Fair Work Ombudsman v New Switch Electrical Pty Ltd (No 2)
[2025] FedCFamC2G 1634
•8 October 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v New Switch Electrical Pty Ltd (No 2) [2025] FedCFamC2G 1634
File number: MLG 576 of 2024
Judgment of: JUDGE SYMONS Date of judgment: 8 October 2025 Catchwords: INDUSTRIAL LAW – Fair Work – failure to comply with compliance notice – application for civil penalties and compensation under s 545(2)(b) of the Fair Work Act 2009 (Cth) – where respondents failed to engage in the proceeding and declarations of contravention made on the basis of their deemed admissions – where first respondent remains registered – where no evidence of contrition or cooperation with regulator – where need for specific and general deterrence – jurisdiction under s 545(2)(b) not engaged where no quantifiable loss causally linked to the contraventions – order for penalties and for the first respondent to take the steps required by the compliance notice pursuant to s 545(2)(d) Legislation: Fair Work Act 2009 (Cth), ss 3, 44, 45, 90, 545, 546, 550, 715, 716, 717
Federal Circuit and Family Court of Australia Act 2021 (Cth), s 190
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth), r 5.08
Electrical, Electronic and Communications Contracting Award 2020, cl 19.2
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157; [2018] HCA 3
Australian Building and Construction Commission v Pattinson (2022) 274 CLR 450; [2022] HCA 13
Fair Work Ombudsman v ABMENG Pty Ltd (No 2) [2024] FedCFamC2G 1287
Fair Work Ombudsman v Carers Portland (No 2) [2024] FedCFamC2G 72
Fair Work Ombudsman v Carers Portland [2023] FedCFamC2G 620
Fair Work Ombudsman v Cobra Security Services Pty Ltd [2024] FedCFamC2G 336
Fair Work Ombudsman v Corporation Sun Pty Ltd & Anor [2020] FCCA 2849
Fair Work Ombudsman v Express Cars Direct Australia Wide Pty Ltd (No 2) [2024] FedCFamC2G 1179
Fair Work Ombudsman v Hess [2021] FCCA 1883
Fair Work Ombudsman v LROC Builders [2025] FedCFamC2G 1516
Fair Work Ombudsman v New Switch Pty Ltd [2024] FedCFamC2G 1124
Fair Work Ombudsman v Pure Telecom [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
Trade Practices Commission v CSR Ltd [1990] FCA 521
Transport Workers’ Union of Australia v Qantas Airways Limited (Compensation Claim) (2022) 292 FCR 34; [2024] FCA 1216
Division: Division 2 General Federal Law Number of paragraphs: 57 Date of last submissions: 6 February 2025 Date of hearing: 6 February 2025 Place: Melbourne Counsel for the Applicant: Mr T Goodwin Solicitor for the Applicant Office of the Fair Work Ombudsman Solicitor for the Respondents: No appearance by or on behalf of the Respondents ORDERS
MLG 576 of 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: NEW SWITCH ELECTRICAL PTY LTD (ACN 646 823 396)
First Respondent
MARK LADORES TAN
Second Respondent
ORDER MADE BY:
JUDGE SYMONS
DATE OF ORDER:
8 OCTOBER 2025
THE COURT ORDERS THAT:
1.Pursuant to s 545(2)(d) of the Fair Work Act 2009 (Cth) (FW Act), the first respondent take the steps that were required by the Compliance Notice given to the first respondent on 16 December 2022 on or before 5 November 2025 (within 28 days) by:
(a)calculating and paying any entitlements owing to the employee (namely, Anh Tuan Do) in accordance with the steps set out in the Compliance Notice (underpayment amount);
(b)calculating any relevant superannuation contributions payable on the underpayment amount in accordance with the steps set out in the Compliance Notice and paying such contributions into the employee’s nominated superannuation fund (additional superannuation contributions);
(c)preparing and producing to the applicant:
(i)a schedule setting out the calculation of the underpayment amount and the additional superannuation contributions with the information required by the Compliance Notice; and
(ii)evidence that the underpayment amount and the additional superannuation contributions have been paid to the employee.
2.Pursuant to s 546(1) of the FW Act, the first respondent pay a pecuniary penalty of $24,750 to the Commonwealth for its contravention of s 716(5) of the FW Act declared on 31 October 2024, within 28 days of this order.
3.Pursuant to s 546(1) of the FW Act, the second respondent pay a pecuniary penalty of $4,950 to the Commonwealth for his contravention of s 716(5) of the FW Act declared on 31 October 2024, within 28 days of this order.
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 24.04(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth)), or to record a variation to the order pursuant to r 24.04 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth).
REASONS FOR JUDGMENT
JUDGE SYMONS
INTRODUCTION
On 31 October 2024, I found that the first respondent (New Switch) had contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with a compliance notice given to it by Fair Work Inspector Logan (FWI Logan) on 16 December 2022 pursuant to s 716(2) of the FW Act (Compliance Notice). I also found that the second respondent (Mr Tan) was involved, within the meaning of s 550(2)(c) of the FW Act, in the first respondent’s contravention of the FW Act. As a result, declarations were made that reflected these matters and otherwise the question of penalty and other relief sought by the applicant (Ombudsman) was reserved to a hearing on 6 February 2025: See Fair Work Ombudsman v New Switch Pty Ltd [2024] FedCFamC2G 1124 (Default Judgment Decision).
These reasons relate to whether New Switch and Mr Tan should each pay pecuniary penalties for their contraventions of the FW Act and whether it is appropriate to make compensatory orders reflecting the amounts allegedly owing to the affected employee by reason of the failure of New Switch to comply with the Compliance Notice.
The background to this matter, along with a detailed chronology of events leading to this point and various findings of fact, are set out in the Default Judgment Decision.
MATERIAL
In support of her argument relating to penalty, the Ombudsman relied upon the following documents:
·Application and Statement of Claim filed on 13 March 2024;
·Affidavit of Alyson Mitchell filed on 10 April 2024;
·Affidavit of Alyson Mitchell filed on 17 April 2024;
·Affidavit of Alyson Mitchell filed on 10 September 2024;
·Affidavit of Alyson Mitchell filed on 23 October 2024;
·Affidavit of Alyson Mitchell filed on 28 October 2024; and
·Affidavit of FWI Logan filed on 22 November 2024 (Logan Affidavit).
Neither the first nor second respondent filed material in accordance with the orders made on 31 October 2024, which gave them each an opportunity to file affidavits and written submissions directed at the issue of penalty (October orders). Furthermore, when the matter was called on for hearing on 6 February 2025, there was nobody who appeared, or purported to appear, on behalf of either respondent.
The Ombudsman produced evidence that her office had:
(1)on 22 November 2024, sent via express post to the registered office for New Switch, the Logan affidavit and a covering letter that reminded New Switch and Mr Tan of their filing obligations under the October orders. The Ombudsman produced evidence that the express post envelope had been delivered on 25 November 2024.
(2)on 22 November 2024 attempted to serve Mr Tan with the same material using the email address previously used in the proceeding to effect service on the second respondent but that the email was returned as “undeliverable” because the email address no longer exists.
(3)on 28 November 2024, engaged the services of an investigations and process serving firm to undertake People (SKIP) Tracing to locate Mr Tan. On 5 December 2024, the Ombudsman received a field report that identified a residential address for Mr Tan.
(4)on 16 January 2025, sent via express post to the registered office for New Switch and to the residential address identified for Mr Tan, a copy of the Ombudsman’s penalty submissions and a cover letter that reminded the respondents of the date and time of the penalty hearing. The Ombudsman produced evidence that the express post envelopes had been delivered on 20 January 2025.
I am satisfied that the Court’s default jurisdiction is engaged for a second time, reflecting the failure of the respondents to appear at a hearing and to comply with orders of the Court, being the October orders. Both of these failures involve an act of default within the meaning of rule 5.08 of the Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2025 (Rules). I am satisfied, having regard to the evidence of service on the respondents, that it is appropriate that I consider whether to exercise the Court’s default jurisdiction without hearing from the respondents or extending them a further opportunity to participate in the proceeding. Their conduct to date, which involves a systemic lack of engagement with the proceeding, suggests that there would be no utility in adopting this course which would, in any case, be antithetical to the Court’s overriding purpose of civil practice and procedure provisions, which is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.[1]
[1] Federal Circuit and Family Court of Australia Act 2021 (Cth), s 190(1).
SUBMISSIONS ON PENALTY
The Ombudsman submits that it is appropriate to impose a penalty against New Switch in the amount of $33,000, representing 80% of the maximum penalty of $41,250 for a contravention of s 716(5) of the FW Act by a corporation. The Ombudsman invites the Court to impose a penalty against Mr Tan in the amount of $6,600, representing 80% of the maximum penalty of $8,250 for a contravention of s 716(5) by an individual.
Factors relevant to penalty
The approach to determining penalty was revisited by the High Court in Australian Building and Construction Commission v Pattinson(2022) 274 CLR 450. In that case, the majority upheld the Commissioner’s appeal and confirmed that the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the FW Act by the deterrence of further contraventions of the FW Act by those responsible and by (like) others. The Court rejected the approach implicit in the decision of the Full Court (the subject of the appeal) that a penalty must be proportionate to the seriousness of the conduct that constituted the contravention. The majority held instead that “[t]he 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 a civil penalty regime”.[2] However, the Court did accept that s 546 requires the Court to ensure that any penalty “strikes a reasonable balance between deterrence and oppressive severity”.[3] It was only in this more qualified sense that the conception of “proportionality” had any role to play.
[2] Pattinson at [10].
[3] Pattinson at [41].
The High Court also referred to the several factors identified by French J in Trade Practices Commission v CSR Ltd [1990] FCA 521 which informed the assessment of a penalty of an appropriate deterrent value. The list revealed that both the circumstances of the contravenor and the circumstances of the contravention may be relevant to the assessment of whether the maximum level of deterrence is called for.[4] However, the Court repeated the caution that the list of possible relevant considerations should not be approached as a “rigid catalogue of matters for attention” and instead the task of the court remains to determine what is an “appropriate” penalty in the circumstances of the particular case.[5]
[4] Pattinson at [57].
[5] Pattinson at [18]–[19].
In her written submissions – which were adopted at hearing and supplemented by the oral submissions of counsel, Mr Goodwin - the Ombudsman placed particular emphasis on the following considerations.
Deterrence
Specific deterrence
The Ombudsman submitted that in this case there was a need for specific deterrence reflecting the following considerations:
(1)the company, New Switch, remains registered, although there is no evidence that it is currently trading;
(2)Mr Tan is the director of the company, with the actual or apparent responsibility for its overall operation, management and control;
(3)the respondents have demonstrated a disregard for the obligations of New Switch under the FW Act by failing to comply with the Compliance Notice;
(4)New Switch has not complied with the Compliance Notice since these proceedings commenced; and
(5)the respondents have not engaged at all in these proceedings.
The Ombudsman produced evidence of multiple attempts made by its officers to encourage compliance by the respondents with the Compliance Notice, which attempts were ultimately fruitless. While there is evidence that Mr Tan engaged on a sporadic basis with the Ombudsman prior to the commencement of proceedings, including to propose a payment plan of unspecified nature, all communication had ceased by the time that the Ombudsman sent the respondents a Final Opportunity Letter on 1 March 2024, which was the precursor to litigation. The Ombudsman submitted that this conduct of avoidance reinforced the need for specific deterrence.
General deterrence
The Ombudsman submitted that there was also a need in this case for any penalty to serve the objective of general deterrence. This was said to recognise that failure to comply with a statutory notice properly issued is serious and that the efficacy of statutory notices, such as compliance notices, would be significantly reduced if there was no sting associated with a failure to comply.
Nature and circumstance and deliberateness of conduct
The Ombudsman emphasised the following circumstances of the contravention as relevant to these considerations:
(1)New Switch was offered assistance to understand the actions it was required to take pursuant to the Compliance Notice;
(2)New Switch was reminded of the requirement to comply with the Compliance Notice on two occasions prior to the due dates for compliance;
(3)New Switch was provided with three opportunities to rectify non-compliance prior to the commencement of these proceedings; and
(4)the Ombudsman made efforts to assist New Switch to rectify non-compliance, including by offering to consider a payment plan and providing calculations.
The Ombudsman submitted that the first respondent’s conduct in failing to comply with the Compliance Notice, despite the numerous opportunities and assistance provided by it, demonstrated a deliberate disregard for its obligations under the FW Act and the authority of the Ombudsman as a regulator of Commonwealth workplace laws.
The Ombudsman invited the Court to have regard to the characteristics of the compliance notice regime, which was introduced into the FW Act to provide a mechanism to address non-compliance with certain employment obligations arising under the FW Act, as an alternative to commencing litigation for each underlying contravention. The Ombudsman noted that the efficacy of the compliance notice regime as a panacea to expensive litigation has been consistently recognised in decisions of this Court as a factor that should inform the approach to penalty.
The Ombudsman submitted that each of these considerations reinforced the need for a significant penalty to be imposed on both respondents, including Mr Tan, who it was previously found, was involved in the contravention given that he had knowledge of each of the essential elements constituting the contravention.[6]
[6] Fair Work Ombudsman v New Switch Pty Ltd [2024] FedCFamC2G 1124 (Default Judgment Decision) at [31].
Corrective action, contrition and cooperation
Under this heading, the Ombudsman repeated its submission that New Switch had failed to take the steps required of it under the Compliance Notice, despite being afforded ample time and opportunities to do so.
In the context of this litigation, the Ombudsman noted that there is judicial support for the view that a failure to engage with proceedings is further evidence of a lack of contrition and should be construed as an extension of the respondents “consciously avoiding, the workplace obligations they owe to their employees, the applicant and this Court”.[7]
[7] Fair Work Ombudsman v Soma Kitchen Pty Ltd & Anor (No 2) [2020] FCCA 2583 at [35] (Judge Kendall).
The Ombudsman noted, as is the case and is reflected in the Default Judgment Decision, that the respondents have failed to participate in the proceedings and have failed to comply with Court orders to file documents and to defend the proceeding. Consistent with these submissions, the Ombudsman did not invite the Court to apply any discount for cooperation.
Failure to comply with minimum standards
The Ombudsman submitted that the respondents’ failure to comply with the Compliance Notice undermined the FW Act’s enforcement framework and the safety net of entitlements it was designed to protect.
Nature and Extent of loss
The Ombudsman submitted that the respondents’ failure to comply with the Compliance Notice had the continued effect of denying to the affected employee the benefit of his lawful entitlements that he would have received, had the Compliance Notice been complied with. The Ombudsman noted that, at the time of hearing, that denial extended to over two years after the date the Compliance Notice was issued.
The Ombudsman submitted that based on evidence it had obtained during its investigation, it had determined that had New Switch taken the action specified by the Compliance Notice, an amount of $4,810.56 plus superannuation would have been paid to the employee. The Ombudsman described this loss as a corollary of the failure to comply with the Compliance Notice, which the Court was entitled to take into account in determining the appropriate penalty (referring to Fair Work Ombudsman v Corporation Sun Pty Ltd & Anor [2020] FCCA 2849 at [35] (Judge Kendell) and Fair Work Ombudsman v Hess [2021] FCCA 1883 at [35] (Judge Jarrett).
The Ombudsman submitted that the Court was also entitled to take account of a more public loss, being the diversion of public funds and the time of the workplace regulator to the prosecution of this proceeding, which would have been avoided had New Switch complied with the Compliance Notice.
Size and financial circumstances of the respondents
The Ombudsman submitted that in circumstances where neither respondent had placed before the Court evidence to illuminate their financial position, this was not a consideration that could operate favourably to them in the assessment of penalty.
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.
CONCLUSION ON PENALTY
In cases of this kind there is invariably a degree of overlap between the matters identified as relevant to the assessment of penalty. This is especially the case where the penalty hearing proceeds on the back of a default judgment obtained because the respondents have failed to engage in the proceeding. It is difficult in these circumstances to meaningfully interrogate the question of whether the employer is likely to offend again. The impact of the proceeding is largely unknown.
Despite these difficulties, I am satisfied that there is a need to apply a penalty to deter both New Switch and Mr Tan from engaging in future contraventions of workplace laws.
This reflects the fact that there is a proper basis to find that neither respondent has demonstrated any insight or contrition around the failure to comply with the Contravention Notice and has not cooperated with the Ombudsman at any stage of the proceeding or at any stage prior to its commencement.
Faced with this lack of engagement, the Ombudsman has been required to start and maintain litigation, which is the very process the compliance notice regime is designed to avoid. I accept that the public cost this involves is a matter that can be reflected in penalty.
I also take account of the evidence before the Court that New Switch remains registered. This suggests the possibility that it does now, or will in the future, take on the responsibility of employing staff, which in turn brings with it the obligation to comply with industrial laws and instruments that regulate employee entitlements. The same can be said of Mr Tan, who is director of New Switch and the person responsible for ensuring its compliance with workplace laws. It is possible that Mr Tan, either through New Switch, or a different entity, will find himself taking on these responsibilities now or in the future. There is an obvious need to ensure that he is deterred from neglecting or avoiding these responsibilities again.
I accept that there is a need for the penalty to also be responsive to the objective of general deterrence, in the sense that the efficacy of the compliance notice regime is enhanced through signalling that a failure to comply, without justification, is a serious matter.
The Ombudsman seeks penalties against both respondents that would represent 80% of the maximum penalty available. While I acknowledge that I am not constrained in the assessment of penalty by any notion of proportionality of the offending to the outcome, I do not consider that the contraventions involved in this case warrant a penalty of the amount proposed by the Ombudsman. The contravention involved a single employee and there is no evidence of any systematic conduct engaged in by either respondent. Furthermore, this is a first offence for both respondents and although there is no financial information placed before the Court as to the present situation of both respondents, the correspondence annexed to the Logan affidavit suggests that New Switch was experiencing financial difficulty at around the time the Compliance Notice was issued and the reality is that where Mr Tan is director and sole shareholder of New Switch, the burden of the penalty on the company will be felt by him also.
In all of these circumstances, I consider that the appropriate penalty for New Switch and Mr Tan is the amount representing 60% of the maximum penalty available. This translates, in the case of New Switch, to a penalty of $24,750 and in the case of Mr Tan, to a penalty of $4,950.
OTHER ORDERS
The Ombudsman also seeks orders pursuant to s 545(1) of the FW Act that would require New Switch to pay the amount it would have paid to the affected employee, had it taken the steps required under the Compliance Notice.
In making this submission, the Ombudsman invites the Court to follow the reasoning in Fair Work Ombudsman v Pure Telecom[2024] FedCFamC2G 664 and Fair Work Ombudsman v ABMENG Pty Ltd (No 2) [2024] FedCFamC2G 1287 rather than the series of judgments of this Court, including Fair Work Ombudsman v Carers Portland [2023] FedCFamC2G 620, Fair Work Ombudsman v Carers Portland(No 2)[2024] FedCFamC2G 72, Fair Work Ombudsman v Taing[2024] FedCFamC2G 270 and Fair Work Ombudsman v Cobra Security Services Pty Ltd [2024] FedCFamC2G 336, in which the Court declined to make orders for compensation. In those judgments, the Court found that there was no causal connection between the employer’s contravention of s 716(5) in failing to comply with a compliance notice and the employee’s loss (namely, unpaid wages). That finding reflected a view taken that the losses relied upon by the Ombudsman were occasioned by a distinct and unproven contravention of workplace laws rather than an incident of the failure to comply with a statutory notice.
The Ombudsman submits that this cohort of cases, as well as my judgment in Fair Work Ombudsman v Express Cars Direct Australia Wide Pty Ltd (No 2) [2024] FedCFamC2G 1179, were wrongly decided and notes that it has filed an appeal in Taing and a cross-appeal in the Carers Portland decisions. These appeals were heard together by the Federal Court in May 2025 and were reserved at the time of this decision.
The Ombudsman also brings to the Court’s attention what it describes as the “numerous occasions” when the Court has seen fit to make orders pursuant to s 545 for compensation to be paid to employees, or to the Ombudsman to distribute to employees, for losses that are the direct result of contraventions of s 716(5) of the FW Act. I note that in a number of these decisions, the reasons for judgment have not been published making it impossible to discern the reasoning that was applied.
The Ombudsman submits that compensable monetary loss can result from a failure to comply with a compliance notice. In seeking to establish this connection it relies on the reasons given by Lee J in Transport Workers’ Union of Australia v Qantas Airways Limited (Compensation Claim) [2024] FCA 1216, which are said to outline the correct approach to assessing any award of statutory compensation under s 545 of the FW Act. In particular, the Ombudsman notes (by reference to [67]–[87] of the judgment) that:
(a)determination of the causal connection between the contravention and the loss claimed involves “consideration of the counterfactual”, which requires “an assessment of what would or might have occurred, but which could no longer occur (because of the contraventions)”.
(b)“[i]t is unnecessary to prove some sort of sole cause to establish the necessary causal connection; it is enough to demonstrate that the contravention of a relevant provision of the Act was a cause of the loss and damage sustained”.
(c)in considering whether to exercise the discretion to make a compensation order, s 545 of the FW Act required the Court to consider “what is reasonable in the circumstances to compensate for the loss caused by the contravention”. Section 545 “does not confer power to grant remedies at large based on general considerations of fairness”.
(d)a discretionary order for statutory compensation may be made “by reference to degrees of probability or possibility”; and
(e)it is important not to overcomplicate the approach to the exercise of the discretion in cases which are informed by the reality that the contravening conduct caused a loss and the probabilities and valuation of such a loss “can be predicted with a reasonable degree of confidence”.
In the particular circumstances of a failure to comply with a compliance notice, the Ombudsman submits that this reasoning can be transposed as follows:
(a)pursuant to s 716 of the FW Act, if an inspector forms a reasonable belief that a person has contravened certain provisions or terms, the inspector may issue a compliance notice.
(b)pursuant to s 716(2)(a) of the FW Act, a compliance notice can require a person “to take specified action to remedy the direct effects of the contravention”.
(c)where an inspector forms a reasonable belief that a person has contravened a relevant provision by failing to pay an employee the monetary entitlement provided by that provision, the “direct effects of the contravention” are that the employee has not received an amount which should have been paid to them. The actions required by the compliance notice to “remedy the direct effects of the contravention” are the calculation and payment of the monetary entitlement.
(d)in the present case, FWI Logan formed a reasonable belief that New Switch contravened provisions of the Electrical, Electronic and Communications Contracting Award 2020 (Award) and the FW Act. FWI Logan issued the Compliance Notice in respect of those contraventions, requiring New Switch to:
(i)calculate the amounts that would have been payable to the employee in respect of the entitlements under the Award and the FW Act;
(ii)calculate the amounts New Switch paid to the employee in respect of the entitlements under the Award and the FW Act; and
(iii)pay the difference between the amounts calculated and the amounts already paid to the employee.
(e)as set out in Pure Telecom at [60], the issuing of the Compliance Notice based on reasonable belief gave rise to a secondary obligation to pay the amounts owing. FWI’s reasonable belief was not the subject of any review under s 717 of the FW Act and has not been challenged in this proceeding.
(f)in determining whether to exercise the discretion conferred by s 545(1) of the FW Act to make an order awarding compensation for the loss suffered (as a result of the contravention of s 716(5) of the FW Act), it is appropriate to have regard to what is reasonable in the circumstances, and to what would have been likely to occur had the contravention of s 716(5) not occurred. The Ombudsman submitted that the counterfactual in this case would involve the person to whom a notice is given under s 716(2) complying with the notice and making a payment of the monetary entitlement to the affected employee. It followed, based on the reasoning at [62] of Pure Telecom, that in the case of a failure to comply, the critical consequence was that the monetary entitlement was not paid to the employee, and this would constitute a compensable loss that could be recovered by the Ombudsman.
The Ombudsman submits that in circumstances where the Court has a broad power under s 545 of the FW Act encompassing “preventative, remedial or compensatory” orders,[8] the concern that an award of compensation for breach of s 716(5) would undermine the integrity of the FW Act is unfounded. To the contrary, recognition that the Court could award compensation for unpaid entitlements would be consistent with the purpose of s 716, which is to provide a mechanism to address non-compliance with employment obligations and more broadly, the objects of the FW Act, which include “ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders”.[9]
[8] Referring to ABCC v CFMEU (2018) 262 CLR 157 at [109]-[110] (Keane, Nettle and Gordon JJ).
[9] FW Act, s 3(b).
The Ombudsman also submits (this being a concern identified in cases such as Carers Portland (No 2) and Cobra Security) that the fact that a notice is issued based on an inspector’s reasonable belief also does not constrain a Court from ordering compensation. The Ombudsman notes that under s 715 of the FW Act, it may accept an enforceable undertaking based on a reasonable belief that a contravention has occurred.[10] Where a term of the undertaking is breached, Parliament has expressly provided that a court can order compensation “for loss that a person has suffered because of the contravention”.[11] The Ombudsman submits that there is no reason why the formation of a “reasonable belief” for the purpose of issuing a compliance notice, should operate to preclude an award of compensation under s 545 of the FW Act.
[10] FW Act, s 715(1).
[11] FW Act, s 715(7)(b).
The Ombudsman makes the further submission that the doubts expressed by the Court in Carers Portland (No 1), as to the absence of a monetary amount in the compliance notice itself, and the fact that a respondent might conclude that no amount is owing, do not provide grounds to decline to exercise the discretion to make an order awarding compensation.
The Ombudsman relies on the testing mechanisms available to respondents, which include the review power contained in s 717 of the FW Act, by which a respondent may challenge the assertion, based on reasonable belief, that a contravention has occurred. The Ombudsman submits that in the absence of such challenge, it may litigate the failure to comply with a notice and that in this context, it may adduce evidence of the loss suffered by a person as a result of the contravention of s 716(5). The respondent to such a proceeding is entitled to challenge this evidence. However, where the Court accepts the Ombudsman’s evidence as to loss, the Court is not prevented from exercising its discretion under s 545 of the FW Act to make an order awarding compensation, despite the fact no monetary amount was specified in the notice.
The Ombudsman submits that applying these principles and analysis to the present case there is a clear case for the making of an order for compensation. This is because:
First, by reason of the respondents’ default, the Court made findings of contraventions of s 716(5). This engages the Court’s jurisdiction to make any order that it “considers appropriate” in relation to the contravention.
Second, the issuing of the Compliance Notice created a secondary obligation on New Switch to calculate and pay amounts to the employee. It is not relevant that underlying contraventions have not themselves been proved independently of the failure to comply with the Compliance Notice. FWI Logan’s reasonable belief, as contained and admitted on the pleadings, has not been challenged and is sufficient (relying on Pure Telecom at [59]).
Third, FWI Logan calculated the outstanding amounts due in respect of the underlying contraventions, as required under the Compliance Notice using the evidence obtained during the investigation. Based on his calculations, if New Switch had paid the affected employee the amount of $4,810.56 plus any additional superannuation, the Ombudsman would have accepted that it had complied with the Compliance Notice. These amounts were pleaded in the statement of claim and because the Court entered default judgment against the respondents, the Ombudsman is entitled to rely on the relief sought and deemed to be admitted in the statement of claim. This relief was pleaded at paragraphs [15]–[16] which states:
Amount Outstanding under the Compliance Notice
15.The amount that the First Respondent would have paid to the Employee had it taken the Specified Action was:
(a) In respect of the All-purpose Rate Entitlement, $1,157.48 (gross).
Particulars
A.Between 22 September 2022 to 28 September 2022, the Employee worked 38 ordinary hours.
B.The Employee was entitled to be paid an hourly all-purpose rate of $30.46 in respect of ordinary hours, pursuant to clause 16.3 of the Award.
(b) In respect of the Annual Leave Entitlement, $3,653.08 (gross).
Particulars
A. The Employee was paid an hourly rate of $32.77.
B.As at the Termination Date, the Employee had 94.8853 hours of accrued but untaken annual leave.
C.Pursuant to section 90(2) of the FW Act, the Employee was entitled to the amount that would have been payable to him had he taken that period of leave, including annual leave loading calculated in accordance with clause 21.4 of the Award.
16.By reason of the matters pleaded in paragraph 15 above, the outstanding amount owed by the First Respondent to the Employee pursuant to the Compliance Notice is $4,810.56 (Outstanding Amount).
Fourth, had New Switch complied with the Compliance Notice, it would have paid the amount of $4,810.56 to the employee, plus the additional superannuation required by cl 19.2 of the Award. Because New Switch did not make those payments the employee continues to suffer the loss of his entitlements under the Award and the FW Act, which loss arises as a result of the respondents’ failure to comply with the Compliance Notice.
CONSIDERATION
I have reflected carefully on the arguments put succinctly by counsel for the Ombudsman, Mr Goodwin. However, I am not persuaded that I have the power to make orders for compensation (reflecting alleged underpayments) because I reject the argument that there is a connection between the loss the affected employee suffered, and the contravention.
Very recently, in Fair Work Ombudsman v LROC Builders [2025] FedCFamC2G 1516, I explained why I had come to this conclusion. I repeat and adopt what I said in LROC at [95]–[102] in circumstances where the arguments deployed in that case by the Ombudsman were similar to those advanced in the case now before me and the facts relevantly indistinguishable.
95.The argument that I continue to resist however is that the giving of the Compliance Notices to LROC and Mr Oliver created a secondary obligation to pay amounts to the Employees which could be later enforced through a compensatory order.
96.Instead, I consider that the only obligation imposed on the respondents by the Compliance Notices was that they take the steps identified in the relevant notice which included to identify the number of hours worked during the relevant period by the affected employee, identify the amount paid to the employee during this period and in the event of a negative difference between the amount in fact paid and the amount to which the employee was entitled, make a payment of the amount outstanding to the individual.
97Self-evidently, the taking of each these steps might or might not result in the identification of a monetary amount owed to the employee that the employer would be required to pay to fully comply with the compliance notice. However, in terms of characterisation, the loss to the affected employee by the failure of the respondents to comply with the Compliance Notices was the lost opportunity to have their entitlements reviewed and if necessary, redressed, through the FWO’s enforcement processes. The monetary loss occasioned by the alleged failure by the respondents to comply with workplace laws and/or industrial instruments had already crystallised as at the date upon which the obligation arose and occurred “because of” this failure.
98Section 545(2)(d) of the FW Act is legislative recognition that in circumstances where a monetary loss has not been established to the standard of proof ordinarily required in the civil jurisdiction (the “reasonable belief”), the appropriate remedy is an order requiring the recalcitrant employer to take the steps that remained unperformed under the compliance notice. In some cases, this would require the employer to take each of the steps identified. In other cases, where calculations had been performed and an underpayment identified, the Court would be empowered to make an order that the identified payment be made to the affected employee. However, its character strictly would not be compensatory but rather one more akin to specific performance.
99An order of this kind would not subvert the operation of the compliance notice regime as it would be one directed principally at enforcement of the notice itself. An order of this kind would recognise that the relevant loss to the affected employee was the lost opportunity to have their entitlements reviewed and if necessary redressed, by their employer which opportunity (co-existent with the obligation) lapsed as at the expiry of the date of compliance. An order made under s 545(2)(d) would have the effect of reviving that obligation and making it the subject of a court order.
100While this analysis might be seen by some as an exercise in semantics, it can be defended by reference to arguments of the kind that have been rehearsed in decisions including Carers Portland and Cobra Security and which emphasise the different character of compliance notice proceedings, compared with, for example, proceedings that allege and are required to prove, breaches of ss 44 or 45 of the FW Act.
101On this analysis, the FWO is not without redress. She can seek penalties which, as this case demonstrates, can be substantial. The FWO can also seek orders which may result, through performance of the steps identified in the compliance notice, in affected employees being paid any unpaid entitlements. The right of the FWO to take direct action to recover outstanding entitlements is also preserved.
102I decline in these circumstances to make the compensatory orders sought by the FWO because I am not satisfied that the Court has the power to make them.
These observations and findings apply with equal force to this case. Furthermore, while I accept that it is appropriate to ask what the counterfactual would involve, for the purpose of divining the relationship between the contravention and the form of any relief, I am not persuaded that the counterfactual should be defined in the manner proposed by the Ombudsman.
Instead, consistent with the reasoning set out above, the counterfactual would involve the situation where the recipient of the compliance notice took each of the steps that it identified and within the time prescribed for compliance. Relief in the form of an order made under s 545(2)(d) operates precisely on this counterfactual.
I am also not persuaded that the fact that Parliament has expressly provided that a Court can order compensation “for loss that a person has suffered because of the contravention” where a term of an enforceable undertaking (obtained upon the formation of a “reasonable belief”) has been breached alters this analysis. The question in each case is whether there is a relationship between the contravention and the relief (in the form of compensation) sought. This question will produce a different response, depending on the circumstances and in particular the nature of the contravention. It is readily conceivable that an undertaking to make payments to employees might provide the basis for an award of compensation. However, this will not universally be the case. Instead, as s 715(7)(a) also recognises, the appropriate order may be one directing the person to comply with the term of the undertaking.
Which brings me to the alternative relief sought by the Ombudsman in this proceeding which is that orders be made that would require New Switch to take the steps required by the Compliance Notice pursuant to s 545(2)(d) of the FW Act.
I consider that I have the power to make an order to this effect and that in the face of continued non-compliance by New Switch it would be appropriate that I do so. I will frame an order that requires New Switch to take the steps required under the Compliance Notice within 28 days.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Symons. Associate:
Dated: 8 October 2025
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