Fair Work Ombudsman v Sempha Solutions Pty Ltd
[2024] FedCFamC2G 1295
•26 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Sempha Solutions Pty Ltd [2024] FedCFamC2G 1295
File number(s): MLG 2274 of 2024 Judgment of: JUDGE MANSINI Date of judgment: 26 November 2024 Catchwords: INDUSTRIAL LAW — retail industry - failure to comply with compliance notice – application for default judgment against company operating adult retail store trading as La La Land and its sole director – where Respondents have not entered an appearance nor participated in proceedings despite numerous opportunities – default judgment as to contraventions of the Fair Work Act 2009 (Cth) – declarations made – remaining forms of relief sought to be subject of further programming. Legislation: Fair Work Act 2009 (Cth)ss. 550, 716.
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr.13.05 13.06.
General Retail Industry Award 2020 cl. 11, 17, 21,22
Cases cited: Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433
Fair Work Ombudsman v Mobile Food Vans & Trucks Pty Ltd [2021] FCCA 882
Luna Park v Bose [2006] FCA 94
Division: Division 2 General Federal Law Number of paragraphs: 28 Date of hearing: 26 November 2024 Place: Melbourne Solicitor for the Applicant: Australian Government Solicitor The Respondent: No appearance ORDERS
MLG 2274 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: SEMPHA SOLUTIONS PTY LTD (ACN 609 049 443)
Respondent
ORDER MADE BY:
JUDGE MANSINI
DATE OF ORDER:
26 NOVEMBER 2024
THE COURT DECLARES THAT:
1.The First Respondent contravened s.716(5) of the Fair Work Act 2009 (Cth) (Act) by its failure to comply with the statutory compliance notice dated 5 October 2023.
2.The Second Respondent was involved in the contravention declared at 1, within the meaning of s.550(2) of the Act.
THE COURT ORDERS THAT:
3.By 4.00pm on 28 November 2024, the Applicant serve a copy of these declarations and associated reasons on the First Respondent and Second Respondent.
4.By 4.00pm on 3 December 2024, the Applicant file an affidavit of service evidencing service in accordance with order 3.
5.The questions of what (if any) further relief be ordered will be subject of further hearing and programming orders.
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 Mansini
IN SUMMARY
Before the Court is an application by the Fair Work Ombudsman (FWO) in relation to an adult retail business (Sempha Solutions Pty Ltd, operated under the trading name “La La Land” (First Respondent)) which did not comply with a statutory compliance notice.
These reasons explain the declarations made by the Court on default of the Respondents.
THE CLAIM
The FWO filed a statement of claim which plead the essential elements of the contravention of s.716(5) of the Fair Work Act 2009 (Cth) (Act) by the First Respondent and involvement of the Second Respondent within the meaning of s.550 of the Act, as follows.
The First Respondent is and at all relevant times was a company that operated an adult retail store trading as “La La Land”. As of 30 October 2024, an ASIC record reflected that a strike-off action was in progress in relation to the First Respondent company.
The Second Respondent, a Mr Simon Herman, is and was at all relevant times the sole director of the First Respondent and a natural person capable of being sued, responsible for the overall operation and control of the First Respondent company and the retail store trading as La La Land and responsible for ensuring that the First Respondent complied with its legal obligations under the Act.
Between June and October 2023, Fair Work Inspector Sheree Paterson (FWI Paterson) commenced an investigation into the First Respondent’s compliance with Commonwealth workplace laws in relation to a particular employee who was engaged on a casual basis (Employee) (Investigation).
During the course of the Investigation and prior to issue of a statutory compliance notice, the Second Respondent received notice of the Investigation and was invited to provide his version of events and any documents in support. The Second Respondent engaged with FWI Paterson to the extent that he twice requested a telephone call from FWI Paterson.
As a result of the Investigation, FWI Paterson formed a reasonable belief that:
(a)In the period 21 September 2022 to 3 April 2023, the Employee was employed by the First Respondent on a casual basis as a Retail Employee Level 4 as defined in the General Retail Industry Award 2020 (Award), which Award covered and applied to the First Respondent in respect of the employment of the Employee.
(b)The First Respondent had contravened the following clauses of the Award in respect of the Employee during the period 21 September 2022 to 3 April 2023:
(i)clauses 17.1 and 11.1 of the Award by failing to pay the Employee the minimum hourly rate plus a casual loading of 25% in respect of the ordinary hours worked;
(ii)clauses 21.2(c) and (e) of the Award by:
(A)failing to pay the Employee at 175% of the minimum hourly rate (inclusive of the casual loading) for the first 3 hours of overtime worked on Monday to Saturday;
(B)failing to pay the Employee at 225% of the minimum hourly rate (inclusive of the casual loading) for each hour of overtime worked after the first 3 hours of overtime worked on Monday to Saturday;
(C)failing to pay the Employee at 225% of the minimum hourly rate (inclusive of casual loading) for overtime worked on a Sunday; and
(iii)clause 22.1(b) of the Award by:
(A)failing to pay the Employee at 150% of the minimum hourly rate (inclusive of casual loading) for ordinary hours worked after 6.00pm, Monday to Friday;
(B)failing to pay the Employee at 150% of the minimum hourly rate (inclusive of the casual loading) for ordinary hours worked on a Saturday;
(C)failing to pay the Employee at 175% of the minimum hourly rate (inclusive of the casual loading) for all hours worked on a Sunday;
(D)failing to pay the Employee at 250% of the minimum hourly rate (inclusive of the casual loading) for all hours worked on a public holiday (as prescribed in Division 10 of Part 2-2 (the National Employment Standards) of the Act).
On or before 13 October 2023, FWI Paterson gave a statutory compliance notice dated 5 October 2023 to the First Respondent (the Notice), pursuant to s.716(2) of the Act and which met the requirements of s.716(3) of the Act (and is extracted in full at Annexure A of these Reasons). The Notice was delivered to the Second Respondent, who confirmed on 13 October 2023 by telephone and text message with an employee of the FWO that he had received the Notice (as detailed below).
By the aforementioned Notice, the First Respondent was required to take a range of actions to calculate and remedy the direct effects of the identified contraventions and keep a record of same (Specified Action).
Also on 13 October 2023, the Second Respondent corresponded with an employee of the FWO by phone call and text message whereby the Second Respondent confirmed that he had received the Notice and that he was with his lawyer and would like some help understanding the Notice. A telephone conversation was then scheduled for the following Monday, 16 October 2023.
There was further communication between the Second Respondent and the FWO in the period 16 to 30 October 2023, including a reminder by the FWO as to the dates for taking the Specified Action on the Notice.
On 14 November 2023, FWI Paterson sent a letter by email to the Second Respondent advising that the First Respondent had failed to comply with the Notice and invited the Second Respondent to advise within 7 days if the First Respondent had a reasonable excuse for its non-compliance.
On 12 June 2024, an employee of the Australian Government Solicitor, a Ms Moore, sent an email to the Second Respondent. That email enclosed a letter which provided the Second Respondent with a “further and final opportunity to take the actions required by the Compliance Notice” and also forewarned of the commencement of these proceedings should the Notice not be complied with by 19 June 2024.
On 12 June 2024, Ms Moore received an email from the Second Respondent’s email address which stated “I just received this in my email you can contact me on *******888” (phone number redacted).
The representative on the record for the FWO received further emails from the Second Respondent’s email address on 26 June 2024 and 1 July 2024.
On 11 July 2024, the originating application and statement of claim in this matter were accepted for filing.
Since commencement of the proceedings, the Court has received 11 affidavits evidencing service of the originating application and statement of claim and various orders of the Court on the Respondents at the registered business address for the First Respondent and the email address by which the Second Respondent is known to communicate and has communicated with the FWO and the Court.
On 8 November 2024, an application by the FWO for default judgement was accepted for filing.
DEFAULT JUDGEMENT
Since the commencement of the proceedings: the Respondents have not complied with Court orders to file a notice of address for service and file a response and defence to the claim; the Respondents have not attended procedural hearings before the Court convened on 14 August 2024, 30 September 2024 and 12 November 2024; and the Respondents did not attend or participate in the hearing of the matter on 26 November 2024.
Being satisfied that the Respondents were properly on notice of the fact of the proceedings and afforded ample opportunity to participate and to understand the consequences of failure to do so, the hearing on 26 November 2024 proceeded in default of the Respondents pursuant to r.13.06(1)(e) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (Rules).
Rule 13.05(2)(c) of the Rules provides that the Court may give judgement against a respondent to proceedings for relief on default if the proceeding was started by an application supported by a statement of claim and provided that:
(a)the applicant appears entitled to the relief, on the statement of claim; and
(b)the Court is satisfied it has power to grant the relief.
It is well established that, in being so satisfied, the Court does not require proof by way of evidence: Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 (Heerey J) at [3], cited in Luna Park v Bose [2006] FCA 94 (Jacobson J) at [20] .
The relevant principles in relation to default judgment are conveniently summarised in a decision of this Court in Fair Work Ombudsman v Mobile Food Vans & Trucks Pty Ltd [2021] FCCA 882 (O’Sullivan J) at [16] – [18] and I have had regard to the principles set out therein.
The Court is satisfied that the statement of claim filed in this matter and upon which the FWO relies complies with the rules of pleading and properly pleads a cause of action that supports a finding of contraventions of the Act, as follows:
(a)The First Respondent contravened s.716(5) of the Act by its failure to comply with the statutory compliance notice dated 5 October 2023.
(b)The Second Respondent was involved in the First Respondent’s contravention of s.716(5) of the Act, within the meaning of s.550(2) of the Act.
The Court has a broad discretion to make a declaration. I consider this an appropriate case for declaratory relief in relation to each determined contravention, if for no other reason than to record the Court’s disapproval of the contravening conduct.
CONCLUSION
For the above reasons, the Respondents are declared to have contravened the Act.
The Respondents have so far elected not to engage with these proceedings at all. Having regard to the seriousness of the matter, and in all of the circumstances, it is appropriate that the Respondents be afforded further opportunity to consider, prepare and file written evidence and submissions as to the questions of what, if any, remedial orders ought be made and/or pecuniary penalty(ies) ought be imposed for the contraventions. A program will be ordered so that the parties may address the Court about those matters.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansini. Associate:
Dated: 26 November 2024
ANNEXURE A
COMPLIANCE NOTICE
(issued under section 716(2) of the Fair Work Act 2009 (Cth))
Date of Issue: 5 October 2023 Name of Employer: SEMPHA SOLUTIONS PTY LTD ACN: 609 049 443 Director: Simon Paul Herman I, Sheree Paterson, being a duly appointed Fair Work Inspector, reasonably believe that SEMPHA SOLUTIONS PTY LTD (Employer) has contravened terms of the General Retail Industry Award 2020
(Award) as described below. This Compliance Notice requires you to take steps to remedy the contraventions described below.
Rights and obligations under this Compliance Notice1.Failure to comply with this Compliance Notice may contravene a civil remedy provision and render you liable for a civil penalty (unless you have a reasonable excuse). See sections 716(5) and 716(6) of the Fair Work Act 2009 (Cth) (FW Act).
2.You may be liable to a civil remedy if you give false or misleading information or produce false or misleading documents. It is also a serious offence under the Criminal Code (Cth).
3.If you do not comply with this Compliance Notice, the Fair Work Ombudsman may, without further notice, commence legal action against you and/or individuals involved in your failure to comply with this Compliance Notice to recover any outstanding monies which this Compliance Notice requires you to pay and to seek civil penalties.
4.Complying with the Compliance Notice is not an admission that you contravened, or have been found to have contravened, the Award or the FW Act.
5.You may apply to the Federal Court, Federal Circuit Court (Division 2) or eligible State or Territory Court for a review of this Compliance Notice on either or both of the following grounds:
(a) you did not commit the contraventions set out in this Compliance Notice;
(b) this Compliance Notice does not comply with sections 716(2) or 716(3) of the FW Act.
Details of the contraventions
6.The Employer employed *************** (Employee) on a casual basis, as a Retail Employee Level 4.
7.The Employer, between 21 September 2022 and 3 April 2023 (Period), contravened clauses of the Award set out in the table below.
No Clause Details of contravention{s} (a) Clauses
17.1 and
11.1Casual Minimum Rate contravention
failing to pay the Employee the minimum hourly rate plus a casual loading of 25% in respect of ordinary hours worked (Casual Minimum Rate Entitlement).(b) Clauses
21.2(c)
and (e)Casual — first 3 hours Overtime contravention
failing to pay the Employee at 175% of the minimum hourly rate (inclusive of the casual loading) for the first 3 hours of overtime worked on Monday to Saturday
(Casual — first 3 hours Overtime Entitlement).
Overtime is payable for hours worked as specified in clause 21.2(c) of the Award.(c) Clauses
21.2(c)
and (e)Casual — after 3 hours Overtime contravention
failing to pay the Employee at 225% of the minimum hourly rate (inclusive of the casual loading) for each hour of overtime worked after the first 3 hours of overtime worked on Monday to Saturday (Casual — after 3 hours Overtime Entitlement).
Overtime is payable for hours worked as specified in clause 21.2(c) of the Award(d) Clauses
21.2(c)
and (e)Casual Sunday Overtime contravention
failing to pay the Employee at 225% of the minimum hourly rate (inclusive of casual loading) for overtime worked on a Sunday (Casual Sunday Overtime Entitlement).
Overtime is payable for hours worked as specified in clause 21.2(c) of the Award(e) Clause
22.1(b)Casual Evening Penalty contravention
failing to pay the Employee at 150% of the minimum hourly rate (inclusive of casual loading) for ordinary hours worked after 6.00pm, Monday to Friday
(Casual Evening Penalty Entitlement).(f) Clause
22.1(b)Casual Saturday Penalty contravention
failing to pay the Employee at 150% of the minimum hourly rate (inclusive of the casual loading) for ordinary hours worked on a Saturday (Casual Saturday Penalty Entitlement).(g) Clause
22.1(b)Casual Sunday Penalty contravention
failing to pay the Employee at 175% of the minimum hourly rate (inclusive of the casual loading) for all hours worked on a Sunday (Casual Sunday Penalty Entitlement).(h) Clause
22.1(b)Casual Public Holiday Penalty contravention
failing to pay the Employee at 250% of the minimum hourly rate (inclusive of the casual loading) for all hours worked on a public holiday (as prescribed in Division 10 of Part 2−2 (the National Employment Standards) of the FW Act) (Casual PublicHoliday Penalty Entitlement).
Required action under this Compliance Notice
8.In accordance with section 716(2) of the FW Act, I require you by 3 November 2023 to:
Step 1 – calculate and rectify underpayments
(a)in respect of the contravention referred to in row (a) of the table above and in relation to the Employee:
(i)identify the number of hours the Employee worked during the Period in respect of which the Entitlement was required to be paid by the Award (Hours);
(ii)identify the amount the Employer paid to the Employee during the Period in respect of the Entitlement (having regard to the Hours, where applicable);
(iii)calculate the amount the Employer should have paid to the Employee during the Period in respect of the Entitlement (having regard to the Hours, where applicable) and identify the applicable rates of pay within the Period and the period during which each rate applied;
(iv)make a payment to the Employee of the difference between the amount referred to in (ii) and the amount referred to in (iii) immediately above; and
(v)make a record of the information and amounts referred to in (i) to (iii) and the amount of the payment referred to in (iv) immediately above (Underpayment Rectification Information)
(b)repeat the same process described in Step l(a) foreach of1he contraventions referred to in rows (b) to (I) of the two tables above.
Step 2 - Superannuation
(c)calculate any additional superannuation contributions required by clause 20.2 of the Award in respect of the amounts required to be paid to the Employee as a result of Step 1; and
(d)pay such additional superannuation contributions to the chosen Superannuation Fund of the Employee.
Reasonable evidence of steps taken to comply with this Compliance Notice
9.In accordance with section 716(2) of the FW Act, I require you to produce the following reasonable evidence of your compliance with the actions specified in paragraph 8 above:
(a) a schedule that sets out:
(ii)the Underpayment Rectification Information
(iii)the additional superannuation contributions calculated for the Employee and paid to the Employee's Superannuation Fund in accordance with Step 2; and
10.proof that full payment has been made to the Employee as required to be made by Step 1 and Step 2, such as a bank transfer showing the transfer of funds to the Employee and their Superannuation Fund, or a copy of the Employee's payroll records showing the payment(s).
11.The evidence referred to above must be provided to the Fair Work Ombudsman by 13 November 2023 by email ***************@fwo.gov.au or mail at Fair Work Ombudsman PO Box 1269 TRARALGON VIC 3844
12.You may be liable to a civil penalty or other civil remedy under the FW Act if you give false or misleading information or produce false or misleading documents in response to this Compliance Notice. You may also be liable for a criminal offence under the Criminal Code (Cth) if you do so.
[Signature omitted]
Fair Work Inspector
Fair Work Ombudsman
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