FEDERAL CIRCUIT COURT OF AUSTRALIA
Fair Work Ombudsman v Sphere 38 (BNE) Pty Ltd [2021] FCCA 536
File number(s): BRG 490 of 2020 Judgment of: JUDGE EGAN Date of judgment: 19 March 2021 Catchwords: INDUSTRIAL LAW – Failure to comply with Compliance Notice – regret and contrition on the part of the respondents – how pecuniary penalty ought to be assessed – relevant principles – orders accordingly. Legislation: Fair Work Act 2009 (Cth), ss 23(1), 90(2) 550, 716. Cases cited: Kelly v Fitzpatrick (2007) 166 IR 14.
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Anor (2015) 258
CLR 482.
Fair Work Ombudsman v Promoting You Pty Ltd [2012] FMCA 58.
Fair Work Ombudsman v Viper Industries Pty Ltd & Anor [2015] FCCA 492.
Construction, Forestry, Maritime, Mining, and Energy Union v Australian Building and Construction
Commissioner [2018] FCAFC 126.
Number of paragraphs: 32 Date of last submission/s: 5 March 2021 Date of hearing: 5 March 2021 Place: Brisbane Counsel for the Applicant: Mr McKechnie Solicitor for the Applicant: Office of the Fair Work Ombudsman Solicitor for the Respondents: Ms Adams of GLR Law ORDERS
BRG 490 of 2020 BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: SPHERE 38 (BNE) PTY LTD ACN 608 358 587
First Respondent
GREGORY DALE JOHNSTON
Second Respondent
ORDER MADE BY:
JUDGE EGAN
DATE OF ORDER:
19 MARCH 2021
IT IS DECLARED THAT:
1.The First Respondent contravened the provisions of s. 716(5) of the Fair Work Act 2009 (Cth) (‘the FWA’) by failing to comply with the Compliance Notice issued to it on 2 April 2020.
2.The Second Respondent was involved in, within the meaning of s. 550(2)(c) of the FWA, the contravention by the First Respondent of s. 716(5) of the FWA and is taken, pursuant to the provisions of s. 550(1) of the FWA, to have contravened s. 716(5) of the FWA.
AND IT IS ORDERED THAT:
3.The First Respondent pay a pecuniary penalty in the sum of $10,000.00 in respect of the contravention the subject of Declaration (1) herein.
4.The Second Respondent pay a pecuniary penalty in the sum of $2,500.00 in respect of the contravention the subject of Declaration (2) herein.
5.Each of the First and Second Respondents respectively pay to the Commonwealth of Australia the pecuniary penalties ordered to be paid in Orders (3) and (4) herein within twenty-eight (28) days of the date of this Order.
REASONS FOR JUDGMENT
JUDGE EGAN:
Introduction
By an application filed on 2 September 2020, the applicant sought a declaration that the first respondent contravened the provisions of s. 716(5) of the Fair Work Act 2009 (Cth) (‘the FWA’) by reason of the first respondent’s failure to comply with a compliance notice issued to it by the applicant on 2 April 2020. Such Compliance Notice related to alleged contraventions by the first respondent of the provisions of s. 90(2) of the FWA by reason of the first respondent’s failure…
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- Case
- [2021] FCCA 536
- Decision Date
CaseChat Overview and Summary
The court was required to consider the extent to which penalties should be discounted due to the respondents' conduct. Specifically, the court had to assess the significance of the first respondent's co-operation with the Fair Work Ombudsman's investigation, its subsequent rectification payments, and its admissions of guilt. The court also had to consider the impact of the COVID-19 pandemic on the first respondent's ability to comply with the terms of the compliance notice, particularly regarding the discussion of a payment plan.
Egan J reasoned that while the first respondent failed to contact the applicant to discuss a payment plan, it had otherwise co-operated with the investigation and made the required rectification payments. Furthermore, the admissions of guilt in the Statement of Facts and Admissions facilitated the resolution of the proceedings. Applying the principles from *Mornington Inn*, the court found that these actions demonstrated an acceptance of wrongdoing and a willingness to facilitate the course of justice, warranting a discount on the penalty. The court also acknowledged the significant impact of the COVID-19 pandemic on the first respondent's non-compliance.
Consequently, the court ordered Sphere 38 (BNE) Pty Ltd to pay a pecuniary penalty of $10,000.00 and the second respondent to pay a pecuniary penalty of $2,500.00, reflecting a substantial discount due to the mitigating factors.
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
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Ratio Decidendi
Legal Principle Established
There is no evidence before the Court that the first or second respondents had contravened the provisions of the FWA in the past. Co-Operation, Contrition and Corrective Action At the hearing of the matter, Counsel for the applicant conceded that the second respondent, on behalf of the first respondent, had co-operated with the applicant during the course of the investigation into contraventions of the FWA by the first respondent. The Court notes, however, the failure by the first respondent to contact the applicant following an offer to discuss options for a reasonable payment plan relating to the making of rectification payments as required by the compliance notice. The Court is minded, due to COVID-19 interruptions, to substantially discount the penalty ordered notwithstanding that the first respondent did not take the opportunity to contact the applicant to discuss a payment plan option prior to the commencement of litigation before this Court. The respondents submitted that the Court ought to apply a discount of 60% as a result of the first respondent’s co-operation. It was submitted on behalf of the applicant that a discount of only 20% of the penalty imposed should apply. The first respondent appropriately made the relevant rectification payments the subject of the Compliance Notice on 22 and 23 September 2020. The first respondent also assisted with the resolution of the proceedings before the Court by moving to admit contraventions in the SAF. On the question of corrective action and contrition, the Full Court observed in Mornington Inn at [76] that: “[76] … the benefit of such a discount should be reserved for cases where it can be fairly said that an admission of liability: (a) has indicated an acceptance of wrongdoing and a suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate the course of justice.” By virtue of the first respondent’s payment of the monies owed, and the admissions of guilt contained in the SAF, the Court finds that the first respondent has indicated both an acceptance of wrongdoing and a willingness to facilitate the course of justice. The Court is minded to reflect such findings in the exercise of its discretion when imposing a pecuniary penalty. Pecuniary Penalties Having weighed up all of the above factors, the most significant being the impact of the COVID-19 pandemic upon the first respondent relevant to its non-compliance with the Compliance Notice, the Court finds that it is appropriate for the first respondent to pay a pecuniary penalty, globally assessed, in the amount of $10,000.00. The Court further finds that the second respondent, on the basis of his direct involvement with the contraventions of the first respondent, ought to pay a pecuniary penalty, globally assessed, in the amount of $2,500.00. It is so ordered.