Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor (No. 2)

Case

[2019] FCCA 2144

6 August 2019


FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v NOBRACE CENTRE PTY LTD & ANOR (No.2) [2019] FCCA 2144

Catchwords:

INDUSTRIAL LAW – Penalty – failure to comply with compliance notice – consideration of appropriate penalties – where the employee is of non-English-speaking background and subject to an employer-sponsored visa – importance of deterrence – deliberate breaches – no contrition or remorse shown by the Second Respondent – consideration of whether a Second Respondent should personally pay compensation – First Respondent in liquidation – penalties and compensation to be paid by the Second Respondent.

Legislation:

Fair Work Act 2009 (Cth), ss.545, 546, 547, 550, 716

Cases cited:

Ahmed v Al Hussain Pty Ltd t/as The Cheesecake Shop (No.2) [2019] FCA 670
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46
Fair Work Ombudsman v Blu Hornsby Pty Ltd [2016] FCCA 1150
Fair Work Ombudsman v Kentwood Industries(No.3) [2011] FCA 579
Fair Work Ombudsman v Nobrace Centre Pty Ltd & Ors [2018] FCCA 378
Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor [2019] FCCA 1148
Fair Work Ombudsman v Step Ahead Security Services Pty Ltd and Anor [2016] FCCA 1482
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant and Bar [2007] FMCA 7
Parker v Australian Building and Construction Commission [2019] FCAFC 56
Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170
Veeraragoo v Goldbreak Holdings Pty Ltd (No.2) [2018] FCA 1448

Applicant: FAIR WORK OMBUDSMAN
First Respondent: NOBRACE CENTRE PTY LTD
Second Respondent: ARI MASTERS
File Number: MLG 1462 of 2018
Judgment of: Judge Blake
Hearing date: On the papers in chambers
Date of Last Submission: 18 June 2019
Delivered at: Melbourne
Delivered on: 6 August 2019

REPRESENTATION

Counsel for the Applicant: On the papers
Solicitors for the Applicant: Fair Work Ombudsman
Counsel for the Respondents: On the papers
Solicitors for the Respondents: Hassett Lee & Co Lawyers

ORDERS

  1. Pursuant to section 545(1) of the Fair Act 2009 (Cth) (‘Act’) the Second Respondent, Dr Ari Masters (‘Dr Masters’), pay to the Applicant $32,889.98 for Ruimin Yao (‘Mr Yao’) within 28 days.

  2. The Applicant will pay the amount in the preceding Order to Mr Yao within 14 days of receipt of the payment.

  3. Pursuant to sections 547(2) and 547(3) of the Act, Dr Masters pay interest to the Applicant, for Mr Yao, at the applicable pre-judgment rate on the amount payable under the order set out at Order 1 above from 12 March 2018 until the date of this Order.

  4. Pursuant to section 546(1) of the Act, a pecuniary penalty of $5,355 (‘pecuniary penalty’) be imposed on Dr Masters for his involvement, within the meaning of section 550 of the Act, in the First Respondent’s contravention of section 716(5) of the Act.

  5. Pursuant to section 546(3)(a) of the Act, Dr Masters pay the pecuniary penalty to the Consolidated Revenue Fund of the Commonwealth within 28 days.

  6. Pursuant to section 546(3) of the Act, in the event that some or all of the monies payable to Mr Yao in accordance with Order 1 are not met, the Applicant may remit, at its discretion, the pecuniary penalty paid to the Commonwealth to Mr Yao.

  7. The Applicant has liberty to apply within seven days’ notice in the event that any of the above orders are not complied with.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1462 of 2018

FAIR WORK OMBUDSMAN

Applicant

And

NOBRACE CENTRE PTY LTD

First Respondent

ARI MASTERS

Second Respondent

REASONS FOR JUDGMENT

Introduction

  1. On 2 May 2019, the Court delivered judgment on liability in this matter, Fair Work Ombudsman v Nobrace Centre Pty Ltd [2019] FCCA 1148 (‘liability judgment’). In the liability judgment, the Court declared that the Second Respondent was involved, within the meaning of section 550 of the Fair Work Act 2009 (‘Act’), in the First Respondent’s contravention of section 716(5) of the Act in failing to comply with a Compliance Notice dated 16 February 2018 (‘Compliance Notice’), and is thereby, pursuant to section 550(1) of the Act, taken to have himself committed that contravention.

  2. I listed the matter for hearing on 16 May 2019 for submissions as to penalty.  The parties ultimately sought that the question of penalty be determined by me on the papers, following receipt of written submissions and any evidence.  In light of the parties’ views, the penalty hearing listed for 16 May 2019 was vacated and Orders were made on 10 May 2019 for the filing and service of written submissions and any evidence by each of the parties.

  3. The facts and circumstances giving rise to the liability of the Second Respondent are set out in the liability judgment.  Accordingly, I have not repeated all of the facts and findings in this judgment, but refer to the liability judgment in that regard. In summary, the contravention relates to the Second Respondent’s involvement in the First Respondent’s failure to comply with the Compliance Notice.

Submissions of the Parties

  1. Written submissions were filed by the Applicant on 23 May 2019. The Applicant also filed submissions in reply on 18 June 2019.  In those submissions, among other things, the Applicant:

    a)identified that the Court in the present matter was dealing with a single contravention;

    b)identified that the maximum penalty that the Court could impose for the single contravention by an individual of section 716(5) of the Act that occurred on 12 March 2018 is $6,300;

    c)submitted that a pecuniary penalty should be imposed on the Second Respondent in the very high range being 85% to 95% of the maximum (or between $5,355 to $5,985);

    d)sought an order pursuant to section 545(1) and 547(2) of the Act that the Second Respondent pay to the Applicant an amount of $32,889.98 plus interest for Mr Yao, the employee affected by the contravention.

  2. The amount sought to be paid to the Applicant for Mr Yao, being $32,889.98, is less than the amount that was specified in the Compliance Notice. The Compliance Notice sought recovery of an amount of $36,698.01. The Applicant noted in its written submission that an amount of $3,803.03 was attributable to a period that is more than 6 years before the proceedings commenced. Pursuant to section 545(5) of the Act, the Court must not make an order in relation to an underpayment that occurred more than 6 years before the proceeding commenced. As such, the amount that the Applicant sought for Mr Yao was the amount of $32,889.98.

  3. In addition to the written submissions, the Applicant filed two further affidavits. The first was an affidavit of Inspector Girach affirmed on 15 May 2019. The second was an affidavit of Ruimin Yao, the employee affected by the contravention, affirmed on 10 May 2019. No objection was taken to the filing of those affidavits and I have had regard to the content of them.

  4. Written submissions were received on behalf of the Second Respondent on 13 June 2019.  In those submissions, the Second Respondent:

    a)argued that Mr Yao took over 4 years to complain to the Applicant and, given the passage of time, there was nothing wrong with the  Second Respondent withdrawing money from the First Respondent for his personal use;

    b)submitted that the sum of approximately $14,000 that was in the First Respondent’s bank account at the time the Compliance Notice was served, was money due to a business which acquired the First Respondent’s business and was therefore not available for distribution to Mr Yao;

    c)argued he successfully challenged the amount of the Compliance Notice;

    d)submitted that this is not a case of deliberate evasion, as submitted by the Applicant;

    e)argued that the vulnerability of, and damage to, Mr Yao is overstated in circumstances where he did not take quick action to complain about the underpayments;

    f)submitted that in the circumstances, a pecuniary penalty not in excess of 50% should be imposed.

  5. No submission was received by the Second Respondent in relation to the order sought that the Second Respondent be held personally liable for any compensation sought to be recovered and paid to Mr Yao.

Penalty

  1. The approach a Court should take to the imposition of a pecuniary penalty under the Act has been considered in numerous written decisions.

  2. In Fair Work Ombudsman v Kentwood Industries(No.3) [2011] FCA 579, McKerracher J at [10] outlined the steps a Court should take in respect of the imposition of penalties. As this matter concerns a single contravention of the Act, the first 3 steps noted by McKerracher J at [10] have no application in this matter, but the last one is relevant and is as follows:

    ‘[10.]    … 4.  Finally, having fixed an appropriate penalty for each separate contravention, group of contraventions or course of conduct, a final review of the aggregate penalty is necessary to determine whether it is an appropriate response to the conduct which led to the contraventions. Put another way, a Court may apply an overall ‘instinctive synthesis’: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 (at [55] and [78]) per Graham J. In the same case, Gray J said (at [23]):

    What [is] required [is] to determine an appropriate level of penalty for each contravention, as if it were a separate offence, and then look at the aggregate of those penalties in the light of the overall conduct of the [offender], to form a view as to whether that aggregate [is] out of proportion to that overall conduct.

    And (at [27]):

    … Graham J and I proceed by what the High Court has called “instinctive synthesis”. See Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [37], where the majority approved what was said by Gaudron,  Gummow and Hayne JJ in Wong v The Queen [2001] HCA 64; (2001) 207 CLR 584 at [74]-[76].

    Buchanan J described it as follows (at [102]):

    The totality principle is a guide to sentencing practice. It must be adapted to the circumstances. It is designed to avoid injustice in the overall result. It is not a principle which suggests that a penalty should necessarily be reduced from an aggregate total fixed for multiple offences. Rather, it involves a final check to ensure that a total or aggregate penalty is not, in all the circumstances, excessive.’

  3. A list of non-exhaustive factors that a Court ought to consider when imposing a penalty was summarised in the decision of Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant and Bar [2007] FMCA 7, and endorsed in Kelly v Fitzpatrick [2007] FCA 1080 at [14]. The factors are as follows:

    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 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 a breach had exhibited contrition, taken corrective action and cooperated with the enforcement authorities;

    j)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and

    k)the need for specific and general deterrence.

Nature and Extent of the Conduct

  1. The relevant conduct here is the failure of the First Respondent to respond to or comply with the Compliance Notice.  For the reasons set out in the liability judgment, the Second Respondent was involved in the First Respondent’s failure to comply with the Compliance Notice.

  2. The Compliance Notice sought that the First Respondent rectify underpayments of $36,693.01 to Mr Yao. The underpayments arose because the First Respondent failed to pay minimum entitlements to Mr Yao arising under the applicable award and the National Employment Standards.

  3. The Second Respondent was the person who received the Compliance Notice on behalf of the First Respondent.  For the reasons articulated in the liability judgment, he was the person with management and control of the First Respondent.

  4. A feature of the contravention in the present proceedings is that it occurred in circumstances where the Respondents were involved in a separate set of proceedings relating to contraventions under the Act: Fair Work Ombudsman v Nobrace Centre Pty Ltd & Ors [2018] FCCA 378 (‘NC1’). NC1 concerned an employee, who like Mr Yao, was paid a flat rate of $15 per hour for all hours worked by the First Respondent. In NC1, the Court found the Respondents had contravened the Act.

  5. The judgment and orders in NC1 were published after the Compliance Notice in the present proceeding was issued to the First Respondent, but before the date on which payment was due under the Compliance Notice.  The similarity of the circumstances means that the Second Respondent was well aware of the underpayment issues raised by the Compliance Notice, and the role of the Applicant.  Despite this, the Second Respondent took no steps to satisfy the Compliance Notice, or even to engage with the Applicant in relation to correcting any underpayments.

  6. The Second Respondent’s answer to this failure to engage with the Compliance Notice was to say, inter alia, to the Inspector at the time the Compliance Notice was served, and at the hearing on liability, that the First Respondent did not have the money to satisfy the Compliance Notice.  That proposition is not sustainable when one has regard to the evidence in this matter recounted in the liability judgment. There was approximately $14,000 in the First Respondent’s bank account which could have gone toward at least partially satisfying the Compliance Notice. While the Second Respondent now submits that this $14,000 was owed to another, no evidence was adduced to support this proposition.

  7. The Second Respondent also submits in relation to the breach that he was entitled to remove money from the First Respondent.  That much might be true but, as I said in the liability judgment for the reasons mentioned there, that proposition misses the point.  The Compliance Notice in this matter was issued to the First Respondent. By nature of the way the business was run, the Second Respondent was aware of and dealt with Compliance Notice. The Second Respondent, having knowledge of the significance of what was occurring in NC1, took no action to deal with the Compliance Notice.  That was a deliberate decision made by the Second Respondent.

  8. Compliance Notices are a mechanism that was introduced into the Act to deal efficiently with identified contraventions and to provide an alternative to commencing litigation. This Court has previously found that Compliance Notices are an important part of the armoury of the Applicant and its inspectors in fulfilling their functions: see Fair Work Ombudsman v Blu Hornsby Pty Ltd [2016] FCCA 1150.

  9. When the above matters are considered, the nature and extent of the conduct which led to the breach is significant.  In my view, the Second Respondent disregarded the enforcement actions taken by the Applicant in this matter and elected not to satisfy the Compliance Notice.

Nature and extent of loss or damage suffered as a result of the breach

  1. The employee affected by the contravention, Mr Yao, has deposed in his affidavit that he struggled to pay his living expenses and bills and had to borrow $20,000 from his family.  Had he been paid what was owed to him it would have been unnecessary to obtain the loan from his family. The amount owed to Mr Yao is much greater than the amount of the loan he obtained from his family.

  2. Mr Yao was employed for two years and during that period he was paid $15 per hour without the payment of any penalties.  The amount specified in the Compliance Notice means that, on average, Mr Yao received $18,000 per annum less than what he should have received.

  3. The Second Respondent submits that the amount of the Compliance Notice was not significant and that the damage to Mr Yao is overstated.  It is said that had it been significant, Mr Yao would have complained to the Applicant sooner.  It is finally said that the Second Respondent successfully challenged the quantum of the Compliance Notice. 

  4. There are three things that I regard as relevant in considering the nature and extent of the loss or damage suffered as a result of the breach. First, there was not any successful challenge to the Compliance Notice. The Applicant properly conceded that the Court could not make an order in relation to an underpayment that relates to a period that is more than 6 years before the proceeding commenced. This is a proper concession in light of the words in the Act. It cannot be characterised as a successful challenge to the quantum in the Compliance Notice. Second, I am not aware, nor was I taken to any authority, in which the time taken to complain about a particular act said to be unlawful is to be regarded as relevant when assessing the extent of loss suffered. Ultimately, it seems to me that what is important is whether or not the proceedings were commenced in the period contemplated by the relevant statute. Third, I find the proposition that the amount is not significant to this individual to be extraordinary. It may be the case that the amount is not of significance to the Second Respondent given the means and resources that are, on the evidence, available to him. It reflects poorly on the Second Respondent, however, that a person of his apparent means would seek to trivialise what is a significant sum of money for a person who is reliant on the minimum terms and conditions set out in awards and legislation.

  5. Having regard to the above, I am satisfied that for this employee the amount was significant, given the rate of pay that he had been receiving from his employer.

Vulnerability

  1. Mr Yao is a migrant, from a non-English-speaking background who at the time he was employed by the First Respondent was working subject to an employer-sponsored visa.  On his own evidence, which was not challenged, Mr Yao did not have any developed understanding of Australian workplace laws.

  2. I am satisfied on the basis of the evidence that Mr Yao was a person who was vulnerable.  I note that the Federal Court has found that employees with limited English skills who work on visas are a group susceptible to exploitation: Ahmed v Al Hussain Pty Ltd t/as The Cheesecake Shop (No.2) [2019] FCA 670 at [68].

Similar Previous Conduct

  1. As noted above, this is a matter in which the Respondents have been previously found to have contravened workplace laws.  A relevant question is the extent to which those contraventions are relevant in the present matter.

  2. I am of the view that, while the Respondents are not to be punished again for past contraventions, their history in relation to prior workplace law breaches is a relevant consideration to take notice of. In Parker v Australian Building and Construction Commission [2019] FCAFC 56, a Full Court of the Federal Court had this to say in relation to the relevance of prior contraventions:

    ‘[341]   Thus, the role of any past contraventions is to be no more than a prism through which to view the instant contravention. This enables a court to assess whether, for example, the instant contravention is an “uncharacteristic aberration”, or whether the contravener has, by the instant conduct, manifested “a continuing attitude of disobedience of the law”. If the latter, as is clearly available to be concluded in this case, the heightened need for deterrence may indicate that a more severe penalty is warranted for the instant contravention. Nonetheless, that penalty must still fall within the applicable range that is otherwise considered appropriate for that contravention. If that is not carefully observed, the contravener may suffer the fate of being sanctioned anew for past contraventions, as the above quote from Veen (No 2) makes clear is not permitted.’

Size and financial circumstances of the Second Respondent

  1. I have referred above and in the liability judgment to the alleged financial position of the First Respondent.  I have rejected the proposition that the First Respondent did not at the time of the offending conduct have money available to at least partially meet the Compliance Notice. I accept the First Respondent is in liquidation.

  2. There is no evidence before me in relation to the financial circumstances of the Second Respondent.  In the liability judgment, I made findings in relation to various withdrawals that were made by the Second Respondent from the accounts of the First Respondent. Those withdrawals were for significant sums of money.  I infer from those withdrawals and other evidence that the Second Respondent has the means to meet any penalty the Court may impose.

Whether the breaches were deliberate

  1. The Second Respondent asserts that the breaches were not deliberate evasion. I understand this argument to be, inter alia, that as the Compliance Notice was served many years after the alleged breaches, the Second Respondent was entitled to withdraw funds from the First Respondent, and the Second Respondent was entitled to test its argument before a Court, prior to making any payments. In these circumstances, it is submitted there was not a deliberate breach.

  2. The history above does not take account of the way in which all the events unfolded. The history relating to the contravention and the Second Respondent’s involvement in it is set out in the liability judgment. I do not repeat those circumstances here suffice to say the following.  The Second Respondent was served with the Compliance Notice. He was the guiding mind of the First Respondent.  He, on behalf of the First Respondent, made the decision not to pay the amount set out in the Compliance Notice.  His assertion that there were no funds to meet the Compliance Notice has been demonstrated by the evidence to be incorrect, a position he now seemingly accepts, and the funds were not used to pay at least part of the amount stipulated in the Compliance Notice. A payment plan was not entertained, despite being offered.

  3. In the circumstances, I am satisfied the breach was deliberate.

Co-operation, contrition and corrective action

  1. There has been no attempt by the Second Respondent to make good the amount of the underpayments. There was limited co-operation during the investigation. The Second Respondent did not admit liability, and put the Applicant through running the matter before this Court. There has been no statement of regret or remorse.

  2. An aspect that favours the Second Respondent is that an agreed statement of facts was entered into. That ultimately limited the issues at trial and made the matter somewhat more efficient. I give this some weight in the scheme of things, but not a great deal, given the other matters I have referred to above.

Deterrence

  1. It is well recognised that general and specific deterrence is a significant factor in relation to the imposition of penalties. In Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 at [55], the High Court observed that:

    ‘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."’ (citations omitted)

  2. Despite the importance of deterrence as a factor when it comes to the imposition of penalties, the Second Respondent did not make an explicit submission in relation to deterrence.

  3. There are two elements of deterrence that need to be considered. I deal firstly with general deterrence. This is a matter in which the contravention is the failure to comply with a Compliance Notice. As I have noted earlier, the purpose of Compliance Notices is, among other things, to provide an avenue for the efficient resolution of underpayment claims. In that sense, Compliance Notices form an essential part of legislation designed to ensure that employees receive as promptly as possible their lawful entitlements.

  4. It is important, in the context above, that recipients of statutory notices such as Compliance Notices act in accordance with such notices. The efficacy of such notices will be hindered or made redundant if recipients perceive that failure to comply with such notices carries with it no meaningful consequence.

  5. I turn to deal with specific deterrence. A Full Court of the Federal Court has observed in relation to specific deterrence that 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’: Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170 at [37].

  6. In relation to these matters, I observe that this is the second occasion in which the Second Respondent has been before the Court in relation to contraventions of workplace laws. Notwithstanding that fact, the Second Respondent has not shown any contrition or remorse for his conduct. The amounts owed to Mr Yao remain outstanding. The Second Respondent also remains a director of three companies. In these circumstances, I consider there to be a need for specific deterrence.

  7. Having regard to the matters above, I am satisfied that a penalty at the higher end of the scale is warranted in this matter. I will order that the Second Respondent pay a pecuniary penalty of $5,355, and that such penalty be paid to the Consolidated Revenue Fund of the Commonwealth of Australia.

Liability of the Second Respondent for amounts specified in the Compliance Notice

  1. This is a matter in which the Applicant seeks that the Second Respondent pay the amounts outstanding in the Compliance Notice with interest, less any amounts which the Court is unable to make an order having regard to section 545(5) of the Act.

  2. It needs to be remembered that the failure to pay the correct amount of wages and entitlements is a failure by the First Respondent.  An issue arises as to whether or not a person found to be involved in a contravention can be held liable for all of the amounts the subject of the primary contravenor’s breach.

  3. An analysis of this issue begins with the terms of the Act. In this respect, it is to be observed that section 545(1) of the Act is in broad terms. It empowers the Court to make any order that the Court considers appropriate in relation to the contravention of a civil remedy provision. It is also relevant to bear in mind section 550(1) of the Act. Section 550(1) provides that a person involved in a contravention of a civil remedy provision is taken to have contravened the provision.

  4. The ability of a Court to order an accessory to pay compensation was considered by the Federal Court of Australia in Veeraragoo v Goldbreak Holdings Pty Ltd (No.2) [2018] FCA 1448. In that matter, Colvin J considered the terms of the relevant statutory provisions in the Act relating to accessories and the power to pay compensation. Colvin J held that the Federal Court had the power to order an accessory to pay compensation and noted that:

    a)Before making an order, a Court must have formed the view that an order providing for the payment of compensation is appropriate in the particular circumstances of the matter; and

    b)Compensation should be ‘confined to that which is referable to the contravening conduct’[1] of the accessory.

    [1] Paragraph [51] of Veeraragoo v Goldbreak Holdings Pty Ltd (No.2) [2018] FCA 1448

  5. In the matter before the Federal Court, Colvin J ordered the accessory to pay compensation. The factors relevant in that matter were that:

    a)the employing entity was in administration which meant that the relevant employee would not recover the amount from the employer;

    b)the accessory was the General Manager of the relevant business, and was personally involved in the contravening conduct;

    c)the relevant contraventions flowed from the accessory’s conduct and occurred with his full knowledge and support; and

    d)the accessory was in charge of the business and he had an interest in the trading businesses.

  6. It is to be noted that a number of decisions of this Court have also held that an accessory may be ordered to pay compensation. In Fair Work Ombudsman v Step Ahead Security Services Pty Ltd and Anor [2016] FCCA 1482, Judge Jarrett of this Court set out a list a list of non-exhaustive factors that should be considered in determining whether a compensation order ought to be made against an accessory. I have had regard to that list. Of significance is the comment by Judge Jarrett at [73] where it is stated that, inter alia, a compensation order is less likely to be made against an accessory ‘where the court forms the view that the accessory was not in a position to influence whether the employer brought about the loss’.

  7. The position in Veeraragoo is not dissimilar to the present case. In this matter, the Court is not able to make any order against the First Respondent as it is in liquidation. As has been noted above and in liability judgment, the Second Respondent was responsible for the management of the business of the First Respondent and was the sole director and secretary of the First Respondent. The Second Respondent had knowledge of the Compliance Notice and the failure of the First Respondent to comply with the Compliance Notice. It is the Second Respondent’s failure to take steps to ensure compliance with the notice that have resulted in the present situation.

  8. For the above reasons, I am satisfied that a compensation order in the amount sought by the Applicant, being $32,889.98 plus interest, ought to be made in this matter. I will make an order that the Second Respondent pay that amount along with an order that the amount paid be given by the Applicant to Mr Yao within 14 days of receipt of the payment.

  9. I stated earlier that the pecuniary penalty of $5,355 to be paid by the Second Respondent is to be paid to the Commonwealth. In the event that the total amount of the compensation ordered in these reasons is not received by the Applicant to give to Mr Yao, I will make an order that the Applicant may, at its discretion, remit the penalty payment payable to the Commonwealth to be paid to Mr Yao.

  10. The Applicant also urged the Court to make orders, among other things, that the Second Respondent, in respect of any business owned or operated by him, register with the Applicant’s ‘My Account’ portal, provide to the Applicant his ‘My Account’ registration number and register with the Applicant’s online learning centre and complete all education courses designed for employers.

  11. I did not receive any submissions from the Applicant as to why these orders are sought, or the evidence that I should have regard to in making these orders. As a result, I decline to make those orders.

I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of Judge Blake

Associate: 

Date:  6 August 2019


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Cases Citing This Decision

30

Cases Cited

15

Statutory Material Cited

2

Markarian v The Queen [2005] HCA 25