Fair Work Ombudsman v Tate
[2024] FedCFamC2G 1213
•15 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Tate [2024] FedCFamC2G 1213
File number(s): SYG 573 of 2024 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 15 November 2024 Catchwords: INDUSTRIAL LAW – Assessment of a pecuniary penalty for contravention of s 716(5) of the Fair Work Act 2009 (Cth). Legislation: Bankruptcy Act 1966 (Cth), s 58(3)
Crimes Act 1914 (Cth), s 4AA
Fair Work Act 2009 (Cth), ss 12, 14, 30N(1), 90(2), 539(1), (2), 546(1),(2), 716(1),(2),(3),(5)
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), r 6.14(1),(3)
Social, Community, Home Care and Disability Services Industry Award 2010, cl 17.2, cl 17.3, cl 25.7(d), cl 28.1(a)(i),(iii), cl 29.3(a),(b),(c), cl 34.2(a)
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Bevis v VA Holdings Pty Ltd trading as Granton Homes & Ors [2020] FCCA 2082
Fair Work Ombudsman v Tate trading as Keating Real Change Disability Services [2023] FedCFamC2G 629
Fair Work Ombudsman v Viper Industries Pty Ltd [2015] FCCA 492
Fair Work Ombudsman v VS Investment Group Pty Ltd [2013] FCCA 208
Kelly v Fitzpatrick [2007] FCA 1080
Kiddle v Nguyen [2021] FedCFamC2G 53
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Division: Fair Work Number of paragraphs: 30 Date of hearing: 6 September, 8 November 2024 Place: Sydney Solicitor for the Applicant: Ms O Candiloro Solicitor for the Respondent: No appearance by, or on behalf of, the Respondent ORDERS
SYG 573 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: KRISTY LEANNE TATE
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
15 NOVEMBER 2024
THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the respondent pay a pecuniary penalty in the sum of $7,012.50 for her contravention of s 716(5) of the FW Act as declared in the orders made on 6 September 2024.
2.The respondent pay the pecuniary penalty referred to in order 1 to the Commonwealth within 28 days after the day on which these orders are pronounced.
3.The applicant has liberty to apply on seven days’ notice in the event 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
INTRODUCTION
The applicant, the Fair Work Ombudsman (FWO), applies under s 546(1) of the Fair Work Act 2009 (Cth) (FW Act) for orders that the respondent, Ms Tate, pay a pecuniary penalty because she contravened s 716(5) of the FW Act by failing to comply with a compliance notice dated 8 December 2022 given under s 716(2) of the FW Act (Compliance Notice).
PROCEDURAL HISTORY
The FWO commenced proceedings on 4 April 2024, by filing an application and a statement of claim.
The matter first came before me on a first court date on 7 May 2024, but Ms Tate had not been served. I directed that the matter be listed for a directions hearing at 9.30 am on 30 May 2024. On that occasion the FWO applied for an order for substituted service. That application was supported by affidavits which deposed to efforts that had been made by the FWO to serve the application and statement of claim on Ms Tate.
At the conclusion of the directions hearing, I made an order pursuant to r 6.14(1) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (GFL Rules) that personal service on Ms Tate of the application and statement of claim be dispensed with and, pursuant to r 6.14(3) of the GFL Rules, an order that Ms Tate be deemed to have been served on 27 May 2024 with the application and statement of claim by the methods I identified in the orders. I also made an order requiring Ms Tate to file and serve a notice of address for service by 6 June 2024, and to file and serve a response and defence to the statement of claim by 27 June 2024; and I stood the matter over to a further directions hearing on 6 August 2024.
Ms Tate did not file a notice of address for service; she did not file a reply or a defence to the statement of claim; and she did not appear at the directions hearing on 6 August 2024. On that occasion I made an order that Ms Tate file and serve a notice for address for service by 13 August 2024, and a defence by 20 August 2024; and I ordered that the matter be listed for a directions hearing at 9.30 am on 6 September 2024. I also made a notation that if Ms Tate did not comply with the orders I made, the FWO intended to apply for a default judgment at the directions hearing that would be listed at 9.30 am on 6 September 2024.
Ms Tate did not comply with the orders I made on 6 August 2024; and on 30 August 2024 the FWO filed an interlocutory application, returnable at the time and date I had fixed for the directions hearing at 9.30 am on 6 September 2024, seeking default judgment against Ms Tate. After receiving evidence, and hearing submissions, I made a number of orders, including a declaration that Ms Tate contravened s 716(5) of the FW Act by failing to comply with the Compliance Notice. I then set the matter down for hearing on the question of penalty on 8 November 2024.
I heard the application for an order for the payment of pecuniary penalties on 8 November 2024. Ms Candiloro appeared for the FWO, but Ms Tate did not appear. Ms Candiloro read an affidavit she made which annexed emails and letters to Ms Tate providing details of how Ms Tate could join the meeting on 8 November 2024.[1] I am satisfied that Ms Tate was aware that the question of penalty had been set down for hearing before me on 8 November 2024.
[1] Affidavit of O F Candiloro, 7.11.2024, [5]-[8]
At the hearing of 8 November Ms Candiloro informed me that the FWO understood that Ms Tate had become a bankrupt on her own petition. Ms Candiloro was not, however, in a position to provide any documentary evidence that Ms Tate had become a bankrupt. That Ms Tate may have become bankrupt, however, would not prevent the Court from determining whether an order under s 546(1) of the FW Act should be made. Subsection 58(3) of the Bankruptcy Act 1966 (Cth) does not apply to a claim for the payment of pecuniary penalty because such a claim is not a remedy “in respect of a provable debt”.[2]
[2] Kiddle v Nguyen [2021] FedCFamC2G 53
FACTS
I made the declaration on 6 September 2024 on the basis of the allegations made in the statement of claim which, given the declaration I made, are taken to have been admitted by Ms Tate. Those allegations are as follows.
Ms Tate
Ms Tate is a sole trader, and operates an aged and disability care business called “Kreating Real Change Disability Services” in NSW. Under s 14 of the FW Act (as extended by s 30N(1)), Ms Tate is considered a “national system employer”.[3]
[3] Statement of Claim, 4.4.2024, [3(a)-(d)]
Investigation
In around October 2022 Fair Work Inspector Ryan Keyhoe (FWI Keyhoe) commenced an investigation into Ms Tate concerning her employment of Ms Catarina Swartz, and Mr Charles Swartz (collectively Employees).[4]
[4] Statement of Claim, 4.4.2024, [4]
Based on the information obtained during the investigation, FWI Keyhoe formed the following beliefs:[5]
[5] Statement of Claim, 4.4.2024, [5(a)-(e)]
(a)during the period 8 June 2020 to 26 September 2022 Ms Tate employed Ms Swartz on a full-time basis;
(b)during the period 27 June 2022 to 26 September 2022 Ms Tate employed Mr Swartz on a full-time basis;
(c)the Social, Community, Home Care and Disability Services Industry Award 2010 (Award), a modern award under the FW Act, covered and applied to Ms Tate’s employment of the Employees;
(d)from 19 September 2022 to 25 September 2022 (Contravention Period), Ms Swartz was classified under the Award as a “Home Care Employee, Level 2, pay point 2”, and Mr Swartz was classified as a “Home Care Employee, Level 3, pay point 1”.
(e)Ms Tate failed to pay:
(i)the Employees the applicable full-time minimum wage for ordinary hours worked during the Contravention Period, contrary to cl 17.2 and cl 17.3 of the Award;
(ii)the Employees the applicable overtime entitlement for the first 2 hours of authorised overtime worked on Monday to Saturday during the Contravention Period, contrary to cl 28.1(a)(i) of the Award;
(iii)the Employees the applicable overtime entitlement for hours worked after the first 2 hours of overtime worked on Monday to Saturday during the Contravention Period, contrary to cl 28.1(a)(i) of the Award;
(iv)the Employees the applicable overtime entitlement for authorised hours worked on a Sunday during the Contravention Period, contrary to cl 28.1(a)(iii) of the Award;
(v)the Employees their accrued but untaken annual leave (including annual leave loading) payable when the Employees’ employment ended, contrary to s 90(2) of the FW Act;
(vi)Ms Swartz the applicable afternoon shift loading for the whole of each afternoon shift during the Contravention Period contrary to cl 29.3(a) of the Award;
(vii)Ms Swartz the applicable public holiday rate for hours worked on the public holiday on 22 September 2022, contrary to cl 34.2(a) of the Award;
(viii)Mr Swartz the applicable night shift loading for the whole of each night shift during the Contravention Period, contrary to cl 29.3(b) of the Award;
(ix)Mr Swartz the applicable public holiday shift loading for hours worked on the public holiday on 22 September 2022, contrary to cl 29.3(c) of the Award;
(x)Mr Swartz the applicable sleepover allowance for each night he slept over during the Contravention Period, contrary to cl 25.7(d) of the Award.
By reason of the matters referred to in paragraph 12 of these reasons, FWI Keyhoe formed a reasonable belief within the meaning of s 716(1) of the FW Act that Ms Tate:[6]
[6] Statement of Claim, 4.4.2024, [6(a)-(c)]
(a)in respect of the Employees, contravened:
(i)cl 17.2 and cl 17.3 of the Award (full-time minimum wage);
(ii)cl 28.1(a)(i) of the Award (Monday to Saturday overtime – first 2 hours);
(iii)cl 28.1(a)(i) of the Award (Monday to Saturday overtime – after 2 hours);
(iv)cl 28.1(a)(iii) of the Award (Sunday overtime); and
(v)s 90(2) of the FW Act (payment for annual leave on termination);
(b)in respect of Ms Swartz, contravened:
(i)cl 29.3(a) of the Award (afternoon shift loading); and
(ii)cl 34.2(a) of the Award (public holiday rate); and
(c)in respect of Mr Swartz, contravened:
(i)cl 29.3(b) of the Award (night shift loading);
(ii)cl 29.3(c) of the Award (public holiday shift loading); and
(iii)cl 25.7(d) of the Award (sleepover allowance).
Giving of Compliance Notice
On 8 December 2022, FWI Keyhoe gave Ms Tate the Compliance Notice in relation to the contraventions identified in paragraphs 12 and of these reasons (Contraventions) in accordance with s 716(2) and (3) of the FW Act.[7] The Compliance Notice required Ms Tate to:[8]
(a)by 19 January 2023, take the following actions to remedy the effects of the Contraventions (Specified Action):
(i)calculate and pay the outstanding amounts owed to the Employees in respect of each Contravention;
(ii)make a record of the amounts calculated and paid referred to in paragraph (i) above; and
(iii)calculate and pay any additional superannuation contributions required by cl 23 of the Award in respect of the amounts referred to in paragraph (i) above; and
(b)by 26 January 2023, to produce reasonable evidence to the FWO of Ms Tate’s compliance with the Compliance Notice.
[7] Statement of Claim, 4.4.2024, [7]
[8] Statement of Claim, 4.4.2024, [8]
Ms Tate failed to take the Specified Action by 19 January 2023 or at all; and she failed to produce to the FWO reasonable evidence of compliance by 26 January 2023, or at all.[9] Ms Tate, therefore, failed to comply with the Compliance Notice and, for that reason, contravened s 716(5) of the FW Act.[10] Had Ms Tate complied with the Compliance Notice, Ms Tate would have paid Ms Swartz $10,584.23, and Mr Swartz $3,293.83.[11]
[9] Statement of Claim, 4.4.2024, [10]
[10] Statement of Claim, 4.4.2024, [11]
[11] Statement of Claim, 4.4.2024, [12]
POWER AND PRINCIPLES
Subsection 546(1) of the FW Act provides that this Court may, on application, order a person to pay a pecuniary penalty the Court considers is appropriate if the Court is satisfied the person has contravened a “civil remedy provision”.[12] That expression is defined in s 539(1) of the FW Act to include the provisions identified in column 1 of the table to s 539(2) of the FW Act. Subsection 716(5) is in column 1 of the table to s 539(2) of the FW Act.
[12] I repeat in this and the following 4 paragraphs much of what I said in Bevis v VA Holdings Pty Ltd trading as Granton Homes & Ors [2020] FCCA 2082, at [33]-[38]
Subsection 546(2) of the FW Act provides that the pecuniary penalty the Court may impose must not, where the person is an individual, be more than “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)” and, if the person is a body corporate, must not be more than five times “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)”. The maximum penalty units for a contravention of s 716(5) of the FW Act as at 19 January 2023, being the day by which Ms Tate was required to carry out the Specified Action, are 30 penalty units for an individual. Section 12 of the FW Act provides that “penalty unit” has the meaning given by s 4AA of the Crimes Act 1914 (Cth). As at 19 January 2023, being the day on which Ms Tate contravened s 716(5) of the FW Act, the penalty unit provided for by s 4AA was $275. Thus, $8,250 is the maximum penalty Ms Tate may be ordered to pay for her contravention of s 716(5) of the FW Act.
The approach of most judges when assessing penalties for a single contravention of a civil remedy provision of the FW Act is to take into account the non-exhaustive considerations Tracey J identified in Kelly v Fitzpatrick,[13] which his Honour adopted from the judgment of Mowbray FM in Mason v Harrington Corporation Pty Ltd. [14] Those considerations are:
[13] Kelly v Fitzpatrick [2007] FCA 1080, at [14]
[14] Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
(a)the nature and extent of the conduct which led to the breaches;
(b)the circumstances in which that conduct took place;
(c)the nature and extent of any loss or damage sustained as a result of the breaches;
(d)whether there had been similar previous conduct by the respondent;
(e)whether the breaches were properly distinct or arose out of the one course of conduct;
(f)the size of the business enterprise involved;
(g)whether or not the breaches were deliberate;
(h)whether senior management was involved in the breaches;
(i)whether the party committing the breach had exhibited contrition;
(j)whether the party committing the breach had taken corrective action;
(k)whether the party committing the breach had cooperated with the enforcement authorities;
(l)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
(m)the need for specific and general deterrence.
Although these factors have been identified and applied as relevant to the assessment of penalties, they do not constitute a “rigid catalogue of matters for attention”.[15]
[15] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, at [91] (Buchanan J)
Also relevant is the maximum penalty for the contravention provided for by the FW Act; and here I refer to the following passage from the judgment of Flick J in The BKH Contractors Case (No 2):[16]
In undertaking the task of assessing and quantifying the penalties to be imposed, the maximum penalty prescribed by the Commonwealth legislature for a specific contravention serves as a “yardstick” against which the assessment of penalties is generally to proceed . . . .
ASSESSMENT OF PENALTY
[16] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563, at [19]
Nature, extent, circumstances, and deliberateness of the contravening conduct
The contravention consisted of Ms Tate not complying with the Compliance Notice. The evidence shows, and I find, that Ms Tate was aware the Employees were owed money because they sent text messages to her demanding payment of their wages to which Ms Tate responded,[17] but Ms Tate did not pay the amounts owing to the Employees. Ms Tate received the Compliance Notice, but she ignored it.
[17] Affidavit of N P Whyte, 04.10.2024, annexure NPW-03
The following passage from the judgment of Judge Emmett in Fair Work Ombudsman v Viper Industries Pty Ltd applies to the nature of Ms Tate’s contravention of s 716(5) of the FW Act.[18]
The Respondents’ intentional failure to comply with a mandatory notice issued by the workplace regulator is “conduct ... [which] undermines the utility and effectiveness of a fundamental object” [of] the FW Act. The failure to comply undermines and frustrates the powers conferred on Fair Work Inspectors, which are conferred for the purposes of providing an effective means of enforcing compliance with lawful minimum entitlements. There is a significant cost to the public by reason of the need to bring this matter before the court to enforce compliance.
[18] Fair Work Ombudsman v Viper Industries Pty Ltd [2015] FCCA 492, at [42 ]
These matters point to assessing penalty at the higher end of the scale.
Nature and extent of loss occasioned by the contravention
As I have already noted, had Ms Tate complied with the Compliance Notice, she would have paid Ms Swartz $10,584.23, and Mr Swartz $3,293.83. That means that Mr and Ms Swartz have suffered losses in the amounts of $10,584.23 and $3,293.83, respectively. These amounts are significant. These matters also point to assessing penalty at the higher end.
Deterrence
I accept the FWO’s submission that the penalty in relation to Ms Tate’s contravention should include an element for specific deterrence. That is particularly so because on 20 July 2023, in an earlier proceeding, I made an order that Ms Tate pay a pecuniary penalty of $4,290 because she had contravened s 716(5) of the FW Act.[19] Ms Tate committed the contravention that is the subject of these reasons after the FWO had commenced the earlier proceeding; and, moreover, Ms Tate failed to pay the penalty I had order Ms Tate to pay in the earlier proceeding.
[19] Fair Work Ombudsman v Tate trading as Kreating Real Change Disability Services [2023] FedCFamC2G 629
As for general deterrence, I refer to what Judge Jarrett said in Fair Work Ombudsman v VS Investment Group Pty Ltd:[20]
The failure to comply with a notice properly issued by the applicant in the course of its investigations and the discharge of its statutory functions is serious. Recipients of such notices should be left under no misapprehension about their obligations to comply with those notices.
[20] Fair Work Ombudsman v VS Investment Group Pty Ltd [2013] FCCA 208, at [51]
The FWO relies on data contained in an industry profile for the “Retirement Village Operation, Accommodation for the Aged Operation, Other Social Assistance Services” industry (Industry) for the period of July 2022 to June 2024.[21] The FWO submits the data reflects a “high dispute rate” in this industry; [22] but it is not clear from the data that this is so. In any event, the penalty should be set at a level which demonstrates to employers in general, that they would be faced with a meaningful penalty if they fail to comply with a compliance notice given under s 716(2) of the FW Act.
[21] Affidavit of O F Candiloro 10.10.2024, annexure OFC-27
[22] Applicant’s submissions on penalty, 11.10.2024, [23]
Determination
The FWO submits that a penalty assessed between 75% and 85% of the maximum would be appropriate for Ms Tate’s contravention of the Compliance Notice. [23] I consider 85% of the maximum, namely, $7,012.50, to be an appropriate penalty.
[23] Applicant’s submissions on penalty, 11.10.2024, [45]
DISPOSITION
I will order that Ms Tate pay a pecuniary penalty of $7,012.50; and that Ms Tate pay this amount to the Commonwealth within 28 days after the day on which I pronounce my orders.
I will reserve to the FWO liberty to apply on seven days’ notice if Ms Tate does not pay the pecuniary penalty I propose to order she pay.
I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 15 November 2024
0
8
5