“(a)whether the proceeding is likely to involve questions of general importance, such that it would be desirable for there to be a decision of the Federal Court or the Family Court on one or more of the points in issue;
(b)whether, if the proceeding is transferred, it is likely to be heard and determined at less cost and more convenience to the parties than if the proceedings is not transferred;
(c)whether the proceeding will be heard earlier in the Court;
(d)the availability of particular procedures appropriate for the class of proceeding;
(e) the wishes of the parties.”
Turning then to a consideration of those factors in the context of these proceedings.
Pending proceedings in an associated matter in the Federal Court
Unlike the situation in Fair Work Ombudsman v Ecosway Pty Ltd [2015] FCA 102, in this case, enquiries were made of the Federal Court before the issue of transfer was considered.
Similar to the situation in Munaretti v ASC Fountain Gate [2019] FCA 949, the issues raised on the pleadings are of such importance as to warrant a decision of the Federal Court, on the approach to ss. 557A, 557B and 557C.
It is not suggested that there are pending proceedings in any associated matter in the Federal Court. However, if the first respondent were to be wound up, only the Federal Court can give leave to the applicant to proceed against the first respondent. In their submissions at paragraph [4], the applicant accepted this as factor in support of the transfer of this the matter to the Federal Court.
Sufficiency of resources of the Federal Circuit Court to hear and determine the proceeding
The applicant in their submissions, addressed this consideration at paragraph [5].
The applicant submitted that this Court has adequate resources to sufficiently hear and determine these proceedings as it is not a “factually complex matter” whilst noting that the number of contraventions under the FW Act does not, of itself, amount to “complexity”.[1]
[1] see Commissioner of the Australian Building and Construction Commission v Hall & Ors (No 2) [2017] FCCA at [46].
However, this assumes that the respondents will not participate in the proceedings and that the relevant provisions of the new offences in the FW Act will not require consideration.
The interests of the administration of justice
The applicant, in their submissions at paragraph [6], submitted that in considering the effect of the transfer on the interests of the administration of justice, it is a neural factor and so much may be accepted.
Questions of general importance
The applicant in their submissions, addressed this consideration at paragraph [8].
The applicant noted that given the respondents’ failure to engage in these proceedings, the matter is likely to proceed by way of default judgment and without a contradictor in respect of any penalty hearing, it is unlikely the matter will require full argument on the relevant issues.
However, the applicant accepted that in circumstances where these proceedings may result in the first decision on the “serious contraventions” provisions of the FW Act (specifically sections 557A and 557B) it may involve questions of general importance about which it would be desirable for there to be a decision of the Federal Court.[2]
[2] note Ghimire v Karriview Management Pty Ltd (No 2) [2019] FCA 1627 only considered s.557C and on appeal whether burden had been misapplied.
Costs and convenience of hearing a determination
The applicant in their submissions, addressed this consideration at paragraph [9].
The applicant submitted that if the proceeding are transferred to the Federal Court there will be a higher cost to the applicant, in particular the higher setting down fees and higher daily hearing fees, all of which are relevant considerations.[3]
[3] see Fair Work Ombudsman v Ecosway Pty Ltd [2015] FCA 102 at paragraph [20].
However, the cost that may be incurred by the parties due to the matter being transferred is not, in of itself, a mitigating factor against the transfer.
Earlier hearing of proceedings
The applicant in their submissions, addressed this consideration at paragraph [10] and said that whether the proceedings would be heard earlier in the Federal Circuit Court is not a matter in which the applicant can make submissions.
The Court, as presently constituted, does not have the ability to hear this matter until the last quarter of 2020.
Availability of particular procedures appropriate for the class of proceedings
Given the largely concurrent jurisdiction of the Federal Court of Australia and the Federal Circuit Court of Australia in relation to matters under the FW Act this point does not have any force in relation to whether the proceedings ought be transferred save for the absence of authority on the issues set out above. However, on the pleadings the applicant is seeking a penalty that will exceed four million dollars.
Wishes of the parties
The applicant in their submissions, addressed this consideration at paragraph [11]. As noted earlier, the applicant does not oppose a transfer of the proceedings to the Federal Court and it adopts a neutral position.
Conclusion
As was acknowledged by the applicant, many of the questions in this case involve determination for the first time of the “serious contravention” provisions in the FW Act. In my view there are a number of issues that make it desirable that there be a decision of the Federal Court on those issues. I am cognisant of the factors that the Court is required to consider under the Rules in relation to this issue are not all one-way but a significant factor, indeed the determinative factor in my view in relation to this matter, is that there are questions of general importance such as to warrant the matter being transferred.
Therefore, having considered all of the factors that the Court must, I order the transfer of these proceedings to the Federal Court.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Judge O'Sullivan
Associate:
Date: 17 October 2019
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