Fair Work Ombudsman v NB Visionary Trading Pty Ltd
[2023] FedCFamC2G 950
•25 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v NB Visionary Trading Pty Ltd [2023] FedCFamC2G 950
File number: MLG 143 of 2023 Judgment of: JUDGE RILEY Date of judgment: 25 October 2023 Catchwords: INDUSTRIAL LAW – non-compliance with compliance notice issued by Fair Work Ombudsman – default judgment previously entered – penalty to be imposed. Legislation: Fair Work Act 2009 ss.539(2), 546 and 716 Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (CFMEU) (2018) 262 CLR 157; (2018) 351 ALR 190; (2018) 92 ALJR 219; (2018) 273 IR 211; [2018] HCA 3
Australian Building and Construction Commissioner v Pattinson (2022) 175 ALD 383; (2022) 399 ALR 599; (2022) 314 IR 301; [2022] HCA 13
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; (2015) 326 ALR 476; (2015) 90 ALJR 113; (2015) 255 IR 87; [2015] HCA 46
Community and Public Sector Union v Telstra Corporation Limittelstraed (2001) 108 IR 228; [2001] FCA 1364
Fair Work Ombudsman v Extrados Solutions Pty Ltd [2014] FCCA 815
Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown (2017) 275 IR 148; [2017] FCA 1301
Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; (2008) 177 IR 243; [2008] FCAFC 170
Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; (2007) 162 IR 444; [2007] FCAFC 65Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412
Division: Division 2 General Federal Law Number of paragraphs: 42 Date of hearing: 16 October 2023 Place: Melbourne Solicitor advocate for the Applicant: Caroline Braithwaite Solicitor for the Applicant: Office of the Fair Work Ombudsman Advocate for the Respondent: None Solicitor for the Respondent: None ORDERS
MLG 143 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
ApplicantAND: NB VISIONARY TRADING PTY LTD
Respondent
ORDER MADE BY:
JUDGE RILEY
DATE OF ORDER:
25 OCTOBER 2023
THE COURT ORDERS THAT:
1.Pursuant to s.546(1) of the Fair Work Act 2009, within 28 days, the respondent pay to the Consolidated Revenue Fund of the Commonwealth of Australia a pecuniary penalty of $26,640 for the respondent’s contravention of s.716(5) of the Fair Work Act 2009 as set out in the declaration made on 5 June 2023.
Note: The form of the order is subject to the entry in the court’s records.
Note: This copy of the court’s reasons for judgment may be subject to review 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 RILEY:
INTRODUCTION
This matter concerns the penalty, if any, to be imposed for a contravention of the Fair Work Act 2009 (“the Act”). The contravention consisted of the respondent failing to comply with a compliance notice issued by the applicant on 16 November 2021 under s.716(2) of the Act.
The applicant is the Fair Work Ombudsman. The respondent, NB Visionary Trading Pty Ltd (“Visionary”), operates a commercial carpentry business.
Visionary employed Mr Spiteri as a full-time daily hire employee from 26 May 2020 to 13 November 2020. The respondent employed Mr Marinos as a full-time weekly hire employee from 10 June 2020 to 27 November 2020. Mr Marinos was purportedly engaged as an apprentice, and paid as such, however the engagement as an apprentice was not valid. That is because clause 15.1(b) of the applicable award, the Building and Construction General On‑Site Award 2010 (“the Award”), defines an apprentice as an employee who is bound by a contract of training registered with an appropriate State or Territory training authority. Mr Marinos was not bound by such a contract.
A Fair Work Inspector formed the view that Visionary had underpaid Mr Spiteri or Mr Marinos. The inspector sent a compliance notice to Visionary in respect of the alleged underpayments of Mr Spiteri and Mr Marinos. The compliance notice required Visionary to:
(a)calculate and pay the outstanding amounts to Mr Spiteri;
(b)calculate and pay the outstanding amounts, including superannuation, to Mr Marinos;
(c)make records of the amounts calculated; and
(d)provide evidence to the Ombudsman that it had done so,
by 5pm on 21 December 2021.
Visionary did not comply with the compliance notice in any respect. The Ombudsman then commenced this proceeding. I am satisfied that Visionary was properly served throughout the proceeding. However, Visionary has not appeared at any hearings or otherwise participated in the proceeding.
The court gave default judgment for the Ombudsman on 5 June 2023, for reasons given orally at the time. The orders and declaration made on 5 June 2023 were as follows:
THE COURT ORDERS THAT:
1.Default judgment be entered against the respondent pursuant to r.13.05(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (“the rules”).
UPON THE ADMSSIONS WHICH THE RESPONDENT IS TAKEN TO HAVE MADE, BY REASON OF DEFAULT BY THE RESPONDENT PURSUANT TO R.13.04(2) OF THE RULES, THE COURT DECLARES THAT:
2.The respondent contravened s.716(5) of the Fair Work Act 2009 (“the Act”) by failing to comply with a compliance notice given to the respondent on 16 November 2021 pursuant to s.716(2) of the Act (“the compliance notice”).
THE COURT ORDERS THAT:
3.Pursuant to s.545(1) of the Act, the respondent take the specified action that was required by the compliance notice within 28 days, by:
a.calculating the outstanding entitlements owing to Michael Spiteri and James Marinos in accordance with the steps set out in the compliance notice (“underpayments”);
b. paying the underpayments to Mr Spiteri and Mr Marinos;
c.calculating any relevant superannuation contributions payable to Mr Marinos in accordance with the steps set out in the compliance notice and paying such contributions into Mr Marinos’ nominated superannuation fund; and
d. preparing and producing to the applicant:
i.a schedule setting out the calculation of the underpayments and superannuation contributions with the information required by the compliance notice; and
ii.evidence that the underpayments and the additional superannuation contributions referred to at subparagraphs 3(b) and 3(c) above have been rectified.
4.Pursuant to s.547(2) of the Act, the respondent pay interest on the underpayments, calculated in accordance with the applicable pre-judgment interest rate prescribed by the Federal Court of Australia, within 28 days.
5.The applicant have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
6. The matter be adjourned to 16 October 2023 at 10am for penalty hearing.
7.By 4pm on 7 July 2023, the applicant file and serve any further affidavit relating to penalty.
8.By 4pm on 4 August 2023, the respondent file and serve any affidavit relating to penalty.
9. By 4pm on 11 August 2023, the applicant file and serve:
a. any affidavit in reply; and
b. an outline of submissions relating to penalty.
10.By 4pm on 25 August 2023, the respondent file and serve an outline of submissions relating to penalty.
11.By 4pm on 1 September 2023, the applicant file and serve any submissions in reply.
12.The applicant ensure that a sealed copy of this order is served on the respondent by 4pm on 12 June 2023.
AND THE COURT NOTES THAT:
A.Pursuant to r.17.05(2)(a) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021, the court may vary or set aside a judgment or order made in the absence of a party.
Visionary did not comply with orders 3, 4, 8 or 10 made on 5 June 2023.
MATERIAL RELIED UPON
At the hearing before this court, the Ombudsman relied upon:
(a)the application filed on 1 February 2023;
(b)the statement of claim filed on 1 February 2023;
(c)the affidavit affirmed by Caroline Braithwaite on 6 July 2023;
(d)the affidavit sworn by Steven Leslie Williams on date 7 July 2023;
(e)the written submissions on penalty filed on 11 August 2023;
(f)the affidavit affirmed by Caroline Braithwaite on 11 October 2023;
(g)the court book filed on 12 October 2023; and
(h)a copy of the respondent’s company search dated 16 October 2023 (exhibit 1).
Visionary did not file any material in this proceeding.
MAXIMUM PENALTY
The maximum penalty under s.546(2) and s.539(2) of the Act for Visionary’s non-compliance with the compliance notice is $33,300. That is because the maximum penalty is 30 penalty units, multiplied by five, because Visionary is a corporation. A penalty unit at the time of the breach was worth $222. The Ombudsman seeks a penalty of $26,640 which represents 80% of the maximum applicable penalty.
THE PURPOSE OF CIVIL PENALTIES
In Australian Building and Construction Commissioner v Pattinson (2022) 175 ALD 383; (2022) 399 ALR 599; (2022) 314 IR 301; [2022] HCA 13, plurality of the High Court said that:
[9]… Under the civil penalty regime provided by the Act, 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. In that context, the penalties fixed by the primary judge were appropriate because they were no more than might be considered to be reasonably necessary to deter further contraventions of a like kind by Mr Pattinson, the CFMMEU or others. They represented a reasonable assessment of what was necessary to make the continuation of the CFMMEU’s non-compliance with the law, amply demonstrated by the history of its contraventions, too expensive to maintain.
[10]The Full Court’s critical error was that it was distracted by a concern, drawn from the criminal law, that a penalty must be proportionate to the seriousness of the conduct that constituted the contravention. 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”, in the sense in which the Full Court used that term, in a civil penalty regime. Further, and relatedly, their Honours were misled by the view that the Act required that the maximum penalty be reserved for only the most serious examples of the offending comprehended by s 349(1), and that this principle could prevent the court from imposing the maximum penalty even though a penalty in that amount might reasonably be considered to be necessary to deter future contraventions of a like kind. Nothing in the text, context or purpose of s 546 requires that the maximum penalty be reserved for the most serious examples of misconduct within s 349(1). 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.
…
[15]Most importantly, it has long been recognised that, unlike criminal sentences, civil penalties are imposed primarily, if not solely, for the purpose of deterrence. The plurality in the Agreed Penalties Case said:
[W]hereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd , is primarily if not wholly protective in promoting the public interest in compliance:
“Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act] … The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.”
(citations omitted)
PROPORTIONALITY
In Pattinson, the High Court addressed the question of proportionality as follows:
[40]Nothing in the text, context or purpose of s 546 of the Act suggests that the Full Court’s “notion of proportionality” inheres in the court’s task, pursuant to s 546, to fix a penalty which it considers to be an “appropriate” penalty. The discretion conferred by s 546 is, like any discretionary power conferred by statute on a court, to be exercised judicially, that is, fairly and reasonably having regard to the subject matter, scope and purpose of the legislation. In a civil penalty context, Burchett and Kiefel JJ in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission said:
“[I]nsistence upon the deterrent quality of a penalty should be balanced by insistence that it ‘not be so high as to be oppressive’. Plainly, if deterrence is the object, the penalty should not be greater than is necessary to achieve this object; severity beyond that would be oppression.”
[41]It may therefore be accepted that s 546 requires the court to ensure that the penalty it imposes is “proportionate”, where that term is understood to refer to a penalty that strikes a reasonable balance between deterrence and oppressive severity. It is in this sense that the Full Court in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd used the term “proportionality”, when their Honours said:
“If it costs more to obey the law than to breach it, a failure to sanction contraventions adequately de facto punishes all who do the right thing. It is therefore important that those who do comply see that those who do not are dealt with appropriately. This is, in a sense, the other side of deterrence, being a dimension of the general deterrence equation. This is not to give licence to impose a disproportionate or oppressive penalty, which cannot be done, but rather to recognise that proportionality of penalty is measured in the wider context of the demands of effective deterrence and encouraging the corresponding virtue of voluntary compliance.” (emphasis added)
[42]However, the Full Court’s “notion of proportionality” derived from Veen (No 2) is something quite different. That notion cannot be reconciled with the decisive statements in the Agreed Penalties Case that civil penalties are not retributive, but rather are protective of the public interest in that they aim to secure compliance by deterring repeat contraventions. To introduce considerations drawn from theories of retributive justice into the application of s 546 of the Act undermines the primary significance of deterrence.
…
[46]It does not follow, as the Full Court suggested and as the CFMMEU argued in this Court, from the rejection of the Full Court’s “notion of proportionality” that s 546 must be taken to require the imposition of a penalty approaching the maximum in relation to any and every contravention by a recidivist offender. It is important to recall that an “appropriate” penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case. A contravention may be a “one-off” result of inadvertence by the contravenor rather than the latest instance of the contravenor’s pursuit of a strategy of deliberate recalcitrance in order to have its way. There may also be cases, for example, where a contravention has occurred through ignorance of the law on the part of a union official, or where the official responsible for a deliberate breach has been disciplined by the union. In such cases, a modest penalty, if any, may reasonably be thought to be sufficient to provide effective deterrence against further contraventions.
[47]The penalty that is appropriate to protect the public interest by deterring future contraventions of the Act may also be moderated by taking into account other factors of the kind adverted to by French J in CSR. For example, where those responsible for a contravention of the Act express genuine remorse for the contravention, it might be considered appropriate to impose only a moderate penalty because no more would be necessary to incentivise the contravenors to remain mindful of their remorse and their public expressions of that remorse to the court. Similarly, where the occasion in which a contravention occurred is unlikely to arise in the future because of changes in the membership of an industrial organisation, a modest penalty may be appropriate having regard to the reduced risk of future contraventions.
…
[50]This Court’s reasoning in the Agreed Penalties Case is distinctly inconsistent with the notion that the maximum penalty may only be imposed in respect of contravening conduct of the most serious kind. Considerations of deterrence, and the protection of the public interest, justify the imposition of the maximum penalty where it is apparent that no lesser penalty will be an effective deterrent against further contraventions of a like kind. Where a contravention is an example of adherence to a strategy of choosing to pay a penalty in preference to obeying the law, the court may reasonably fix a penalty at the maximum set by statute with a view to making continued adherence to that strategy in the ongoing conduct of the contravenor’s affairs as unattractive as it is open to the court reasonably to do.
(citations omitted)
APPROACH TO DETERMINING PENALTY
Bromwich J summarised the proper approach to determining penalty in cases such as this in Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown (2017) 275 IR 148; [2017] FCA 1301 at [36] as follows:
(1)Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.
(2)Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.
(3)Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.
(4)Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
(5)Consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO (as permitted by Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (CFMEU Civil Penalties Case) at [64]) and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary: see Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14 at [30]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560 at [23]. [71] and [102].
A convenient checklist of the factors that the court might consider in determining penalty include the matters that were identified by Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 at [26]-[59] and adopted by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [14]. That list is as follows, (with paragraph letters inserted):
(a)The nature and extent of the conduct which led to the breaches.
(b)The circumstances in which that conduct took place.
(c)The nature and extent of any loss or damage sustained as a result of the breaches.
(d)Whether there had been similar previous conduct by the respondent.
(e)Whether the breaches were properly distinct or arose out of the one course of conduct.
(f)The size of the business enterprise involved.
(g)Whether or not the breaches were deliberate.
(h)Whether senior management was involved in the breaches.
(i)Whether the party committing the breach had exhibited contrition.
(j)Whether the party committing the breach had taken corrective action.
(k)Whether the party committing the breach had cooperated with the enforcement authorities.
(l)The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements.
(m)The need for specific and general deterrence.
The court must, of course, be mindful of the caution expressed by the High Court at [19] of Pattinson as follows:
It may readily be seen that this list of factors includes matters pertaining both to the character of the contravening conduct (such as factors 1 to 3) and to the character of the contravenor (such as factors 4, 5, 8 and 9). It is important, however, not to regard the list of possible relevant considerations26 as a "rigid catalogue of matters for attention"27 as if it were a legal checklist. The court's task remains to determine what is an "appropriate" penalty in the circumstances of the particular case.
FN 26:See also Re HIH Insurance Ltd (in prov liq) and HIH Casualty and General Insurance Ltd (in prov liq); Australian Securities and Investments Commission v Adler (2002) 42 ACSR 80; [2002] NSWSC 483 at [126]; Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [14].
FN 27:Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (an inspector pursuant to s 84(2) of the Workplace Relations Act 1996 (Cth)) (2008) 165 FCR 560; 246 ALR 35; [2008] FCAFC 8 at [91].
The court will consider the circumstances of the case under the various headings suggested by Mowbray FM, and then consider whether any other matters are relevant.
Step 1: identifying the breaches
As stated above, the respondent breached s.716(5) of the Act by failing to comply with a compliance notice issued on 16 November 2021.
Step 2: single course of conduct
The breach in this case was a single breach, so the single course of conduct provisions do not apply.
Step 3: grouped breaches
This step does not apply in this case because there was only one breach.
Step 4: the appropriate penalty for the breach
a. the nature and extent of the conduct which led to the breach
There was one breach in this case, being the failure to comply with a compliance notice.
b. the circumstances in which that conduct took place
The circumstances of the breach were that Visionary failed to comply with a compliance notice, which the Ombudsman had issued in an effort to correct various underpayments in respect of two employees.
c. the nature and extent of any loss or damage sustained
The Ombudsman did not calculate the total underpayment in this case. However, it appears that Visionary underpaid Mr Spiteri $3,351.16 and Mr Marinos $1,618.14 for accrued but untaken annual leave. In addition, Visionary appears to have underpaid Mr Marinos various amounts including failing to pay the minimum hourly rate, failing to pay the ordinary time hourly rate, failing to pay the correct overtime rates, failing to pay the correct Saturday rates, and failing to pay correctly for leave days and public holidays.
Of course, the compliance notice required Visionary to calculate the underpayments but it did not do so. Compliance with the compliance notice would have required Visionary to correctly pay Mr Spiteri and Mr Marinos the amounts underpaid.
d. whether there had been similar previous conduct
The Ombudsman did not suggest that Visionary had been engaged in any similar conduct previously.
e. whether the breaches arose out of the one course of conduct
There was a single breach, so this factor does not apply.
f. the size of the business enterprise involved
There was no evidence before the court about the size of Visionary. In any event, it is well established that small businesses, as much as large businesses, are obliged to comply with workplace laws. For example, Judge Jarrett said in Fair Work Ombudsman v Extrados Solutions Pty Ltd [2014] FCCA 815 at [10] that:
The obligation to comply with the Fair Work Act and, in particular, s.716 falls just as heavily on small corporations and small businesses – and individuals, for that matter – as it does on large employers or businesses. Put shortly, one cannot shirk one’s responsibilities imposed by law simply because one might be described as a “small business” or because the business has a particular size. It is incumbent on all employers to comply with the requirements of the Fair Work Act.
Tracey J said in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [28]:
No less than large corporate employers, small businesses have an obligation to meet minimum employment standards and their employees, rightly, have an expectation that this will occur. When it does not it will, normally, be necessary to mark the failure by imposing an appropriate monetary sanction. Such a sanction “must be imposed at a meaningful level”.
(footnote omitted)
Similarly, in Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412, the court said at [27]:
Employers must not be left under the impression that because of their size or financial difficulty that they are able to breach an award. Obligations by employers for adherence to industrial instruments arise regardless of their size. Such a factor should be of limited relevance to the Court’s consideration of penalty.
g. whether or not the breaches were deliberate
Visionary has provided no evidence to the effect that the breach was not deliberate. It is hard to see how it could have been anything other than deliberate. The compliance notice spelt out what was required. Visionary, apparently, ignored the notice. I infer that the breach was deliberate.
h. whether senior management was involved in the breach
There was no evidence specifically about this factor. However, the compliance notice was sent to Visionary’s registered office. It could be expected that it would have come to the attention of senior management. I infer that it did, and that senior management were involved in the breach.
i. contrition, corrective action and co-operation with the authorities
Visionary has not participated in this proceeding. It cannot be said to have co-operated with the authorities. Visionary has not taken corrective action, by repaying the underpayments or otherwise complying with the compliance notice. Visionary has shown no signs of remorse. Consequently, Visionary cannot get a discount for these factors.
j. the need to ensure compliance with minimum standards
The compliance notice scheme is designed to ensure, among other things, compliance with minimum standards, even if underpayments are not corrected until the compliance notice is issued. However, in this case, Visionary did not comply with minimum standards even after being sent the compliance notice.
k. the need for specific and general deterrence
In addition to Pattinson, in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; (2015) 326 ALR 476; (2015) 90 ALJR 113; (2015) 255 IR 87; [2015] HCA 46, French CJ, Kiefel, Bell, Nettle and Gordon JJ said at [55]:
No less importantly, whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:
“Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.”
(footnotes omitted)
Similarly, in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (CFMEU) (2018) 262 CLR 157; (2018) 351 ALR 190; (2018) 92 ALJR 219; (2018) 273 IR 211; [2018] HCA 3, Keane, Nettle and Gordon JJ said at [116]:
As has been observed, the principal object of an order that a person pay a pecuniary penalty under s 546 is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners. According to orthodox sentencing conceptions as they apply to the imposition of civil pecuniary penalties, specific deterrence inheres in the sting or burden which the penalty imposes on the contravener. Other things being equal, it is assumed that the greater the sting or burden of the penalty, the more likely it will be that the contravener will seek to avoid the risk of subjection to further penalties and thus the more likely it will be that the contravener is deterred from further contraventions; likewise, the more potent will be the example that the penalty sets for other would-be contraveners and therefore the greater the penalty’s general deterrent effect. Conversely, the less the sting or burden that a penalty imposes on a contravener, the less likely it will be that the contravener is deterred from further contraventions and the less the general deterrent effect of the penalty. Ultimately, if a penalty is devoid of sting or burden, it may not have much, if any, specific or general deterrent effect, and so it will be unlikely, or at least less likely, to achieve the specific and general deterrent effects that are the raison d'être of its imposition.
(footnotes omitted)
In relation to specific deterrence, Gray J observed in Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; (2008) 177 IR 243; [2008] FCAFC 170 at [37] that:
… Specific deterrence focuses on the party on whom the penalty is to be imposed and the likelihood of that party being involved in a similar breach in the future. Much will depend on the attitude expressed by that party as to things like remorse and steps taken to ensure that no future breach will occur. …
In relation to general deterrence, Lander J noted in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; (2007) 162 IR 444; [2007] FCAFC 65 at [93]:
… In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty…
(footnotes omitted)
Similarly, in Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228 at 230-231; [2001] FCA 1364, Finkelstein J said at [9]:
… even if there be no need for specific deterrence, there will be occasions when general deterrence must take priority, and in that case a penalty should be imposed to mark the law’s disapproval of the conduct in question, and to act as a warning to others not to engage in similar conduct ….
Visionary remains registered. There was no evidence that it has ceased business.
Other issues
There do not appear to be any other relevant issues in this case.
Step 4: the appropriate penalty
As noted above, the Ombudsman submitted that the appropriate penalty in the present case is $26,640, which is 80% of the maximum applicable penalty. I consider that a penalty at that level is appropriate in all the circumstances of this case. The complete failure of Visionary to engage with the court process, show any remorse, or take any corrective action indicates a cavalier disregard of Visionary’s obligations as an employer. A high degree of specific deterrence is warranted. In addition, general deterrence is also required. Employers cannot be under the illusion that they can ignore compliance notices with impunity.
Step 5: the totality principle
I consider that the penalty mentioned above accurately responds to Visionary’s contravention.
CONCLUSION
There will be orders accordingly.
I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Riley. Associate:
Dated: 25 October 2023
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