Fair Work Ombudsman v Tipene
[2022] FedCFamC2G 853
Federal Circuit and Family Court of Australia
(DIVISION 2)
Fair Work Ombudsman v Tipene [2022] FedCFamC2G 853
File number(s): SYG 566 of 2022 Judgment of: JUDGE HUMPHREYS Date of judgment: 7 October 2022 Catchwords: INDUSTRIAL LAW – Fair Work Act 2009 – application for default judgment – penalty imposed. Legislation: Fair Work Act 2009 (Cth) s 716
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 13.05
Cases cited: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] 165 FCR 560
Canturi v Sita Coaches Pty Ltd [2002] 116 FCR 276
Electrical, Electronic, Energy Information, Postal, Plumbing and Allied Services Union of Australia [2001] 110 IR 372
Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charleston [2017] FCA 1301
Fair Work Ombudsman v NoBrace Centre Pty Limited (in Liquidation) [2019] FCCA 2970
Mason v Harrington Corporation Pty Limited [2007] FMCA 7
Mornington Inn Pty Ltd v Jordan [2008] 168 FCR 383
Seven Network (Operations) Pty Ltd v Communications,
Division: Division 2 General Federal Law Number of paragraphs: 23 Date of last submission/s: 7 October 2022 Date of hearing: 7 October 2022 Place: Parramatta Solicitor for the Applicant: Mr Lodge Solicitor for the Respondent: There was no appearance by or on behalf of the Respondent ORDERS
SYG 566 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: WINATA TIPENE
Respondent
order made by:
JUDGE HUMPHREYS
DATE OF ORDER:
7 OCTOBER 2022
THE COURT ORDERS THAT:
1.Default judgment be entered for the Applicant against the Respondent pursuant to Rule 13.05(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) (‘Rules’) by reason of the Respondent’s default pursuant to Rule 13.04(2) of the Rules by failing to:
(a)file a notice of address for service as required by Rule 6.01 of the Rules;
(b)file a notice of address for service by 3 June 2022 in accordance with Order 1 of the orders of His Honour Judge Humphreys dated 27 May 2022 (‘Orders’);
(c)file a response by 24 June 2022 in accordance with Order 2 of the Orders;
(d)file a defence in accordance with Rule 4.04(3); and
(e)defend the proceedings with due diligence.
2.A declaration is made that the Respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (‘FW Act’) by failing to comply with the compliance notice dated 21 October 2021 (‘Compliance Notice’).
3.Pursuant to s 545(1) of the FW Act, the Respondent, within 28 days from the date of this order take action to remedy the direct effects of the contravention set out in the Compliance Notice by:
(a)paying $2,152.19 (gross) to Mr Prismall-Webster;
(b)calculating and paying into Mr Prismall-Webster’s nominated superannuation fund the additional superannuation contributions required to be paid on the amount in subparagraph a. above pursuant to clause 20.2 of the Plumbing and Fire Sprinklers Award 2020 (‘Plumbing Award’);
(c)paying $4,514.32 (gross) to Mr Campisi; and
(d)calculating and paying into Mr Campisi’s nominated superannuation fund the additional superannuation contributions required to be paid on the amount in c. above pursuant to clause 20.2 of the Plumbing Award.
4.Pursuant to s 547(2) of the FW Act, the Respondent pay, within 28 days of the date of this order:
(a)interest to Mr Prismall-Webster on the amount set out in paragraph 3.a. above;
(b)interest to Mr Campisi on the amount set out in paragraph 3.c. above.
5.Pursuant to s 546 of the FW Act, the Respondent pay a pecuniary penalty of $6,300.00 to the Commonwealth for the contravention declared at paragraph 2 within 28 days of the order.
6.The Applicant have 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
(AS REVISED FROM TRANSCRIPT)JUDGE HUMPHREYS
introduction
On 14 April 2022, the applicant filed a Statement of Claim, being an application alleging that the respondent contravened s 716 of the Fair Work Act 2009 (Cth) by failing to comply with a compliance notice issued by a Fair Work Inspector on 21 October 2021. The compliance notice was in respect of the employment of a number of employees.
default
The Court is satisfied that the statement of claim has been served on the respondent. Further, the Court is satisfied the respondent is or should have been aware of the proceedings as a result of correspondence sent to the respondent’s listed home address via both email and mail together with correspondence that has been sent to him by the Court.
On 27 May 2022, the Court made orders to the effect that if the respondent failed to file and serve a Notice of Address on or before 3 June 2022 and/or failed to file and serve a Response on or before 24 June 2022., the applicant, the Fair Work Ombudsman, was at liberty to file and serve an Application in a Proceeding seeking orders for default judgment together with submissions on the question of penalty.
The Court is satisfied that the respondent has failed to comply with the court orders set out above. In these circumstances, the Court is satisfied that the respondent has failed to comply with r 13.05(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) 2021 Rules (Cth), and it is appropriate to give default judgment in favour of the applicant. The Court is satisfied that it is also convenient to set an appropriate penalty for the contraventions alleged.
penalty
Material has been tendered before the Court which consists of some six Affidavits of various employees of the applicant. The Court has read those and has taken them into account.
The respondent is a sole trader carrying on a business installing metal roofing in Sydney under the registered business name of “The Brothers Metal Roofing”. The respondent employed two people the subject of this matter, being a Mr Kampise and a Mr Prismall-Webster, following an investigation carried out by an officer of the applicant, the reasonable belief was formed within the meaning of s 716 of the Act that the respondent has contravened the relevant Award in relation to his employees and underpaid them.
The underpayment in relation Mr Prismall-Webster is calculated as $2,152.19 gross, and in relation to Mr Kampise, $4,114.32 gross. By gross, that is not net of tax.
A compliance notice was issued pursuant to s 716(2) of the Act, requiring the respondent to calculate and rectify the underpayments to the employees and produce reasonable evidence of compliance. The respondent has failed to engage with the compliance notice, and accordingly, the applicant was forced to commence proceedings in this Court.
The Court is satisfied it has the power to grant the relief sought by the applicant and in particular, pursuant to s 545(1) of the Act, make an order that it considers appropriate, which it does, that the Court is satisfied that there has been a civil contravention and that the Court should impose a penalty, an order for interest pursuant to s 547(2) of the Act and the payment of a pecuniary penalty.
the law
The Court has a broad discretion as to penalty. In Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charleston [2017] FCA 1301, Bromwich J summarised how the discretion is to be approached at [36]. Firstly, the Court should:
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 if they arise out of a course of conduct…
3) Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, that there is no double penalty imposed, and the penalty is appropriate in response to what each respondent did.
4) Consider the appropriate penalty in respect of each final group of contraventions, taken in isolation.
5) Consider the overall penalties … 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.
It is not necessary for the Court to undertake those steps in this matter, because there is only a single contravention, which is the failure to comply with the compliance notice. The purposes of civil penalties, primarily if not wholly, are to promote the public interest and compliance with laws that have been contravened. It does not engage principles of retribution or rehabilitation: Fair Work Ombudsman v NoBrace Centre Pty Limited (in Liquidation) [2019] FCCA 2970 (‘NoBrace’) per Kelly J at 65. As the principles of retribution or rehabilitation are not involved in the determination of 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 mandatory criteria inclusive or exclusive that a Court must consider when determining whether to impose a penalty or the amount of the penalty: Canturi v Sita Coaches Pty Ltd [2002] 116 FCR 276. The choice of penalty must be guided by the individual circumstances of the case and not by 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 and not an application of a scientific process: Mornington Inn Pty Ltd v Jordan [2008] 168 FCR 383. In Mason v Harrington Corporation Pty Limited [2007] FMCA 7, Mowbray, as he was then, set out what is now a well-accepted set of factors 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 any similar previous correspondence 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 has exhibited contrition;
(j) whether the party committing the breach has taken corrective action;
(k) whether the party committing the breach has co-operated with enforcement authorities;
(l) the need to ensure compliance with minimum standard provisions or an effective means of investigation and the 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:
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
These proceedings involve one contravention of s 716(5) of the Act. The maximum penalty that the Court may impose on a respondent for such a contravention is $6,600.00.
In terms of the nature and deliberateness of the contravention, the Court notes the respondent was given an opportunity to rectify the contraventions and has failed to do so nearly 8 months after the time specified in the compliance notice. Further, the respondent has not meaningfully engaged in any way with either the applicant’s investigation or the Court processes. The Court acknowledges the applicant has made extensive efforts to engage with the respondent for the purposes of seeking compliance.
Evidence has been given on 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 for his responsibilities under the Act, the applicant as the regulator of Commonwealth workplace laws and the Court.
In terms of the nature and extension of the loss, the employees have not received correct payment for hours worked and leave entitlements that was due to them, notwithstanding eight months has passed since the compliance notice was issued.
Further, the failure to comply with the compliance notices and necessitated the applicant to institute Court proceedings. This is a significantly aggravating factor as the applicant and the Court have been required to spend time at significant cost in public funds in dealing with a civil remedy proceeding that could have been rectified had the compliance notice been complied with. In terms of compliance with minimum standards, the respondent has disregarded the minimum standards in industrial instruments. His disregard of the compliance notice and the proceedings in Court indicate a seriousness which must be reflected in the penalty and, indeed, his unwillingness to engage in any way means that any reduction in penalty that might have been possible is, effectively, ruled out.
No evidence has been adduced as to the financial circumstances of the respondent. Whilst it was asserted he was no longer trading due to COVID-19 and/or that he was “broke”, no evidence has been provided of the financial hardship. Rather, the evidence indicates that he was simply not happy with the employees, who are the subject of these proceedings, and this was the justification for failing to pay them. There is also evidence that indicates the respondent continues to trade in the metal roofing industry and has a significant number of employees working for him. Irrespective of this, it is well-established that the size and financial circumstances of an employer do not exculpate breaches of workplace laws and a capacity to pay a penalty will be of less relevance in objective general deterrence.
The Court notes there has been no cooperation or corrective action whatsoever and no contrition. General deterrence is of a significant consideration in this matter, in that the Court needs to send a clear message, not only in respect of the breaches, but in respect of the failure of the applicant to engage with the applicant, being the Fair Work Ombudsman, and to engage with the Court. In effect, the respondent has sought to thumb his nose at both the applicant, the Fair Work Ombudsman, and the Court. There is a need to send a message to other employers that a failure to comply with a compliance notice will not be tolerated by the Fair Work Ombudsman, the community or the Courts.
The Court is satisfied that there is a need for a high level specific deterrence directed towards the respondent, given that his business name is still registered and held by him and there was evidence before the Court to indicate that he engages anything up to 13 workers and has been subject to subsequent enforcement activity by the applicant. The respondent simply said he will not comply with the compliance notice, despite being warned of the potential penalty. Therefore, specific deterrence needs to take account of his complete failure to evidence any contrition or corrective action. The Court notes that it has been recommended that the penalty should be in the 80 to 90 per cent range, being $5,328.00 to $5,994.00 of the maximum penalty of $6,600.00.
The Court notes this recommendation. However, the Court is at liberty to vary it from that recommendation, taking into account what it considers to be the appropriate penalty in all of the circumstances. The Court has significant concerns as to the actions of the respondent and, as I have said, he has thumbed his nose at both the Court and the Fair Work Ombudsman. In effect, he has said, “Do your worst to me. I do not care”. In those circumstances, the Court is satisfied that the appropriate penalty should be at the highest end of the range and fix a penalty of $6,300.00.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Humphreys. Deputy Associate:
Dated: 7 October 2022
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