Fair Work Ombudsman v L.E.C Builders & Designers Pty Ltd (No 2)
[2022] FedCFamC2G 326
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v L.E.C Builders & Designers Pty Ltd (No 2) [2022] FedCFamC2G 326
File number(s): MLG 568 of 2021 Judgment of: JUDGE O'SULLIVAN Date of judgment: 6 May 2022 Catchwords: INDUSTRIAL LAW – Fair Work – application for civil penalty – penalty hearing – failure to obey compliance notice under Fair Work Act 2009 (Cth) – appropriate penalty – compensation. Legislation: Fair Work Act 2009 (Cth) s. 539, 545, 546, 550, 716 Cases cited: Commonwealth v Director Fair Work Building Inspectorate (the Agreed Penalties Case) (2015) 258 CLR 482
Fair Work Ombudsman v L.E.C Builders & Designers Pty Ltd (No 1) FedCFamC2G 96
Fair Work Ombudsman v Trucking Services Pty Ltd [2021] FCCA 760
Kelly v Fitzpatrick [2007] FCA 1080
Division: Division 2 General Federal Law Number of paragraphs: 34 Date of hearing: On the papers ORDERS
MLG 568 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: L.E.C BUILDERS & DESIGNERS PTY LTD
First Respondent
LUKE JOHN ELLIOT
Second Respondent
ORDER MADE BY:
JUDGE O'SULLIVAN
DATE OF ORDER:
6 MAY 2022
THE COURT ORDERS THAT:
1.Pursuant to s.545(1) of the Fair Work Act 2009 (Cth) (‘the FW Act’), within 28 days, the First Respondent pay to the Applicant compensation in the amount of $22,054.50 (‘the Compensation Amount’) for loss suffered by the Employee because of the First Respondent’s contravention of s.716(5) of the FW Act.
2.Pursuant to s.547(2) and (3) of the FW Act, within 28 days, the First Respondent pay interest to the Applicant on the Compensation Amount at the applicable pre-judgment interest rate (‘the Interest Amount’).
3.Pursuant to s.545(1) of the FW Act or s.44 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (‘the FCFCA Act’), within 90 days of receiving the Compensation and Interest Amounts, or any part of those amounts, the Applicant seek to locate and pay such amounts to the Employee.
4.Pursuant to s.545(1) of the FW Act and/or s.44 of the FCFCA Act, if the Applicant is unable to locate and pay the Employee within the time specified in paragraph 3 above, the Applicant pay to a person the Compensation and/or Interest Amounts if:
(a)the person makes a claim for the amount in accordance with the form prescribed by the Fair Work Regulations 2009 (Cth) or s.559(3) of the FW Act; and
(b)the Applicant is satisfied that the person is entitled to the amount.
5.Pursuant to s.546(1) of the FW Act, the First Respondent pay a pecuniary penalty of $18,658 in respect of its contravention of s.716(5) of the FW Act.
6.Pursuant to s.546(1) of the FW Act, the Second Respondent pay a pecuniary penalty of $3,396 in respect of his contravention of s.716(5) of the FW Act.
7.All pecuniary penalties to be paid within 28 days to the Consolidated Revenue Fund of the Commonwealth.
8.The Applicant serve a copy of these orders on the First and Second Respondent by the same means as specified in order 5 of the orders made on 16 February 2022.
9.The Applicant have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
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
INTRODUCTION
On 16 February 2022, for the reasons published as Fair Work Ombudsman v L.E.C Builders & Designers Pty Ltd (No 1) FedCFamC2G 96 (‘the liability judgment”), the Court granted default judgment and made various declarations against the first and second respondents.
These reasons, in which the parties will be referred to in the same terms, concern the appropriate penalties that should be imposed on the respondents for the contraventions found to have occurred in the liability judgment.
BACKGROUND
The liability judgment which should be read in conjunction with these reasons sets out the background to these proceedings at paragraphs [7] to [9] which, for the sake of brevity, will not be rehearsed. For the reasons set out in paragraphs [10] to [24] of the liability judgment, the Court made the following orders:
THE COURT ORDERS THAT:
1.Pursuant to Rules 13.05(2)(c) and 13.06(1)(e) of the Federal Circuit and Family Court of Australia (Division 2) (General Law) Rules 2021 (‘the Rules’), the applicant have leave to proceed on an undefended basis for default judgment this day.
THE COURT DECLARES THAT:
2.Upon the admissions which the Respondents are taken to have made, consequent upon default by the Respondents pursuant to Rule 13.04(2) of the Rules that:
a.the First Respondent contravened section 716(5) of the Fair Work Act 2009 (‘the FW Act’) by failing to comply with the Compliance Notice dated 12 December 2020; and
b.the Second Respondent was involved, within the meaning of section 550(2)(c) of the FW Act, in the First Respondent’s contravention of section 716(5) of the FW Act by failing to comply with the Compliance Notice.
THE COURT ORDERS THAT:
3.Pursuant to s.545(1) of the FW Act, the First Respondent take the steps that were required by the Compliance Notice within 28 days of this order, by:
a.calculating and paying to Brian Wilson (Employee) the outstanding entitlements it was required to pay under the Compliance Notice (‘Outstanding Entitlements’);
b.calculating and paying to the chosen Superannuation Fund of the Employee the additional superannuation contributions it was required to pay under the Compliance Notice;
c.preparing and producing to the Applicant a schedule outlining its calculation of the Outstanding Entitlements and additional superannuation contributions; and
d.producing to the Applicant evidence that the Outstanding Entitlements and superannuation contributions were paid as required in subparagraphs (a) and (b) above.
4.Pursuant to section 547(2) of the FW Act that the First Respondent pay interest, within 28 days of this order:
a.to the Employee on the amounts required to be paid in accordance with paragraph 3(a) above;
b.to the Employee’s chosen Superannuation Fund on the amounts required to be paid in accordance with paragraph 3(b) above.
5.The applicant serve a copy of these orders within 7 days:
a.on the first respondent by posting it to the first respondent at its registered office and principal place of business;
b.on the second respondent by email to [email protected]
6.The matter is adjourned to 13 May 2022 commencing at 10.00am at the Federal Circuit and Family Court of Australia in Melbourne for a further hearing in respect of the Applicant’s claim for penalties to be imposed on the Respondents for the contraventions declared at paragraph 2 above and;
a.evidence in chief on the question of penalty be by way of affidavit;
b.the Applicant file and serve evidence and submissions relating to penalty by no later than 35 days prior to the date of the hearing;
c.the Respondents file and serve evidence and submissions relating to penalty no later than 21 days prior to the date of the hearing.
7.The Applicant have liberty to apply on seven days’ notice in the event that any of the above orders are not complied with.
8.In the event that the Respondents fail to comply with order 6(c) then the penalty hearing listed on 13 May 2022 will be vacated and the issue of the appropriate penalty will be dealt with on the papers in Chambers.
Notwithstanding the orders made in the liability judgment, and the applicant proving that the orders were served on the respondents, orders 3 and 4 were not complied with. The respondents also abjured the opportunity to apply to set aside those orders or file submissions on the issue of penalty. Consequently, and in accordance with the above orders and, at the applicant’s request, the Court vacated the penalty hearing. As a result, and as contemplated in those orders, the appropriate penalties have been determined on the papers. [1]
[1] See Rule 13.04(2)(a)(b)(iii) and Rule 13.05(2)(d) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021.
MATERIAL RELIED ON
The applicant relied on the following evidence:
a)the Affidavit of Maddison Sears dated 29 October 2021;
b)the Affidavit of Maddison Sears dated 10 February 2022;
c)the Affidavit of Megan Carter dated 8 April 2022;
d)the Affidavit of Andy Lam dated 8 April 2022; and
e)the Submissions filed 8 April 2022.
RELEVANT PROVISIONS OF THE FAIR WORK ACT[2]
[2] Fair Work Act 2009 (Cth)
Section 716 of the Fair Work Act 2009 (Cth) (‘the FW Act’) provides:
716 Compliance notices
Application of this section
(1)This section applies if an inspector reasonably believes that a person has contravened one or more of the following:
a.a provision of the National Employment Standards;
b.a term of a modern award; …
Giving a notice
(2)The inspector may, except as provided by subsection (4), give the person a notice requiring the person to do either or both of the following within such reasonable time as is specified in the notice:
a.take specified action to remedy the direct effects of the contravention referred to in subsection (1);
b.produce reasonable evidence of the person’s compliance with the notice.
(3)The notice must also:
a. set out the name of the person to whom the notice is given; and
b. set out the name of the inspector who gave the notice; and
c. set out brief details of the contravention; and
d.explain that a failure to comply with the notice may contravene a civil remedy provision; and
e.explain that the person may apply to the Federal Court, the Federal Circuit Court or an eligible State or Territory Court for a review of the notice on either or both of the following grounds:
(i)the person has not committed a contravention set out in the notice;
(ii)the notice does not comply with subsection (2) or this subsection; and
f.set out any other matters prescribed by the regulations.
…
Relationship with civil remedy provisions
(4A) An inspector must not apply for an order under Division 2 of Part 4‑1 in relation to a contravention of a civil remedy provision by a person if:
a.the inspector has given the person a notice in relation to the contravention; and
b.either of the following subparagraphs applies:
(i) the notice has not been withdrawn, and the person has complied with the notice;
(ii)the person has made an application under section 717 in relation to the notice that has not been completely dealt with.
Note: A person other than an inspector who is otherwise entitled to apply for an order in relation to the contravention may do so.
(4B)A person who complies with a notice in relation to a contravention of a civil remedy provision is not taken:
a.to have admitted to contravening the provision; or
b.to have been found to have contravened the provision.
Person must not fail to comply with notice
(5) A person must not fail to comply with a notice given under this section.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(6) Subsection (5) does not apply if the person has a reasonable excuse.
The issuing of compliance notices is a power given to Fair Work Inspectors and it is designed to be a method by which non-compliance with obligations imposed by the FW Act can be enforced as an alternative to court proceedings.[3] The failure to comply with a notice given under s.716 of the FW Act is a civil remedy provision. A “civil remedy provision” is defined in s.539(1) to mean the provisions referred to in the table in s.539(2) of the FW Act.
[3] See Fair Work Ombudsman v Absynthe Restaurant Pty Ltd & Anor [2015] FCCA 58 at [36].
It is not only the person who has contravened a civil remedy provision who may be liable to an order for the payment of a pecuniary penalty as s.550 of the FW Act provides that:
Involvement in contravention treated in same way as actual contravention
(1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:
a. has aided, abetted, counselled or procured the contravention; or
b.has induced the contravention, whether by threats or promises or otherwise; or
c.has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
d.has conspired with others to effect the contravention.
APPROACH TO PENALTY PROCEEDINGS
The power for the Court to order the imposition of a civil penalty against the respondents for their involvement in, and contraventions of, the FW Act by failing to abide by the compliance notice (“the Notice”) arises under s.546 of the FW Act.
The approach of the Court in determining penalties involves the following steps:
a)the Court is to identify the separate contraventions involved. For the purposes of s.539(2), each contravention of an obligation located in the FW Act constitutes a separate contravention of a civil remedy provision of the FW Act;
b)the Court should consider whether any of the breaches taken together constitute a single course of conduct pursuant to s.557(1) such that multiple contraventions should be treated as a single contravention;
c)to the extent that two or more contraventions have common elements, this should be taken into account in considering what an appropriate penalty is in all the circumstances for each contravention. The respondents should not be penalised more than once for the same conduct. The penalties imposed by the Court should be an appropriate response to the respondents’ actions. Importantly, this third task is distinct from, and in addition to, the final application of the “totality principle”;
d)the Court will consider an appropriate penalty to impose in respect of each contravention, whether a single contravention, a course of conduct, or group of contraventions, having regard to all of the circumstances of the case; and
e)having fixed an appropriate penalty for each contravention, the Court should then review the aggregate penalty so as to determine whether it is an appropriate response to the contravening conduct. In doing so, the Court should apply an “instinctive synthesis” in making this assessment. This final step is commonly known as the “totality principle”.
The process set out above is facilitated by addressing the non-exhaustive considerations Tracey J identified in Kelly v Fitzpatrick [2007] FCA 1080, which were as follows:
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 respondents;
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 co-operated 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.
CONSIDERATION
The maximum penalty for a breach of s.716(5) of the FW Act is specified in the table in s.539 of the FW Act as 30 penalty units. Subsection 546(2) of the FW Act provides that body corporates, such as the first respondent, and individuals, such as the second respondent, are to receive a penalty of no more than the maximum number of penalty units set out in the table in s.539(2) of the FW Act.
The maximum penalty units for a contravention of s.716(5) of the FW Act as at December 2020, being the day by which the first respondent was required to carry out the actions specified in the Notice, are 30 penalty units for an individual, and 150 penalty units for a body corporate. Accordingly, $33,300 is the maximum penalty the first respondent may be ordered to pay for its contravention of s.716(5) of the FW Act, and $6,660 is the maximum penalty the second respondent may be ordered to pay for his involvement in the first respondent’s contravention.
In the Commonwealth v Director Fair Work Building Inspectorate (the Agreed Penalties Case) (2015) 258 CLR 482 at [495] it was said that civil penalties of the kind enacted in s.546 have a “statutory function of securing compliance with provisions of the [statutory] regime”.
I have considered the submissions made on behalf of the applicant in relation to each of the relevant factors for determining the appropriate penalty to be imposed on the first and second respondents in this case. The relevant single breach has been referred to in the liability judgment. As there was only one contravention it is not necessary to consider the second or third steps set out at paragraph [10] above. Therefore it is now necessary to consider the appropriate penalty in the context of the following relevant factors.
The nature, extent and circumstances of the conduct which led to the breaches
The applicant’s written submissions filed on 8 April 2022 addressed this consideration as follows:
26.The contravention of section 716(5) of the FW Act occurred in circumstances where:
(a)the Second Respondent was personally handed a copy of the Compliance Notice on 12 December 2020 and FWI Lam emailed him a further copy on 21 December 2020;
(b)the Respondents took no steps towards compliance with the Compliance Notice;
(c)following non-compliance, on 11 January 2021 FWI Lam put the Respondents on notice that litigation may commence if they still did not comply;
(d)on 12 January 2021, FWI Lam spoke to the Second Respondent and stressed the need for compliance; and
(e)on 12 March 2021, the Applicant’s lawyers notified the Respondents of the Applicant’s intention to commence litigation and provided a final opportunity for compliance.
27.Despite being given ample time and multiple opportunities to comply with the Compliance Notice and avoid litigation, the First Respondent failed to comply by the required date in the Compliance Notice and thereafter failed to take steps to rectify that failure, despite being clearly informed that this may lead to the Applicant commencing legal proceedings.
28.As a result of the First Respondent’s failure to comply with the Compliance Notice, the Applicant was required to bring proceedings seeking orders to remedy the contravention.
29.The Respondents have provided no explanation for their prolonged failure to comply with the Compliance Notice, despite the Second Respondent being clearly aware of the need to comply.
30.The Applicant submits that the Respondents’ conduct in failing to comply with the Compliance Notice demonstrates a deliberate disregard for their obligations under the FW Act and the authority of the FWO as a regulator of Commonwealth workplace laws.
The liability judgment set out the background in relation to this matter in greater detail. The respondent’s attitude towards the Notice reflects an unacceptable disregard for their statutory obligations. The conduct of the respondents frustrated the purpose of the provisions of inter alia s.716 of the FW Act.
The nature and extent of any loss or damage sustained as a result of the breaches
The applicant’s written submissions filed on 8 April 2022 addressed this consideration as follows:
31.As a result of the First Respondent’s failure to comply with the Compliance Notice, the Employee has been denied, and continues to be denied, the benefit of the entitlements due under the Compliance Notice. As set out above, FWI Lam has calculated these to be $22,054.50 plus additional superannuation contributions required to be paid on that amount. These amounts have been outstanding for more than 15 months since the Compliance Notice fell due and nearly two years since the Employee ceased employment.
32.Another relevant loss in this matter is the frustration of the statutory purpose behind section 716 of the FW Act. As Judge Kendall explained in Fair Work Ombudsman v Soma Kitchen Pty Ltd & Anor (No 2):
“the purpose of s.716 is to provide an alternative to litigation. That is, it is designed to prevent litigation. Litigation is timely and expensive. It is also not controversial that Court resources are limited and this Court actively promotes alternative resolution methods in order to reduce unnecessary expenditure. Here, that purpose has been systematically undermined.”
33.The Respondents’ failure to comply with the Compliance Notice obviates the utility of compliances notices as an effective mechanism for the efficient and cost-effective rectification of identified contraventions of the FW Act.
34.The legislature has set penalties for non-compliance with a compliance notice because a failure to comply will cause (as it has done in these proceedings) the FWO (and the Court) to spend time and public funds dealing with civil remedy proceedings which would not have been required had compliance occurred.
The Employee affected by the contraventions has been deprived of the lawful entitlements owed to them. There has also been public funds spent securing compliance with the FW Act.
The need to ensure compliance with minimum standards
The applicant’s written submissions filed on 8 April 2022 addressed this consideration as follows:
35.One of the principal purposes of the FW Act is to provide a guaranteed safety net of fair, relevant, and enforceable minimum terms and conditions for all employees. To be able to enforce these terms, FWIs must be able to exercise their compliance powers effectively. The purpose of the powers conferred on FWIs is to provide an effective means of investigating and enforcing compliance with minimum standards and industrial instruments.
36.The power of a FWI to issue a compliance notice was introduced into the FW Act to provide a mechanism for dealing with non-compliance with minimum entitlements in the FW Act, as an alternative to commencing litigation for each underlying contravention of an obligation. If a person complies with a compliance notice, no civil remedy proceedings can be brought against the person for the contravention(s) to which it relates.34
37.Compliance notices thereby provide a mechanism for the efficient and cost-effective rectification of identified contraventions of the FW Act, including underpayments to employees. Compliance notices have been recognised by the Court as “an important part of the armoury of Fair Work Inspectors in fulfilling their functions”.
38.The Respondents’ failure to comply with the Compliance Notice undermines the FW Act’s enforcement framework and, therefore, the safety net of entitlements it is designed to protect.
I accept that the conduct involved here undermines the FW Act’s enforcement framework and the safety net of minimum standards it provides.
The need for specific and general deterrence
The applicant’s written submissions filed on 8 April 2022 addressed this consideration as follows:
General deterrence
39.General deterrence must serve a purpose such that the penalty is not seen by others as just ‘the cost of doing business’. In order to be useful as a general deterrent, a penalty ‘should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by likeminded persons or organisations’.
40.The efficacy of statutory notices such as compliance notices will be hindered if recipients perceive that a failure to comply carries no meaningful consequences. Given the importance of the power to issue a compliance notice as a tool of Fair Work Inspectors, and that compliance with such notices avoids the need for litigation or the imposition of any penalties, penalties for non-compliance should be set at a level which demonstrates there are serious consequences for failing to comply with a compliance notice. In doing so, the Court will deter other parties from failing to comply with compliance notices.
Specific deterrence
41.Specific deterrence is directed at ensuring that a contravener does not take the risk of engaging in the contravening conduct in the future. As Gray J observed in Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union, in assessing the relevance of specific deterrence to appropriate penalties the Court should focus on whom the penalty is to be imposed and the likelihood of that party being involved in similar breaches in the future, examine any remorse expressed by a respondent and any steps they have taken to ensure no future breaches will occur.
43.While the Second Respondent informed the Applicant that the Company is no longer operating a business and he is currently “not employing anyone”, the First Respondent remains a registered and the Second Respondent still holds the position of sole director and secretary of the First Respondent. The Respondents already demonstrated a disregard for their obligations under the FW Act and have demonstrated no remorse nor attempted to redress their failures. The need for specific deterrence is somewhat reduced if the Respondents are not currently employing anyone, but it remains a relevant consideration as there is at least a risk that they may employ people in the future.
It has long been recognised that civil penalties are imposed primarily, if not solely, for the purpose of deterrence.[4] This is a significant factor in this case particularly in relation to the second respondent.
[4] See Australian Building and Construction Commissioner v Patterson [2022] HCA 13 at [15].
The size of the business enterprise involved and capacity to pay
The applicant’s written submissions filed on 8 April 2022 addressed this consideration as follows:
44.It is well established that the size and financial circumstances of an employer do not exculpate contraventions of workplace laws and that capacity to pay a penalty will be of less relevance than the objective of general deterrence.
45.The Respondents have not put any evidence before the Court of their financial position and circumstances although the Applicant has identified that the Second Respondent owns two properties (one jointly). Accordingly, the Applicant submits that there is no proper basis for the Court to reduce the penalty on the basis of financial considerations.
As noted in submissions, the size of the business and financial circumstances do not excuse the contravention. In any event, there is no proper basis to reduce the appropriate penalty on this ground.
Contrition, corrective action and co-operation
The applicant’s written submissions filed on 8 April 2022 addressed this consideration as follows:
46.The Respondents have done nothing to demonstrate contrition or cooperation. They have not taken action to remedy the contravention.
47.The Respondents have failed to engage in any meaningful way with the Applicant or the Court throughout this litigation. The history of that lack of engagement is set out in the Affidavits of Maddison Sears affirmed on 29 October 2021 and 10 February 2021 and resulted in the Applicant seeking default judgment.
In the circumstances, I accept that there should be no discount for these factors.
OTHER ORDERS
As noted at paragraph [4] above, despite being served with the orders made, for the reasons set out in the liability judgment, the respondents have not complied with the Notice or the orders made on 16 February 2022.
Given this, the applicant sought orders for compensation under s.545 of the FW Act to secure compliance with the Notice. The applicant’s submissions were:
15.FWI Lam has undertaken the calculations that were required of the First Respondent under the Compliance Notice.16 He has calculated that the First Respondent would have paid $22,054.50 (Underpayment Amount) to the Employee had it complied with the Compliance Notice. FWI Lam’s affidavit sets out the evidence relied on and approach taken in calculating the compensation amount.
16.On the basis of the Respondents’ lack of engagement in the Court process to date, and their failure to respond to the Applicant’s communication regarding the February Orders, the Applicant anticipates that the First Respondent is likely to be in default of the February Orders when this matter next comes before the Court. In that event, the Applicant seeks orders that the First Respondent pay compensation for the benefit of the Employee in the amount calculated by FWI Lam, plus superannuation and interest. The Applicant seeks orders that the compensation and interest be payable to the Applicant and thereafter be distributed to the Employee.
17.The Court is empowered under section 545(2)(b) of the FW Act to make an order awarding compensation for loss that a person has suffered because of a contravention of the FW Act.
18.The Applicant submits that the Court can be satisfied from FWI Lam’s affidavit that the Underpayment Amount represents appropriate compensation for the loss suffered by the Employee arising from the First Respondent’s contravention of the section 716(5) of the FW Act.
19.The proposed orders, set out in Annexure A:
(a)simplify compliance for the First Respondent, in that it is no longer required to undertake its own calculations (having now failed to do so for more than a year since the Compliance Notice was first issued); and
(b)render the Court’s orders more readily enforceable by the Applicant in circumstances where the First Respondent has demonstrated an ongoing disregard for orders of this Court.
Similar orders such as those sought by the applicant were made in Fair Work Ombudsman vCorporation San Pty Ltd & Anor [2020] FCCA 2849. The orders sought by the applicant here can be made under s.545 of the FW Act.
CONCLUSION
In Fair Work Ombudsman v Trucking Services Pty Ltd [2021] FCCA 760 at paragraph [21] it was said:
As other judges of this Court have observed, the efficacy of statutory notices such as compliance notices will be hindered or made redundant if recipients perceive that a failure to comply carries no meaningful consequences. Given the importance of a Fair Work Inspector’s power to issue compliance notices, and that compliance with such notices avoids the need for litigation or the imposition of any penalties, penalties for non-compliance should be set at a level which demonstrates there are serious consequences for failing to comply with a compliance notice. In doing so, the Court will deter other parties from failing to comply with compliance notices.
The failure to comply with the 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. There is clearly a need for a penalty to be imposed on the respondents in this case to show that their behaviour is unacceptable, will not be tolerated and to serve as a deterrent to future contraveners.
The applicant submitted there were a range of penalties appropriate given the above factors. For the reasons set out above, I find that a penalty of $18,658 (being 57% of the maximum penalty of $33,000) would be an appropriate penalty for the first respondent and $3,996 (being 60% of the maximum of $6,600) for the second respondent. The reason for the differential is the culpability of the second respondent for his involvement in the contraventions as set out in the liability judgment warrants a greater sanction. It is otherwise appropriate to order compensation under s.545(2) of the FW Act for what was referred to in submissions as the “Underpayment Amount” but which will be termed the “Compensation Amount” which, as it transpires, is the same as the appropriate penalties to be imposed on the respondents.
Therefore, the Court:
(a)is directed by the relevant authorities to consider what is appropriate in all the circumstances of this case; and
(b)in its discretion in relation to penalty is not fettered by a checklist of mandatory criteria; and
(c)is satisfied in the light of the above considerations the penalty set out above is just and appropriate;
there will be orders as set out in the beginning of these reasons for decision.
I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of Judge O'Sullivan. Associate:
Dated: 6 May 2022
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