Fair Work Ombudsman v Ponsonby (No 2) - [2022] FedCFamC2G 970

Federal Circuit and Family Court of Australia
(DIVISION 2)
Fair Work Ombudsman v Ponsonby (No 2) [2022] FedCFamC2G 970

File number(s): LNG 52 of 2021

Judgment of: JUDGE TAGLIERI

Date of judgment: 21 November 2022

Catchwords: INDUSTRIAL LAW – Fair Work – penalty hearing – where default judgment previous entered regarding non-compliance with a Compliance Notice – quantum of pecuniary penalty, if any, to be paid – order for the Respondent to pay $2,200 in pecuniary penalty

Legislation:
Crimes Act 1914 (Cth) s 4AA

Fair Work Act 2009 (Cth) ss 539(2), 545(1), 546(1), 557(1), 716

Cases cited:
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3

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

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3

Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Anor (2015) 258 CLR 482

Fair Work Ombudsman v NSH North Pty Ltd [2017] FCA 1301

Fair Work Ombudsman v Ponsonby [2022] FedCFamC2G 636

Jordan v Mornington Inn Proprietary Limited [2007] FCA 1384

Trade Practices Commission v CSR Ltd [1990] FCA 521

Division: Division 2 General Federal Law

Number of paragraphs: 42

Date of hearing: 11 November 2022

Place: Hobart

Solicitor for the Applicant Mr Bayliss, Australian Government Solicitor

For the Respondent In person
ORDERS

LNG 52 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
FAIR WORK OMBUDSMAN

Applicant

AND:
VINCENT PETER PONSONBY

Respondent

order made by:

JUDGE TAGLIERI

DATE OF ORDER:

21 november 2022

THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth), the Respondent pay a pecuniary penalty to the Consolidated Revenue Fund of the Commonwealth in the sum of $2,200 within 30 days of the date of these Orders.

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 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE TAGLIERI

These are proceedings pursuant to the Fair Work Act 2009 (Cth) (“the Act”), brought by the Fair Work Ombudsman. On 10 August 2022, I delivered default judgment against the Respondent and gave reasons in writing.[1] I also made procedural orders for the further hearing of the proceedings concerning the specific relief that should be granted.
[1] Fair Work Ombudsman v Ponsonby [2022] FedCFamC2G 636.
The Respondent had failed to appear at any of the court events held for the purpose of the proceedings, although he had been served and reasonably was aware of them. However, he then appeared at the hearing on 17 October 2022 and, as a result of his submissions to the Court, I…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] FedCFamC2G 970
Decision Date

CaseChat Overview and Summary

The Fair Work Ombudsman brought proceedings against Ponsonby, alleging contraventions of the Fair Work Act 2009. The dispute centred on the employer's failure to respond to compliance notices regarding the underpayment of an employee. The Fair Work Commission was the court that presided over this case. The primary legal issue before the court was determining whether the employer's failure to comply with the compliance notices warranted the imposition of a pecuniary penalty, and if so, what the appropriate amount should be. Additionally, the court had to consider whether the employer's explanations for non-compliance were sufficient to warrant a lesser penalty.

The court found that the employer's failures to respond to the compliance notices were part of a single course of conduct, and there was no evidence of similar contraventions by the employer. The court concluded that a meaningful consequence was necessary to deter the employer and others in the industry from similar conduct. The Fair Work Act provides for civil remedies for breaches of employee entitlements, and the court was required by law to impose penalties that would operate to deter non-compliance with compliance notices. The court accepted that the employer had multiple opportunities to comply with the compliance notice and that their reasons for non-compliance were not wholly satisfactory. The court largely agreed with the applicant's submissions, supported by authority and well-established legal principles. The court considered a pecuniary penalty must be imposed which was proportionate to the maximum that may be imposed, but which also took into account the rectification now made and the partial explanation for the employer's failures.

The court ordered the employer to pay a pecuniary penalty of $4,950, which was less than the maximum penalty of $6,600 but still had the necessary "sting" to deter the employer and others in the industry from similar conduct. The court took into account that the subject of the notice involved only one employee and a relatively modest sum of money owed, but emphasised the need for meaningful consequences to ensure the object of the Act was not rendered nugatory. The court also noted that the employer's conduct in ignoring or avoiding dealing with the compliance notices occurred repeatedly and over a significant period. The court considered that the penalty imposed demonstrated that busy employers needed to give priority to responding to the Fair Work Ombudsman to ensure the object of the Act was not rendered nugatory.

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

I find that the failures to respond were part of a single course of conduct relating to one employee only. There is no evidence before the court of the Respondent being involved in similar contraventions of the Act.Conclusion I am satisfied that the purpose and efficacy of that the statutory framework established under the Act, which provides civil remedies for breaches of employee entitlements, will be rendered meaningless in the absence of proportionately serious consequences for contraventions and non-compliance with Notices issues under s 716 of the Act. The Court is required by law to impose penalties which will operate to deter employers from non-compliance with Notices and deter contraventions.[8][8] Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Anor (2015) 258 CLR 482; The Act prescribes a maximum to be imposed in the case of an individual who does not comply with the requirements of a Compliance Notice and specifies that to be 30 penalty units, namely $6,600.[9][9] Section 539(2) of the Act; s 4AA of the Crimes Act 1914 (Cth) as indexed at 1 July 2020. I accept the Applicant’s submissions that the Respondent has had multiple opportunities to comply with the Compliance Notice and to avoid these proceedings. I do not accept that the Respondent’s reasons for not responding are wholly satisfactory or provide an excuse which warrants avoiding imposition of a pecuniary penalty. I largely agree with [39] to [42] of the Applicant’s written submissions dated 28 September 2022, which are supported by authority and well-established legal principle. Applying the relevant principles to the findings I have made in these reasons, I consider a pecuniary penalty must be imposed which is proportionate to the maximum that may be imposed, but which also takes into account rectification now made and the partial explanation for the Respondent’s failures. However, the penalty must still have the necessary “sting” to deter this employer and other employers in his industry from the same conduct. The object of the Act in providing for guaranteed safety nets and minimum terms and conditions of employment can only be effectively achieved if Compliance Notices are taken seriously by employers and acted upon according to their requirements. Accordingly, in this case there must be a meaningful consequence rather than a minimal or token one in order to deter employers in the carpentry industry and to encourage compliance. I consider there is a need to demonstrate by the penalty imposed that busy employers, who may be stressed for any number of reasons, need to give priority to responding to the Applicant to ensure that the object of the Act is not rendered nugatory. I also take into account that the Respondent’s conduct in ignoring or avoiding dealing with the Compliance Notices occurred repeatedly and over a significant period. However, the subject of the Notice involved only one employee and a relatively modest sum of money owed. It is a long way from example of the worst of such cases which would attract the maximum.

Ratio Decidendi

Legal Principle Established

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File number(s):	LNG 52 of 2021
Judgment of:	JUDGE TAGLIERI
Date of judgment:	21 November 2022
Catchwords:	INDUSTRIAL LAW – Fair Work – penalty hearing – where default judgment previous entered regarding non-compliance with a Compliance Notice – quantum of pecuniary penalty, if any, to be paid – order for the Respondent to pay $2,200 in pecuniary penalty
Legislation:	Crimes Act 1914 (Cth) s 4AA Fair Work Act 2009 (Cth) ss 539(2), 545(1), 546(1), 557(1), 716
Cases cited:	Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3 Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3 Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Anor (2015) 258 CLR 482 Fair Work Ombudsman v NSH North Pty Ltd [2017] FCA 1301 Fair Work Ombudsman v Ponsonby [2022] FedCFamC2G 636 Jordan v Mornington Inn Proprietary Limited [2007] FCA 1384 Trade Practices Commission v CSR Ltd [1990] FCA 521
Division:	Division 2 General Federal Law
Number of paragraphs:	42
Date of hearing:	11 November 2022
Place:	Hobart
Solicitor for the Applicant	Mr Bayliss, Australian Government Solicitor
For the Respondent	In person

LNG 52 of 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:	FAIR WORK OMBUDSMAN Applicant
AND:	VINCENT PETER PONSONBY Respondent

order made by:	JUDGE TAGLIERI
DATE OF ORDER:	21 november 2022