Fair Work Ombudsman v LROC Builders Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v LROC Builders Pty Ltd [2025] FedCFamC2G 1516

File number: MLG 1554 of 2023
Judgment of: JUDGE SYMONS
Date of judgment: 15 September 2025
Catchwords: INDUSTRIAL LAW – Fair Work – failure to comply with compliance notices – application for civil penalties and orders for rectification under s 545(1) of the Fair Work Act 2009 (Cth) – where respondents engaged only briefly in the proceeding and declarations made on the basis of their deemed admissions – where first respondent continues to trade and remains registered – where no evidence of contrition or introspection about the contraventions – where need for specific and general deterrence – jurisdiction under s 545(2)(b) not engaged where no quantifiable loss causally linked to the contraventions – orders for penalties and for a proportion of the penalties to be redirected to the employees identified in the compliance notices
Legislation:

Fair Work Act 2009 (Cth), ss 3, 44, 45, 65, 76, 90, 99, 116, 134, 539, 545, 546, 550, 557, 570, 682, 716, 717, 793

Fair Work Legislation Amendment (Closing Loopholes No.  2) Act 2024 (Cth)

Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2025 (Cth), rr 5.11, 24.04

Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2021 (Cth) r 17.05

Federal Court Rules 2011 (Cth), r 5.23

Fair Work Legislation Amendment (Closing Loopholes) Bill 2023

Building and Construction General On-site Award 2020, cll 10, 19.1, 19.3, 29.4, 31.2

Building and Construction General On-site Award 2010, cll 19.1, 25.1, 36.2, 37.1

Cases cited:

Australian Building and Construction Commission v Pattinson (2022) 274 CLR 450; [2022] HCA 13

Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46

Dafallah v Fair Work Commission [2014] (2014) 225 FCR 559; FCA 328

Fair Work Ombudsman v ABMENG Pty Ltd (No 2) [2024] FedCFamC2G 1287

Fair Work Ombudsman v Annangrove Road Pty Ltd (in liq) (No 2) [2024] FedCFamC2G 854

Fair Work Ombudsman v Carers Portland Inc [2023] FedCFamC2G 620

Fair Work Ombudsman v Carers Portland Inc (No 2) [2024] FedCFamC2G 72

Fair Work Ombudsman v Clark Projects Pty Ltd [2025] FedCFamC2G 24

Fair Work Ombudsman v Cobra Security Services Pty Ltd [2024] FedCFamC2G 336

Fair Work Ombudsman v Double Hao International Pty Ltd (No 2) [2024] FedCFamC2G 943

Fair Work Ombudsman v Express Cars Direct Australia Wide Pty Ltd (No 2) [2024] FedCFamC2G 1179

Fair Work Ombudsman v Pure Telecom Pty Ltd [2024] FedCFamC2G 664

Fair Work Ombudsman v Soma Kitchen Pty Ltd & Anor (No.  2) [2020] FCCA 2583

Fair Work Ombudsman v Taing [2024] FedCFamC2G 270

Fair Work Ombudsman v Territory Tough Pty Ltd [2024] FedCFamC2G 743

Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290

Kidd v Kwek (No 2) [2024] FCA 194

Patrick Stevedores Holdings Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union (No 4) [2021] FCA 1481

Trade Practices Commission…

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Details
Case
[2025] FedCFamC2G 1516
Decision Date

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) filed a claim against LROC Builders Pty Ltd and its sole director, Mr Oliver, for non-compliance with compliance notices issued under the Fair Work Act 2009. The FWO sought civil penalties and orders for rectification under section 545(1) of the Act. Both respondents were absent during the penalty hearing, and the court proceeded based on deemed admissions. Mr Oliver continued to operate both businesses without addressing the contraventions, showing no remorse or introspection. The court needed to consider both specific and general deterrence in its decision. The FWO argued for penalties and that a portion of these should be redirected to the affected employees.

The primary legal issues before the court were whether to impose civil penalties on the respondents for their failure to comply with the compliance notices and to what extent these penalties should be directed towards the affected employees. The court also had to consider the need for deterrence and the lack of quantifiable loss causally linked to the contraventions. The FWO's submission regarding the loss flowing from the respondents' failure to comply with the compliance notices was also evaluated.

The court found that both respondents had deliberately ignored the compliance notices and failed to take corrective action, despite multiple opportunities to comply. The lack of cooperation and continued non-compliance demonstrated a disregard for their legal obligations. The absence of prior similar conduct was noted as a mitigating factor, but the need for deterrence outweighed this consideration. The court held that the FWO's submissions regarding the loss to employees provided a reasonable basis for calculating the penalties. Consequently, the court ordered that penalties be imposed on both respondents and that a proportion of these penalties be redirected to the identified employees.

Orders

Orders of the court

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Background

Background to the litigation

As foreshadowed by these orders, the matter returned before me for hearing on penalty and relief on 11 December 2024. Mr McDermott of counsel appeared for the FWO. There was no appearance by or on behalf of either respondent.BACKGROUND The first respondent, LROC Builders Pty Ltd (LROC), operates a building and construction business based in Carrum Downs, Victoria. The second respondent, Mr Oliver, is (and was at relevant times) the sole director, secretary and shareholder of LROC; the person responsible for the operation, management and control of the business; the person responsible for ensuring LROC complied with its legal obligations under the Act; the person responsible for corresponding with the FWO in respect of its investigation and the compliance notices; and a person whose conduct is taken to be that of LROC pursuant to s 793(1) of the Act. Mr Oliver was also at relevant times, a sole trader who operated a building and construction business under the name “LR Oliver Carpentry”.First investigation In around March 2022, Fair Work Inspector Andrew Semmler (FWI Semmler) commenced an investigation into Mr Oliver concerning his employment of Mr Mark Dooney.[1][1] Statement of Claim filed 7 September 2023 (SOC), [5]. Based on the information obtained during the investigation, FWI Semmler formed the following beliefs:[2](a)Mr Oliver employed Mr Dooney as a full-time weekly hire employee from 1 July 2021 to 27 August 2021;(b)the Building and Construction General On-site Award 2020 (2020 Award) covered and applied to Mr Oliver in respect of the employment of Mr Dooney;(c)from 1 July 2021 to 27 August 2021, Mr Dooney was classified under the 2020 Award as a “level 3 carpenter”.(d)At the end of this employment period, Mr Oliver failed to pay Mr Dooney the annual leave entitlements which he had accrued but had not taken.[2] SOC, [6(a)-(d)]. By reason of the matters referred to in paragraph 10 of these reasons, FWI Semmler formed a reasonable belief within the meaning of s 716(1) of the FW Act that Mr Oliver had contravened s 90(2) of the FW Act by failing to pay Mr Dooney accrued and untaken annual leave on termination. On 6 April 2022, FWI Semmler issued a compliance notice to Mr Oliver (First Compliance Notice), requiring him to calculate and rectify the underpayments owing to Mr Dooney by 11 May 2022. On 8 April 2022, Mr Oliver provided the requested calculations, confirming that $855.38 was owed.[3] However, since that time, neither respondent has paid this amount to Mr Dooney.[3] Annexure AS-7 of the affidavit of FWI Andrew Semmler dated 1 October 2024 (first Semmler affidavit). Second investigation In around September 2022, Fair Work Inspector Jay Chin (FWI Chin) commenced an investigation into LROC concerning its employment of Mr Benjamin Housden.[4][4] SOC, [9]. Based on the information obtained during the investigation, FWI Chin formed the following beliefs:[5][5] SOC, [10(a)-(d)]. (a)LROC employed Mr Housden as a full-time weekly hire employee from 4 December 2020 to 15 January 2021;(b)The Building and Construction General On-site Award 2010 (2010 Award) covered and applied to LROC in respect of the employment of Mr Housden;(c)from 4 December 2020 to 15 January 2021, Mr Housden was classified under the 2010 Award as a “level 3 construction worker”;(d)LROC failed to pay Mr Housden:(i)the applicable minimum wage for ordinary hours worked;(ii)the relevant fares and travel allowance expenses;(iii)the relevant overtime rate for the first two hours of overtime worked on a weekday;(iv)the relevant overtime rate for overtime worked on a weekday after two hours of overtime;(v)the relevant overtime rate for the first two hours of overtime worked before 12pm on a Saturday;(vi)the relevant overtime rate for overtime worked before 12pm on a Saturday after two hours of overtime;(vii)the relevant overtime rate for overtime worked after 12pm on a Saturday; and(viii)any accrued, but untaken, annual leave as well as annual leave loading when his employment ended.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The FWO invites the Court to also take account of the loss flowing from the respondents’ failure to comply with the Compliance Notices which it submits can be assimilated to the amount which Mr Oliver calculated in respect of the First Compliance Notice and the amounts which the FWO calculated and then pleaded in the statement of claim, in respect of the Second and Third Compliance Notices. These amounts, which remain outstanding, are:(a)$855.38 to Mr Dooney;[18](b)$4,364.00 to Mr Housden;[19](c)$25,218.73 to Mr Van Der Meer;[20](d)$16,805.88 to Mr Guanizo.[21] [18] SOC, [44].[19] SOC, [46(b)].[20] SOC, [46(c)].[21] SOC, [46(d)].Corrective action, cooperation and contrition The FWO relies on a catalogue of opportunities given to both Mr Oliver and to LROC to engage with the FWO and to comply with the statutory notices as evidence that neither party has behaved cooperatively and that their continued lack of compliance should be characterised as deliberate. For example, in relation to Mr Oliver it is noted that the FWO sent emails to Mr Oliver on 7 April 2022 and 12 April 2022, before compliance with the First Compliance Notice was due and then again on 23, 25 and 26 May 2022 and 6 and 15 June 2022, after compliance with the First Compliance Notice was due.[22][22] Second Semmler affidavit, [3], [5]-[6], [8], [10]-[11]. The FWO notes that while Mr Oliver expressed an initial intention to pay the amount outstanding under the First Compliance Notice and acknowledged it was a small sum, he nonetheless has failed to remit this payment to Mr Dooney. As far as LROC is concerned, the FWO asks the Court to take account of the documented attempts and efforts made by it to engage with LROC in relation to the Second and Third Compliance Notices. This includes multiple attempted phone calls to Mr Oliver, in his capacity as director of LROC, and emails sent before and after compliance with the Second Compliance Notice was due, and emails sent to LROC before and after compliance with the Third Compliance Notice was due. The FWO submits that the respondents’ inaction necessitated the commencement of these proceedings and that once the proceeding was on foot, the uncooperative and dilatory conduct of the respondents continued. This was exemplified by the attempts made by the FWO to negotiate a statement of agreed facts with the respondents. The FWO notes that the respondents agreed initially to participate in the process of filing an agreed statement and orders were made by consent on 6 February 2024 to facilitate this occurring. However, the respondents did not sign the statement provided by the FWO or provide an alternate version for the FWO’s consideration. As a result, no agreement was reached, and the matter proceeded to default judgment.Similar previous conduct There is no evidence before me that the respondents have engaged in similar previous conduct. I therefore infer that it is a first offence for the respondents and will take that consideration into account.The penalty range sought by the FWO