Fair Work Ombudsman v Schneider

Case [2022] FedCFamC2G 478

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Schneider [2022] FedCFamC2G 478

File number(s):

MLG 2730 of 2021

Judgment of:

JUDGE MANSINI

Date of judgment:

20 June 2022

Catchwords:

INDUSTRIAL LAW – FAIR WORK – application for pecuniary penalty following default judgment – multiple contraventions of ss.716(5) and 536(1) of the Fair Work Act 2009 (Cth) – where s.536(1) contraventions constitute a single course of conduct – not appropriate to group contraventions – assessment of relevant considerations – penalty ordered pursuant to s.546(1) – where s.546(3) provides that the Court may order payment in part to the Commonwealth, a particular organisation or a particular person.

Legislation:

Crimes Act 1914 (Cth) s 4AA.

Fair Work Act 2009 (Cth) ss 12, 14, 30D, 536(1), 549, 546(1), 546(2), 557, 716(2), 716(5).

Cases cited:

Australian Building and Construction Commissioner v Pattinson [2019] FCA 1654

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

Australian Opthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCA 8

Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97

Fair Work Ombudsman v Maclean Bay Pty Ltd (No 2) [2012] FCA 557

Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301

Fair Work Ombudsman v Tester [2021] FCCA 771

Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53

Trade Practices Commission v CSR Ltd [1990] FCA 762

Markarian v The Queen [2005] HCA 25

Wong v The Queen [2001] HCA 64

Division:

Division 2 General Federal Law

Number of paragraphs:

61

Date of last submission/s:

2 June 2022

Date of hearing:

2 June 2022

Place:

Melbourne

Solicitor for the Applicant:

Office of the Fair Work Ombudsman

The Respondent:

No appearance by or on behalf of the Respondent

ORDERS

MLG 2730 of 2021

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

FAIR WORK OMBUDSMAN

Applicant
AND:

JESSICA LEE SCHNEIDER

Respondent

ORDER MADE BY:

JUDGE MANSINI

DATE OF ORDER:

20 JUNE 2022

THE COURT ORDERS THAT:

1.Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) (the Act), Ms Jessica Lee Schneider (Respondent) pay a pecuniary penalty totalling $6,660 in respect of:

(a)the contravention of section 716(5) of the Act in relation to the Harvey Compliance Notice;

(b)the contravention of section 716(5) of the Act in relation to the Stevensen Compliance Notice; and

(c)the contraventions of section 536(1) of the Act in relation to the failures to give payslips to Ms Harvey and Ms Stevensen, which are taken to be a single course of conduct pursuant to section 557 of the Act.

2.The penalty in Order 1 be paid to the Fair Work Ombudsman (FWO) within 28 days of the date of this order.

3.The penalty received in accordance with Order 2 be distributed by the FWO within 90 days of payment being made by the Respondent as follows:

(a)$1,400 to Ms Harvey;

(b)$230 to Ms Stevensen; and

(c)the remainder…

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AGLC
Fair Work Ombudsman v Schneider [2022] FedCFamC2G 478
Case
[2022] FedCFamC2G 478
Decision Date

CaseChat Overview and Summary

In the Federal Circuit and Family Court of Australia, the Fair Work Ombudsman (FWO) brought proceedings against Schneider, a sole trader and employer, for multiple contraventions of the Fair Work Act 2009 (Cth). The primary issues before the Court were the determination of the appropriate pecuniary penalties for Schneider’s contraventions of the Act, specifically sections 716(5) and 536(1). Schneider had failed to comply with compliance notices issued in relation to two employees, Ms. Tiana Harvey and Ms. Charli Stevenson, and had also failed to provide pay slips within the required timeframe.

Schneider, having been absent from and not participated in the proceedings, had already been found in default by the Court, which made declarations of contraventions and issued orders for compliance and interest payments. The Court then proceeded to determine the appropriate pecuniary penalties for the identified contraventions. In considering the penalties, the Court assessed the nature of each contravention separately, noting that the contraventions under section 536(1) were treated as a single contravention due to their arising from a single course of conduct, while the contraventions under section 716(5) were treated as separate. The Court also examined whether the contraventions could be grouped together but concluded that there was no evidence to suggest a single transaction or decision had led to the separate contraventions.

The Court determined that each contravention warranted a separate penalty, applying the maximum penalties allowable under the Act. The maximum penalty for each contravention of section 716(5) was 30 penalty units, while the contraventions under section 536(1) were treated as a single contravention, attracting a maximum penalty of 60 penalty units. After considering the relevant circumstances, including Schneider's history of non-compliance and the seriousness of the contraventions, the Court imposed the maximum penalties for each contravention.

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

On 8 February 2022, his honour Judge McNab (as he then was) entered default judgment in which the Court:(a)made declarations that the Respondent had contravened ss.716(5) and 536(1) of the Fair Work Act 2009 (Cth) (Act); (b)made orders pursuant to s.545(1) of the Act stipulating that the Respondent was to take certain steps that were required by the compliance notices, calculate and pay any superannuation contributions and prepare a schedule outlining calculation of the outstanding entitlements and pay and superannuation, provide proof that outstanding amounts were rectified, pay interest; and(c)made orders for hearing of the FWO’s application for pecuniary penalty,(Default Judgment). These reasons address the remaining question of the appropriate pecuniary penalty (if any) to be imposed on the Respondent for its contraventions. PROCEDURAL CONTEXT On 25 October 2021 these proceedings were commenced. On 13 December 2021, the Respondent consented to orders for programming including filing of a notice of address for service and defence but was thereafter absent from and did not participate in the proceedings. On 8 February 2022, the Court declared that:1.The Respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the requirements of:(a)a compliance notice in regards to employee Ms Tiana Harvey issued to the Respondent on 19 March 2021 pursuant to s 716(2) of the FW Act (Harvey Compliance Notice); and(b)a compliance notice in regards to employee Ms Charli Stevenson issued to the Respondent on 19 March 2021 pursuant to s 716(2) of the FW Act (Stevenson Compliance Notice).2.A declaration that the Respondent contravened s 536(1) of the FW Act by failing to provide a payslip within one working day of paying an amount:(a) to employee Ms Harvey in relation to performance of work; and(b) to employee Ms Stevenson in relation to performance of work.(sic.) Also on 8 February 2022, the Court ordered that:3.Pursuant to s 545(1) of the FW Act, the Respondent take the steps that were required by the Harvey Compliance Notice, within 28 days of this order, by:(a)calculating and paying to Ms Harvey the outstanding entitlements she was required to pay to Ms Harvey, as required by the Harvey Compliance Notice;(b)calculating and paying any superannuation contributions into Ms Harvey’s nominated superannuation fund for any additional superannuation contributions required to be paid on the outstanding entitlements referred to in order 3(a) above; and(c)preparing and producing to the Applicant a schedule outlining her calculation of the outstanding entitlements she was required to pay to Ms Harvey and any superannuation contributions required to be paid to Ms Harvey’s nominated superannuation fund referred to in orders 3(a) and 3.(b) above and providing proof to the Applicant that the outstanding amounts were rectified.4.Pursuant to s 547(2) of the FW Act, the Respondent pay interest to Ms Harvey on the amounts owed pursuant to order 3 above.5.Pursuant to s 545(1) of the FW Act, the Respondent take the steps that were required by the Stevenson Compliance Notice, within 28 days of this order, by:(a)calculating and paying to Ms Stevenson the outstanding entitlements she was required to pay to Ms Stevenson, as required by the Stevenson Compliance Notice;(b)calculating and paying any superannuation contributions into Ms Stevenson’s nominated superannuation fund for any additional superannuation contributions required to be paid on the outstanding entitlements referred to in order 5.(a) above; and(c)preparing and producing to the Applicant a schedule outlining her calculation of the outstanding entitlements she was required to pay to Ms Stevenson and any superannuation contributions required to be paid to Ms Stevenson’s nominated superannuation fund referred to in orders 5.(a) and (b) above and providing proof to the Applicant that the outstanding amounts were rectified.6.Pursuant to s 547(2) of the FW Act, the Respondent pay interest to Ms Stevenson on the amounts owed pursuant to order 5 above.7.The Applicant file and serve an outline of submissions and any affidavit evidence in respect of penalty by no later than 4.00pm on 28 April 2022.8.The Respondent file and serve an outline of submissions and any affidavit evidence in respect of penalty by no later than 4.00pm on 27 May 2022.9.The Applicant file and serve any reply to the Respondent’s evidence and submissions by no later than 4.00pm on 3 June 2022.10.The proceeding be listed for Penalty Hearing in the Federal Circuit and Family Court of Australia at Melbourne on 8 June 2022 at 10.00am.11. The parties have liberty to apply on three days’ notice.12.The Applicant serve a copy of these Orders on the respondent as soon as practicable.(sic.)

Ratio Decidendi

Legal Principle Established

I consider the present matter in light of those well-established principles.CONSIDERATIONIdentify each separate contravention The present case involves four contraventions of the Act by the Respondent being a sole trader and the employer.[15] Specifically: two contraventions of s.716(5) (in relation to the failures to comply with the Harvey Compliance Notice and the Stevensen Compliance Notice) and two contraventions of s.536(1) (in relation to the failures to provide a payslip to Ms Harvey and to Ms Stevensen within one working day of payment in relation to work performed). [15] A “national system employer”, see s.14 and s.30D of the Act.Course of conduct I accept the FWO’s contentions that: the contraventions of s.536(1) are to be treated as arising out of “a single course of conduct” pursuant to s.557 of the Act; and that s.716(5) is not a civil remedy provision covered by s.557(2) of the Act. Accordingly, the two contraventions of s.536(1) are taken to be a single contravention for the purposes of assessment of penalty and the two contraventions of s.716(5) each attract a separate penalty. Common elements In Fair Work Ombudsman v Tester the Court considered the discretion to group separate contraventions together in the context of an employer’s failure to comply with two compliance notices and ultimately held it was not appropriate in that case:…the Court has a discretion to group separate contraventions together where the contraventions may be said to overlap with each other or involve the potential double punishment of a respondent for the same or substantially similar conduct. The onus to demonstrate such overlap or commonality of factual substratum is on the respondent and there is no evidence before the Court that the respondent’s failure to comply with the two notices arose from the one transaction or decision such that they should be grouped together. [16][16] Fair Work Ombudsman v Tester [2021] FCCA 771 at [14]-[15]. In the present case, the Compliance Notices were issued on the same date. But each notice related to different employees engaged under different classifications of the Award and required the Respondent to take action specific to each employee and the contraventions identified therein. The obligations imposed by each notice were separate and distinct. The Respondent has not appeared or made any attempt to discharge its onus in this regard. On the materials before the Court, there is no basis on which to be satisfied that the Respondent’s decisions not to comply with the Harvey Compliance Notice and not to comply with the Stevensen Compliance Notice constituted a single transaction or decision. In this case, it is appropriate that each of the three contraventions attract a separate penalty. Fix an appropriate penalty for each single or group contravention, taking into account all relevant circumstances At the relevant times, a penalty unit was $222.[17] Accordingly, the maximum penalty applicable to the Respondent is one of $6,660 or 30 penalty units for each contravention of s.716(5) and $13,320 or 60 penalty units for contraventions of s.536(1) of the Act which are taken to be a single contravention for present purposes (ss.539 and 546(2)). [17] See s.12 of the Act and s.4AA of the Crimes Act 1914 (Cth).