Fair Work Ombudsman v T & Sons Pty Ltd

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FEDERAL CIRCUIT COURT OF AUSTRALIA

Fair Work Ombudsman v T & Sons Pty Ltd [2020] FCCA 3519  

File number(s): BRG 376 of 2020
Judgment of: JUDGE JARRETT
Date of judgment: 22 December 2020
Catchwords: INDUSTRIAL LAW – Commonwealth – Compliance and enforcement – Civil remedies – Pecuniary penalty orders – Amount of penalty – failure to comply with compliance notice  
Legislation:

Fair Work Act 2009 (Cth) ss 539(2), 546(1), 546(2)(a), 550(1), 550(2), 716(4A), 716(4B), 716(5)

Federal Circuit Court Rules 2011 (Cth) r 13.03B(2)(c)
Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157

Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482
Number of paragraphs: 34
Date of last submission/s: 18 December 2020
Date of hearing: 18 December 2020
Place: Brisbane
Solicitors for the Applicant: Norton Rose Fulbright Australia

ORDERS

BRG 376 of 2020
BETWEEN:

FAIR WORK OMBUDSMAN

Applicant
AND:

T & SONS PTY LTD

First Respondent

ROSA VO

Second Respondent

ORDER MADE BY:

JUDGE JARRETT

DATE OF ORDER:

22 DECEMBER 2020

THE COURT ORDERS THAT:

1.Pursuant to s.546(1) of the Fair Work Act:

(a)the first respondent T & Sons Pty Ltd pay a pecuniary penalty of $22,050 to the Commonwealth for the contravention of s.716(5) of the Fair Work Act 2009 (Cth), within 28 days of this order; and

(b)the second respondent Rosa Vo pay a pecuniary penalty of $4,410 to the Commonwealth for her involvement (within the meaning of s.550(2) of the Fair Work Act) in the first respondent T & Sons Pty Ltd’s contravention of s.716(5) of the Fair Work Act 2009 (Cth), within 28 days of this order.

REASONS FOR JUDGMENT

JUDGE JARRETT

  1. By this application the Fair Work Ombudsman seeks the imposition of pecuniary penalties on the first respondent and the second respondent for contraventions of s.716(5) of the Fair Work Act 2009 (Cth). The first respondent failed to comply with a compliance notice given to it on or about 14 January, 2020.

  2. On 16 October, 2020 this court made declarations that:

    (c)the first respondent contravened s.716(5) of the Fair Work Act, by failing to comply with the compliance notice; and

    (d)the second respondent was involved, within the meaning of s.550(2) of the Fair Work Act, in that contravention and is taken, by s.550(1) of the Fair Work Act, to have contravened s.716(5) of the Fair Work Act.

  3. The Court ordered that default judgment be entered for the Fair Work Ombudsman, pursuant to rule 13.03B(2)(c) of the Federal Circuit Court Rules 2011 (Cth), and that the first respondent take the steps required by the compliance notice within 28 days of 16 October, 2020 by calculating and paying to the Fair Work Ombudsman the outstanding entitlements it was required to pay to a former employee, Ms Jasmine Wood, calculating and paying any additional superannuation contributions into Ms Wood’s nominated superannuation fund, preparing and producing a schedule to the Fair Work Ombudsman and providing corresponding proof of rectification to the Fair Work Ombudsman.

  4. Pursuant to s.546(1)…

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Details
Case
[2020] FCCA 3519
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Justice Jarrett considered proceedings brought by the Fair Work Ombudsman against T & Sons Pty Ltd and Rosa Vo. The dispute concerned T & Sons Pty Ltd's failure to comply with a compliance notice issued under the *Fair Work Act 2009* (Cth), which required the company to pay an amount owed to an employee. Ms Vo was involved in this contravention.

The court was required to determine the appropriate pecuniary penalties to be imposed on both T & Sons Pty Ltd and Ms Vo for the contravention of section 716(5) of the *Fair Work Act 2009* (Cth). This involved assessing the seriousness of the conduct and the objectives of civil penalty provisions.

Justice Jarrett reasoned that the primary objectives of civil penalties are specific and general deterrence, requiring penalties to have a sufficient "sting or burden." The court found that T & Sons Pty Ltd, through Ms Vo, was aware of the compliance notice and the consequences of non-compliance, yet deliberately failed to engage with the Fair Work Ombudsman or comply with the notice, even after being offered a payment plan. This deliberate disregard for obligations under the Act and the authority of the regulator was compounded by the respondents' failure to engage with the court proceedings. The court concluded that a penalty was necessary to reflect the seriousness of the deliberate conduct and to deter future contraventions by the respondents and others.

Consequently, the court ordered T & Sons Pty Ltd to pay a pecuniary penalty of $22,050 to the Commonwealth, and Rosa Vo to pay a penalty of $4,410 to the Commonwealth, for their respective contraventions. These penalties were to be paid within 28 days.

Orders

Orders of the court

THE COURT ORDERS THAT:

1. Pursuant to s.546(1) of the Fair Work Act:

(a) the first respondent T & Sons Pty Ltd pay a pecuniary penalty of $22,050 to the Commonwealth for the contravention of s.716(5) of the Fair Work Act 2009 (Cth), within 28 days of this order; and

(b) the second respondent Rosa Vo pay a pecuniary penalty of $4,410 to the Commonwealth for her involvement (within the meaning of s.550(2) of the Fair Work Act) in the first respondent T & Sons Pty Ltd’s contravention of s.716(5) of the Fair Work Act 2009 (Cth), within 28 days of this order.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

I also accept that there is a particular need to specifically deter both the first respondent and the second respondent from engaging in the same contravening conduct in the future, given that the first respondent is still registered and no evidence has been provided that the second respondent no longer remains the Manager of the first respondent. The first respondent and the second respondent have demonstrated a disregard for the obligations of an employer under Commonwealth workplace laws.CONCLUSION The failure to comply with a statutory notice is serious and in this case it required the Fair Work Ombudsman to commence proceedings in circumstances where litigation could have easily been avoided. I can only conclude that the failure to comply by both respondents was a deliberate choice. The only positive thing that might be said for the respondents is that Ms Wood has now been paid. A penalty needs to reflect the seriousness of the respondent’s conduct and it needs to send a message to both the respondents in this case and other like-minded organisations and individuals that ignoring the obligations cast upon employers and those that control them by the Fair Work Act will not be tolerated. A penalty of $22,050 for the first respondent and a penalty of $4,410 for the second respondent is appropriate in this case. There is no evidence that such a penalty would be crushing or oppressive for either respondent. It reflects the objective seriousness of the deliberate conduct engaged by the first respondent and the second respondent. There will be orders as set out at the commencement of these reasons.

Ratio Decidendi

Legal Principle Established

Specific and general deterrence, is either the sole or at least the primary objective of civil penalties: Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at 506, [55] (French CJ, Kiefel, Bell, Nettle and Gordon JJ) see also at 513, [79] Keane J agreeing with the plurality. The “principal object” of deterrence is achieved where a penalty has the necessary “sting or burden” to secure the specific and general deterrent effects that are the raison d’etre of its imposition: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157 at [116].CONSIDERATION OF PENALTY On 14 January, 2020 a copy of the compliance notice was given to the first respondent at the first respondent’s principal place of business. The first respondent, through the second respondent, was aware of the compliance notice and the obligation to comply with it, including that failure to comply may lead to the Fair Work Ombudsman commencing proceedings seeking civil penalties and orders for compliance. Despite the notice, neither respondent engaged with the Fair Work Ombudsman. An opportunity to engage in a payment plan to rectify the amount due under the compliance notice was offered to the first respondent, but that elicited no response either. Despite being given ample time and multiple opportunities by the Fair Work Ombudsman to comply with the notice and avoid litigation, the first respondent failed to comply by the required date in the compliance notice or at all. These proceedings are the result of the respondents’ failure to engage with the Fair Work Ombudsman. I can come to no other conclusion than that the respondents’ failure to comply with the compliance notice was deliberate. I accept the Fair Work Ombudsman’s submission that the first respondent’s conduct in failing to comply with the compliance notice coupled with its failure to engage in these proceedings, demonstrates a deliberate disregard for its obligations under the Fair Work Act and the authority of the Fair Work Ombudsman as a regulator of Commonwealth workplace laws. It demonstrates a contempt for the laws put in place to safeguard the entitlements of employees. As a result of the failure to comply with the compliance notice, Ms Wood did not receive the amount owing to her until on or around 15 October, 2020 approximately 18 months after she ceased employment with the first respondent and approximately 9 months after compliance with the compliance notice was required. This case serves to demonstrate the utility of the compliance notice regime set out in the Act. The loss sustained by Ms Wood was only rectified through the commencement and active pursuit of these proceedings by the Fair Work Ombudsman. Neither the first respondent nor the second respondent have meaningfully engaged with the Fair Work Ombudsman or the Court throughout the process of this litigation. The respondents have failed to:(a)attend the first court date on 9 September, 2020;(b)file and serve a notice of address for service as required by rule 6.01 of the Rules;(c)file and serve a response or defence within 28 days of service as required by rules 4.03 and 4.05(3) of the Rules;(d)file and serve a response and defence by 4:00pm on 7 October, 2020 in accordance with order 1 of the orders of the Court dated 9 September, 2020;(e)attend the directions hearing and hearing of the default application on 16 October, 2020; and(f)take all of the steps set out in order 4 of the orders of the Court dated 16 October, 2020.