Fair Work Ombudsman v Little Italy Wagga Wagga Pty Ltd
[2021] FedCFamC2G 329
•24 November 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Little Italy Wagga Wagga Pty Ltd [2021] FedCFamC2G 329
File number(s): MLG 655 of 2021 Judgment of: JUDGE BURCHARDT Date of judgment: 24 November 2021 Catchwords: INDUSTRIAL LAW – ex tempore ruling – statement of Agreed Facts – employer not appearing at trial and filing no materials – orders made within the range sought by the applicant. Legislation: Fair Work Act 2009 (Cth) Division: Division 2 General Federal Law Number of paragraphs: 9 Date of last submission/s: 24 November 2021 Date of hearing: 24 November 2021 Place: Melbourne Advocate for the Applicant: Ms Neal Solicitor for the Applicant: Office of the Fair Work Ombudsman The Respondent: The Respondent did not appear ORDERS
MLG 655 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: LITTLE ITALY WAGGA WAGGA PTY LTD (ACN 605 455 490)
Respondent
ORDER MADE BY:
JUDGE BURCHARDT
DATE OF ORDER:
24 NOVEMBER 2021
THE COURT DECLARES BY CONSENT THAT:
1.The Respondent contravened section 716(5) of the Fair Work Act 2009 (Cth) by failing to comply with the Compliance Notice dated 23 December 2020.
THE COURT ORDERS THAT:
2.Pursuant to section 546(1) of the Fair Work Act, that the Respondent pay a pecuniary penalty of $10,656 for the declared contravention in paragraph 1 above within 28 days of this order.
3.The Applicant has liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
4.The sum ordered by way of penalty be paid to Consolidated Revenue Fund.
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
Revised from TranscriptJUDGE BURCHARDT
The application filed in the Court on 8 April 2021 was accompanied by a statement of claim, which relevantly sought a declaration that the respondent had contravened section 716(5) of the Fair Work Act 2009 (Cth) by failing to comply with a compliance notice. The statement of claim also sought consequential orders, including the imposition of a pecuniary penalty because of the contravention. A statement of agreed facts was filed on 5 July 2021 and was signed by Dino Palma on behalf of the respondent. I clarified with Counsel today that she has personal knowledge that it was indeed Dino Palma who signed it. He is the company secretary and one of the four shareholders of the respondent. And his signature follows correspondence from his accountant, Trifon Gouvas, to Ms Tam of the Fair Work Ombudsman’s office, dated 17 May 2021, which relevantly indicates to my then associate Ms Baffi, that he had been working with Ms Tam to try and resolve the matter, some difficulties in obtaining legal representation, and relevantly, having said that he communicated with all the directors, “[t]hey admit to the contravene and wish to proceed to the penalty hearing”. It then pointed out the payment of the disputed annual leave had, in fact, been made. In the circumstances, it is clear that the respondent admits the contravention and agrees with the statement of agreed facts, including the declaration that forms part of the statement of agreed facts.
From the statement of agreed facts, the following matters are not controversial. The respondent is a company and is a national system employer. The Fair Work Ombudsman has all the relevant, necessary authority and powers to bring and prosecute this proceeding. Fair Work Inspector Mitchell investigated the respondent between October 2020 and February 2021, following a request for assistance by a former employee of the respondent. There is no question that the restaurant industry award applied, and that the employee accrued 52.37 hours of annual leave during employment. She was not paid this money when her employment ended. As a result of these matters, Fair Work Inspector Mitchell formed a reasonable belief, pursuant to section 716, that the respondent had contravened national employment standards. A compliance notice was served on the respondent on 23 December 2020, which indicated remedial action to be taken, including payment to the employee of the unpaid annual leave and that compliance was required by 20 January 2021. This did not occur and nothing was paid to the employee before this proceeding was issued. On 12 May 2021, the respondent paid the employee the annual leave.
Those facts are not in any way the subject of controversy. They form the relevant factual basis for consideration of this matter now. The following matters are in my view relevant and I readily concede that the structure of these observations follows relatively closely the helpful written submissions of the Fair Work Ombudsman. I have not, however, included reference to authorities. They are in the written submissions if anyone wants to look them up. First, the maximum penalty for contravention of section 716(5) is $33,300. The primary purpose in these sort of proceedings is to put a price on contravention high enough to deter firstly any repetition by the respondent itself, and secondly, anyone else who might be otherwise minded to contravene.
There has been a single contravention of the civil penalty provision. Compliance notices are an important part of the armoury of Fair Work inspectors. Amongst other things, if they are complied with, then there is no need for litigation and matters are dealt with efficiently and expeditiously. There has been no compliance by the respondent in this matter, despite having notice that this proceeding would be brought in the event of failure to do so. Payment only took place in May. There has been no explanation proffered by the respondent to explain their failure to comply with the compliance notice. Compliance with minimum standards is important. To enforce such standards, the inspector must be able to exercise compliance powers effectively.
The failure of the respondent to comply with the compliance notice must be seen in the light of these considerations. Failure to comply meant that the worker did not get paid until May when their employment had ended as long ago as 1 January 2020. The employment was part-time and it is more probable than otherwise that the lack of a sum of over $900 was significant to them. General deterrence is, of course, important. It is very important that employers comply with compliance notices for the sort of reasons I have discussed. Specific deterrence is also relevant. As I understand it, it is accepted that the respondent is no longer trading, but there is no evidence as the Fair Work Ombudsman’s submissions point out, about its size or financial resources.
In the respondent’s favour, it should be noted that the respondent has cooperated by making full admissions and signing the statement of agreed facts. I agree with the Fair Work Ombudsman that a 20 per cent discount is an appropriate discount in the light of these matters. There is, of course, a range of penalties. Although the Fair Work Ombudsman is permitted to make submissions as to the range and submits that the range should be 40 to 50 per cent, it is important to remember the Court does not act as a rubber stamp. On the contrary, the Court must form for itself a state of satisfaction as to what the appropriate penalty should be.
Nonetheless, I actually agree with the Fair Work Ombudsman that the range of 40 to 50 per cent is appropriate in the particular circumstances of this case. It is, of course, a first contravention. The respondent has offered no explanation as to its failure to comply, nor offered any financial information that might inform the Court as to its circumstances. The respondent has likewise expressed no contrition, although that matter it should be emphasised, does not operate in any way to increase the penalty to be determined, but rather simply means that the respondent does not get the benefit of any contrition it might, in fact, have expressed.
In all these circumstances, in my view, it is important to remember how important compliance is. And I think a penalty of 40 per cent of the applicable maximum is appropriate in these circumstances, in a total of $10,656. The applicant has set out as annexure A to the written submissions the declaration and orders sought. It is important to remember that declarations are not made as a matter of course or as a matter of form. Just recently, Kerr J has pointed to some of the difficulties with declarations being made if there is no real utility to them. However, this is an industry which I could say from my own experience of these matters is notorious for non-compliance.
Even if it was not within my own experience that this is the case, it is quite apparent from the annexure C12 to the affidavit of Patricia Louise Campbell, affirmed on 20 July 2021 that compliance disputes are high in this industry. A declaration will assist in emphasising the nature of the contravention and will hopefully help in a general sense to assist in the process of ensuring compliance within an industry which I say is notorious for lack of compliance. In my view, a declaration in the terms agreed between the parties is, in these circumstances, appropriate.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Burchardt. Associate:
Dated: 6 December 2021
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