FEDERAL COURT OF AUSTRALIA
Fair Work Ombudsman v IE Enterprises Pty Ltd [2021] FCA 60
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- Case
- [2021] FCA 60
- Decision Date
CaseChat Overview and Summary
The court examined the principles that underpin the imposition of civil penalties, particularly the need for penalties to be sufficiently high to act as a deterrent to contraventions. The court considered the maximum penalties applicable to the contraventions, the conduct of the respondents, and whether the penalties would appropriately reflect the seriousness of the contraventions and the need to promote compliance with the Act. The court also considered whether the contraventions should be treated as separate or grouped together, based on the distinct obligations breached and the need to avoid double penalisation for the same conduct.
The court found that the penalties proposed by the FWO were reasonable and appropriate, given the deliberate and systematic conduct of Uncle Toys and Mr Israel, which had a significant impact on the employees. The penalties reflected the seriousness of the contraventions and served as a deterrent to both the respondents and others who might be tempted to contravene the Act. The court made orders imposing pecuniary penalties on Uncle Toys and Mr Israel, with the amounts reflecting the number and seriousness of the contraventions. The court also made orders for the payment of the penalties to the Consolidated Revenue Fund of the Commonwealth and provided the FWO with liberty to apply for enforcement if the orders were not complied with.
Orders
Orders of the court
1. Pursuant to the declarations and orders made by Justice Anderson on 18 June 2020 (Default Orders):
(a) the First Respondent pay pecuniary penalties in an amount of $215,000 for its contraventions as declared in orders 1(a) to (k) of the Default Orders, pursuant to subsection 546(1) of the Fair Work Act 2009 (Cth) (FW Act);
(b) the Second Respondent pay pecuniary penalties in an amount of $41,000 for his involvement in the First Respondent’s contraventions, as declared in orders 2 and 1(a) to (e) and (g) to (k) of the Default Orders, pursuant to subsection 546(1) of the FW Act;
(c) pursuant to subsection 546(3) of the FW Act, the First Respondent and the Second Respondent pay their respective penalty amounts to the Consolidated Revenue Fund of the Commonwealth within 28 days of these Orders.
2. The Applicant has liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
The FWO submits that, after the application of s 557(1) of the FW Act, there are 11 contraventions committed by Uncle Toys and 10 contraventions committed by Mr Israel: see columns 1, 2 and 3 in Annexure A to this judgment.CONSIDERATION OF COMMON ELEMENTS In addition to the statutory course of conduct in s 557, the Court may impose a single penalty in respect of multiple contraventions where treating contraventions separately would give rise to a danger that the Respondents would be penalised twice for essentially the same conduct: Fair Work Ombudsman v Construction, Forestry, Mining, Maritime and Energy Union [2019] FCAFC 69 at [181] per Rangiah J; see also Ross J at [90]-[92]; Ophthalmic Supplies at [46] per Graham J. The FWO submits it would not be appropriate to further group the contraventions, as each contravention arises from separate and distinct obligations and to do so would give insufficient weight to the separate legal character of the obligations: Lohr at [29]-[34] per Bromwich J. The FWO referred to Uncle Toys’ conduct in failing to pay Debora Van Hattem, Jean-Brieuc Gicquel, Julian Mizzi, Seoin (Jessica) Park and Thomas Gatt:(1)in full, in contravention of s 323(1) of the FW Act (a serious contravention); and(2)at the end of every contravention engagement, weekly or fortnightly per cl 13.3 of the Award, in contravention of s 45 of the FW Act. The FWO accepts that this conduct arose from essentially the same conduct, namely a failure to pay those five employees at all for their last period of work, being: (1)three weeks for Ms Van Hatten; (2)two weeks for Mr Gicquel; (3)one week for Ms Park; and (4)the last day for each of Mr Mizzi and Mr Gatt. On that basis, and to ensure there is no overlap, the FWO submits that the Court should not penalise the Respondents for the contravention of s 45 of the FW Act for breaching cl 13.3 of the Award. The FWO submits that failure to pay the five employees during their last periods of work resulted in underpayments to those five employees in respect of their minimum hourly rates, casual loading, Saturday penalty rates, Sunday penalty rates and public holiday penalty rates, which were pleaded separately. The FWO submits that the contraventions in respect of the failure to pay in full and the failure to pay at the end of every engagement, weekly or fortnightly arose from distinct conduct and decisions to not pay at all or on time, rather than as a result of the decision to pay the employees insufficient flat rates of pay.MAXIMUM PENALTIES It is appropriate for the Court to consider “the maximum penalty as a yardstick rather than using particular cases for that purpose, as so to do can divert attention from the ordained maximum”: Australian Building and Construction Commissioner v J Hutchinson Pty Ltd T/A Hutchinson Builders [2019] FCA 667 at [35]; see also Ophthalmic Supplies at [108] per Buchanan J. In Markarian v The Queen [2005] HCA 25; 228 CLR 357, Gleeson CJ, Gummow, Hayne and Callinan JJ stated at [31]:… careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick.