Fair Work Ombudsman v Tester

The Fair Work Ombudsman (the applicant) commenced proceedings against Ms Tester (the respondent) in the Federal Court of Australia. The dispute concerned Ms Tester's failure to comply with two compliance notices issued by a Fair Work Inspector, which required her to calculate and pay outstanding entitlements to former employees. Although Ms Tester eventually complied with the notices after the proceedings were filed, the applicant sought pecuniary penalties for the contraventions.

The court was required to determine whether Ms Tester had contravened section 716(5) of the *Fair Work Act 2009* (Cth) by failing to comply with the two compliance notices. A further issue was whether the two contraventions should be grouped together under section 557(1) of the Act, thereby potentially limiting the penalties that could be imposed. The court also had to consider the appropriate penalty for the contraventions, having regard to the objectives of pecuniary penalties under the Act.

Jarrett J found that Ms Tester had committed two contraventions of section 716(5) of the Act. The court reasoned that contraventions of section 716(5) are not subject to the course of conduct provisions in section 557(1) because section 716(5) is not a civil remedy provision specified in section 557(2). While the court has a discretion to group contraventions if they overlap or involve potential double punishment, the onus was on the respondent to demonstrate this. The court found no evidence that the failure to comply with the two notices arose from a single transaction or decision, noting that each notice related to different employees, different awards, and identified different contraventions, making the obligations distinct. The court emphasised that failure to comply with a compliance notice is a contravention of a civil remedy provision, and the primary objective of pecuniary penalties under the Act is deterrence.

The court ordered Ms Tester to pay a total penalty of $5,250. This penalty was considered appropriate given the serious and deliberate nature of her conduct in failing to comply with the statutory notices, which necessitated court proceedings that could have been avoided. The penalty also reflected the fact that the employees had now been paid and that Ms Tester consented to the making of the orders. The court noted the absence of evidence regarding Ms Tester's financial capacity or any prior contraventions of the Act.