Fair Work Ombudsman v Powell

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Federal Circuit and Family Court of Australia

(DIVISION 2)

Fair Work Ombudsman v Powell [2022] FedCFamC2G 831

File number: MLG 2032 of 2021
Judgment of: JUDGE FORBES
Date of judgment: 13 October 2022
Catchwords: INDUSTRIAL LAW - Fair Work Act – employer’s contravention of s 716 Compliance Notice – failure to provide pay slips pursuant to s 536 – false and misleading payslips - declarations of contraventions – further orders for compliance and penalties sought by Ombudsman – principles and factors relevant to determination of penalties
Legislation:

Crimes Act 2009 (Cth) s 4AA

Evidence Act 1995 (Cth) s 191

Fair Work Act 2009 (Cth) s 3, 30N, 47, 48, 536, 539, 545, 546, 547, 557, 716, 717

Cases cited: 

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

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) FCR 560

Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482

Fair Work Ombudsman v Al Hilfi [2016] FCA 193

Fair Work Ombudsman v Goldream Pty Ltd [2021] FedCFamC2G 61

Fair Work Ombudsman v Hess [2021] FCCA 1883

Fair Work Ombudsman v Nobrace Centre Pty Ltd (No 2) [2019] FCCA 2144

Fair Work Ombudsman v NSH North Pty Ltd t/a New Shanghai Charlestown (2017) 275 IR 148

Fair Work Ombudsman v PEBS Group Pty Ltd[2021] FedCFamC2G 158

Fair Work Ombudsman v Soma Kitchen Pty Ltd & Anor (No 2) [2020] FCCA 2583

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

Kelly v Fitzpatrick [2007] FCA 1080

Trade Practices Commission v CSR Ltd[1990] FCA 521

Division: Division 2 General Federal Law
Number of paragraphs: 103
Date of last submission: 25 March 2022
Date of hearing: 29 April 2022
Place: Melbourne
Solicitor for the Applicant: Ms Parry
Solicitor for the Applicant: Norton Rose Fulbright
Respondent: No appearance

ORDERS

MLG 2032 of 2021

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

FAIR WORK OMBUDSMAN

Applicant
AND:

ADAM POWELL

Respondent

order made by:

JUDGE FORBES

DATE OF ORDER:

13 OCTOBER 2022

THE COURT ORDERS THAT:

1.Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) (“the FW Act”), the Respondent:

(a)pay a pecuniary penalty of $3,330.00 for the contravention of section 716(5) of the FW Act, the subject of the declaration made by this Court on 21 December 2021, within 28 days of the date of this order.

(b)pay a pecuniary penalty of $6,660.00 for the contravention of section 536(3) of the FW Act, the subject of the declaration made by this Court on 21 December 2021, within 28 days of the date of this order.

2.Pursuant to section 546(3)(a) of the FW Act, any pecuniary penalties ordered to be paid by the Respondent be paid into the Consolidated Revenue Fund of the Commonwealth within 28 days.

3.Pursuant to section 545(1) of the FW Act, within 28 days of the date of this order, the Respondent take the steps that were required by the Compliance Notice given to the Respondent on…

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Details
Case
[2022] FedCFamC2G 831
Decision Date

CaseChat Overview and Summary

In this case, the Fair Work Ombudsman brought an application against Mr Powell, the owner of Oak and Stone Landscaping, for failing to comply with certain obligations under the Fair Work Act 2009 (FW Act) and the Building and Construction General On-site Award 2010. The primary issue before the Court was whether the respondent had contravened the specified sections of the Fair Work Act and the Award. Additionally, the Court had to determine the appropriate penalty for the contraventions.

The respondent, who was a sole trader operating a landscaping business, was required to adhere to the terms of the Award, which stipulated various employee entitlements. The respondent employed Mr Taylor, a 17-year-old casual labourer, and was required to pay him the minimum wage and casual loading as per the Award. However, the respondent paid Mr Taylor a flat rate of $21.88 per hour, which was below the stipulated rate. The respondent also failed to provide payslips that were not false or misleading. The Court found that the respondent had contravened sections 716(5) and 536(3) of the FW Act.

In assessing the penalty, the Court considered the seriousness of the contraventions, the respondent's history of non-compliance, and the need for deterrence and retribution. The Court found that a combined aggregate penalty of just under $10,000 was an appropriate response to the respondent's conduct. The Court noted that there was no evidence to suggest that the penalty was unduly crushing or oppressive.

In conclusion, the Court granted the relief sought by the Ombudsman and ordered Mr Powell to pay a penalty of $9,990.00. The Court also declared that the respondent had contravened the specified sections of the Fair Work Act and the Award.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

On 29 April 2022, the Ombudsman’s application came before this Court. Ms Parry represented the Ombudsman. There was no appearance by the respondent at this hearing. In support of its application for orders and penalties, the Ombudsman relied upon its originating application and accompanying statement of claim, both filed on 13 August 2021, as well as numerous affidavits deposing to the background facts and service of relevant documents. These documents have been read and considered in reaching my decision. BACKGROUND The circumstances that resulted in the respondent’s declared contraventions are summarised below. This summary has derived from the statement of claim and the affidavits filed by the Ombudsman. The Court is satisfied that the documents the Ombudsman sought to rely on in their submission on penalty have been served on the respondent. The evidence contained within these documents has not been challenged by the respondent. Business and employee entitlements At all relevant times, the respondent was a sole trader carrying on a business known as “Oak and Stone Landscaping” (“the business”). The business provided landscaping services within the state of Victoria. The respondent is a “national system employer” for the purpose of section 30N(1) of the FW Act. Employees of the business performing general landscaping and labouring work were entitled to be paid wages and work to conditions stipulated within the Building and Construction General On-site Award 2010 (“the Award”). The Award covered the respondent’s business within the meaning of section 48 of the FW Act. The Award stipulated various employee entitlements including the minimum wage and the hourly rate of pay in respect of ordinary hours as well as casual loading. As a national system employer, the respondent was also bound to adhere to various obligations imposed by the FW Act. Relevantly, this included the obligation that an employer provide its employees with payslips that are not false or misleading[1].[1] Fair Work Act 2009 (Cth) s 536(3) On 4 August 2020, Mr Jaxon Taylor commenced working for the business. Mr Taylor was 17 years old at the time of his employment. He was engaged on a casual basis to perform work as a labourer. As an employee of the business, the Award applied to Mr Taylor within the meaning of section 47 of the FW Act. Under the Award, the work performed by Mr Taylor classified him as a Construction Worker CW 1 (level a). Mr Taylor was entitled to be paid $21.58 in respect of each ordinary hour worked[2] with an additional $5.40 as a casual loading[3].[2] Building and Construction General On-site Award 2021 cl 19.1[3] Building and Construction General On-site Award 2021 cl 14.5 Mr Taylor performed approximately two months of work for the respondent’s landscaping business. After 11 October 2020, Mr Taylor ceased working for the business. The respondent paid Mr Taylor a flat rate of $21.88 per hour. For the entire employment period, the respondent paid Mr Taylor a total amount of $1,344.60 by way of the following three payments made through electronic fund transfer:[4] (a)$217.40 on 7 September 2020; (b)$563.80 on 22 September 2020; and (c)$563.80 on 22 September 2020. [4] Statement of Claim page 3, para 6

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Taking all matters into account, I consider a combined aggregate penalty of just under $10,000 is an appropriate response to the conduct which led to the breaches. There is no evidence before the Court which would cause it to conclude that the penalty is unduly crushing or oppressive.CONCLUSION The Court has concluded that there ought be orders in the terms set out in Annexure A to the Ombudsman’s written outline of submissions, with the appropriate penalty being set in the amount of $9,990.00.

Ratio Decidendi

Legal Principle Established

On 27 October 2021, the matter was listed for a directions hearing. There was no appearance by the respondent on this occasion. I vacated the order made by consent on 31 August 2022 concerning the statement of agreed facts and made various procedural orders to enable the matter to be prepared for a contested trial. I am satisfied that these orders were served on the respondent on 29 October 2021 via email. Default judgment and declaration On 9 December 2021, the Ombudsman filed an Application in a Proceeding seeking default judgment against the respondent (“the Default Application”) pursuant to rule 13.05(2)(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021. The Ombudsman sought judgment against the respondents by reason of his failure to comply with the orders made by the Court on 27 October 2021, which required the respondent to file and serve a notice of address for service, response and any defence. The Default Application was supported by an affidavit of Ms Smith, which deposed that the orders made on 27 October 2021 were emailed to the respondent on 29 October 2021. Within that email, the Ombudsman had put the respondent on notice that if he failed to comply with the October 2021 orders it intended to seek default judgment against him. The respondent did not respond to this correspondence. On 10 December 2021, the Ombudsman emailed a sealed copy of the Default Application to the respondent’s personal email address and several days later, had it delivered via courier to the respondent’s residential address. At a Directions Hearing on 14 December 2021, Ms Smith appeared on behalf of the Ombudsman. There was no appearance for or on behalf of the respondent. Upon being satisfied that service of the Default Application was effective, I adjourned the Ombudsman’s Default Application for a further 7 days to ensure that the respondent had an opportunity to engage in the proceeding should he wish to. I made orders that the Ombudsman serve a copy of these orders on the respondent’s email address. In an affidavit Ms Parry, a solicitor acting for the Ombudsman, deposed that a copy of these orders were emailed to the respondent on 14 December 2021. At the hearing for the Ombudsman’s Default Application on 21 December 2021, Ms Parry appeared on behalf of the Ombudsman. Once again, there was no appearance by or on behalf of the respondent. Being satisfied as to service and being satisfied that the statement of claim pleaded a viable cause of action, I granted the Ombudsman the relief sought in its Default Application. I made declarations and orders in the following terms: THE COURT DECLARES THAT:1.The Respondent contravened section 716(5) of the Fair Work Act 2009 (Cth) by failing to comply with the Compliance Notice given to the Respondent on 19 January 2021.2.The Respondent contravened section 536(3) of the Fair Work Act 2009 (Cth) by knowingly giving pay slips to Jaxon Taylor that were false or misleading.THE COURT ORDERS THAT:3.The Applicant serve a copy of these orders within 7 days on the Respondent by way of:a.pre-paid post in a sealed envelope addressed to the Respondent at the Respondent’s address [redacted]; andb.email to ************@hotmail.com.4.The matter is adjourned to 29 April 2022 at 10.15am for a further hearing in respect of the Applicant’s claim for penalties to be imposed on the Respondent for the contraventions declared.5.Evidence in chief on the question of penalty be by way of affidavit6.The Applicant file and serve evidence and submissions relating to penalty by no later than 25 March 2022. 7.The Respondent file and serve evidence and submissions relating to penalty by no later than 8 April 2022.8.The parties have liberty to apply. AND THE COURT NOTES THAT:A.Pursuant to Rule 17.05 of the Federal Circuit and Family Court of Australia (Division 2) Rules 2021, the Court has the power to vary or set aside a judgment or order after it has been entered in circumstances where it was made in the absence of a party.