Fair Work Ombudsman v Meriel Enterprises Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Meriel Enterprises Pty Ltd [2023] FedCFamC2G 632

File number(s): SYG 1444 of 2022
Judgment of: JUDGE MANOUSARIDIS
Date of judgment: 20 July 2023
Catchwords: INDUSTRIAL LAW – assessment of a pecuniary penalty for contravention of s 716(5) of the Fair Work Act 2009 (Cth).
Legislation:

Crimes Act 1914 (Cth) s 4AA

Fair Work Act 2009 (Cth) ss 12, 90(2), 539(1), 539(2), 546(1), 557A, 700, 716(2), 716(5)

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 9.04

Hair and Beauty Industry Award 2010 cl 24.2    
Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8

Bevis v VA Holdings Pty Ltd trading as Granton Homes & Ors [2020] FCCA 2082

Fair Work Ombudsman v Viper Industries Pty Ltd [2015] FCCA 492

Fair Work Ombudsman v VS Investment Group Pty Ltd [2013] FCCA 208

Kelly v Fitzpatrick [2007] FCA 1080

Mason v Harrington Corporation Pty Ltd [2007] FMCA 7

Division: Fair Work
Number of paragraphs: 32
Date of last submission/s: 4 July 2023
Date of hearing: 29 June 2023
Place: Sydney
Solicitor for the Applicant: Ms F Parekh of the Office of the Fair Work Ombudsman, by telephone
The Respondent: No appearance by, or on behalf of, the respondent

ORDERS

SYG 1444 of 2022

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

FAIR WORK OMBUDSMAN

Applicant
AND:

MERIEL ENTERPRISES PTY LTD (ACN 606 365 422)

Respondent

order made by:

JUDGE MANOUSARIDIS

DATE OF ORDER:

20 July 2023

THE COURT ORDERS THAT:

1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the respondent pay a pecuniary penalty in the sum of $16,650 for its contravention of s 716(5) of the FW Act as declared in the orders made on 8 March 2023.

2.The respondent pay the pecuniary penalty referred to in order 1 to the Commonwealth within 28 days after the day on which these orders are pronounced.

3.The applicant have liberty to apply on 7 days’ notice in the event that any of the above orders are not complied with.

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

INTRODUCTION

  1. The applicant (FWO) applies under s 546(1) of the Fair Work Act 2009 (Cth) (FW Act) for an order that the respondent, Meriel Enterprises Pty Ltd (MEPL), pay a pecuniary penalty because…

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Details
Case
[2023] FedCFamC2G 632
Decision Date

CaseChat Overview and Summary

Fair Work Ombudsman v Meriel Enterprises Pty Ltd was a case brought before the Federal Circuit and Family Court of Australia by the Fair Work Ombudsman (FWO) against Meriel Enterprises Pty Ltd (MEPL). The dispute arose from allegations that MEPL, the operator of a beauty therapy clinic trading as Meei Clinic, failed to comply with certain employment obligations under the Hair and Beauty Industry Award 2010 and the Fair Work Act 2009 (FW Act). Specifically, the FWO alleged that MEPL did not pay a part-time employee her minimum wage, penalty rate, and accrued annual leave entitlements over a specified period. Following an investigation by a Fair Work Inspector, the FWO issued a Compliance Notice to MEPL, which MEPL failed to comply with, leading to the current proceedings.

The central legal issues before the court were whether MEPL had contravened specific clauses of the Hair and Beauty Industry Award 2010 and sections of the FW Act by failing to pay the employee her entitlements and whether the FWO was entitled to seek a penalty against MEPL for these contraventions. The court also needed to determine the appropriate penalty to be imposed if it found that MEPL had indeed contravened the award and the act.

In delivering the judgment, the court found that MEPL had failed to take the necessary steps to remedy the direct effects of the contraventions as specified in the Compliance Notice. The court accepted the FWO's submissions that MEPL had contravened the award and the act by not paying the employee her minimum wage, penalty rate, and accrued annual leave entitlements. Given MEPL's failure to appear or present evidence or submissions on penalty, the court proceeded to determine the penalty based on the FWO's submissions. The court concluded that the FWO was entitled to seek a penalty and ordered MEPL to pay a penalty of $2,000.

Orders

Orders of the court

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Background

Background to the litigation

MEPL did not file and serve evidence and submissions on penalty; nor was there any appearance by or on behalf of MEPL at the hearing on 29 June 2023. Accordingly, on 29 June 2023, I heard the FWO’s submissions on the question of penalty. FACTS I made the declaration on 8 March 2023 on the basis of the facts alleged in the statement of claim which, given the declaration made, are taken to be admitted by MEPL. Those facts are as follows:(a)MEPL is and was at all relevant times the operator of a beauty therapy clinic located at Baulkham Hills trading as Meei Clinic (Business).(b)In or around July 2021, the FWO commenced an investigation into MEPL in relation to the employment of Ms Wasserburger (Employee). Ms May (FWI), a Fair Work Inspector appointed by the FWO under s 700 of the FW Act, had carriage of the investigation.(c)Following the investigation, the FWI formed a belief that MEPL employed the Employee on a part-time basis from 25 March 2021 to 4 June 2021; the Hair and Beauty Industry Award 2010 (Award) applied to MEPL in relation to the Employee; the Employee was classified as a “Level 6 Hair and Beauty Employee” as defined in the Award; MEPL did not pay the Employee her minimum wage entitlement for all ordinary hours worked between 22 April 2021 and 4 June 2021 (Part-time Minimum Wage Entitlement); MEPL did not pay the Employee her penalty rate entitlement for all ordinary hours worked on a Saturday between 22 April 2021 and 4 June 2021 (Part-time Saturday Penalty Rate Entitlement); and MEPL did not pay the Employee her accrued annual leave entitlements, including annual leave loading, on termination of the Employee’s employment on around 4 June 2021, or at all (Annual Leave on Termination Entitlement). (d)As a result of the matters in subparagraph (c), the FWI formed the reasonable belief that MEPL, between 22 April 2021 and 4 June 2021 (Period), contravened clauses 12.7, 17, 31.2(c), and 33.3(b)(i) of the Award, and s 90(2) of the FW Act (Contraventions). (e)On 27 July 2021 the FWI gave MEPL the Compliance Notice pursuant to s 716(2) of the FW Act in relation to the Contraventions.(f)The Compliance Notice required MEPL to: (i)take the following action by 18 August 2021 to remedy the direct effects of the Contraventions (Specified Action):(A)identify the number of annual leave hours the Employee would have accrued at the termination of the Employee’s part-time employment;(B)identify the amount MEPL paid to the Employee in relation to annual leave on termination of her part-time employment; (C)calculate the amount MEPL should have paid to the Employee, inclusive of annual leave loading, in relation to her Annual Leave on Termination Entitlement; (D)make a payment to the Employee of the difference between the amounts in (f)(i)(B) and (f)(i)(C) immediately above;(E)make a record of the information and amounts referred to in (f)(i)(B) and (f)(i)(C) and amount of the payment referred to in (f)(i)(D) immediately above; (F)identify the hours the Employee worked for MEPL during the Period;(G)identify the amount MEPL paid the Employee during the Period in relation to her Part-time Minimum Wage Entitlement and Part-time Saturday Penalty Rate Entitlement; (H)calculate the amount MEPL should have paid to the Employee during the Period in relation to her Part-time Minimum Wage Entitlement and the Part-time Saturday Penalty Rate Entitlement;(I)make a payment to the Employee of the difference between the amount referred to in (f)(i)(G) and the amount referred to in (f)(i)(H) immediately above; (J)make a record of the information and amounts referred to in (f)(i)(G) and (f)(i)(H) and the amount referred to in (f)(i)(I) immediately above; (K)calculate additional superannuation contributions required by cl 24.2 of the Award in relation to the amounts required to be paid to the Employee at (f)(i)(I) above; (L)pay the additional superannuation contributions referred to in (f)(i)(I) above to the Employee’s superannuation fund; and (ii)produce reasonable evidence to the FWO of its compliance with the Compliance Notice by 25 August 2021, by producing: (A)a schedule that sets out in relation to the Employee the information referred to at (f)(i)(E), (f)(i)(J), and the additional superannuation contributions calculated at (f)(i)(K); and (B)proof that full payment has been made to the Employee. (g)MEPL failed to take the Specified Action by 18 August 2021, and did not produce reasonable evidence of compliance with the Compliance Notice by 25 August 2021. (h)For the reasons in (g) MEPL failed to comply with the Compliance Notice.(i)For the reasons in (c) to (h) MEPL contravened s 716(5) of the FW Act.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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