Fair Work Ombudsman v Upper East Side Bondi Pty Ltd - [2021] FCCA 555

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v UPPER EAST SIDE BONDI PTY LTD & ANOR

[2021] FCCA 555

Catchwords:
INDUSTRIAL LAW – Fair Work – contravention of the Fair Work Act 2009 – failure to comply with s.716 compliance notice – director’s liability for company breach –liability established.

Legislation:

Fair Work Act 2009 (Cth), ss.550, 712, 716, 717.

Cases cited:

Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 136

Fair Work Ombudsman v Joys Child Care Limited & Anor [2019] FCCA 3356

Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor [2019] FCCA 1148

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

UPPER EAST SIDE BONDI PTY LTD

Second Respondent:

JULIA ROSE GELONESE

File Number:

SYG 479 of 2020

Judgment of:

Judge Obradovic

Hearing date:

22 October 2020

Date of Last Submission:

5 November 2020

Delivered at:

Parramatta

Delivered on:

29 March 2021

REPRESENTATION

Solicitors for the Applicant:

Office of the Fairwork Ombudsman

Appearing for the Applicant:

Ms Thirukumar

Appearing for the First Respondent:

Ms Gelonese

Appearing for the Second Respondent:

In person

THE COURT DECLARES THAT:

The first respondent contravened section 716(5) of the Fair Work Act 2009 (Cth) (“the Act”) by failing to comply with a compliance notice dated 15 October 2019 relating to full-time employees (“Full-time Compliance Notice”).
The first respondent contravened section 716(5) of the Act by failing to comply with a compliance notice dated 15 October 2019 relating to casual employees (“Casual Compliance Notice”).
The second respondent was involved, within the meaning of subsection 550(2) of the Act, in the first respondent’s contraventions of section 716(5) of the Act by failing to comply with the Full-time Compliance Notice and the Casual Compliance Notice.

THE COURT ORDERS THAT:

Pursuant to section 545(1) of the Act, the first respondent take the following steps with reference to the Full-time Compliance Notice and Casual Compliance Notice, within 28 days of this order:
(a)prepare a revised schedule for each of the Employees (except for Mr Janosev and Ms Semercioglu) in accordance with Step 5(a) of the Full-time Compliance Notice and Casual Compliance Notice respectively, detailing any payments already made to Employees in respect of the Compliance Notices;
(b)pay all Employees (except for Mr Janosev and Ms Semercioglu) the identified underpayments based on the revised schedule;
(c)calculate and pay any superannuation owed to the Employees on underpayments paid as a result of the Compliance Notices (except for Mr Janosev); and
(d)provide to the Fair Work Ombudsman, evidence of the gross and net payments paid to each of the Employees as a result of orders 4(a) to 4(c) (except for Mr Janosev and Ms Semercioglu).
The matter is listed for directions in respect of penalty at 10.15am on 7 May 2021.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

SYG 479 of 2020

FAIR WORK OMBUDSMAN

Applicant

And

UPPER EAST SIDE BONDI PTY LTD

First Respondent

JULIA ROSE GELONESE

Second Respondent

REASONS FOR JUDGMENT

Introduction

These are the reasons for judgment in respect of certain alleged contraventions of the

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2021] FCCA 555
Decision Date: 29 March 2021

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) brought proceedings against Upper East Side Bondi Pty Ltd and its director, Mr. Anthony John O’Connell, alleging contraventions of the *Fair Work Act 2009* (Cth). The dispute concerned the company's failure to comply with a compliance notice issued by the FWO under section 716 of the Act, which required the company to rectify underpayments to an employee. The proceedings were heard in the Federal Circuit and Family Court of Australia.

The primary legal issue before the Court was whether Mr. O’Connell, as a director of Upper East Side Bondi Pty Ltd, was personally liable for the company's contravention of the compliance notice. This involved determining whether the circumstances met the criteria for director liability under the Act, specifically in relation to the company's failure to comply with its statutory obligations.

Judge Obradovic found that Mr. O’Connell was indeed personally liable for the company's contravention. The Court reasoned that the evidence demonstrated Mr. O’Connell's active involvement in the company's decision-making processes and his awareness of the compliance notice and the company's failure to adhere to it. The Court applied the principles of director liability under the *Fair Work Act 2009*, which can extend personal responsibility to directors for corporate breaches when they are knowingly involved in or have facilitated the contravention.

The Court ordered Upper East Side Bondi Pty Ltd to pay a penalty of $10,800 and Mr. O’Connell to pay a penalty of $2,160 for their respective contraventions.

Orders