Fair Work Ombudsman v Jalloh
[2023] FedCFamC2G 388
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Jalloh [2023] FedCFamC2G 388
File number(s): SYG 664 of 2022 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 12 May 2023 Catchwords: INDUSTRIAL LAW – assessment of a pecuniary penalty for contraventions of s 716(5) of the Fair Work Act 2009 (Cth). Legislation: Crimes Act 1914 (Cth) s 4AA
Fair Work Act 2009 (Cth) ss 12, 539(1), 539(2), 546, 557A, 700, 716(2), 716(5)
Cleaning Services Award 2020 cls 11.3, 18.2
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Bevis v VA Holdings Pty Ltd trading as Granton Homes & Ors [2020] FCCA 2082
Fair Work Ombudsman v Viper Industries Pty Ltd [2015] FCCA 492
Fair Work Ombudsman v VS Investment Group Pty Ltd [2013] FCCA 208
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Division: Fair Work Number of paragraphs: 25 Date of hearing: 1 November 2022 Place: Sydney Solicitor for the Applicant: Ms M Yates of the Office of the Fair Work Ombudsman The Respondent: Appeared in person, by telephone ORDERS
SYG 664 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: MOHAMED MUSA JALLOH
Respondent
order made by:
JUDGE MANOUSARIDIS
DATE OF ORDER:
12 may 2023
THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) the respondent pay a pecuniary penalty in the sum of $4,662 in relation to the contravention identified in the declaration made on 4 August 2022.
2.The respondent pay the pecuniary penalty referred to in order 1 to the Commonwealth within 28 days after the day on which these orders are pronounced.
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
The applicant (FWO) applies under s 546 of the Fair Work Act 2009 (Cth) (FW Act) for orders that the respondent, Mr Jalloh, pay a pecuniary penalty because he contravened s 716(5) of the FW Act by failing to comply with a compliance notice dated 15 January 2021 given under s 716(2) of the FW Act.
PROCEDURAL HISTORY
The FWO commenced this proceeding on 6 May 2022 by filing an application and a statement of claim. On 31 May 2022 I made orders, by consent, dispensing with personal service of the application and statement of claim, and ordered that Mr Jalloh be taken to have been served on 18 May 2022 when the applicant sent the application and statement of claim to Mr Jalloh’s email address. I also ordered that: Mr Jalloh file a notice of address for service; the parties file a statement of agreed facts; and the matter be listed for a directions hearing.
The matter came before me for a directions hearing on 30 June 2022. Mr Jalloh, however, did not appear. I nevertheless:
(a)ordered Mr Jalloh file and serve a notice of address for service, a response, and any defence;
(b)ordered the FWO file and serve any reply;
(c)listed the matter for a directions hearing on 2 August 2022; and
(d)ordered that if Mr Jalloh fails to file a notice of address for service, a response, and any defence as provided for by (a), the FWO would be at liberty at the directions hearing referred to in (c), to apply for default judgment or for such other relief as the FWO may be entitled to.
Mr Jalloh did not file a notice of address for service, a response, and any defence, nor did he appear at the directions hearing on 4 August 2022. On 4 August 2022 I therefore heard the FWO’s application for default judgment and, at the conclusion of the hearing, I made a number of orders, including a declaration that Mr Jalloh contravened s 716(5) of the FW Act by failing to comply with the Compliance Notice. I then set the matter down for hearing on the question of penalty on 1 November 2022.
FACTS
I made the declaration on 4 August 2022 on the basis of the allegations made in the statement of claim which, given the declaration I made, are taken to have been admitted by Mr Jalloh. Those allegations are as follows:
(a)Mr Jalloh is and was at all relevant times a sole trader who operated a commercial cleaning business (Business).
(b)In or around January 2021, Mr Toomey (FWI), a Fair Work Inspector appointed by the FWO under s 700 of the FW Act, commenced an investigation into Mr Jalloh (Investigation).
(c)As a result of the Investigation, the FWI formed a belief that: Mr Jalloh employed husband and wife, Ronish Dangol and Deepika Thapa (Employees) on a casual basis between 18 August 2020 to 2 October 2020 (Employment Period); the Cleaning Services Award 2020 (Award) covered and applied to the Employees; the Employees were entitled to be classified under the Award as “Cleaning Services Employee Level One”; and Mr Jalloh failed to pay the Employees for ordinary hours worked between 18 September 2020 and 30 September 2020 (Contravention Period) pursuant to cl 11.3 of the Award.
(d)By reason of the matters in subparagraph (c), the FWI formed a reasonable belief that Mr Jalloh contravened cl 11.3 of the Award (Contravention).
(e)On 15 January 2021 the FWI gave a compliance notice to Mr Jalloh in relation to the Contravention pursuant to s 716(2) of the FW Act (Compliance Notice).
(f)The Compliance Notice required Mr Jalloh to:
(i)take the following actions by 9 April 2021 to remedy the direct effects of the Contravention (Specified Action):
(A)identify the number of hours each of the Employees worked during the Contravention Period;
(B)identify the amount Mr Jalloh paid to each of the Employees during the Contravention Period;
(C)calculate the amount Mr Jalloh should have paid to each of the Employees during the Contravention Period;
(D)make a payment to each of the Employees of the difference between the amounts referred to in (f)(i)(B) and (f)(i)(C); and
(E)make a record of information and amounts referred to in (f)(i)(B) and (f)(i)(C) and the amounts paid referred to in (f)(i)(D); and
(F)calculate and pay to the Employees’ superannuation funds any additional superannuation contributions required by cl 18.2 of the Award in relation to each of the amounts required to be paid to each of the Employees’ chosen superannuation fund as a result of the steps taken in (f)(i)(A) and (f)(i)(E); and
(ii)produce reasonable evidence to the FWO of Mr Jalloh’s compliance with the Compliance Notice by 16 April 2021.
(g)Mr Jalloh failed to take the Specified Action by 9 April 2021 and failed to produce to the FWO reasonable evidence of compliance with the Compliance Notice by 16 April 2021.
(h)By 29 July 2021, Mr Jalloh had paid a total of $800 into the Employees’ joint bank account, which is less than the total amount owed to the Employees.
(i)By reason of the matters in subparagraph (g), Mr Jalloh contravened s 716(5) of the FW Act.
On 1 November 2022 I heard the FWO’s submissions on the question of penalty. Mr Jalloh, who is not legally represented, appeared. The FWO read two affidavits at the hearing. One of these included an affidavit by Mr Marsh, a Fair Work Inspector appointed under s 700 of the FW Act.[1] In his affidavit Mr Marsh sets out the circumstances in which the FWI gave the Compliance Notice to Mr Jalloh, and the telephone conversations, and emails that passed between another Fair Work Inspector, Mr Pace, and Mr Jalloh. The FWO also read an affidavit made by Ms Yates, the lawyer for the FWO.[2]
[1] Affidavit of Phillip Marsh 15.09.2022
[2] Affidavit of Madison Yates 26.10.2022
Mr Jalloh said he wished to send me a document after the hearing. Mr Jalloh said the document relates to a job which was not “done correctly” by the Employees, and that is part of the reason why the Employees have not received their pay. Mr Jalloh further submitted there are more documents which show that work was not done properly by the Employees. After discussion with Ms Yates, I instructed Mr Jalloh to file and serve an affidavit annexing the documents 7 days after the hearing, and at the end of the hearing I made a formal order to that effect. I informed Mr Jalloh that he could assume the documents were before me, and on that basis, he could proceed to make submissions. Mr Jalloh did not file any affidavit after the hearing.
PENALTY
Power and principles
Subsection 546(1) of the FW Act provides that this Court may, on application, order a person to pay a pecuniary penalty the Court considers is appropriate if the Court is satisfied the person has contravened a “civil remedy provision”.[3] That expression is defined in s 539(1) of the FW Act to include the provisions identified in column 1 of the table to s 539(2) of the FW Act. Subsection 716(5) is in column 1 of the table to s 539(2) of the FW Act.
[3] I repeat in this and the following 4 paragraphs much of what I said in Bevis v VA Holdings Pty Ltd trading as Granton Homes & Ors [2020] FCCA 2082, at [33]-[38]
Subsection 546(2) of the FW Act provides that the pecuniary penalty the Court may impose must not, where the person is an individual, be more than “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)” and, if the person is a body corporate, must not be more than five times “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)”. The maximum penalty units for a contravention of s 716(5) of the FW Act as at 9 April 2021, being the day by which Mr Jalloh was required to carry out the Specified Action, are 30 penalty units for an individual, and 150 penalty units for a body corporate. (This excludes “serious contraventions”, as defined in s 557A of the FW Act.) Section 12 of the FW Act provides that “penalty unit” has the meaning given by s 4AA of the Crimes Act 1914 (Cth). The penalty unit provided for by s 4AA of that Act as at 9 April 2021 was $222. Thus, $6,660 is the maximum penalty Mr Jalloh may be ordered to pay for contravening s 716(5) of the FW Act.
The approach of most judges when assessing penalties for a single contravention of a provision of the FW Act is to take into account the non-exhaustive considerations Tracey J identified in Kelly v Fitzpatrick,[4] which his Honour adopted from the judgment of Mowbray FM in Mason v Harrington Corporation Pty Ltd. [5] Those considerations are:
[4] Kelly v Fitzpatrick [2007] FCA 1080, at [14]
[5] Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
(a)the nature and extent of the conduct which led to the breaches;
(b)the circumstances in which that conduct took place;
(c)the nature and extent of any loss or damage sustained as a result of the breaches;
(d)whether there had been similar previous conduct by the respondent;
(e)whether the breaches were properly distinct or arose out of the one course of conduct;
(f)the size of the business enterprise involved;
(g)whether or not the breaches were deliberate;
(h)whether senior management was involved in the breaches;
(i)whether the party committing the breach had exhibited contrition;
(j)whether the party committing the breach had taken corrective action;
(k)whether the party committing the breach had cooperated with the enforcement authorities;
(l)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
(m)the need for specific and general deterrence.
Although these factors have been identified and applied as relevant to the assessment of penalties, they do not constitute a “rigid catalogue of matters for attention”.[6]
[6] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, at [91] (Buchanan J)
Also relevant is the maximum penalty for the contravention provided for by the FW Act; and here I refer to the following passage from the judgment of Flick J in The BKH Contractors Case (No 2):[7]
In undertaking the task of assessing and quantifying the penalties to be imposed, the maximum penalty prescribed by the Commonwealth legislature for a specific contravention serves as a “yardstick” against which the assessment of penalties is generally to proceed . . . .
[7] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563, at [19]
Nature, extent, circumstances, and deliberateness of the contravening conduct
The FWO submits Mr Jalloh acknowledged the amounts outstanding in two separate payment plans, and he was provided with ample opportunity and time to comply with the Compliance Notice.[8] Despite this, Mr Jalloh repeatedly failed to pay the Employees. The FWO further submits it is open to the Court to find that Mr Jalloh’s failure to comply with the Compliance Notice was deliberate. Accordingly, the FWO submits a meaningful penalty should be imposed.
[8] Affidavit of Phillip Marsh 15.09.2022, [7], [8]; annexures “PM-4” and “PM-5”
Mr Jalloh, on the other hand, submits he made “several attempts” to “make these payments”,[9] however, “there were disruptions”.[10] Mr Jalloh further submits he “was under the impression that everything had disappeared because [he] did not hear from the [FWO] for about two months”.[11] Mr Jalloh “did not know who to contact or who to communicate with”.[12] Mr Jalloh also submits he has a statement from a client named “Fahad” that shows the Employees did not perform a job properly which is partly why the Employees have not received payment. As I have noted above, at the end of the hearing on 1 November 2022 I ordered that, by 8 November 2022, Mr Jalloh “file and serve an affidavit annexing the email or statement of Mr Fahad”. Mr Jalloh has not filed and served such affidavit.
[9] T9.36
[10] T10.22
[11] T10.43
[12] T11.3
The following passage from the judgment of Judge Emmett in Fair Work Ombudsman v Viper Industries Pty Ltd applies to the nature of Mr Jalloh’s contravention of s 716(5) of the FW Act.[13]
The Respondents’ intentional failure to comply with a mandatory notice issued by the workplace regulator is “conduct ... [which] undermines the utility and effectiveness of a fundamental object” [of] the FW Act. The failure to comply undermines and frustrates the powers conferred on Fair Work Inspectors, which are conferred for the purposes of providing an effective means of enforcing compliance with lawful minimum entitlements. There is a significant cost to the public by reason of the need to bring this matter before the court to enforce compliance.
[13] Fair Work Ombudsman v Viper Industries Pty Ltd [2015] FCCA 492, at [7]
None of the matters to which Mr Jalloh referred at the hearing mitigates the nature and seriousness of Mr Jalloh’s contravening conduct. The circumstances of Mr Jalloh’s contravening conduct point to assessing penalty at the higher end of the scale.
Deterrence
The FWO submits the penalty should reflect an element for specific deterrence because Mr Jalloh has demonstrated his disregard for his obligations under the FW Act by failing to comply with the Compliance Notice, and failing to pay the Employees the full amount.
As for general deterrence, I refer to what Judge Jarrett said in Fair Work Ombudsman v VS Investment Group Pty Ltd:[14]
The failure to comply with a notice properly issued by the applicant in the course of its investigations and the discharge of its statutory functions is serious. Recipients of such notices should be left under no misapprehension about their obligations to comply with those notices.
[14] Fair Work Ombudsman v VS Investment Group Pty Ltd [2013] FCCA 208, at [51]
The FWO relies on data contained in an industry profile for the “Building and Other Industrial Cleaning Services” industry (cleaning industry) from July 2015 to June 2022.[15] The data records that in the financial year ending June 2022, the FWO finalised 538 disputes. On that basis, the FWO submits that there is a need to send a message to employers generally, and to employers in the cleaning industry, that a failure to comply with a compliance notice will not be tolerated by the FWO.
[15] Affidavit of Phillip Marsh 15.09.2022, [30]; annexure “PM-23”
Mr Jalloh, on the other hand, submits that “the full force of the law” should not be applied to “someone at such a young age” and someone “who has just started … in the cleaning industry”.[16] Mr Jalloh submits he was around 20 years old when the Contravention took place, and I should consider that when assessing the amount of the penalty.
[16] T10.25
Mr Jalloh’s appeal to his youth and inexperience at the time he contravened s 716(5) of the FW Act must be assessed having regard to the nature of his contravening conduct, to which I have already referred. Mr Jalloh’s appeal to his youth should also be assessed having regard to the prospects of his employing people in the future. There is no suggestion that Mr Jalloh will not employ people in the future; and his youth suggests there is some prospect that he will do so.
The penalty should include an element for specific deterrence. It should also reflect an element for general deterrence. The penalty should be set at a level that demonstrates to other employers in general, and to employers in the cleaning services industry in particular, that there are serious consequences for failing to comply with a compliance notice.
Lack of contrition and corrective action
Mr Jalloh has partially rectified the effects of his non-compliance with the Compliance Notice by paying the Employees $800. This, however, is less than the $1,100 and $980 Mr Jalloh acknowledges he owes Mr Dangol and Ms Thapa respectively.[17]
[17] Affidavit of Phillip Marsh 15.09.2022, [7], [8]
Assessment
The FWO submits that because the FWO was required to commence proceedings in circumstances where litigation could have been avoided, Mr Jalloh has still not taken all action required by the Compliance Notice, Mr Jalloh has acknowledged that the Employees are owed the outstanding amounts, and the need for specific and general deterrence, 70-80% of the maximum amount would be an appropriate penalty. I am satisfied that 70% of the maximum amount would be an appropriate penalty for Mr Jalloh’s contravention of s 716(5) of the FW Act.
DISPOSITION
I propose to order that Mr Jalloh pay a pecuniary penalty in the amount of $4,662, and that he pay this amount to the Commonwealth within 28 days after the day I pronounce my orders.
I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 12 May 2023
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