Fair Work Ombudsman v PTES 928 Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v PTES 928 Pty Ltd [2023] FCA 934  

File number: VID 28 of 2021
Judgment of: SNADEN J
Date of judgment: 11 August 2023
Catchwords: INDUSTRIAL LAW – breach of award and statutory obligations – significant underpayments – pecuniary penalties – agreed contraventions – application of “course of conduct”, “totality”, and “accessorial liability” principles – appropriateness of declaratory relief – no declaratory relief granted – significant penalties imposed
Legislation:

Crimes Act 1914 (Cth), s 4AA

Fair Work Act 2009 (Cth) pt 4‑1, ss 45, 46, 535, 536, 539, 545, 546, 550, 557

Fair Work Regulations 2009 (Cth) regs 3.34, 3.40, 3.46

Waste Management Award 2010

Cases cited:

A & L Silvestri Pty Limited v Construction, Forestry, Mining and Energy Union [2008] FCA 466

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 249 FCR 458

Australian Building and Construction Commissioner v Pattinson (2019) 291 IR 286

Australian Building and Construction Commissioner v Pattinson (2022) 399 ALR 599

Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378

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

Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640

Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) v Milin Builders Pty Ltd [2019] FCA 1070

Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) (2018) 265 FCR 208

Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non‑Indemnification Personal Payment Case) (2018) 264 FCR 155

Fair Work Ombudsman v ACN 052 182 180 Pty Ltd & Anor [2013] FCCA 688

Fair Work Ombudsman v Australian Workers’ Union [2020] FCA 60

Fair Work Ombudsman v Dosanjh [2016] FCCA 923

Fair Work Ombudsman v Lohr (2018) 158 ALD 457

Fair Work Ombudsman v Roach (The Melbourne Quarter Case) [2023] FCA 781

Fair Work Ombudsman v Soleimani & Anor [2014] FCCA 2380

Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) (2018) 260 FCR 68

Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153

Royer v Western Australia (2009) 197 A Crim R 319

Trade Practices Commission v CSR Ltd (1991) ATPR 41‑076

Warramunda Village Inc v Pryde (2001) 105 FCR 437

Whitby v ZG Operations Australia Pty Ltd (No 2) [2019] FCA 201

Division: Fair Work Division
Registry: Victoria
National Practice Area: Employment and Industrial Relations
Number of paragraphs: 171
Date of hearing: 2 February 2023
Counsel for the Applicant: Mr J McKenna
Solicitor for the Applicant: Office of the Fair Work Ombudsman
Counsel for the First and Third Respondents: Ms R Preston
Solicitor for the First and Third Respondents: HR Legal
Counsel for the Second and Fourth Respondents: Mr A Galbraith
Solicitor for the Second and Fourth Respondents: PH Solicitor

ORDERS

VID 28…
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Details
Case
[2023] FCA 934
Decision Date

CaseChat Overview and Summary

The Fair Work Ombudsman, in this instance represented by an officer, brought an action against PTES 928 Pty Ltd, Polytrade, PES, Ms Ho, and Mr Cheng in the Federal Circuit and Family Court of Australia. The central issue was the significant underpayment of wages to employees working at two waste management facilities operated by Polytrade in Victoria. The underpayments occurred despite the employees being classified as level 2 employees under the relevant award and working various shifts including nights, weekends, and public holidays. The court had to determine whether the contraventions of the award and the Fair Work Act 2009 (FW Act) were proven and, if so, what penalties should be imposed on each respondent.

The court examined the legal principles of accessorial liability, the totality principle, and the course of conduct to determine the appropriate penalties. It was established that each respondent was involved in the contraventions to varying degrees. The court concluded that the penalties should be proportionate to the nature and extent of the wrongdoing. The Fair Work Ombudsman sought pecuniary penalties and declaratory relief, but the latter was declined due to its lack of utility. The court imposed substantial penalties on each respondent, taking into account the severity of the breaches and the need for deterrence.

The court found the respondents liable for significant underpayments of wages and imposed pecuniary penalties. The penalties were calculated based on the totality of the contraventions, with a focus on deterrence and ensuring accountability. The penalties were set at $200,375.00 for PES, $138,600.00 for Polytrade, $8,820.00 for Ms Ho, and $27,720.00 for Mr Cheng. These amounts were deemed proportionate to the breaches and intended to serve as a deterrent for future violations.

The final orders required the respondents to pay the specified penalties to the Commonwealth within 28 days. No costs were awarded as per the provisions of the FW Act and no application for costs was made. The decision underscores the importance of compliance with award obligations and the court's willingness to impose significant penalties for serious breaches.

Orders

Orders of the court

1. The first respondent pay pecuniary penalties totalling $200,375.00.

2. The second respondent pay pecuniary penalties totalling $138,600.00.

3. The third respondent pay pecuniary penalties totalling $8,820.00.

4. The fourth respondent pay pecuniary penalties totalling $27,720.00.

5. The penalties referred to in orders 1 to 4 above be paid to the Commonwealth within 28 days.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons that follow, I am satisfied that each of the contraventions that is alleged transpired. I will decline, for want of utility, to grant declaratory relief; but I consider that it is appropriate to (and I will) impose upon the respondents pecuniary penalties in respect of those contraventions as follows, namely:(1)for PES, penalties totalling $200,375.00;(2)for Polytrade, penalties totalling $138,600.00;(3)for the third respondent, penalties totalling $8,820.00; and(4)for the fourth respondent, penalties totalling $27,720.00.BACKGROUND The applicant is the holder of a statutory office. Her standing to bring this action is not controversial and is, in any event, well‑established. At times that are presently relevant, Polytrade operated two waste management facilities in Victoria (perhaps amongst others): one located at Thomas Murrell Crescent, Dandenong; and another located at David Lee Road, Hallam. In connection with both, it engaged PES, which was tasked with supplying labour to the facilities on what the applicant’s amended statement of claim describes as “an on‑hire basis”. The third respondent, Ms Ho, was the sole director, secretary and sole shareholder of PES. She performed the role of PES’s Chief Financial Officer. She also held 10% of the shareholdings in Polytrade. Her husband, the fourth respondent (Mr Cheng), held the other 90%. He was Polytrade’s sole director and secretary. Each of the Relevant Employees was employed by PES to work at one of the two facilities mentioned above. Each of them was engaged on a casual basis, each performed duties that involved the sorting of recyclable materials and each was properly classified as a “level 2” employee for the purposes of the Award. When they performed their work, each was (subject to minor variations into which it is not presently necessary to descend) paid at a flat rate of $22 per hour. That position obtained regardless of when the work was performed, including at night times, on weekends and on public holidays. That arrangement resulted in each of the Relevant Employees receiving less by way of remuneration than the Award entitled him to receive. Those underpayments are the subject of articulation in the applicant’s amended statement of claim of 24 February 2021. There, it is said that PES failed to pay the Relevant Employees various amounts to which they were entitled on account of the work that they performed and the times that they performed it, including amounts referrable to minimum hourly rates, minimum engagement periods, casual loadings, overtime rates, shift loadings, and weekend and public holiday penalties. The amended statement of claim alleges that, over the period spanning February 2018 to October 2019, PES failed to pay to the Relevant Employees amounts due to them under the Award totalling $194,249.70. Although those sums ultimately were paid prior to the commencement of this proceeding, the amended statement of claim nonetheless charges PES with having contravened various provisions of the Award; and, in so doing, with having contravened s 45 of the FW Act (which is the subject of exploration below). Further, it is said that each of Polytrade, Ms Ho and Mr Cheng was involved in all but one of those contraventions, such that (by reason of s 550(1) of the FW Act), each is taken also to have committed equivalent contraventions.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

As with PES, the “totality principle” requires that, before levying multiple penalties, the court should consider whether the total of what is proposed is proportionate to the whole of the wrongdoing in respect of which it is to be imposed. Again, I am satisfied that the amounts set out above are proportionate to the wrongdoing in which Polytrade and Mr Cheng were involved. They must pay heavy prices for it: not merely to ensure that they are brought to account for what they did; but also to serve as a warning to others who might be minded to be similarly involved in egregious Award underpayments. I am satisfied that the imposition upon Polytrade and Mr Cheng of penalties totalling $138,600.00 and $27,720.00, respectively, will achieve that end.CONCLUSIONS I will make orders imposing upon the respondents penalties totalling the amounts set out above in respect of each of them. The amounts so imposed will be made payable to the Commonwealth within 28 days. Section 570 of the FW Act operates to preclude the making of any order for costs and, in any event, none has been sought. None will be made.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.