Fair Work Ombudsman v Nilkanth Enterprise Pty Ltd

Link copied
Case Copied 17 min read

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Nilkanth Enterprise Pty Ltd [2024] FedCFamC2G 687

File number(s): MLG 1105 of 2023
Judgment of: JUDGE J YOUNG
Date of judgment: 1 August 2024 
Catchwords: INDUSTRIAL LAW – FAIR WORK – applicant seeks declaration of contraventions of the Fair Work Act 2009 (Cth) – contravention of civil remedy provisions – penalties sought - underpayment – where respondent cooperated by signing statement of agreed facts – where underpayment has since been rectified – declarations of contraventions and penalty orders made.
Legislation:

Corporations Act 2001 (Cth)

Fair Work Act 2009 (Cth) ss 3(b), 12, 14, 539(2), 545(1), 546, 550, 687(1), 700(1), 701, 716(5),

793(1)

General Retail Industry Award 2020
Cases cited:

Australian Building and Construction Commissioner v Pattinson [2022] HCA 13

Australian Building and Construction Commissioner v Pattinson [2019] FCA 1654

Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25

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

CFMMEU v ABCC [2018] FCAFC 97

Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (In Liq) (No 4) [2021] FCA 1242

Fair Work Ombudsman v IE Enterprises Pty Ltd [2021] FCA 60

Fair Work Ombudsman v Yogurberry World Square [2016] FCA 1290

Fair Work Ombudsman v Yuxuan Group Pty Ltd [2023] FedCFamC2G 1081

Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; (2018) 260 FCR 68,

Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357

Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65

Trade Practices Commission v CSR Ltd [1990] FCA 762

Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR 41

Wong v The Queen [2001] HCA 64; (2001) 207 CLR 582, 611
Division: Division 2 General Federal Law
Number of paragraphs: 52
Date of hearing: 15 July 2024
Place of hearing: Melbourne
Solicitor for the Applicant: Ms Stolzenhain of the Office of the Fair Work Ombudsman
Solicitor for the Respondents: Mr Mohamed of Starnet Legal Pty Ltd

ORDERS

MLG 1105 of 2023

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

FAIR WORK OMBUDSMAN

Applicant
AND:

NILKANTH ENTERPRISE PTY LTD

First Respondent

ASHVINKUMAR MAVJIBHAI CHAVAN

Second Respondent

ORDER MADE BY:

JUDGE J YOUNG

DATE OF ORDER:

1 AUGUST 2024

THE COURT DECLARES THAT:

1.The First Respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the Compliance Notice issued to the First Respondent on 13 October 2022.

2.The Second Respondent was involved, within the meaning of s 550(2) of the FW Act, in the Contravention by the First Respondent of section 716(5) of the FW Act declared at Order 1 herein and is taken to have contravened that provision.

THE COURT ORDERS THAT:

3.Pursuant to s 546(1) of the FW Act, the First Respondent pay a pecuniary penalty in the amount of $6,660 to the Commonwealth within 28 days of the…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Fair Work Ombudsman v Nilkanth Enterprise Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2024] FedCFamC2G 687
Decision Date

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) has filed an application against Nilkanth Enterprise Pty Ltd and its director seeking declarations that the respondents contravened civil remedy provisions of the Fair Work Act 2009 (Cth) and the imposition of penalties for those contraventions. The relevant facts are agreed and the respondents have since rectified the underpayment of the employee, Sana Banu. The legal issues before the Court were whether the respondents contravened the Act by underpaying Ms Banu and whether penalties should be imposed. The Court found that the respondents contravened the Act by underpaying Ms Banu and that penalties should be imposed, albeit reduced by 20% due to the respondents’ cooperation. The Court held that the statutory framework concerning compliance notices is an important mechanism for an inspector to deal with non-compliance with minimum entitlements in the Act as an alternative to commencing litigation and that the failure to comply with a statutory notice issued by the FWO is serious and such conduct ultimately undermines the Act’s enforcement framework and the safety net of entitlements it is designed to protect. The Court also held that general deterrence must serve a purpose such that the penalty is not seen by others as just “the cost of doing business” and that in order to be useful as a general deterrent, a penalty “should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by likeminded persons or organisations”.

The Court made declarations that Nilkanth Enterprise Pty Ltd and its director contravened several civil remedy provisions of the Fair Work Act 2009 (Cth) and imposed penalties. The penalty was reduced by 20% due to the respondents’ cooperation. The Court held that the statutory framework concerning compliance notices is an important mechanism for an inspector to deal with non-compliance with minimum entitlements in the Act as an alternative to commencing litigation and that the failure to comply with a statutory notice issued by the FWO is serious and such conduct ultimately undermines the Act’s enforcement framework and the safety net of entitlements it is designed to protect. The Court also held that general deterrence must serve a purpose such that the penalty is not seen by others as just “the cost of doing business” and that in order to be useful as a general deterrent, a penalty “should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by likeminded persons or organisations”. The Court found that the penalty should be $12,000 for the company and $4,000 for the director.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Before the Court is an application by the Fair Work Ombudsman (FWO) for declarations that the respondents have contravened several civil remedy provisions of the Fair Work Act 2009 (Cth) (Act) and for the imposition of penalties in respect of those contraventions.BACKGROUND The relevant facts are agreed as summarised in the following paragraphs. The Applicant is the Fair Work Ombudsman (FWO). The FWO is and was at all materials times:(a)a statutory appointee of the Commonwealth appointed by the Governor-General by written instrument pursuant to s 687(1) of the Act;(b)a Fair Work Inspector pursuant to s 701 of the Act; and(c)a person with standing to bring these proceedings and to apply for orders for contraventions of civil remedy provisions pursuant to s 539(2) of the Act. The First Respondent is and was at all relevant times:(a)a company incorporated under the Corporations Act 2001 (Cth) and registered since 5 August 2016;(b)a “constitutional corporation” within the meaning of section 12 of the Act;(c)a “national system employer” within the meaning of section 14 of the Act;(d)the operator of a greengrocer selling fruit, vegetables, meats and groceries under the trading name Strawberry Point (Business) with a registered office located at Unit 2, 18 Cornhill Street, Ferntree Gully in the State of Victoria (Registered Office); and(e)by reason of the matters pleaded in paragraphs 4(a) to 4(d) above, covered by the Act in respect of its employees. The Second Respondent is and was at all relevant times:(a)a natural person capable of being sued;(b)the sole director of the First Respondent since 22 March 2018;(c)the sole shareholder of the First Respondent;(d)a person with actual or apparent responsibility for:(i)the operation, management and control of the First Respondent; and(ii)ensuring the First Respondent complied with its legal obligations under the Act; and(e)a person whose conduct (engaged in on behalf of the First Respondent and within the scope of his actual or apparent authority) is taken to be that of the First Respondent pursuant to section 793(1) of the Act. In or around June 2022, the FWO commenced an investigation into the First Respondent’s compliance with the Act in respect of its employment of Sana Banu (Employee). During her relevant employment period with the First Respondent, the Employee held an international student visa. The investigator, Fair Work Inspector Ryan Keyhoe (FWO Inspector) is, and was at all material times, appointed under s 700(1) of the Act. On 13 October 2022, the FWO Inspector gave a compliance notice (Notice) to the First Respondent, having formed a reasonable belief that in respect of the Employee’s employment the First Respondent had contravened the following clauses of the General Retail Industry Award 2020 (Award):(a)between 3 May 2021 and 26 September 2021, clauses 17.1 and 11.3 – casual minimum wages;(b)between 27 September 2021 and 23 May 2022, clauses 17.1 and 11.1 – casual minimum wages; and(c)clause 22.1(b) – Saturday and Sunday casual penalty rates.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

JUDGE J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: JUDGE J

There is, however, no evidence of these matters before the Court nor any evidence which established any serious difficulty with paying a penalty if ordered to do so. In any event, the size and financial circumstances of an employer do not excuse an employer of its obligations to comply with workplace laws.Corrective action, cooperation with the FWO and contrition As set out above, the First Respondent has now rectified the effects of its non-compliance. However, as also set out above, this did not occur until some eight months after these proceedings were commenced and some 15 months after the Notice required the action to be taken. The Respondents filed a Response on 30 November 2023 where they consented to the orders sought in the FWO Statement of Claim, however this was prior to rectification. Further, the Respondents have spared some cost and complexity by working with the FWO to submit an agreed statement of facts and their admissions. The FWO concedes that a discount is justified on the basis that the Respondents have demonstrated a willingness to facilitate the court of justice through the proceedings. These are all matters I consider relevant and find that a discount of 20% ought be applied to any penalty ordered.Compliance with minimum standards It is an object of the Act to promote a guaranteed safety net of fair, relevant, and enforceable minimum terms and conditions for all employees, regardless of their visa status or other vulnerabilities: s 3(b) of the Act; Fair Work Ombudsman v IE Enterprises Pty Ltd [2021] FCA 60 at [77] (IE Enterprises). Underpayment of employees and the exploitation of vulnerable employees undermines this core object of the Act which is fundamental to the effectiveness of workplace regulation in Australia: IE Enterprises at [77]. The mere fact that a person is young, a citizen of another country, or in Australia on a visa does not necessarily lead to the conclusion that those persons are vulnerable employees: Fair Work Ombudsman v Yuxuan Group Pty Ltd [2023] FedCFamC2G 1081 at [66]. However, the vulnerability of employees on temporary visas, such as the Employee, has been judicially recognised as “notorious”: Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (In Liq) (No 4) [2021] FCA 1242 at [740]. A further and important consideration in this case is the need for compliance with the statutory framework. The statutory framework concerning compliance notices is an important mechanism for an inspector to deal with non-compliance with minimum entitlements in the Act as an alternative to commencing litigation. It also provides a means of early resolution and rectification without penalty. The failure to comply with a statutory notice issued by the FWO is serious and such conduct ultimately undermines the Act’s enforcement framework and the safety net of entitlements it is designed to protect.Deterrence General deterrence must serve a purpose such that the penalty is not seen by others as just “the cost of doing business”: Fair Work Ombudsman v Yogurberry World Square [2016] FCA 1290, [27]. In order to be useful as a general deterrent, a penalty “should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by likeminded persons or organisations’: Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65, [93] (Lander J).