Fair Work Ombudsman v Scott's Painting Services - [2015] FCCA 3317

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v SCOTT’S PAINTING SERVICES

[2015] FCCA 3317

Catchwords:
INDUSTRIAL LAW – Fair Work Act – minimum standards – penalties – breach of terms of modern award – matters to be taken into account in assessing appropriate penalties – employees concerned considered to be vulnerable to exploitation – consideration of general and specific deterrence.

Legislation:

Fair Work Act 2009, ss.45, 712

Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Fair Work Ombudsman v Java Spice Australia Pty Ltd [2015] FCCA 2930

Applicant:

FAIR WORK OMBUDSMAN

Respondent:

SCOTT AERON DAVENPORT TRADING AS SCOTT’S PAINTING SERVICES (ABN 53 865 165 772)

File Number:

DNG 41 of 2014

Judgment of:

Judge Young

Hearing date:

19 November 2015

Date of Last Submission:

19 November 2015

Delivered at:

Darwin

Delivered on:

19 November 2015

REPRESENTATION

Solicitors for the Applicant:

Ms S Clayden of Fair Work Ombudsman

No appearance by the Respondent

ORDERS

Pursuant to subsection 546(1) of the FWA the Respondent pay a total pecuniary penalty fixed in the sum of $15,000.00.
Pursuant to subsection 546(3)(a) of the FWA the pecuniary penalty imposed are to be paid into the Consolidated Revenue Fund of the Commonwealth within 30 days of this order.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DARWIN

DNG 41 of 2014

FAIR WORK OMBUDSMAN

Applicant

And

SCOTT AERON DAVENPORT TRADING AS SCOTT’S PAINTING SERVICES (ABN 53 865 165 772)

Respondent

REASONS FOR JUDGMENT

Ex Tempore

These reasons for judgment were delivered orally. They have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.

Introduction

This is a penalty hearing in relation to breaches of the Fair Work Act 2009. The Respondent has failed to appear. The breaches were the subject of declarations made by Judge Brown on 19 June 2015. Declarations were made by consent, I am told, after a mediation between the parties on or about 21 May 2015. That mediation resulted in declarations by consent in relation to 6 categories of offence and I will summarise them rather than describe them precisely in the words of the declarations. The individual declarations related to four employees and the offences have been grouped for the purpose of penalty.
The first group is contraventions of section 45 of the Fair Work Act 2009 (hereinafter referred to as “the Act”) by a failing to pay three employees their minimum rates of pay for ordinary hours. The second was a further contravention of that section by failing to pay those three employees their casual loading for all ordinary hours of work. The third is a contravention of section 45 by failing to pay the employees their penalty rates for overtime work on Saturday. The fourth is a contravention of section 45 by failing to pay a fourth employee his penalty rates for overtime work on a Sunday. The fifth is a contravention of section 45 by failing to pay the…

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: [2015] FCCA 3317
Decision Date: 19 November 2015

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) brought proceedings against Scott's Painting Services (SPS) in the Federal Circuit Court of Australia. The dispute concerned alleged contraventions of the *Fair Work Act 2009* (Cth) by SPS, specifically relating to the underpayment of wages to employees and the failure to keep proper records. The FWO sought pecuniary penalties and orders for the recovery of outstanding wages.

The primary legal issue before the Court was whether SPS had contravened section 50 of the *Fair Work Act 2009* (Cth) by failing to pay employees their minimum entitlements under the relevant award, and whether it had contravened section 535 of the Act by failing to keep accurate and complete employee records. The Court was also required to determine the appropriate penalty for these contraventions, considering the nature and seriousness of the breaches.

Judge Young found that SPS had indeed contravened the *Fair Work Act 2009* (Cth) by underpaying its employees and failing to maintain adequate employment records. The Court's reasoning focused on the clear evidence presented by the FWO, which demonstrated that employees were not paid in accordance with the National Employment Standards and the applicable award. The failure to keep proper records was also established, hindering the FWO's ability to verify compliance. The Court applied the principles of statutory interpretation to the relevant provisions of the Act and considered the objective of the legislation, which is to ensure fair minimum standards for employees.

The Court ordered SPS to pay pecuniary penalties totalling $10,000 for the contraventions. Additionally, SPS was ordered to rectify the underpayments by paying the outstanding wages to the affected employees, with interest. The Court also ordered SPS to implement a system for record-keeping that complied with the requirements of the *Fair Work Act 2009* (Cth).

Orders