Fair Work Ombudsman v Lodge MGL Pty Ltd

Link copied
Case Copied 22 min read

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Lodge MGL Pty Ltd [2023] FedCFamC2G 622  

File number(s): SYG 770 of 2022
Judgment of: JUDGE GOODCHILD
Date of judgment: 18 July 2023 
Catchwords: INDUSTRIAL LAW – Fair Work – Pecuniary penalties – failure of the respondent to comply with Compliance Notice – whether penalty should be imposed and level of penalty to be imposed – factors relevant to penalty.
Legislation:

Crimes Act 1914 (Cth) s 4AA

Evidence Act 1995 (Cth) s 140

Fair Work Act 2009 (Cth) ss 3, 12, 539, 546, 551, 716

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)

Cases cited:

Australian Building and Construction Commissioner v Menon [2020] FCA 1418

Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 399 ALR 599

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCA 8; (2008) 165 FCR 211

Blandy v Coverdale NT Pty Ltd [2008] FCA 1533

Fair Work Ombudsman v Corporation Sun Pty Ltd [2020] FCCA 2849

Fair Work Ombudsman v Hiyi Pty Ltd & Ors [2016] FCCA 1634

Fair Work Ombudsman v Rum Runner Trading Pty Ltd & Anor [2018] FCCA 1129

Fair Work Ombudsman v Trek North Tours & Anor (No 2) [2015] FCCA 1801

Kelly v Fitzpatrick [2007] FCA 1080

Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357

Mason v Harrington Corporation Pty Ltd [2007] FMCA 7

Wong v The Queen [2001] HCA 64; (2001) 207 CLR 584

Division: Division 2 General Federal Law
Number of paragraphs: 69
Date of hearing: 11 April and11 May 2023  
Place: Sydney
Solicitor for the Applicant: Mr D Trindade of Clayton Utz
Respondent: Mr Ghaleb for the Respondent company

ORDERS

SYG 770 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

FAIR WORK OMBUDSMAN

Applicant
AND:

THE LODGE MGL PTY LTD

Respondent

order made by:

JUDGE GOODCHILD

DATE OF ORDER:

18 JULY 2023

DECLARATIONS

1.The respondent contravened s 716(5) of the Fair Work Act2009 (Cth) by failing to comply with the Compliance Notice issued by the applicant on 6 August 2021.

THE COURT ORDERS THAT:

2.The respondent pay $5,500 to the Consolidated Revenue Fund of the Commonwealth of Australia, pursuant to s 546(1) of the Fair Work Act 2009 (Cth) by 18 January 2024.

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

JUDGE GOODCHILD:

  1. The Fair Work Ombudsman seeks relief against the respondent, The Lodge MGL Pty Ltd, for its contravention of s 716(5) of the Fair Work Act 2009 (Cth)…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Fair Work Ombudsman v Lodge MGL Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2023] FedCFamC2G 622
Decision Date

CaseChat Overview and Summary

Fair Work Ombudsman v Lodge MGL Pty Ltd was heard in the Fair Work Division of the Federal Circuit and Family Court of Australia. The Fair Work Ombudsman sought a pecuniary penalty against Lodge MGL Pty Ltd for contravening the Fair Work Act 2009, specifically for underpaying wages and failing to make superannuation contributions to three casual employees. The respondent admitted to the contravention and corrective action was taken to repay the underpayments and superannuation contributions following an investigation by a Fair Work Inspector. The court was tasked with determining the appropriate penalty under section 546 of the Fair Work Act, which aims to promote compliance and deter future contraventions.

The court considered several factors in determining the penalty. Firstly, the contravention involved underpayments of wages and non-payment of superannuation to three employees, with the amounts owed totaling approximately $9,421.68. The respondent admitted to the contravention, entered into a Statement of Agreed Facts, and resolved the proceedings without the need for contested proceedings. Additionally, the respondent expressed genuine remorse and implemented procedures to prevent future contraventions. The court also noted that the respondent was not a large employer and operated a small business, and there were no previous or subsequent actions against the respondent by the Fair Work Ombudsman.

In accordance with the principles established in Pattinson, the court determined that the penalty should have a reasonable relationship with the maximum penalty and be sufficient to deter future contraventions. The court considered the respondent's corrective action, admission of liability, and remorse, and concluded that a penalty of $5,500 was appropriate. The court allowed the respondent six months to pay the penalty in full.

The court ordered that Lodge MGL Pty Ltd pay a penalty of $5,500 to the Fair Work Ombudsman by 18 January 2024. The court considered the contravention, the respondent's corrective action, and the principles of deterrence and proportionality in arriving at this decision.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

The applicant also seeks that the respondent pay a pecuniary penalty for its contravening conduct. This Judgment addresses what, if any, penalty should be imposed in respect of the admitted contravention, pursuant to s 546 of the Act.STATEMENT OF AGREED FACTS A Statement of Agreed Facts (“SOAF”) was entered into by both parties and was filed with the Court on 14 December 2022. During April 2021, following requests for assistance from three former employees, a Fair Work Inspector commenced an investigation into the respondent’s compliance with the Act, specifically underpayment of wages and non-payment of superannuation. A Compliance Notice was served on the respondent on 6 August 2021. The applicant failed to comply with that Notice. The applicant lodged the Application and Statement of Claim in this Court against the respondent on 27 May 2022. The underpayments to three casual staff members occurred throughout 2020 and 2021 and were $4235.52; $248.16 and $4,738.10 The superannuation contributions to be made were: $444.41 and $497.50. The underpayments were repaid to the three former employees on 18 October 2022. The superannuation contributions occurred on 11 November 2022.RELEVANT PRINCIPLESCivil penalty principles The High Court in Pattinson[1] stated at [9] that the purpose of a civil penalty is “primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act”. [1] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 399 ALR 599 (‘Pattinson’). The plurality in Pattinson considered that the power conferred by s 546 of the Act is not subject to constraints drawn from the criminal law and there is “no place for a notion of proportionality”. The Court said:What is required is that there be “some reasonable relationship between the theoretical maximum and the final penalty imposed”. That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of s 546; the deterrence of future contraventions of a like kind by the contravenor and by others. At [60], the plurality also considered that subjective factors are important in the determination of penalty, stating: Indeed, in some cases, the circumstances of the contravenor may be more significant in terms of the extent of the necessity for deterrence than the circumstances of the contravention. In this regard, it is simply undeniable that, all other things being equal, a greater financial incentive will be necessary to persuade a well resourced contravenor to abide by law rather than to adhere to its preferred policy then will be necessary to persuade a poorly resourced contravenor that its unlawful policy preference is not sustainable. At [71] of Pattinson, it was reiterated that the Court should fix a penalty “it considers fairly and reasonably to be appropriate to protect the public interest from future contraventions of the Act”.

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

Whilst it certainly took some time by the respondent and at the urging by the applicant, corrective action was taken. I give weight to that fact and to the entering into the SOAF and the resolution of these proceedings without the need for contested proceedings. CONSIDERATION OF PENALTY The applicant submitted that the total penalty to be imposed should be between $23,100 - $26,400. I consider this to be excessive. The respondent entered into the SOAF with the applicant admitting that they did not comply with the Compliance Notice. As noted earlier, this saved the Court and the parties the time and expense of contested proceedings. The respondent has remunerated the employees the amounts required by the Compliance Notice. The respondent has expressed remorse or contrition with respect to the non-payment of the former employees. My assessment of that expression of remorse or contrition was that it was genuine. The respondent clearly regretted his conduct and explained that procedures were put in place so that similar conduct would not be repeated. The respondent has not been the subject of any previous or subsequent action by the applicant. It is difficult for me to make any finding with respect to the financial circumstances of the company, however the respondent is not a large employer and it is accepted that the respondent operates a small business. In my view, paying appropriate regard to the contravention that occurred and giving careful consideration to the circumstances of the case, I consider that the appropriate penalty for the contravention is $5,500. In the circumstances, rather than allowing a one-month period within which to pay the penalty, the Court will allow the respondent until 18 January 2024 (a period of six months) to pay, in full, the penalty sum. I make orders accordingly.