Fair Work Ombudsman v Matcraft Pty Ltd & Ors

The Federal Circuit Court of Australia, presided over by Judge Kendall, considered a penalty hearing concerning admitted contraventions of the *Fair Work Act 2009* (Cth) by Matcraft Pty Ltd and two of its directors, Mr and Mrs Ruthenberg. The dispute arose from Matcraft's failure to comply with a Compliance Notice issued by the Fair Work Ombudsman, which required the company to calculate and rectify underpayments of wages and superannuation to an employee. The directors were alleged to be involved in this contravention.

The central legal issue before the Court was to determine the appropriate pecuniary penalties to be imposed on Matcraft and its directors for the admitted contravention of section 716(5) of the Act, and for the directors' involvement in that contravention under section 550(2). The Court was required to consider the nature, circumstances, and extent of the contravention, as well as the consequences that arose from it, in accordance with established principles for penalty determination.

Judge Kendall reasoned that the failure to comply with a Compliance Notice strikes at the core objects of the *Fair Work Act 2009* (Cth), which aim to provide accessible and effective dispute resolution and compliance mechanisms. The Court noted that Matcraft had failed to pay an employee wages for a significant period, had not adhered to an agreed payment plan, and had not responded to the Compliance Notice or subsequent correspondence from the Fair Work Inspector. Despite the respondents admitting the contraventions and agreeing to the Court making declarations and orders, the Court emphasized that non-compliance with a Compliance Notice is a serious matter.

Consequently, the Court ordered Matcraft to take the steps required by the Compliance Notice, including calculating and paying outstanding entitlements and superannuation to the employee, and to pay a pecuniary penalty of $22,050. Mr and Mrs Ruthenberg were each ordered to pay a pecuniary penalty of $4,410 for their involvement in Matcraft's contravention. The Court granted the respondents 90 days to pay these penalties, acknowledging the potential impact of the COVID-19 pandemic on businesses.