Fair Work Ombudsman v Rundle trading as Porkys Garage
[2025] FedCFamC2G 994
•30 June 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Rundle trading as Porkys Garage [2025] FedCFamC2G 994
File number(s): ADG 240 of 2024 Judgment of: JUDGE BROWN Date of judgment: 30 June 2025 Catchwords: INDUSTRIAL LAW – Fair Work – penalty hearing – failure to comply with compliance notice – respondent has failed to defend proceedings with due diligence – liability determined – underpayment of one employee – first time offender – lack of cooperation by the respondent – calculation of penalty – matters to be considered. Legislation: Fair Work Act 2009 (Cth) ss 457, 545(1), 545(2), 546, 716(2), 716(5), 745(1). Cases cited: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Blandy v Coverdale NT Pty Ltd [2008] FCA 1533
FWO v Corporation Sun Pty Ltd [2020] FCCA 2849
FWO v Darna Pty Ltd & Anor [2015] FCCA 709
FWO v Maclean Bay Pty Ltd (No 2) [2012] FCA 557
FWO v Matcraft Pty Ltd [2021] FCCA 272
FWO v Trek North Tours & Anor (No 2) [2015] FCCA 1801
FWO v Yogurberry World Square [2016] FCA 1290
Kelly v Fitzpatrick [2007] FCA 180
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Ponzio v B & P Caelli Construction Pty Ltd [2007] FCAFC 65
Veen v R (No 2) (1998) 164 CLR 465, 472
Division: Division 2 General Federal Law Number of paragraphs: 99 Date of hearing: 14 May 2025 Place: Adelaide Counsel for the Applicant: Mr McMillan Solicitor for the Applicant: Norton Rose Fulbright Counsel for the Respondent: The Respondent did not appear ORDERS
ADG 240 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: BRIAN THOMAS RUNDLE T/AS PORKYS GARAGE
Respondent
ORDER MADE BY:
JUDGE BROWN
DATE OF ORDER:
30 JUNE 2025
THE COURT DECLARES THAT:
A.The Respondent contravened section 716(5) of the Fair Work Act 2009 (Cth) (“the Act”), by failing to comply with the Compliance Notice dated 18 September 2023.
THE COURT ORDERS THAT:
1.Pursuant to sections 545(1) and 545(2)(d) of the Act, Brian Thomas Rundle (“the Employer”) take the steps that were required by the Compliance Notice within 28 days of this order by:
(a)Calculating and paying to Michael hayward (“the Employee”) the outstanding entitlements it was required to by the Compliance Notice;
(b)Calculating and paying superannuation contributions into the Employee’s nominated superannuation fund for additional superannuation contributions required to be paid on the outstanding entitlements referred to in paragraph 1(a) of these Orders;
(c)Producing to the Applicant a schedule outlining the Employer’s calculation of the outstanding entitlements the Employer is required to pay the Employee and the superannuation contributions required to be paid to the Employee’s nominated superannuation fund referred to in paragraph 1(b) of these Orders; and
(d)Providing proof to the Applicant that the outstanding entitlements and additional superannuation contributions as set out in paragraphs 1(a) and 1(b) of these orders have been paid.
2.Pursuant to section 545(1) and 547(2) of the Act, the Employer pay interest calculated in accordance with the applicable pre-judgment interest rate prescribed by the Federal Court of Australia, within 28 days of these Orders, to:
(a)The Employee, on the amounts owed pursuant to paragraph 1(a) of these orders; and
(b)The Employee’s nominated superannuation fund, on any additional superannuation contributions required to be paid pursuant to paragraph (1)(b) of these orders.
3.Pursuant to section 546(1) of the Act, within 28 days of this order the Employer pay a pecuniary penalty to the Commonwealth for the contraventions, in the amount of $7,042.50 (SEVEN THOUSAND AND FOURTY TWO DOLLARS AND 50 CENTS).
4.The applicant have further liberty to apply on 7 day’s notice in the event that any of the preceding orders are not complied with.
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 BROWN:
INTRODUCTION
The Fair Work Ombudsman[1] commenced these proceedings against Brian Thomas Rundle,[2] on 1 July 2024, pursuant to the provisions of the Fair Work Act 2009 (Cth).[3] In general terms, the FWO seeks the following:
·Leave to enter default judgment against the respondent on the basis that he has neither defended the application brought against him with due diligence nor complied with orders of the Court requiring him to file documents.
·The Court make a finding that Mr Rundle has contravened the provisions of section 716(5) of the FWA by failing to comply with a Compliance Notice that he calculate and then pay wages due to one of his employees, Michael Hayward;
·Thereafter, the Court impose a penalty for that contravention pursuant to the civil remedy provisions of the Act.
[1] Herein referred to as “the FWO” or “the Ombudsman”.
[2] Hereinafter referred to as “Mr Rundle” or “the respondent”.
[3] Hereinafter referred to as “the FWA” or “the Act”.
BACKGROUND
The FWO has a statutory responsibility for ensuring compliance, by employers for their relevant employees, with the industrial safety net, created by the Commonwealth Government, pursuant to the relevant provisions of the Act.
Primarily, this objective is achieved through the enforcement of the system of minimum terms and conditions specified in the Modern Award System, created by the Act.[4]
[4] See FWA at section 3.
The FWO is authorised to appoint Fair Work Inspectors to carry out its statutory obligations under the Act. In the current matter, such a Fair Work Inspector, Ms Marilyn Sturgeon, received a complaint from Mr Hayward that he had only been paid a total of $100.00 for 6 months of work whilst in the employ of Mr Rundle.
Mr Rundle was, at the relevant times, a sole trader carrying on an automotive repair and maintenance business called Porkys Garage. It had premises in Pooraka, South Australia.
Mr Rundle employed Mr Hayward between 5 September 2022 and 3 March 2023, a period just short of 6 months, as an apprentice. Mr Hayward worked as a mechanic and his employment was covered by the Vehicle Repair, Services and Retail Award 2020.[5]
[5] Hereinafter referred to as “the Award”.
On 18 March 2023, after he had left the employ of Mr Rundle, Mr Hayward made a request for assistance to the FWO, alerting the Ombudsman that he had not been appropriately paid whilst in the employ of Mr Rundle and a Fair Work Inspector, Marilyn Sturgeon, was subsequently appointed to investigate the matter.
Ultimately, this investigation led to the relevant Fair Work Inspector concluding as follows:
·Mr Hayward had not been paid the minimum wage due to full time employment;
·He had not been paid the minimum wage due to a full time first year apprentice;
·He had not paid the amount due to him for working overtime hours;
·He had not paid the amount due to him for accrued untaken annual leave on the termination of his employment; and
·He had not appropriately paid into Mr Haywards nominated superannuation account.
In these circumstances, Ms Sturgeon issued a compliance notice to Mr Rundle pursuant to the provisions of section 716(2) of the FWA on 18 September 2023. The current proceedings are essentially directed towards determining what penalty should be imposed on Mr Rundle for failing to pay the full amount of monies due to Mr Hayward.
In general terms, the relevant Compliance Notice required the respondent to undertake a number of steps in order to discharge his obligations under the Award; particularly to calculate and then pay the amounts due to Mr Hayward pursuant to said award.
The Compliance Notice was issued on 18 September 2023 and required compliance on or before 20 October 2023. The amount estimated to be owed to Mr Hayward is roughly some $24,000.00 plus other entitlements.[6]
[6] See Affidavit of Ms Marilyn Sturgeon dated 2 April 2025.
Part of the process envisaged by a Compliance Notice is for an employer who is alleged to have remiss in the provisions of an employee’s entitlement is for the employer concerned to calculate the amount due and then pay the sum so calculated to the person concerned.
It is the FWO’s position that Mr Rundle has not complied with his obligations under the Compliance Notice and therefore has contravened the provisions of section 716(5) of the Act, which have necessitated these proceedings.
The Ombudsman further contends that it has given ample notice of these proceedings to Mr Rundle, who has properly been served with them, but has elected not to take part in these proceedings.
Mr McMillan, the solicitor for the FWO has deposed that he emailed a letter to Mr Rundle’s email address on 19 June 2024 informing him of the Ombudsman’s intention to commence proceedings against him in respect of Mr Rundle’s failure to comply with the compliance notice
The maximum penalty, prescribed by the Act, for a breach of section 716(5) of the Act is, at the time of the contravention, $9,390.00. The FWO submits that the appropriate penalty range, for the offending in this case, should fall between 70 to 80% of the maximum penalty – that is between $6,573.00 and $7,512.00.
DEFAULT JUDGMENT
The relevant rules of court – the Federal Circuit and Family Court of Australia Division 2) (General Federal Law) Rules 2021 – grant an applicant an option to commence proceedings by way of an application supported by either an affidavit of evidence or a statement of claim.
On 1 July 2024, the FWO elected to file a statement of claim particularising how it was alleged Mr Rundle had contravened section 716(5) of the Act by failing to comply with the Compliance Notice issued by the relevant Fair Work Inspector.
The relevant application statement of claim was personally served on Mr Rundle, on 5 July 2024 at the Ingle Farm Shopping Centre, in Ingle Farm.[7] The solicitor for the FWO provided with the statement of claim a letter which stated that the matter was to be first listed before the court on 3 October 2023.
[7] See Affidavit of Matthews Stephens filed 22 July 2024
Axiomatically this date was erroneous, and the correct date was 3 October 2024. This was the date endorsed on the filing sheet that the court had attached to the relevant application which was filed with the statement of claim and enclosed in the correspondence served upon Mr Rundle.
There is no evidence that Mr Rundle contacted the court to seek clarification in respect of the apparent discrepancy in the dates arising from what is, to my mind, an obvious typographical error. More significantly, on 24 September 2024, Mr McMillan sent an email to Mr Rundle confirming that the date was indeed 3 October 2024.
Mr Rundle did not appear at court on 3 October 2024 and, in his absence, he was directed to file a notice of address for service with seven day of that date and a response and defence by 24 October 2024.
In these circumstances, the case was adjourned until 4 December 2024. Again, Mr McMillan provided a copy of the relevant order to Mr Rundle at his email address and left a number of voice messages on his telephone service, which were not responded to. Mr McMillan also sought to contact Mr Rundle directly through the telephone number for Porky’s Garage – again to no avail.[8]
[8] See affidavit of Jonathon McMillan filed 16 December 2024
Mr Rundle has not filed the response required of him, nor has he made any other attempts to participate in any of the subsequent mentions of the matter or to take any active part in the proceedings. Accordingly, in a formal sense, his attitude towards the FWO’s application is not known.
However, during a telephone call alleged to occur between Mr Rundle and Ms Sturgeon, he acknowledged that he owed Mr Hayward a sum of money; and that his preference was to pay this directly to him in a lump sum payment, rather than a payment plan.[9] I am satisfied that Mr Rundle has been served with the relevant application and has notice of it but has elected not to take part in the proceedings.
[9] See Affidavit of Ms Marilyn Sturgeon (ibid)
It is the contention of the FWO that Mr Rundle has failed to take any necessary steps in the proceedings, despite having been formally advised of these requirements. I accept this submission. Mr McMillan has assiduously attempted to contact Mr Rundle prior to each court event and formally advised him that the FWO was open to negotiating a set of agreed facts for the court’s consideration and of the significance of his potential cooperation in the calculation of any penalties. It seems to me to be inconceivable that Mr Rundle is unaware of these proceedings and their potential financial implications for him personally.
It is on this basis that the applicant seeks default judgment pursuant to the provisions of Division 13.2 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) 2021.[10]
[10] Hereinafter referred to as “the Rules”.
Rule 13.04 delineates when a person is in default, which includes when a document has not been filed or served; non-compliance with an order of the court in the relevant proceedings; and the proceedings have not been defended with due diligence. If such a default is established, pursuant to the provisions of Rule 13.05(2) the court may give judgment or make any other order against the relevant respondent concerned.
In the present matter, I am satisfied that Mr Rundle is in default and therefore the court can enter judgment against him as sought by the applicant. I am also satisfied that Mr Rundle has been put on notice that the FWO will be seeking a pecuniary penalty against him.
THE EVIDENCE OF FWI STURGEON
Mr Hayward approached the office of the FWO on 18 March 2023. He indicated that he started employment, as an adult apprentice on 4 September 2022, at Porky’s Garage. He indicated that he loved being an apprentice but had encountered difficulties in finding employment due to his deafness.
He further indicated that he had made constant requests for payment of wages and his perception was that he was being taken advantage of. It would appear to be the case that he had earlier worked at Porky’s Garage at an earlier stage of his apprenticeship.
The FWO categorised Mr Hayward as a vulnerable employee due to his mature years and disability. The absence of wages records and payslips was also noted as a concern. A business name search indicated that Mr Rundle was the proprietor of the business name Porky’s Garage.
On 1 August 2023, FWI Sturgeon successfully contacted Mr Rundle to discuss Mr Hayward’s complaint directly with him. Mr Rundle confirmed that he was the sole proprietor of the business and Mr Hayward had been employed by him on the basis that he was an adult apprentice in the third year of a four year apprenticeship.
Mr Rundle further indicated that his former partner (Julie) had been responsible for wages records through a MYOB system but the two of them had been involved in a messy divorce. He confirmed that Mr Hayward had, from time to time, utilised the assistance of an Auslan interpreter.
In the record of interview between him and FWI Sturgeon, which occurred on 1 August 2023, Mr Rundle indicated the following:
·He had agreed to pay Mr Hayward $24.00 per hour, which was slightly higher than the base rate;
·Mr Hayward had worked Mondays to Fridays between 8.30 am and 5.00 pm;
·Mr Hayward had worked one Saturday for 4.5 hours;
·Mr Hayward had worked between 5 September 2022 and 3 March 2025;
·Julie would have the correct records;
·An Auslan interpreter had attended at his workshop to assist Mr Hayward in the required periodic assessment of his apprenticeship;
·He had issued payslips but no payments had been made to Mr Hayward other than a trial payment of $100.00 which he had sent through his bank;
·No superannuation guarantee payments had been made;
·Mr Rundle was not aware how much he owed to Mr Hayward but Julie would know;
·When FWI Sturgeon put it to him that it was 25 weeks at $24.00 per hour, the sum was likely to be $24,216.00, Mr Rundle agreed;
·In these circumstances, Mr Rundle indicated his preference to obtain a loan to pay the sum in full to avoid the matter dragging on.
It is evident from FWI Sturgeon’s evidence that this loan never materialised and, as a consequence, she elected to issue the relevant compliance notice on the basis of the information which had been provided to her. Thereafter, it would appear to be the case that there were a number of telephone conversations between her and Mr Rundle, in which he indicated that he had been in hospital due to internal bleeding and had nearly died.
Concurrent with these discussions, Mr Rundle was asked whether he had considered the calculations which had been made by the FWO regarding what it had assessed Mr Hayward was due in unpaid wages for the relevant period. Mr Rundle advised that it had been hard for him to obtain the foreshadowed loan due to his divorce; hospitalisation; and the fact that he had been unable to work.
FWI Sturgeon has deposed that between 18 September 2023 and 5 December 2023, the FWO’s office contacted or attempted to contact Mr Rundle on 22 occasions. In these circumstances and in the light of the on-going failure to comply with the notice or make arrangements to pay the sum calculated to be due to Mr Haywood, the FWO made the decision to instigate these proceedings.
MATTERS TO BE CONSIDERED
In Fair Work Ombudsman v Matcraft Pty Ltd, Judge Kendall explained the legislative intention of a Compliance Notice, as an alternative to litigation, in the following terms:
As explained in the Explanatory Memorandum to the Fair Work Bill 2008 (Cth), the purpose of s716 of the Act is to provide an alternative to litigation. Section 716 is an informal mechanism whereby the applicant can identify potential contraventions of the Act and seek rectification without an employer having to admit liability.
One of the objects of the Act is to provide accessible and effective procedures to resolve grievances and disputes and provide effective compliance mechanisms. Section 716 encapsulates this objective by allowing employees to make a request for assistance which the applicant can then resolve through the use of s716.[11]
[11] Fair Work Ombudsman v Matcraft Pty Ltd [2021] FCCA 272 at [34]-[35] (Kendall J).
In Fair Work Ombudsman v Trek North Tours & Anor (No 2), Judge Jarrett explained the underlying rationale of the Compliance Notice system in the following terms:
The provision of notices to employers serves a number of purposes, not the least of which is to give the employer an opportunity to deal with the contravention that is being alleged, or, in the case of notices to produce, to provide information which would demonstrate that no contravention of the Act has occurred. The regime set out under s.716 and s.717 of the Act relating to compliance notices represents a regime which would avoid proceedings coming to a court at all if an employer took the steps set out in those sections.[12]
[12] Fair Work Ombudsman v Trek North Tours & Anor (No 2) [2015] FCCA 1801 at [22].
Accordingly, in general terms, the successful implementation of the process envisaged when a Compliance Notice is issued represents a win/win for all concerned in the following terms:
·An underpaid employee gets his/her entitlements expeditiously and as calculated pursuant to all the applicable provisions of the relevant Award.
·An employer is educated about his/her responsibilities under the relevant industrial system without being penalised or forced to incur the costs of indignities of litigation or indeed to be identified as an errant employer; and
·The public purse is spared the cost of bringing expensive proceedings to court.
The failure of the respondent to comply with the relevant notice served upon him engages the provisions of section 716(5) of the Act, which renders it a civil remedy provision if a person fails to comply with a Compliance Notice.
I accept that the evidence arising from the various file notes and records of conversation between FWI Sturgeon and Mr Rundle indicates that from the latter’s perspective the issue of the notice and the resulting proceedings coincided with a period of crisis in his personal life and health.
However, in a formal sense, he has not put this material before the court and the significant amount of wages due to Mr Hayward for around a period of six months remains outstanding. To all intents and purposes, Mr Hayward worked during this period for essentially nothing. There has been no quick fix for him, following his complaint to the industrial regulator on 18 March 2023.
THE LEGAL PRINCIPLES APPLICABLE TO PENALTY HEARINGS
Pursuant to section 546 of the Act, upon finding that the respondent has contravened the Compliance Notice provisions of the Act, the court is authorised to impose a pecuniary penalty.
It may also, pursuant to the provisions of section 545(2) make an order awarding compensation for any loss that a person has suffered because of the contravention. In this case, it seeks an order for the payment of the monies due to Mr Hayward along with interest thereon [see section 457].
It has been said that the calculation of a civil remedy penalty is a process of intuitive synthesis. In Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith Gray J said as follows:
[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.[13]
[13] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [23] (Gray J).
Regardless of these considerations, the fundamental task for the court is to determine, from all the factual circumstances arising, the gravity or seriousness of the offending, which it is called upon to penalise. Again, there is a general agreement between the parties as to the considerations relevant to this task, which has been delineated in a number of decisions of both this Court and the Federal Court.[14] The considerations are as follows:
[14] Mason v Harrington Corporation Pty Ltd [2007] FMCA 7; Kelly v Fitzpatrick [2007] FCA 1080 at [140] (Tracey J); Blandy v Coverdale NT Pty Ltd[2008] FCA 1533 at [23] (Reeves J).
·The nature and extend of the conduct which led to the breaches;
·The circumstances in which the conduct took place;
·The nature and extent of any loss or damage sustained as a result of the breaches;
·Whether there has been similar previous conduct by the respondent;
·Whether the breaches were properly distinct or arose out of the one course of conduct;
·The size of the business enterprise involved;
·Whether or not the breaches were deliberate;
·Whether senior management was involved in the breaches;
·Whether the party committing the breaches has exhibited contrition;
·Whether the party committing the breaches has taken corrective action;
·Whether the party committing the breaches has cooperated with the enforcement authorities;
·The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
·The need for specific and general deterrence.
The court needs to be careful not to apply a formulaic approach to the imposition of penalties or attempt to extrapolate the penalties imposed in one case to the circumstances of another. Each case involving the imposition of a civil penalty warrants an idiosyncratic approach and a careful analysis of all relevant circumstances. As was stated in Australian Ophthalmic Supplies:
Penalties are not a matter of precedent. The choice of penalty must be dictated by the individual circumstances of a case, not by a line by line comparison with another case.[15]
[15] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [12] (Graham J).
Clearly the checklist, as enumerated above, is useful. However, it is not to be regarded as an exhaustive, strict, list of factors to be considered. The ultimate control on any sentence is that is must be proportionate to the offence committed. A court is not permitted to impose a sentence greater than is warranted by the objective circumstances of the offending.[16]
[16] Veen v R (No 2) (1988) 164 CLR 465, 472 (Mason CJ, Brennan, Dawson and Toohey JJ).
However, in the context of the significant interest the public has in ensuring that employees are paid their proper entitlements and are accorded the protection of the industrial safety net envisaged by the legislature, the court cannot lose sight of the importance of deterrence, both in a specific and general sense.
Penalties have to be fixed at a meaningful level, not set at a level at which their imposition, on an errant employer, can be seen as an acceptable cost of doing business for the employer. In short, penalties must hurt so that others who are considering cutting corners, so far as the payment and protection of their employees are concerned, will be deterred from doing so.
In the recent case of Australian Building and Construction Commissioner v Pattinson,[17] the High Court discussed the inherent problems likely to arise when principles of retributive sentencing, relevant to the criminal law, are applied in civil penalty proceedings.
[17] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13.
In this context, the High Court rejected the principle of proportionality being applied to the calculation of penalties in the civil sphere. Essentially, the High Court indicated the principle that the maximum penalty should be reserved only for the worst or most egregious examples of the applicable offence did not apply in civil penalty proceedings.
In addition, the High Court indicated that the Primacy of deterrence is the objective of any civil penalty regime. As such a sentencing court, in a civil penalty matter, is required to impose a penalty which is proportionate in the sense that is strikes a reasonable balance between deterrence and what is described as oppressive severity.[18]
[18] Ibid at [41].
In this context, the essential purpose of Compliance Notices must be considered. As indicated above, prompt compliance with their terms can result in a win/win situation for all concerned – the industrial regulator and the public purse is not put to the expense of a hearing; an underpaid employee can be reimbursed promptly; and an errant employer is spared the bother and embarrassment of public prosecution, and is given an opportunity to learn about and rectify past failings for the good of all concerned.
DISCUSSION
Nature, circumstances, and deliberateness of the contravening conduct
Given Mr Rundle’s non-involvement with the case, other than through his various conversations with FWI Sturgeon and her colleagues at the FWO, it is not possible to put the various circumstances surrounding the failure to comply with the relevant compliance notice in a fully informed context.
On the one hand, it must be the case that Mr Hayward was paid only a token amount for the approximately six months of his employment at Porky’s Garage. He must be regarded as a vulnerable employee given his deafness and the fact that he required work to complete his apprenticeship.
This is not a case of some modest underpayment because of a lack of understanding of the complexity of the applicable modern award or some other exemplar of inadvertence. In simple terms, Mr Hayward did not receive his wages not withstanding his request that he be paid and Mr Rundle’s clear appreciation that he should be paid.
Given the period of time involved and the close to total failure to pay the wages due, this must be regarded as an extreme example of wage exploitation. It is also clear that, despite numerous promises to make good the loss involved, Mr Rundle was incapable of making any rectification in respect of what he owed Mr Hayward.
On the other hand, it is apparent the Porky’s Garage is a mum and dad operation with Mr Rundle being on the tools and Julie on the books. With their apparent separation and the later illness of Mr Rundle, neither fact which has been properly established by Mr Rundle, it would appear to be the case that the wheels have fallen off the business. In these circumstances, it is hard not to feel some level of sympathy for Mr Rundle.
However, the fact remains that Mr Hayward was underpaid and not be a little and every attempt has been made to assist Mr Rundle to make good the sum. The amount estimated to be owed to Mr Hayward is roughly $24,000.00, which I accept must be a significant sum for Mr Hayward, given this was his apparent means of financial support for a period of six months. Up to this stage, the only payment made to him by Mr Rundle is $100.00.
At the present time, just over 2 years after ceasing employment for Mr Rundle and the compliance notice being issued, these due wages are still outstanding. In these circumstances the matter must be regarded as being of a serious nature.
The evidence supports the finding that Mr Rundle was aware of the Compliance Notice and the obligation to comply with it. I am satisfied that the FWO has made significant attempts to assist Mr Rundle, both before and after the issue of the Compliance Notice, to assist him to make the required payments to Mr Hayward and so avoid these proceedings.
I am also satisfied that there has been a failure to comply with the minimum standards provided by the Award which was applicable to Mr Rundle’s employment of Mr Hayward. As such, it is a serious matter that Mr Rundle has not complied with the relevant notice and Mr Hayward’s wages remain outstanding.
Clearly, in my view, the failure of Mr Rundle to take part in these proceedings or to abide by his undertaking to make good Mr Hayward’s wages before the FTC period expires, demonstrates a lack of formal contrition on Mr Rundle’s part. I accept that he did acknowledge his conduct orally to FWI Sturgess.
As a consequence of Mr Rundle failure to take part in these proceedings, I have no comprehensive level of knowledge as to the size of his enterprise or its current financial viability. The tone of his correspondence with the FWO is that it is struggling, which is the inferential explanation as to why he has not been more proactive in regard to his engagement with the FWO.
I accept, however, that his business is to be characterised as a small business. It would not be unreasonable to deduce that Mr Rundle was heavily dependent upon Julie to attend to administrative matters relating to its operation and with their separation, such things as pay role and the like descended into chaos.
However, in general terms, the size of the business concerned cannot be utilised as an excuse for a wholesale failure to adhere to minimum wage standards and it remained Mr Rundle’s obligation to ensure that his employee was paid as required and in Julie’s absence, if Mr Rundle could not attend to these matters himself, it was incumbent on Mr Rundle to retain someone who had such a capability. These issues may explain the circumstances leading up to the breach but cannot excuse it.
In these circumstances, counsel for the FWO, in his written submissions, relies on the following passage from Judge Jarrett (formerly of this court) as follows: and Judge Whelan respectively:
The obligation to comply with the Fair Work Act and, in particular, s.716 falls just as heavily on small corporations and small businesses – and individuals, for that matter – as it does on large employers or businesses. Put shortly, one cannot shirk one’s responsibilities imposed by law simply because one might be described as a “small business” or because the business has a particular size. It is incumbent on all employers to comply with the requirements of the Fair Work Act.[19]
[19] Fair Work Ombudsman v Extrados Solutions Pty Ltd [2014] FCCA 815 at [10]
In addition, in Kelly v Fitzpatrick, Whelan J relevantly noted that the size of an employer is no excuse for a failure to comply with the FW Act and stated:
…no less than large corporate employers, small businesses have an obligation to meet minimum employment standards and their employees, rightly, have an expectation that this will occur. When it does not it will, normally, be necessary to mark the failure by imposing an appropriate monetary sanction. Such a sanction “must be imposed at a meaningful level.[20]
[20] Kelly v Fitzpatrick [2007] FCA 1080 at [30]
As I have already indicated, although it must be the case that the difficulties faced by Mr Rundle in operating what seems to have become a one person enterprise, after Julie had left, must precipitate feelings of sympathy for him, such feelings cannot be utilised to diminish the seriousness of the breach so far as Mr Hayward is concerned.
I accept that the FWO has made several attempts to assist Mr Rundle to comply with the notice issued to him. However. the evidence is unequivocal that no actual efforts at rectification of the non-payment to Mr Hayward have been made on Mr Rundle’s part. This is the most significant feature of the case.
In these circumstances, there is little evidence of any contrition on Mr Rundle’s part or any indication that he has learnt a salutary lesson as a result of these proceedings against him. As such, his conduct must be approached on the basis that it represents a complete disregard for both his obligations, as an employer, and the authority of the FWO, as the industrial regulator.
Deterrence
Deterrence has two aspects – general deterrence directed towards the community as a whole, and specific deterrence directed towards the individual concerned whose conduct is to be sanctioned. As the High Court has recently indicated, issues of deterrence must be accorded primacy in the imposition of any civil penalty.
In Fair Work Ombudsman v Darna,[21] Judge Hartnett said as follows in respect of the importance of the Compliance Notice process in the industrial regulatory system in this country:
The Explanatory Memorandum to the Fair Work Bill 2008 (Cth) provides that compliance notices were designed to be another option to deal with non-compliance instead of pursuing court proceedings. It was to be a less costly and less time consuming procedure. Section 716 of the FW act allows a person to whom a compliance notice is issued an opportunity to rectify an underpayment without being subject to civil remedy provisions. The First Respondent’s failure to comply wit the Compliance Notice issued has, in these proceedings, caused the Applicant and the Court to spend time and public funds in dealing with civil remedy proceedings which would not have been necessary had compliance occurred.[22]
[21] Fair Work Ombudsman v Darna Pty Ltd & Anor [2015] FCCA 709
[22] Ibid at [11].
As previously indicated, the purpose of a Compliance Notice is to provide a mutually beneficial outcome for all of the parties concerned. An employee gets what is due to him or her promptly; an employer avoids costly legal proceedings and the societal stigma of having a conviction recorded; and the industrial regulator avoids the expense of having to commence litigation to ensure compliance with the industrial safety net. As a consequence, the general public benefits from the Compliance Notice system.
In the current matter, the Compliance Notice process has not achieved any of these desirable outcomes. This must be a significant consideration both in terms of general deterrence and specific deterrence to Mr Rundle personally. Mr Hayward remains unpaid for six months of his labour.
To be able to enforce the terms of modern awards, Fair Work Inspectors must be able to exercise their compliance powers effectively through investigation and then rectification. When there has been a concerted non-compliance with a Compliance Notice issued by a Fair Work Inspector, the court needs to indicate that such non-compliance will be regarded as a serious matter by reference to the quantum of any penalty imposed.
I accept that the failure to comply with a Compliance Notice has the potential to undermine the entire purpose of the relevant statutory regime. If an employer does not accept the contents of any Compliance Notie served upon it, the regime provides formal mechanisms of review.[23]
[23] Fair Work Ombudsman v Corporation Sun Pty Ltd [2020] FCCA 2849 at [63] (Kendall J).
In Fair Work Ombudsman v Maclean Bay Pty Ltd (No 2),[24] Marshall J said as follows:
It is important to ensure that the protection afforded by the Act to employees are real and effective and properly enforced. The need for general deterrence cannot be understated. Rights are a mere shell unless respected.[25]
[24] Fair Work Ombudsman v Maclean Bay Pty ltd (No 2) [2012] FCA 557.
[25] Ibid at [29].
In imposing a penalty to reflect general deterrence, the court must impose fines that cannot be seen by others as the cost of doing business.[26] The role of general deterrence in fixing appropriate penalty is demonstrated by was lander J said in Ponzio v B & P Caelli Constructions Pty Ltd,[27] namely:
In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend…. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by likeminded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty (citations omitted).
[26] Fair Work Ombudsman v Yogurberry World Square [2016] FCA at [27] (Flick J).
[27] Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65 at [93] (lander J).
In my view, it is important that employers recognise that Compliance Notices are significant and are thus encouraged to manage their business so that errors, including innocent ones, can be rectified quickly and cheaply for the benefit of both business and employee. These considerations are applicable to both large and small employers.
In this context, I consider that I must be careful to avoid placing undue emphasis on the personal crisis to which Mr Rundle has alluded in his conversation with FWI Sturgeon, to diminish the gravity of his conduct. In particular, other small businesses should not consider that they can utilise administrative failings in their businesses, as being factors that can diminish the gravamen of a failure to comply with section 715 notices served upon them.
In addition, in terms of the application of general deterrence, it is important for the court to note the nature of the industry in which this non-compliance with a statutory notice arose. The automotive repair and maintenance industry is frequently one which operates in dispersed and suburban and regional locations throughout this country. As such it is not amenable to easy regulation or organisation.
These factors render its workforce more vulnerable to exploitation through non-compliance with the terms of any applicable awards than other more organised groups of employees. In addition, in this context, apprentices who require employment to complete vocational qualifications may also be susceptible to exploitation by unscrupulous employers.
In this context, counsel for the FWO relied on statistical material relating to complaints received by it in respect of the Automotive Repair and Maintenance Industry for the period from July 2022 to June 2024 regarding compliance with workplace laws in the industry. This shows that a total of 44% of the alleged contraventions raised in requests for assistance lodged with the FWO in the Industry concerned wages and conditions; and the FWO issued a total of 64 compliance notices to employers in the Industry, being 1.3% of all compliance notices issued by the FWO.
Accordingly, in general terms, the automotive repair industry does not appear to be awash with employers who are non-compliant with directives issued by the FWO but where the industrial regulator is engaged with the industry it is very often in relation to wage issues. I take these matter into account in a broad sense.
It is currently unclear whether Porkys Garage is still trading. However, the FWO submit that the employer’s ABN remains registered and active and there is no prohibition on the Employer from engaging employees in the future.
What are the implications of this for the potential employment of other individuals, either on a casual basis or as apprentices, is not clear to me. However, in the event that Mr Rundle is or does intend to employ others in the future, the penalty must be set at a sufficiently high level to avoid future breaches of the Act in the future.
In my view, the most significant aggravating factor is the fact the Mr Hayward, despite complaining to the FWO and action being taken against Mr Rundle, remains out of pocket so far as his wages are concerned. In my view, this calls for the imposition of a significant penalty.
THE CALCULATION OF PENALTIES
As previously indicated, the maximum penalty available for the offences is $9,390.00. The FWO asserts that the seriousness of the offending warrants the imposition of a penalty in the high range of between 70% and 80% of this figure.
In this context, I note that Mr Rundle is not previously known to the FWO and cannot be regarded as a repeat offender or one whose intransigence requires special censure. Ordinary rules of sentencing require the most significant penalties are reserved for the most serious offenses.
The main difficulty in this case arises from the fact that Mr Rundle has failed to cooperate with the process and so little is known of his individual circumstances. However, what is clear is the nature of the circumstances which led to the issue of the compliance notice and what happened afterwards.
In essential terms, Mr Rundle agreed to employ Mr Hayward as an apprentice mechanic at an agreed rate of pay of $24.00 per hour and for a period of around six months he worked on a full-time basis and was paid nothing.
When the matter was raised with him by the FWO, Mr Rundle acknowledged this state of affairs and indicated a willingness to rectify it but nothing concrete occurred. The FWO exercised forbearance and endeavoured to provide what support it could but ultimately lost its patience and the current proceedings were initiated, which Mr Rundle has ignored.
I acknowledge that there are indications of Mr Rundle facing challenging circumstances in the operation of his business but, in my view, the factual context which the proceedings have precipitated must be regarded at the upper level of seriousness. In essential terms, the regulatory system directed towards ensuring a vulnerable employee receives his wage entitlements has totally failed. Accordingly, a significant penalty must be imposed for reasons of both general and specific deterrence.
I consider that a penalty of 75% of the maximum is an appropriate one, which on my calculations is a figure of $7,042.50. I will make the declarations sought by the FWO and require the respondent to reimburse Mr Hayward the sums due to him and make the other orders and declarations as sought by the FWO.
For all these reasons the orders of the Court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding ninety-nine (99) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 30 June 2025
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