Fair Work Ombudsman v Siner Enterprises Pty Ltd
[2024] FedCFamC2G 893
•4 September 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Siner Enterprises Pty Ltd [2024] FedCFamC2G 893
File number(s): PEG 123 of 2013 Judgment of: JUDGE VASTA Date of judgment: 4 September 2024 Catchwords: INDUSTRIAL LAW – pecuniary penalty – enforcement of pecuniary penalty Legislation: Fair Work Act 2009 (Cth) - s570(2)
Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2021 (Cth) – r 25.11
Cases cited: Fair Work Ombudsman v Construction, Forestry and Maritime Employees Union (The M1 Yatala Exit 41 case) [2024] FedCFamC2G 340. Division: Division 2 General Federal Law Number of paragraphs: 31 Date of hearing: 4 September 2024 Place: Perth Solicitor for the Applicant: Australian Government Solicitor Counsel for the First Respondent: there being no appearance on behalf of the First Respondent Counsel for the Second Respondent: the Second Respondent appearing on his own behalf ORDERS
PEG 123 of 2013 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: SINER ENTERPRISES PTY LTD ACN 146 837 887
First Respondent
SIMON PETER MACKENZIE
Second Respondent
ORDER MADE BY:
JUDGE VASTA
DATE OF ORDER:
4 SEPTEMBER 2024
THE COURT ORDERS THAT:
1.Pursuant to Rule 25.11 of the Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2021 (Cth), Order 46 of the Rules of the Supreme Court 1971 (WA) and section 33 of the Civil Judgments Enforcement Act 2004 (WA), the Second Respondent pay the penalty fixed by paragraph 2 of the orders the Court made on 15 March 2018 in the amount of $34,815.00 to the Consolidated Revenue Fund of the Commonwealth, by weekly instalments of $80.00 until paid in full, with the first payment to be paid on 9 September 2024 and on the Friday of each week thereafter.
2.The application filed on 13 December 2023 be otherwise dismissed.
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
(Ex tempore)
JUDGE VASTA
On 15 March 2018, His Honour Judge Lucev ordered that the second respondent in the matter before him, Simon Peter Mackenzie, pay a pecuniary penalty of $34,815. That pecuniary penalty was imposed, in short, because the Fair Work Ombudsman had taken a company by the name of Siner Enterprises Pty Ltd as well as Mr Mackenzie to court because they alleged that the company, and Mr Mackenzie as an accessory to the company’s actions, had underpaid an employee of the company in various ways.
The case that was brought against the company, and Mr Mackenzie, was that the company was running a restaurant and the employee was an employee at that restaurant who was employed under the auspices of the appropriate Award. The Fair Work Ombudsman alleged that various contraventions were made, that being for underpayment of wages, for non-payment of penalties on Saturdays, weekends, public holidays, and also that there had been a failure to keep proper records.
The matter was, in the end, undefended, and the employee did give evidence before His Honour Judge Lucev. His Honour ended up making orders that found that there had been the contraventions that had been alleged by the Fair Work Ombudsman.
Having come to that conclusion, His Honour then set the matter down for the assessment of pecuniary penalties. When His Honour did this, Mr Mackenzie did appear. During the submissions that were made, Mr Mackenzie was quite vocal as to what he saw as being the injustice of the findings that there have been contraventions of the Fair Work Act (“the Act”).
In the written judgement of some 43 pages, His Honour Judge Lucev spoke of those matters that Mr Mackenzie relayed to the Court. His Honour accepted what the Fair Work Ombudsman had said about the manner in which the penalty should be structured and, in the end, made orders for pecuniary penalties in the order of over $170,000 for the company and $34,815 against the second respondent, Mr Mackenzie, personally.
There was an appeal period, and there was no appeal that was lodged. Mr Mackenzie had not, and still has not, paid any portion of that $34,815.
In February 2022, the Fair Work Ombudsman took this current action for enforcement of that debt. Mr Mackenzie said that he did not have the means to pay the debt. That caused the Fair Work Ombudsman to ask for “means inquiries” to be conducted through the Court and through a Registrar of the Court.
The hearings were held. There were hearings in 2022 and 2023 where the second respondent, Mr Mackenzie, did not appear. But Mr Mackenzie did eventually appear and was cross-examined. Also, his wife, or de facto wife, was also required to appear. It would seem the reasons for this were so that the Fair Work Ombudsman, through this means, might be able to establish what were the actual expenses and incomings of the household itself and thereby get to a point where it could work out what the realistic ability for there to be some form of repayment of the debt, actually was.
During the course of all of those proceedings, I have been shown quite a deal of correspondence between Mr Mackenzie and the Australian Government Solicitor, who were acting on behalf of the Fair Work Ombudsman. In those bits of correspondence, it is clear that Mr Mackenzie attempted to settle this claim in this way, in that he would agree to a payment plan, but that he wanted the payment to be capped at $20,000; and doing this on a figure of about $80 per week, Mr Mackenzie was of the view that he could pay the debt within five years and that would be the end of it.
The Fair Work Ombudsman did not take up this offer, and there is a reason as to why that did not occur. I will talk of that now for the benefit of Mr Mackenzie.
The order of His Honour Judge Lucev is that the pecuniary penalty was $34,815. That is a penalty that has been ordered by the Court. There is no discretion by any statutory office holder to do anything with that debt, though I feel that the Minister responsible for the Office of the Fair Work Ombudsman, personally, would have a discretion in this way, but certainly the Fair Work Ombudsman themselves or any of the other persons under the Fair Work Ombudsman do not have the discretion to be able to compromise debts that have been ordered by the Court to be paid to Consolidated Revenue.
For that reason, the $20,000 figure simply could not have been truly considered by the Fair Work Ombudsman.
However, the Fair Work Ombudsman wanted more than the sum of $34,815. The Fair Work Ombudsman submitted that, because the applicant had not paid any money since the time that the order was made (that being in March of 2018), that interest should apply. On the calculations of the Fair Work Ombudsman, which I have accepted, that interest bill amounts to a total of $14,000.
But the Fair Work Ombudsman wanted even more than that.
The Fair Work Ombudsman wanted their costs. They wanted their costs because, pursuant to section 570(2) of the Act, they argued that the second respondent, Mr Mackenzie, had committed an unreasonable act. The unreasonable acts that the Fair Work Ombudsmen rely upon are contained in their written submissions from paragraph 30 onwards. They were that Mr Mackenzie had failed to complete the production of the required documents that he was summonsed to produce in April 2022, that he failed to comply with various Court orders requiring him to attend a hearing, that he failed to attend an examination hearing on 1 June 2023 and that this meant that the inquiry was significantly protracted, that the Fair Work Ombudsman suffered delays in ascertaining the financial capacity and that the Fair Work Ombudsman was required to pursue other avenues, including issuing subpoenas, to obtain the relevant financial information.
The cost of that exercise, the Fair Work Ombudsman calculated, as being $22,000. The Fair Work Ombudsman has subsequently said that their costs have increased since then to the tune of $13,932.13. This means that the Fair Work Ombudsman is now seeking a sum of over $85,500 from Mr Mackenzie.
The Fair Work Ombudsman submits that Mr Mackenzie can pay the sum of $80 per week to lessen the debt. If he pays a sum of $80 per week, it would take him 1000 weeks to pay a sum of $85,000. 1000 weeks is well over 20 years. The Fair Work Ombudsman says that this is not an unreasonable amount of time that such an arrangement could be in place.
Mr Mackenzie has submitted a number of things to me, some of which are not directly on point as to this particular matter, but one can describe what he has said to me today as being the pleadings of a person who has become frustrated and disenchanted with the legal system.
He maintains the innocence with the matters that the Fair Work Ombudsman began investigating in 2011/2012 and brought to this court in June 2013. He has a number of issues about those matters.
That may be all well and good, but, unfortunately for Mr Mackenzie, that ship has well and truly sailed.
Once it is that His Honour made the order that he did (that there had been a contravention of the Fair Work Act), unless appealed within the appeal period, that was a finding that was going to stay. Having made those findings, and having accepted the submissions on penalty for the Fair Work Ombudsman, His Honour’s calculation of a pecuniary penalty for Mr Mackenzie, personally, of $34,815 was also a matter that, unless appealed, was then final.
As I have said to Mr Mackenzie during the course of the hearing, I have no discretion over that penalty. I cannot in any way diminish it or reduce it or compromise it. It is an order of the Court, and unless an Appeal Court changes the amount – and that will not happen because the appeal period is over – remains the same.
The amount of $34,815 is very much, to use a term, untouchable.
The question for me, then, is whether I ought to include the amounts calculated as being interest on the debt and the amounts claimed in costs as part of the enforcement order. Those are matters that are within my purview. It is not a necessity for the Court to order either interest or costs; that is still a matter in my discretion.
The matter that I raised with the Fair Work Ombudsman has really been the attitude of the Fair Work Ombudsman. I have no problem with the attitude of the Fair Work Ombudsman, as long as the Fair Work Ombudsman is consistent.
It is this issue of consistency that I spoke about in a decision that I had published earlier this year. This was a matter of Fair Work Ombudsman v Construction, Forestry and Maritime Employees Union (The M1 Yatala Exit 41 case) [2024] FedCFamC2G 340. In that matter, at paragraph 140 to 143, I wrote this:
[140]Whilst the FWO is a “model litigant”, it is in a different position to occasions where the Commonwealth, or other government department, simply happened to be one of the participants. This is because the FWO is both investigator and prosecutor where the outcome sought is a civil penalty or a pecuniary penalty.
[141]The FWO is, in effect, the gatekeeper for ensuring that the provisions of the FW Act are upheld. As is boldly trumpeted on the FWO website, the mission of the FWO is:
We help everyone in Australia follow the laws that make all workplaces equal and fair
[142]It is therefore incumbent upon the FWO to ensure that they have the trust of the community, given the importance of the role that they have. This means that the FWO must help everyone to follow the laws, and in this case, the FW Act. It also means that they must treat everyone equally, whether they be the victim of a person, or entities, who have contravened the FW Act, or whether they be the perpetrators of such a contravention.
[143]For the FWO to be effective, it must have the trust and confidence of the public. In doing this, it must live up to its purpose, as outlined on its website, which is:-
to promote harmonious, productive, cooperative and compliant workplace relations in Australia
I went on to talk about what had happened in that particular prosecution of the CFMEU. I said at paragraph 149 - 151:
[149]What concerned me is that there may be a perception that the FWO had not complied with their obligations as a model litigant. Those obligations include such concepts as acting as transparently as possible and acting consistently.
[150]The FWO “prosecutes” many matters before this Court, predominantly contraventions of s 716 of the FW Act where employers have failed to comply with compliance notices. The FWO prosecutes those matters fairly but very firmly. For public confidence to be maintained in the FWO, the same attitude, that is present in those matters, must, not only be present in all matters handled by the FWO, but be seen to be present in all matters handled by the FWO.
[151]In this matter, the perception may very well be that the FWO has, by its own actions, not lived up to its purpose. Whilst it must treat all victims equally and all perpetrators equally, the perception here may very well be an Orwellian one; that is, that some victims, and some perpetrators, are more equal than others.
I have quoted from that previous judgment of mine because what I had said in that judgment has been echoed very much by what Mr Mackenzie has said today. I am not in a position to say whether all of the things that Mr Mackenzie complains about are legitimate or not, but it does go to exactly what I warned about in that judgment. That is, that the Fair Work Ombudsman must not only treat everyone equally, it must be perceived and seen by the public to be doing so, and if it doesn’t, it risks losing the confidence of the public.
The Fair Work Ombudsman has already ascertained that, in true justice, the only order that it could possibly ask for is an order that Mr Mackenzie pay $80 a week to service that debt that has been ordered against him by His Honour back in March 2018. $80 a week may not seem much, but going on what the figures were, that were ascertained from the means inquiry, that was still a very significant sum in the household budget of Mr Mackenzie’s family.
To ask that Mr Mackenzie continue to pay $80 a week for 1000 weeks may, very well, be seen as oppressive.
One thing that the High Court has said is that in calculating a penalty, the Court must strike a balance between deterring persons who may transgress the law and making an order that is oppressive. It seems to me that same principle must be well and truly alive in Courts ordering the enforcement of its orders. I am of the view that to ask Mr Mackenzie, in his current financial state and the state which is obviously obtained since 2018, to pay more than the sum that had been fairly calculated by His Honour Judge Lucev to be the proper pecuniary penalty (that is, $34,815), will lead to an oppressive outcome which is not in keeping with the interests of justice.
I am going to accede to the applicant’s request for an enforcement order and for Mr Mackenzie to pay $80 per week to this sum, but the total that Mr Mackenzie will have to pay is the total ordered by His Honour Judge Lucev, that is, $34,815, and I am not going to order that he pay any sum greater than that.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Vasta. Associate:
Dated: 18 October 2024
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