Fair Work Ombudsman v T.S.T Commercial Cleaning Pty Ltd
[2022] FedCFamC2G 282
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v T.S.T. Commercial Cleaning Pty Ltd [2022] FedCFamC2G 282
File number(s): SYG 1715 of 2021 Judgment of: JUDGE HUMPHREYS Date of judgment: 19 April 2022 Catchwords: INDUSTRIAL LAW – Fair Work Act – penalty hearing – no appearance by the respondents – matter proceed in absence of the respondents – orders made. Legislation: Fair Work Act 2009 (Cth) ss 539, 546, 716,
Federal Circuit and Family Court (Division 2) (General Federal Law) Rules 2021 (Cth) r 13.06
Cleaning Services Employee Award
Cases cited: Fair Work Ombudsman v NSH North Pty Ltd trading New Shanghai Charlestown [2017] FCA 1301
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Division: Division 2 General Federal Law Number of paragraphs: 14 Date of last submission/s: 19 April 2022 Date of hearing: 19 April 2022 Place: Parramatta Solicitor for the Applicant: Ms Andersen Counsel for the First Respondent: No appearance by the First Respondent Counsel for the Second Respondent: No appearance by the Second Respondent ORDERS
SYG 1715 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: T.S.T. COMMERCIAL CLEANING PTY LTD ACN 634 166 395
First Respondent
TRACEY GREER
Second Respondent
ORDER MADE BY:
JUDGE HUMPHREYS
DATE OF ORDER:
19 APRIL 2022
THE COURT ORDERS THAT:
1.The matter proceed pursuant to r 13.06(1)(e) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) in the absence of the respondents.
2.A declaration that the First Respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (“FW Act”) by failing to comply with the Compliance Notice issued on 23 April 2021.
3.
A declaration that that the Second Respondent was involved, within the meaning of
s 550(2) of the FW Act, in the contravention by the First Respondent of s 716(5) of the FW Act.
4.Pursuant to s 546(1) of the FW Act, the First Respondent pay a pecuniary penalty of $13,320 in respect of the contravention of s 716(5) of the FW Act.
5.Pursuant to s 546(1) of the FW Act, the Second Respondent pay a pecuniary penalty of $2,664 in respect of the contravention of s 716(5) of the FW Act.
6.Pursuant to s 546(3)(a) of the FW Act, any pecuniary penalties ordered to be paid by the First and Second Respondents be paid to the Commonwealth within 28 days.
7.The Applicant has liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
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
Revised from transcriptJUDGE HUMPHREYS
INTRODUCTION
This is judgment of the matter of Fair Work Ombudsman v T.S.T. Commercial Cleaning Pty Limited as the first respondent and Tracy Greer as the second respondent.
The Court is satisfied that the respondents are aware of the time, date and place of the hearing and that they have chosen not to appear. In these circumstances, it is appropriate that to deal with the matter pursuant to rule 13.06(1)(e) of the Federal Circuit and Family Court (Division 2) (General Federal Law) Rules 2021 (Cth) and proceed with the hearing generally in relation to the claim.
The applicant Fair Work Ombudsman commenced proceedings on 14 September 2021 against the first and second respondents in relation to alleged contraventions of s 716(5) of the Fair Work Act 2009 (Cth) (“the Act”), arising from the first respondent’s failure to comply with a compliance notice that was issued to the first respondent dated 23 April 2021. The applicant seeks declarations that the respondents contravened s 716(5) of the Act and seeks that the Court make orders for pecuniary penalties to be paid by each of the respondents. The first respondent, being the employer, and the second being the sole director of the employer as an accessory in relation to the alleged breaches.
A number of documents are relied upon, including the applicant’s Statement of Claim filed 14 September 2021, the Statement of Agreed Facts, which is signed by both parties on
17 January 2022, together with further Affidavits of 18 February 2022 and 14 April 2022. The facts that give rise to the breaches have been set out and they relate to complaints that were received by the applicant in relation to two employees in relation to underpayments.
As result of these allegations, a Fair Work inspector conducted an investigation into the first respondent in respect of two employees, Debra Douglas and Rita Tighe. They were employed for limited periods in January 2021. They were classified under the Cleaning Services Employee level 1 Award (“the Award”) at which set rates of payment. The first respondent paid Ms Douglas at the rate of $20 per hour for 56 hours of works but did not pay at all for other hours worked and Paid Ms Tighe the rate of $20 per hour for 39 hours of work on 19 February but did not pay Ms Tighe in relation to all other hours worked.
The breaches included were a breach of clauses 11.3 and 15.1 of the Award, for failing to pay the rate applicable to the employees’ classification in respect of the ordinary hours of work, and failing to pay a loading of 25 per cent for a casual employee in addition to the minimum hourly rate. It was further ascertained that there was a further breach in that the first respondent had not paid an amount of $246.66 in relation to Ms Douglas’s superannuation fund. The total amounts payable by way of rectification was an amount of $497.80 to Ms Douglas and an amount of $438.12 to Ms Tighe in addition to the superannuation amount previously indicated.
The Court is advised and it accept that the respondent has made full rectification in relation to all amounts that were owing. In those circumstances, that is a matter of significant mitigation. It does not, however, deal with the fact that it was necessary for the applicant to commence proceedings in this Court. In relation to the matters, it was only after proceedings were in fact instituted and considerable expense occurred in the filing of statements of claim and various other supporting documentation that rectification took place. That is a matter of some aggravation. In terms of the position, both the applicant and the respondents have agreed that a mid-range penalty of 50 per cent of the maximum penalty which can be awarded under ss 539(2) and 546(2)(a) of the Act is appropriate.
The applicant submits that an amount of discount of 20 per cent should be applied, given the respondent’s cooperation in the conduct of the proceedings, notwithstanding the fact that the respondent has not appeared today.
Notwithstanding the fact that there is a position of the parties that the penalty in relation to the first respondent should be $13,320.00 for the first respondent and $2,664.00 in respect of the second respondent, it is a matter for the Court to satisfy itself that the submitted penalty is appropriate. It is put to me that the Court should not depart from the proposed figure merely because it might have been disposed to select some other figure. The Court suggests that in this case, the non-appearance of the respondents are, in fact, an aggravating feature which might otherwise have disposed me to actually order a slightly higher amount in respect of the second respondent than what was agreed. However, in the circumstances, the Court is not proposing to do that.
In relation to the matters the Court should take into account, it is satisfied the failure to comply with the statutory notice is serious. It has caused the applicant to commence proceedings, despite the quantum was relatively small. There is a need for general deterrence against non-compliance with compliance notices, particularly where it relates to underpayments. The Courts have consistently said that underpayments to workers in circumstances where there are awards amount to wage theft and there needs to be both specific and general deterrents. The Courts will not tolerate wage theft by employers. If they simply cannot engage workers and pay them the appropriate rates, they should not do so and should find other ways.
The Court has taken into account that the failure to comply with the compliance notice was rectified, albeit after proceedings were commenced. It is appropriate that this is a plea of guilty. When I say a plea of guilty, there have been admissions made sufficient to admit the contraventions. There is a general view that that would attract a specific discount on a penalty that might otherwise be payable in the order of 25 per cent on the basis of being a utilitarian nature and the saving of the Court of time and money and running to a hearing. There are a number of other matters that the Court has taken into account in relation to it. The Court has adopted the approach of Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd trading New Shanghai Charlestown [2017] FCA 1301, which sets out a pathway that should be followed in these matters.
There was only one contravention. It is not necessary for the Court to look at whether or not there should be an aggregation of penalties because there is only a single contravention. The Court has got to look at the appropriate penalties and then consider whether or not the penalties arrived at may be considered as being appropriate in all of the circumstances, applying a principle of totality.
In Mason v Harrington Corporation Pty Ltd [2007] FMCA 7, Mowbray FM, as he was then, set out a well-accepted set of factors in assessing a pecuniary penalty. They include: the nature and extent of the conduct which led to the breaches; the circumstances in which the conduct took place; the nature and extent of any loss; whether there has been any previous similar conduct. The Court notes there has not been; whether the breaches were properly distinct or arose out of a course of conduct; the size of the business enterprise. In this case, no real material has been put to the Court or it perhaps can be inferred that this is a small enterprise; whether or not the breaches were deliberate. Again, the Court is satisfied they were; whether senior management was involved in the breaches. The Court is satisfied they were. There has been contrition and corrective action taken and there has been cooperation with the Fair Work Ombudsman. However, at the end of the day, there is an overriding need to ensure compliance with minimum standards by the provision of effective means for the enforcement of investigation enforcement of entitlements. The Court must take a dim view in relation to the non-compliance with compliance notices. There is also the need for general and specific deterrents.
The Court is satisfied that the penalties put forward by the applicant in this matter are appropriate in all the circumstances. The Court might have been minded to turn out and actually increase the penalty in relation to the second respondent due to their non-appearance but, in the circumstances, does not propose to do so.
I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Humphreys. Associate:
Dated: 19 April 2022
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