Fair Work Ombudsman v L.E.C Builders & Designers Pty Ltd (No 2)

In the Federal Circuit and Family Court of Australia, the Fair Work Ombudsman filed proceedings against L.E.C Builders & Designers Pty Ltd and a related individual seeking penalties and compensation for breaches of the Fair Work Act 2009 (FW Act). The case concerns the appropriate penalties that should be imposed on the respondents for contraventions found in the liability judgment. The primary legal issue before the Court was to determine the appropriate penalty for the contraventions of sections 716(5) and 550(2)(c) of the FW Act by the respondents. The Court considered various factors in determining the appropriate penalty, including the nature and extent of the conduct leading to the breaches, the circumstances in which the conduct took place, and the need for deterrence.

The Court found that the respondents' conduct demonstrated a deliberate disregard for their obligations under the FW Act and the authority of the Fair Work Ombudsman. The First Respondent failed to comply with a Compliance Notice, despite multiple opportunities to do so, and the Second Respondent was involved in the First Respondent’s contravention. The Court concluded that a penalty of $18,658 for the First Respondent and $3,996 for the Second Respondent would be appropriate, considering the culpability of the Second Respondent for his involvement in the contraventions. The Court also ordered compensation for the underpayment amount, which was the same as the penalties imposed.

The Court’s reasoning was based on the need to ensure compliance with minimum standards by providing an effective means for investigation and enforcement of employee entitlements, as well as the need for specific and general deterrence. The Court found that the penalties imposed would serve as a deterrent to future contraveners and demonstrate that such behaviour is unacceptable and will not be tolerated. The Court ordered the First Respondent to take specific steps to remedy the contraventions and pay interest on the amounts owed. The matter was adjourned for a further hearing to determine the appropriate penalty.