Fair Work Ombudsman v Western Chinese Language School Incorporated

Case [2025] FedCFamC2G 298

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Western Chinese Language School Incorporated [2025] FedCFamC2G 298

File number: MLG 383 of 2024
Judgment of: JUDGE CHAMPION
Date of judgment: 6 March 2025
Catchwords:

FAIR WORK – Compliance Notice

FAIR WORK – Reasonable belief – Section 716(1)(a) – Whether the Inspector reasonably believed that the employer had contravened terms of a modern award – Where the Compliance Notice did not specify each and every contravention but “roved” across a date range throughout a relevant period – Where the court held that employer’s system of conduct in paying a flat rate less than prescribed Award minimums was sufficient grounds for the Inspector’s reasonable belief that the contraventions occurred throughout the relevant period

FAIR WORK – Review of the Compliance Notice –Section 717(1)(a) – Whether the employer had not committed a contravention set out in the Notice because the modern award, the Social, Community, Home Care And Disability Services Industry Award 2010 did not apply to it – Where held that a community language school was an employer in the social and community services sector and the Award applied to it

FAIR WORK – Section 717(1)(b) – Whether the Notice set out “specified action to remedy the direct effects of the contravention” under s. 716(2)(a) – Whether the Notice set out “brief details” of the contravention under s. 716(3)(c) –Held Notice complied with ss. 716(2)(a) and 716(3)(c) –Where the court found that the First Respondent failed to comply with the notice under s. 716(5)

FAIR WORK – Accessorial liability – Where under s. 716(2)(a) the Inspector may require a person to take specified action “within such reasonable time as is specified in the notice” – Where an officer of the FWO made an express representation that the First Respondent should not make payments at the time specified in the notice – Where the failure to comply with the Contravention Notice was a continuing contravention – Where the Second Respondent was an intentional participant in the contravention

Legislation:

Fair Work Act 2009 (Cth) ss. 90, 550, 706, 716, 717

Miscellaneous Award 2020

Social, Community, Home Care and Disability Services Industry Award 2010

Explanatory Memorandum, Fair Work Bill 2008 (Cth)
Cases cited:

Brammer v Deery Hotels Pty Ltd (1974) 22 FLR 276

Ezy Accounting 123 Pty Ltd v FWO (2018) 360 ALR 261; [2018] FCAFC 134

Fair Work Ombudsman v ANSA Finance Pty Ltd [2022] FedCFamC2G 833

Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365

Fair Work Ombudsman v Grouped Property Services Pty Ltd (2016) 152 ALD 209; [2016] FCA 1034

Fair Work Ombudsman v Pure Telecom Pty Ltd [2024] FedCFamC2G 664

Federal Commissioner of Taxation v Australia and New Zealand Banking Group Limited (1979) 143 CLR 499

George v Rockett (1990) 170 CLR 104; [1990] HCA 26

Hana Express Group Pty Ltd v Fair Work Ombudsman (2020) 350 FLR 359; [2020] FCCA 54,

Health Services Union v Catering Industries (NSW) Pty…

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Fair Work Ombudsman v Western Chinese Language School Incorporated [2025] FedCFamC2G 298
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[2025] FedCFamC2G 298
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CaseChat Overview and Summary

In the case of Fair Work Ombudsman v Western Chinese Language School Incorporated, the Western Chinese Language School, along with its directors, faced allegations of non-compliance with employment standards and modern awards. The Fair Work Ombudsman issued a Compliance Notice to the school, alleging multiple breaches of the National Employment Standards and the Social, Community, Home Care and Disability Services Industry Award 2010. The school sought to have the Compliance Notice reviewed and cancelled. The primary issues for the court's determination were whether the award applied to the school, whether the Inspector had a reasonable belief that the school had contravened employment standards, whether the Compliance Notice was properly drafted, and whether the directors were accessory to the contraventions.

The court examined the applicability of the Social, Community, Home Care and Disability Services Industry Award 2010 to the school. The court found that the school fell within the scope of the award, as it was an employer in the social and community services sector. The court rejected the school's argument that the award did not apply to it. Regarding the Inspector's reasonable belief, the court held that the school's system of paying a flat rate less than the prescribed award minimums was sufficient grounds for the Inspector's belief that contraventions occurred throughout the relevant period. The court also found that the Compliance Notice complied with the relevant sections of the Act, as it specified remedial action and included brief details of the contraventions. Lastly, the court found that the directors were accessory to the contraventions, as they were intentional participants in the school's conduct.

The court ultimately found in favour of the Fair Work Ombudsman and dismissed the school's application to review and cancel the Compliance Notice. The court ordered the school to comply with the Compliance Notice, including the payment of backpay and superannuation to the affected employees. The directors were also held to be accessory to the contraventions and were jointly and severally liable for the payment of the penalties and costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

The Notice also set out that FWI Zhang reasonably believed that WCLS had contravened s.90(2) of the Act — a provision of the NES — because it had not paid accrued and untaken annual leave to Ms Zhuang when her employment ended on 5 December 2020. WHAT ARE THE ISSUES FOR DECISION? The following five issues arise for decision:(1)Did the SCHADS Award apply to WCLS and the Employees?(2)Was the Notice invalid because there was not an objective basis for FWI Zhang under s. 716(1)(a) to “reasonably believe” that WCLS had contravened a provision of the NES or a term of the SCHADS Award?(3)Did the Notice not comply with s. 716(2)(a) because its required WCLS to take remedial action which exceeded the limits of “specified action to remedy the direct effects of the contravention”?(4)Did the Notice not comply with s. 716(3)(c) because it did not set out the “brief details” of the contravention? and;(5)Was Mr Chen - the Second Respondent - “involved” in the contravention within the meaning of s. 550 of the Act? I have sequentially dealt with those five issues.ISSUE 1: DID THE SCHADS AWARD APPLY TO WCLS AND TO THE EMPLOYEES?It was common ground that if the SCHADS Award did not apply to WCLS the Notice should be cancelled with retrospective effect at least as to the Award contraventions Under s. 717(1) WCLS applied for review of the Notice on both of the following grounds:(a) the person has not committed a contravention set out in the notice;(b) the notice does not comply with subsection 716(2) or (3) Under s. 717(3) on a review “the court may confirm, cancel or vary the notice after reviewing it.” If the SCHADS Award did not cover or apply to WCLS, it was common ground that the appropriate order under s. 717(3) would be for the court to “cancel… the notice after reviewing it” with retrospective effect in so far as it concerned Award breaches. The common position followed as a necessary consequence of the parties’ recognition that if the SCHADS Award did not cover or apply to WCLS, WCLS would not have committed the Award contraventions set out in the notice under s. 717(1)(a).Legal principles as to award construction The proper construction of a term of an award depends upon a consideration of the words used in the term, having regard to any relevant context and purpose (Kucks v CSR Ltd (1996) 66 IR 182, 184). Further, in Kucks Madgwick J said at 184:…. meanings which avoid inconvenience or injustice may reasonably be strained for.…But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.What are the relevant coverage provisions of the SCHADS Award and what is the relevant test?

Ratio Decidendi

Legal Principle Established

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