Fair Work Ombudsman v TKN Civil Works 2019 Pty Ltd

[2021] FCCA 2153

FEDERAL CIRCUIT COURT OF AUSTRALIA

Fair Work Ombudsman v TKN Civil Works 2019 Pty Ltd [2021] FCCA 2153

File number(s):

BRG 115 of 2021

Judgment of:

JUDGE JARRETT

Date of judgment:

27 August 2021

Catchwords:

INDUSTRIAL LAW – Commonwealth – compliance and enforcement – civil remedies – pecuniary penalty orders – assessing penalty – contravention deemed to be admitted.

INDUSTRIAL LAW – Commonwealth – compliance and enforcement – civil remedies – pecuniary penalty orders – amount of penalty – particular cases.

Legislation:

Fair Work Act 2009 (Cth) ss 90(2), 716(2), 716(5)

Federal Circuit Court Rules 2001 (Cth) r 13.03A(2), pt 13

Number of paragraphs:

13

Date of last submission/s:

27 August 2021

Date of hearing:

27 August 2021

Place:

Brisbane

Solicitor for the Applicant:

Office of the Fair Work Ombudsman

The Respondent:

No appearance

ORDERS

BRG 115 of 2021

BETWEEN:

FAIR WORK OMBUDSMAN

Applicant

AND:

TKN CIVIL WORKS 2019 PTY LTD

Respondent

ORDER MADE BY:	JUDGE JARRETT
DATE OF ORDER:	27 AUGUST 2021

THE COURT DECLARES THAT:

1.Upon the admission that the respondent is taken to have made consequent upon its default pursuant to r.13.03(2) of the Federal Circuit Court Rules 2001 (Cth), that the respondent contravened s.716(5) of the Fair Work Act 2009 (Cth) by failing to comply with the compliance notice given by the applicant to the respondent on 22 November, 2020.

THE COURT ORDERS THAT:

2.Pursuant to s.545(1) Fair Work Act 2009 (Cth), that within 28 days of the date of these orders, the respondent take the steps required by the compliance notice given 22 November, 2020 by:

(a)calculating the entitlements that the respondent was required to pay to Mr Brett Backhouse, the relevant employee as specified in the compliance notice;

(b)preparing and producing to the applicant a schedule outlining the calculation of the outstanding entitlements that the respondent was required to pay; and

(c)providing evidence to the applicant that said entitlements were paid to Mr Backhouse.

3.Pursuant to s.547(2) of the Fair Work Act 2009 (Cth) that the respondent pay interest to Mr Backhouse at the applicable pre-judgment rate on the amount calculated in accordance with order 2(a) above within 28 days of the date of these orders.

4.Pursuant to s.546(1) of the Fair Work Act 2009 (Cth) that the respondent pay a pecuniary penalty of $20,000 to the Commonwealth within 28 days of the date of this order.

REASONS FOR JUDGMENT

JUDGE JARRETT:

1. On 26 March this year, the applicant, the Fair Work Ombudsman, commenced proceedings against the respondent, TKN Civil Works 2019 Pty Ltd for a contravention of the Fair Work Act 2009 (Cth). The contravention alleged was that the respondent did not comply with a compliance notice issued by the applicant pursuant to s.716(2) of the Act. To not comply with such a notice is a contravention of s.716(5) of the Fair Work Act.

2. When she commenced the proceedings, the applicant filed a statement of claim setting out the facts upon which the applicant sought the relief set out in the application.  The proceedings were served on the company on 12 May, 2021 in the way in which service upon companies is permitted: see the affidavit of Michael Todd filed on 17 May, 2021.  The matter came before me on 21 May.  There was no appearance by the respondent.  The application was adjourned to today.  At no time has the respondent filed a notice of address for service or a response or a defence to the statement of claim.  There was no appearance on the last occasion.

3. Today, a person who says that she is a representative of the company but not a director of the company has answered the call when the company was called in these proceedings.  She is not a lawyer and she says that she simply wants to find out how much the company needs to pay and to come to an agreement with the other side.  I have not given her leave to appear for the company.  There is no evidence before me, by way of affidavit or otherwise, that would allow me to make the requisite findings upon which I might exercise the discretion to grant leave.  So I intend to proceed with the application before me for default judgment this morning.

4. It will be tolerably clear from the facts that I have already set out in these reasons that the respondent is in default for the purposes of the Federal Circuit Court Rules 2001 (Cth), and Part 13 of the Rules is engaged. The Court is, upon being satisfied of the default, able to grant the applicant the relief that the Court thinks the applicant is entitled to, having regard to the statement of claim. Because there is a statement of claim, no evidence is necessary.

5. The statement of claim and the facts alleged in it reveal these things. The respondent is a company and at the relevant time it operated a business providing civil works within the construction industry, such as earthmoving. In October, 2020 there was an investigation into the respondent by the applicant through her authorised fair work inspector. That investigation was prompted by a request for assistance by an employee. After the investigation, the fair work inspector formed a belief that the respondent had contravened s.90(2) of the Fair Work Act by failing to pay the employee accrued but untaken annual leave on termination.

6. The inspector gave to the respondent a compliance notice under s.716(2) of the Act. That notice was given to the company on 22 November, 2020. The notice required the respondent to do certain things and in particular, it required the company to calculate and pay to the employee his unpaid annual leave by 16 December, 2020. It also required the company to provide to the inspector a schedule of calculations and payments and evidence that the payment had been made to the employee by 23 December, 2020. The statement of claim alleges that the respondent did not do those things. It did not do them by the date specified in the notice and has not done them at all.

7. Some further opportunities to comply with the notice were extended to the company, but the company did not take up those opportunities and these proceedings are the result.  Evidence that has been filed for the purposes of this application indicates that on 19 May this year, the applicant received an email from the respondent’s then sole director, a Mr Northcott, who stated that the respondent “will not file a defence” and that the respondent’s liquidation “will only follow in a matter of time”.  There has been no further correspondence with the applicant, according to the evidence, since that contact and as I have already indicated the respondent has not participated in these proceedings.

8. It is appropriate to grant the relief sought by the applicant in the statement of claim insofar as it consists of declaratory relief. Accordingly, I declare that upon the admissions which the respondent is taken to have made, consequent upon its default pursuant to r. 13.03A(2) of the Federal Circuit Court Rules, the respondent contravened s. 716(5) of the Fair Work Act by failing to comply with a compliance notice given to the respondent on 22 November, 2020.

9. The applicant also seeks the imposition of a pecuniary penalty on the respondent. The non-compliance with s.716(5) is the type of non-compliance that enlivens the Court’s power to make a pecuniary penalty order. The circumstances here demonstrate that the respondent has paid no attention to the compliance notice. As I have been given to remark in a number of cases now, the compliance notice regime is an important aspect of the enforcement regime established under the Fair Work Act.

10. It provides the regulator with an appropriate mechanism to effectively and efficiently call upon employers to remedy non-compliance with the Act.  It has advantages for the recipients of such notices.  Those advantages are that if the notice is complied with, court proceedings cannot be brought against the recipient of the notice. The recipient is not taken to have contravened the orders the subject of the notice if the notice is complied with.  Put shortly, if the notice is complied with, that is the end of the matter, but if the notice is not complied with, as this case demonstrates, it is not the end of the matter.

11. The evidence shows that the respondent was given a number of opportunities to meet its obligations under the compliance notice but has failed to do so.  There is no evidence before me about the respondent or its business or anything of that nature.  It has not participated in these proceedings. 

12. The maximum penalty that might be imposed for a contravention in the present case is $33,300.  The applicant submits that I ought to impose a penalty which is 80 per cent of the maximum, or $26,640. 

13. I decline to impose a pecuniary penalty of that amount.  In my view, an appropriate penalty, having regard to the matters to which I have referred, is $20,000.

    ORDERS DELIVERED

I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Jarrett delivered on 27 August, 2021.

Associate:

Dated:       17 September 2021