Fair Work Ombudsman v Monochromatic Engineering Pty Ltd - [2017] FCCA 533

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v MONOCHROMATIC ENGINEERING PTY LTD & ANOR

[2017] FCCA 533

Catchwords:
INDUSTRIAL LAW – Penalty hearing – small enterprise – relevant factors to be taken into account – Fair Work Ombudsman urged penalties to be imposed at the rate of 80% of sum unpaid – 20% ordered.

Legislation:

Fair Work Act 2009 (Cth)

Penalty Interest Rates Act 1983 (Cth)
Supreme Court Act 1986 (Vic)

Cases cited:

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46
Cotis v MacPherson (2007) 169 IR 30
Fair Work Ombudsman v Raimondi Investments Pty Ltd & Anor [2016] FCCA 1398
Fair Work Ombudsman v Ramsey Food Processing Pty Ltd [2012] FCA 408
Kelly v Fitzpatrick [2007] FCA 1080
Markarian v The Queen (2005) 228 CLR 357
Mayberry v Kijani Investments Pty Ltdas trustee for The Dawe Investments Trust Subway Wallsend trading as Subway [2011] FCA 1238
McIver v Healey [2008] FCA 425
Meadley v Sort Worx Pty Ltd [2013] FCA 1012
Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008)
171 FCR 357
Re Stephen Gibbs v the Mayor, Councillors and Citizens of the City of Altona [1992] FCA 553
Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550
Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

MONOCHROMATIC ENGINEERING PTY LTD (ACN 007 274 044)

Second Respondent:

ZORAN CRVENKOVIC

File Number:

MLG 1309 of 2016

Judgment of:

Judge Wilson

Hearing date:

4 October 2016

Date of Last Submission:

22 November 2016

Delivered at:

Melbourne

Delivered on:

23 March 2017

REPRESENTATION

Solicitors for the Applicant:

Solicitor for Fair Work Ombudsman

No appearance on behalf of the first or second respondents

ORDERS

The first respondent pay a penalty in the sum of 20% of the maximum sum payable ($108,000.00) namely, $21,600.00 within 60 days.
The second respondent pay a penalty in the sum of 20% of the maximum sum payable ($21,600.00) namely, $4,320.00 within

60 days.
The first and second respondents pay the costs of the applicant fixed in the sum of $4,718.00.
The applicant has liberty to apply on seven days’ notice in the event that any of the orders made in paragraphs 1, 2 or 3 are not complied with.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1309 of 2016

FAIR WORK OMBUDSMAN

Applicant

And

MONOCHROMATIC ENGINEERING PTY LTD
(ACN 007 274 044)

First Respondent

ZORAN CRVENKOVIC

Second Respondent

REASONS FOR JUDGMENT

Introduction

Consequent upon the entry of default judgment against Monochromatic Engineering Pty Ltd (“the first respondent”) and Zoran Crvenkovic (“the second respondent”) on 4 October 2016 and the making of various declarations, Fair Work Ombudsman (“FWO”) sought the imposition of penalties on each respondent for contraventions of the Fair Work Act 2009 (Cth) (“the Act”). The first respondent’s liability was direct. The second respondent’s liability was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] FCCA 533
Decision Date: 23 March 2017

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) brought proceedings against Monochromatic Engineering Pty Ltd (the Company) in the Federal Circuit and Family Court of Australia. The dispute concerned alleged contraventions of the *Fair Work Act 2009* (Cth) by the Company, specifically in relation to the underpayment of wages to an employee. The FWO sought declarations and pecuniary penalties against the Company for these alleged breaches.

The central legal issue before the Court was whether the Company had contravened the *Fair Work Act 2009* (Cth) by failing to pay an employee the minimum wages and entitlements as prescribed by the relevant award and the National Employment Standards. This involved determining the correct classification of the employee under the award and assessing whether the payments made by the Company met the minimum requirements.

Judge Wilson found that the Company had indeed contravened the *Fair Work Act 2009* (Cth) by underpaying the employee. The Court reasoned that the Company had incorrectly classified the employee, leading to the payment of wages below the minimum rate stipulated by the applicable award. The Court applied the principles of award interpretation and wage payment obligations under the Act, concluding that the Company's actions constituted a breach of its statutory obligations. The Court ordered the Company to pay the outstanding wages to the employee and imposed a pecuniary penalty for the contraventions.

Orders