Fair Work Ombudsman v New Switch Electrical Pty Ltd (No 2)

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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…

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Details
Case
[2025] FedCFamC2G 1634
Decision Date

CaseChat Overview and Summary

The Fair Work Ombudsman brought proceedings against New Switch Electrical Pty Ltd and Mr Tan for failure to comply with a compliance notice issued under the Fair Work Act 2009. The respondents, having failed to engage in the proceeding, were deemed to have admitted the contraventions. The central issue for the court was whether it had the jurisdiction to order civil penalties and compensation for the contraventions, and if so, what the appropriate penalties should be. The court had to consider factors such as the respondents' failure to engage in the proceedings, their lack of contrition, and the need for deterrence. The court also needed to determine if there was a quantifiable loss causally linked to the contraventions that would warrant compensation.

The court held that while the respondents' failure to comply with the compliance notice did warrant penalties, it did not have the jurisdiction to order compensation for the alleged underpayments. The court reasoned that the contraventions resulted in a lost opportunity for the affected employee to have their entitlements reviewed and potentially redressed, rather than a quantifiable monetary loss. This reasoning was consistent with previous cases that distinguished between the enforcement of compliance notices and other types of workplace law breaches. The court emphasised that the primary remedy in such cases is to enforce the compliance notice itself, which could result in the payment of any outstanding entitlements. The court also noted that the respondents' failure to engage in the proceedings and cooperate with the regulator further supported the need for penalties to ensure deterrence.

The court ordered significant penalties against both respondents, reflecting the seriousness of their failure to comply with the compliance notice and their lack of engagement with the proceedings. Additionally, the court ordered that the first respondent take the steps required by the compliance notice to address the contraventions. The court declined to make any compensatory orders, as it did not find that it had the jurisdiction to do so under the circumstances of this case.

The final orders included a significant penalty against New Switch Electrical Pty Ltd and Mr Tan, and an order for the first respondent to comply with the steps outlined in the compliance notice. The court's decision underscored the importance of compliance with workplace laws and the consequences of failing to engage with regulatory processes.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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

Ratio Decidendi

Legal Principle Established

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.