Fair Work Ombudsman v Tipene
[2023] FedCFamC2G 296
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Tipene [2023] FedCFamC2G 296
File number(s): SYG 1693 of 2022 Judgment of: JUDGE D HUMPHREYS Date of judgment: 21 April 2023 Catchwords: INDUSTRIAL LAW – Fair Work Act – Plumbing and Fire Sprinklers Award 2020 – default by respondent – matter determined on the papers – determination of pecuniary penalty. Legislation: Fair Work Act 2009 (Cth) ss 539, 546, 716
Federal Circuit and Family Court of Australia (Division 2) (General Federal law ) Rules 2021 (Cth)
Plumbing and Fire Sprinklers Award 2020
Cases cited: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith (2008) 165 FCR 560
Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276
Fair Work Ombudsman v Nobrace Centre Pty Ltd (in Liquidation) [2019] FCCA 2979
Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301
Fair Work Ombudsman v Tipene [2022] FedCFamC2G 853
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Seven Network (Operations) Pty Ltd v Communications, Electrical, Electronic, Energy Information, Postal Plumbing and Allied Services Union of Australia (2001) 110 IR 372
Division: Division 2 General Federal Law Number of paragraphs: 29 Date of last submission/s: 30 March 2023 Date of hearing: In Chambers Place: Parramatta Solicitor for the Applicant: Mr Lodge of the Fair Work Ombudsman Solicitor for the Respondent: No appearance by or on behalf of the Respondent ORDERS
SYG 1693 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: WINIATA TIPENE
Respondent
order made by:
JUDGE D HUMPHREYS
DATE OF ORDER:
21 APRIL 2023
THE COURT ORDERS THAT:
1.Pursuant to s 546 of the Fair Work Act 2009 (Cth), the Respondent pay a pecuniary penalty of $6,660.00 to the Commonwealth for the contravention declared in order 2 of the orders of 24 February 2023 to be payable within 28 days of the day of this order.
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
JUDGE D HUMPHREYS
INTRODUCTION
On 21 November 2022, the Fair Work Ombudsman (FWO) filed a Statement of Claim alleging that the Respondent Mr Wainata Tipine, breached s 716(5) of the Fair Work Act 2009 (Cth) (“the Act”) by failing to comply with a Compliance Notice issued on him.
That Compliance Notice followed an investigation launched by the FWO after receiving information that a Mr Josh Jackson had been underpaid by Mr Tipene in breach of the Plumbing and Fire Sprinklers Award 2020.
The Compliance Notice required Mr Tipene to pay Mr Jackson the amount of $1,406.34 (gross) together with relevant superannuation payments based upon the underpayment. Mr Tipene failed to comply with the Compliance Notice, necessitating proceedings being commenced in the Court.
Following proceedings being commenced, Mr Tipene failed to engage with the proceedings by filing and serving a Notice of Address for Service, a Response or a Defence and defend the proceedings with due diligence as required by the Federal Circuit and Family Court of Australia (Division 2) (General Federal law ) Rules 2021 (Cth) (“the Rules”)
On 24 February 2023, the Court entered default judgement against Mr Tipene pursuant to r 13.05 of the Rules and made orders inter ailia that Mr Tipene pay Mr Jackson the amounts set out above within 28 days. The matter was stood over to enable submissions to be filed in relation to penalty.
Unsurprisingly, given the history of the matter, Mr Tipene has failed to file any submissions or evidence. Accordingly the matter is being determined on the material filed by the FWO in Chambers.
EVIDENCE RELIED UPON
The FWO relied upon the following evidence:
a. Statement of Claim filed 21 November 2022.
b. Affidavit of Megan Carter made on 3 February 2023; and
c. Affidavit of Vanessa Camilleri made on 30 March 2023.
The Court is satisfied that both before default judgement was made by the Court and following, the FWO has extensively tried to engage with Mr Tipene to resolve the matter. As at the date of this judgement no payment as required by the Court’s orders has been made to Mr Jackson.
EARLIER COURT PROCEEDINGS
The Court notes this is the second time that the FWO is found it necessary to take proceedings against Mr Tipene in relation to failing to comply with a Compliance Notice. In Fair Work Ombudsman v Tipene [2022] FedCFamC2G 853 the Court imposed a pecuniary penalty of $6300 on Mr Tipene together with orders for the payment of amounts in respect of underpayments to two employees. The Court has been advised that the orders made on 7 October 2022 at not been complied with in that no payments have been made to the underpaid employees and the pecuniary penalty remains outstanding.
At paragraph 17 of that judgement the Court said as follows:
Evidence has been given of a belligerent and obdurate attitude by the respondent. The Court is of the view that the respondent has displayed a complete disregard for his obligations under the Compliance Notice and is in serious and wilful disregard of his responsibilities under the Act, as towards the applicant as the regulator of Commonwealth workplace laws and the Court.
The above, is equally applicable in the current proceedings.
RELEVANT LAW IN RELATION TO PENALTY
The Court has a broad discretion as to penalty. In Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (“Pattinson”) at [71] it is said that the Court should fix a penalty ‘it considers fairly and reasonably to be appropriate to protect the public interest from future contraventions of the Act’. Further at [10] and [12], the High Court stated that the penalty must not exceed what is ‘reasonably necessary to achieve the purpose of section 546: the deterrence of future contraventions of a like kind by the contravener and others’.
In Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301 Bromwich J summarised how the discretion is to be approached at [36], as follows:
1) Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.
2) Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.
3) Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.
4) Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
5) Consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO (as permitted by Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (CFMEU Civil Penalties Case) at [64]) and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary: see Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14 at [30]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560 at [23]. [71] and [102].
The purpose of a civil penalty is primarily, if not wholly, promoting the public interest in compliance with the laws that have been contravened, and it does not engage principles of retribution or rehabilitation: Fair Work Ombudsman v Nobrace Centre Pty Ltd (in Liquidation) [2019] FCCA 2979 per Kelly J (“Nobrace”) at [65]. As the principles of retribution or rehabilitation are not involved in the determination of a civil penalty, this intensifies the focus of a civil penalty determination on issues of specific and general deterrence: Nobrace at [66].
The Act does not set out any mandatory criteria, inclusive or exclusive, that the Court must consider when determining whether to impose a penalty or the amount of any penalty: Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276 at [88]. The choice of penalty must be guided by the “individual circumstances of a case, not by a line-by-line comparison with another case”: Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith (2008) 165 FCR 560 at 12. The process is an intuitive one by the Court and not an application of a scientific process: Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383 at [60]‑[63].
In Mason v Harrington Corporation Pty Ltd [2007] FMCA 7, Mobray FCM set out what is a now well accepted set of factors relevant in assessing a pecuniary penalty. They are as follows:
a) the nature and extent of the conduct which led to the breaches;
b) the circumstances in which the conduct took place;
c) the nature and extent of any loss sustained as a result of the breaches;
d) whether there has been similar previous conduct by the Respondents;
e) whether the breaches were properly distinct or arose out of 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 enforcement authorities;
l) the need to ensure compliance with minimum standards by provision of an effective means for the investigation and enforcement of employee entitlements; and
m) the need for specific and general deterrence.
Merkel J in Seven Network (Operations) Pty Ltd v Communications, Electrical, Electronic, Energy Information, Postal Plumbing and Allied Services Union of Australia (2001) 110 IR 372 set out some guiding considerations for the Court at 374:
matters to be taken into account in determining the appropriate penalty include the cost of the contravention, deterrence, the flagrancy and deliberateness of the breach, the offender’s past record of behaviour and any contrition displayed by the offender.
CONSIDERATION
The current proceedings concern one contravention of s 716(5) of the Act. Pursuant to ss 539(2) and 546(2)(a) of the Act, the maximum penalty the Court may impose on the respondent for the contravention is $6,660.00.
In terms of the nature, circumstances and deliberateness of the contravention, the underpayment took place in circumstances where the Compliance Notice gave the respondent an opportunity to rectify the contraventions and therefore be protected from civil remedy proceedings. It also occurred in a background where the respondent was on notice from as early as 30 April 2022 of the need to comply with the Compliance Notice and that it may lead to the imposition of civil penalties if not complied with. The Court is satisfied the failure to comply with a Compliance Notice demonstrates a serious and deliberate disregard for his obligations under the Act and the authority of the applicant as a regulator of Commonwealth workplace laws.
In terms of the nature and extent of the loss, Mr Jackson has been directly impacted by the respondent’s failure to comply with a Compliance Notice. At a time of significant inflation, any underpayment to a worker will be keenly felt and have most likely significant impact on the worker. The non-compliance has required the FWO to institute proceedings in this Court and has taken up valuable Court time in circumstances where Mr Tipene has ignored the Court and its authority.
In terms of the size and financial circumstances of the respondent, the Court notes that he has not adduced any evidence that establishes the reason he did not comply with the Compliance Notice either due to financial hardship or otherwise. Further, the respondent has expressed on multiple occasions to the FWO an intention to make payments to rectify the non-compliance but is not done so. Further, it is well established the size and financial circumstances of an employer do not exculpate breaches of workplace laws and that the capacity to pay a penalty will be of less relevance in the objective of general deterrence.
In terms of cooperation, contrition and corrective action, the Court notes the respondent has not displayed one iota of contrition or remorse. By failing to engage with the Court has put the respondent to considerable further additional time and expense in having to obtain default judgement. The Court is of the view that no discount on any appropriate penalty can be given in respect of contrition and corrective action.
In terms of general deterrence, the penalty imposed must aim to deter “future contraventions of a like kind… by others”: Pattinson at [10]. There should be some reasonable relationship to the maximum penalty such that the penalty imposed does not exceed what is reasonably necessary. Thus any penalty imposed must be sufficient to deter others so that penalties are not regarded as “an acceptable cost of doing business”: Pattinson at [17].
In terms of specific deterrence, the respondent claims that he does not work for himself, and that he works for a company. The Court gives this little weight in circumstances where the evidence indicates that first, the respondent’s business name remains registered, and second the respondent became a director and majority shareholder of TBR Roofing Pty Ltd. The Court accepts the submission of the FWO that there is a likelihood of the respondent continuing to employ staff into the future.
Noting the previous failure to comply with a Compliance Notice and to pay both compensation and the civil penalty ordered in the previous matter, the Court is of a view that this second offence is a continuing serious and wilful disregard of the Mr Tipene’s responsibilities under the Act.
The Court accepts the submission by the FWO that Mr Tipene appears to consider that his compliance with Compliance Notices and engagement in court proceedings is optional at his discretion. Accordingly, any penalty must reflect the seriousness of the disregard of his obligations to pay award rates.
It all the circumstances, the FWO propose that a high range penalty in the order of 90 to 100% of the maximum penalty is appropriate, that being in the range of $5,995- $6,660.
Given the previous proceedings, together with the failure to rectify the underpayments in those proceedings or pay a pecuniary penalty imposed, and the similarity of the current proceedings to the previous proceedings, the Court accepts that the penalty imposed must be at the very highest end of the available range of penalties. The Court notes the guidance issued by the High Court in Pattinson that this may include the imposition of the maximum available penalty. In the particular circumstances of this matter, the court is satisfied that the maximum penalty is the appropriate penalty. The imposition of a maximum penalty will serve both as a general deterrent, but also a specific deterrent to Mr Tipene as to what will happen in the future should he again failed to comply with the provisions of the Act.
In the Courts view, this matter also highlights the inadequacy of the current penalty regime in relation to recidivist offenders, such as Mr Tipene. Pecuniary penalties only have an impact if they can be enforced, if necessary, by the prospect of further action by a Court in circumstances where there is a flagrant disregard for orders made. It is, however, a matter for the executive and not the Court to consider whether or not the current penalty regime should be strengthened so as to properly protect workers in the circumstances of this case.
I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment of Judge D Humphreys. Deputy Associate:
Dated: 21 April 2023
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