Fair Work Ombudsman v VIP Security Services Pty Ltd - [2018] FCCA 1969

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v VIP SECURITY SERVICES PTY LTD & ANOR

[2018] FCCA 1969

Catchwords:

INDUSTRIAL LAW – Commonwealth – Compliance and enforcement – Civil remedies – Pecuniary penalty orders – Assessing penalty – Deterrence.

INDUSTRIAL LAW – Commonwealth – Compliance and enforcement – Civil remedies – Pecuniary penalty orders – Amount of penalty – Totality and proportionality.

Legislation:

Fair Work Act 2009, ss.550(1), 557(1)

Cases cited:

Fair Work Ombudsman v Lohr [2018] FCA 5

Rocky Holdings v. Fair Work Ombudsman [2014] FCAFC 6
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482
Trade Practices Commission v CSR Ltd [1990] FCA 52
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No.2) [2017] FCA 557

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

VIP SECURITY SERVICES PTY LTD

Second Respondent:

ADAM MARCINKOWSKI

File Number:

BRG 560 of 2017

Judgment of:

Judge Jarrett

Hearing date:

19 April 2018

Date of Last Submission:

21 May 2018

Delivered at:

Brisbane

Delivered on:

20 July 2018

REPRESENTATION

Counsel for the Applicant:

Mr McKechnie

Solicitors for the Applicant:

Fair Work Ombudsman

Counsel for the Respondents:

Ms Hartigan

Solicitors for the Respondents:

Wotton & Kearney Insurance Lawyers

ORDERS

THE COURT DECLARES THAT:

The First Respondent contravened:
(a)s.340 of the Fair Work Act 2009 (Cth) by taking unlawful adverse action against Theo Kouros;
(b)s.45 of the Fair Work Act 2009 (Cth) by failing to ensure that Matt Donohoe and Theo Kouros were better off on individual flexibility agreements in accordance with clause 7.3(b) of the Security Services Industry Award 2010;
(c)s.45 of the Fair Work Act 2009 (Cth) by failing to pay casual loading in accordance with clause 10.5(b) of the Security Services Industry Award 2010;
(d)s.45 of the Fair Work Act 2009 (Cth) by failing to pay broken shift allowance in accordance with clause 15.6 of the Security Services Industry Award 2010;
(e)s.45 of the Fair Work Act 2009 (Cth) by failing to pay night span penalty in accordance with clause 22.3 of the Security Services Industry Award 2010;
(f)s.45 of the Fair Work Act 2009 (Cth) by failing to pay permanent night span penalty in accordance with clause 22.3 of the Security Services Industry Award 2010;
(g)s.45 of the Fair Work Act 2009 (Cth) by failing to pay Saturday penalty in accordance with clause 22.3 of the Security Services Industry Award 2010;
(h)s.45 of the Fair Work Act 2009 (Cth) by failing to pay Sunday penalty in accordance with clause 22.3 of the Security Services Industry Award 2010;
(i)s.45 of the Fair Work Act 2009 (Cth) by failing to pay public holiday penalty in accordance with clause 22.3 of the Security Services Industry Award 2010;
(j)s.45 of the Fair Work Act 2009 (Cth) by failing to pay overtime in accordance with clause 23.3 of the Security Services Industry Award 2010;
(k)s.45 of the Fair Work Act 2009 (Cth) by failing to reimburse employees for the cost of…

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: [2018] FCCA 1969
Decision Date: 20 July 2018

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) brought proceedings in the Federal Court of Australia against VIP Security Services Pty Ltd (VIP Security) concerning alleged contraventions of the *Fair Work Act 2009* (Cth). The dispute centred on VIP Security's failure to pay minimum award wages and entitlements to a number of its employees, leading to claims of underpayment.

The primary legal issue before Judge Jarrett was the assessment of an appropriate pecuniary penalty for VIP Security's contraventions. This involved considering the principles of deterrence, both specific and general, and ensuring that the penalty imposed was proportionate to the seriousness of the offending conduct and the overall circumstances of the case, including the totality of the contraventions.

Judge Jarrett reasoned that a significant penalty was warranted to reflect the deliberate nature of the contraventions and to deter VIP Security and other employers from engaging in similar conduct. The court applied the principles of totality and proportionality, considering the number of employees affected, the duration of the underpayments, and the financial capacity of the employer. The court emphasised that penalties should not merely compensate for underpayments but should also serve a punitive and deterrent purpose. The final orders imposed a penalty on VIP Security, reflecting the court's assessment of the seriousness of the breaches and the need for general and specific deterrence.

Orders