Fair Work Ombudsman v Western Chinese Language School Incorporated (No 2)
[2025] FedCFamC2G 1037
•24 July 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Western Chinese Language School Incorporated (No 2) [2025] FedCFamC2G 1037
File number: MLG 383 of 2024 Judgment of: JUDGE CHAMPION Date of judgment: 24 July 2025 Catchwords: INDUSTRIAL LAW – CIVIL PENALTIES – Where in the liability judgment the court made declarations that the First Respondent had contravened a compliance notice and that the Second Respondent was involved in the contravention – Penalties imposed
INDUSTRIAL LAW – OTHER RELIEF – Whether appropriate to order the First Respondent to take the steps required of it in the compliance notice under s. 545(1) or 545(2)(d) of the FW Act – Where s. 545(2)(d) inserted into the FW Act after the date of the First Respondent’s failure to comply – Whether order able to be framed with precision so that the First Respondent knew what it had to do for compliance – Held appropriate to make a remedial order for the First Respondent to take the steps required of it in the Compliance Notice – Interest
Legislation: Fair Work Act 2009 (Cth) ss. 539, 545, 546, 547, 550, 716, 717
Fair Work Legislation Amendment (Closing Loopholes No 2) Act 2024
Cases cited: Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157;[2018] HCA 3
Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 540; [2022] HCA 13
Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25; [2016] FCAFC 181
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8
Australian Securities and Investments Commission v Dixon Advisory & Superannuation Services Ltd [2022] FCA 1105
Brammer v Deery Hotels Pty Ltd (1974) 22 FLR 276
Commissioner of Taxation v Rowntree (No 3) [2021] FCA 306
Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46
Fair Work Ombudsman v Corporation Sun Pty Ltd & Anor [2020] FCCA 2849
Fair Work Ombudsman v Sails Waterfront Bar & Grill Pty Ltd (No 2) [2021] FCCA 2002
Fair Work Ombudsman v Tester [2021] FCCA 771
Fair Work Ombudsman v Western Chinese Language School Incorporated [2025] FedCFamC2G 298
Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290
Joseph v Worthington and Another (2018) 272 A Crim R 292; [2018] VSCA 102
Kelly vFitzpatrick [2007] FCA 1080
Patrick Stevedores Operations No 2 Pty Ltd v MUA (1998) 195 CLR 1
Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; [2007] FCAFC 65
Sloggett v Adams (1953) 70 WN (NSW) 206
Tjiong v Tjiong (No 2) [2018] NSWSC 1981
Trade Practices Commission v CSR Ltd (1991) ATPR 41-076; [1990] FCA 521
Bromwich J, and Holtby, A, “What’s in the Box? Instinctive Synthesis in the Determination of Civil Penalties” in Deniz Kayis, Eloise Gluer and Samuel Walpole (eds), The Law of Civil Penalties (Federation Press, 2023) 34
Division: Division 2 General Federal Law Number of paragraphs: 86 Date of last submissions: 8 May 2025 Date of hearing: 8 May 2025 Place: Melbourne Counsel for the Applicant: Ms Campbell Solicitor for the Applicant: Fair Work Ombudsman Counsel for the First Respondent: Mr Garozzo Solicitor for the First Respondent: Irwell Law Second Respondent: In person ORDERS
MLG 383 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: WESTERN CHINESE LANGUAGE SCHOOL INCORPORATED (ABN 15 081
First Respondent
BAOQUAN CHEN
Second Respondent
ORDER MADE BY:
JUDGE CHAMPION
DATE OF ORDER:
24 JULY 2025
THE COURT ORDERS THAT:
1.Under s. 545 of the FW Act, the First Respondent take the steps that were required by the Compliance Notice on or before 4 September 2025 (within 42 days) by:
(a)calculating and paying the outstanding entitlements owing to the Employees (namely Ms Ling Zhuang, Ms Weihong Zhao, Ms Ying Tan and Ms Yuehua You) in accordance with the steps set out in the Compliance Notice (Underpayment Amount);
(b)calculating any relevant superannuation contributions payable on the Underpayment Amount in accordance with the steps set out in the Compliance Notice and paying such contributions into the Employees’ nominated superannuation funds (Additional Superannuation Contributions);
(c)preparing and producing to the Applicant:
(i)a schedule setting out the calculation of the Underpayment Amounts and the Additional Superannuation Contributions with the information required by the Compliance Notice; and
(ii)evidence that the Underpayment Amounts and the Additional Superannuation Contributions have been paid to the Employees.
2.The First Respondent pay interest, at the pre-judgment rate to the Employees on the amounts paid in accordance with paragraph 1(a) and interest to the superannuation funds under order 1(b) above on or before 4 September 2025 calculated in accordance with r. 39.06 of the Federal Court Rules 2011 (as applicable under r. 1.06(3) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021) with interest to be calculated on and from 13 November 2023 until the date of payment.
3.Under s. 546(1) of the FW Act, on or before 4 September 2025 (within 42 days of this order), the First Respondent pay a pecuniary penalty for contravening section 716(5) of the FW Act to the Commonwealth in the amount of $13,320.
4.Under s. 546(1) of the FW Act, on or before 4 September 2025 (within 42 days of this order), the Second Respondent pay a pecuniary penalty for his involvement, within the meaning of section 550(2) of the FW Act, in the First Respondent’s contravention of section 716(5) of the FW Act to the Commonwealth in the amount of $825.
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
JUDGE CHAMPION:
INTRODUCTION
On 6 March 2025 I published my liability judgment (LJ) in Fair Work Ombudsman v Western Chinese Language School Incorporated [2025] FedCFamC2G 298.
I held that WCLS, the First Respondent, had contravened s. 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with a compliance notice dated 12 September 2022.
I also held that Mr Baoquan Chen, the Second Respondent, was involved, within the meaning of s. 550(2) of the FW Act, in WCLS’s contravention.
As a result, I made two declarations:
1.The First Respondent contravened s. 716(5) of the Fair Work Act by failing to comply with the compliance notice issued on 12 September 2022.
2.The Second Respondent was involved, within the meaning of s. 550(2) of the FW Act, in the First Respondent’s contravention of s. 716(5) of the FW Act.
I held over issues as to penalties and any other consequential matters. These are my reasons as to penalties and consequential matters.
ISSUES FOR DECISION
The residual issues for decision are as follows:
(1)the appropriate penalty to be imposed on WCLS;
(2)the appropriate penalty to be imposed on Mr Chen; and
(3)whether I should order consequential relief — specifically whether under s. 545(1) or s. 545(2)(d) of the FW Act — I ought to make orders requiring WCLS to take the specified actions set out in the Compliance Notice so as to comply with the notice.
SUMMARY
As to these three issues:
(1)I will impose a penalty of $13,320 on WCLS (40% of the maximum penalty);
(2)I will impose a penalty of $825 on Mr Chen (12.5% of the maximum);
(3)I will make orders requiring WCLS to take the steps prescribed in the Compliance Notice (substantially as the FWO proposed).
My reasons follow.
THE PARTIES’ POSITIONS
FWO
The FWO submitted that a penalty of $16,500 for WCLR was appropriate.
The FWO submitted that a penalty of $1,000 for Mr Chen was appropriate.
As noted, the FWO sought a further order that WCLS take the steps necessary to comply with the Compliance Notice within 28 days.
WCLS
WCLS submitted that it was only appropriate to make an order for a penalty against it in the low range — approximately 10-20% of the maximum penalty ($3,300-$6,600) — or no order at all — because WCLS’ contravention arose only due to the admissions it made in its defence and, had it not made those admissions, the Court would not have found there had been a contravention of the Compliance Notice.
WCLS further submitted that it was not appropriate for the Court to make an order under s. 545(1) that it take the required action to comply with the Compliance Notice. It submitted (among other matters) that such an order could not be framed with the necessary precision such that WCLS would know what was required of it. I will return to this matter below.
Mr Chen
Mr Chen, the Second Respondent, submitted that it was not appropriate to impose a penalty on him.
RELEVANT PRINCIPLES
Under s. 546(1) of the FW Act I may order a person to pay a pecuniary penalty that the court considers is “appropriate”.
Maximum penalties
It was common ground that under ss. 539(2) and 546(2)(a) of the FW Act, the maximum penalty that the Court may impose for a contravention of s. 716(5) of the FW Act, at the relevant time, was $33,300 for a corporation and $6,660 for an individual.
Relevant authority
In Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 540; [2022] HCA 13 the High Court said at [9]:
… the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act…
Deterrence comprehends both specific deterrence and general deterrence.
In Pattinson, the High Court explained that various factors — pertaining both to the character of the contravening conduct and to the character of the contravenor (which French J (as he then was) identified in Trade Practices Commission v CSR Ltd(1991) ATPR 41-076; [1990] FCA 521 (at 52-152–52-153)) — were relevant to determining the quantum of the penalty which would achieve deterrence (Pattinson, [18], [55]).
Tracey J in Kelly vFitzpatrick [2007] FCA 1080 distilled nine non-exhaustive factors at [14] (which drew upon factors French J had identified in CSR Ltd):
•The nature and extent of the conduct which led to the breaches.
•The circumstances in which that conduct took place.
•The nature and extent of any loss or damage sustained as a result of the breaches.
•Whether there had been similar previous conduct by the respondent.
•Whether the breaches were properly distinct or arose out of the one course of conduct.
•The size of the business enterprise involved.
•Whether or not the breaches were deliberate.
•Whether senior management was involved in the breaches.
•Whether the party committing the breach had exhibited contrition.
•Whether the party committing the breach had taken corrective action.
•Whether the party committing the breach had cooperated with the enforcement authorities.
•The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
•The need for specific and general deterrence.
General principles
I accept the following four principles drawn from the FWO’s submissions as to interrelated matters relevant to deterrence. These principles were uncontroversial as between the parties.
First, given that civil penalties are imposed primarily, if not solely, for the purpose of deterrence the principal object of a penalty is to “put a price on [the]contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act” (Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46 (Agreed Penalties Case)) at [55] citing CSR Ltd, [40]). The same principle differently expressed is that, to achieve a deterrent effect, a penalty “should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like-minded persons or organisations” (Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; [2007] FCAFC 65, [93]).
Second, the factors French J identified in CSR Ltd and Tracey J recognised in Kelly do not constitute a “rigid catalogue of matters for attention” (Pattinson, [19], citing Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560, [91]; [2008] FCAFC 8, [91]).
Third, a civil penalty should not be so high that it is oppressive but it should not be so low as to be regarded by the contravener as an acceptable cost of doing business (Australian Securities and Investments Commission v Dixon Advisory & Superannuation Services Ltd [2022] FCA 1105 at [33] (McEvoy J), citing Pattinson at [17] and [40]–[41]).
Fourth, as to specific deterrence, an appropriate penalty will aim to ensure a contravenor is not prepared to embark upon the risk of engaging in the same contravening conduct in the future (Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290, [27]).
Civil penalties and compliance notices
These principles as to deterrence apply in the specific context of failure to comply with a compliance notice as Judge Jarrett (as he then was) observed in Fair Work Ombudsman v Tester[2021] FCCA 771 at [28]–[29]:
As has been said many times now, the failure to comply with a compliance notice properly issued by the applicant pursuant to s.716(2) of the Act is serious. The efficacy of such notices will be eroded or negated if recipients perceive that a failure to comply carries no meaningful consequences.
Given the importance of a Fair Work Inspector's power to issue compliance notices and that compliance with such notices avoids the need for litigation or the imposition of any penalties, I accept, as I have done in the past, that penalties for noncompliance should be set at a level which demonstrates that there are serious consequences for failing to comply with a compliance notice. Deterrence of others from refusing or failing to comply with compliance notices is singularly important. A penalty must be set such that it is not seen by others as just the cost of doing business. It must be likely to act as a deterrent in preventing similar contraventions by like-minded persons or organisations.
ISSUE 1: WHAT IS THE APPROPRIATE PENALTY TO BE IMPOSED ON WCLS?
In the context of those relevant principles, I turn now to the issue of the appropriate penalty to be imposed on WCLS.
Nature, extent and circumstances of the conduct
The underlying loss suffered by the employees
I am imposing a penalty because of a failure to comply with a compliance notice and not because the FWO has proved that WCLS failed to meet the underlying award obligations. I accept, however, the Compliance Notice concerned significant non-payment of Saturday penalty rates over a protracted period. I have found that the Compliance Notice was “properly issued” (Tester, [27], above). I dismissed WCLS’ application for review made on the basis that it had not committed a contravention set out in the notice under s. 717(1)(a). The FWO submitted (and I accept) that “the loss suffered by the employees is a corollary of the failure to comply with the Compliance Notice and the court may have regard to this loss in determining the appropriate penalty” (Fair Work Ombudsman v Corporation Sun Pty Ltd & Anor [2020] FCCA 2849, [35]).
It is not possible to quantify the exact amount at issue as to the unpaid penalty rates but the evidence was that it approximated not less than $36,000 and was possibly substantially more.
Co-operation up to 14 November 2022
A factor which mitigates the amount of the penalty is that WCLS initially cooperated with the FWO and did not ignore or disregard the Compliance Notice or the regulator. Before the 14 November 2022 deadline for the action specified in the notice, on 7 November 2022 Mr Chen (on behalf of WCLS) provided to the FWO a spreadsheet of calculations as to anticipated rectification payments (LJ, [111]). On 14 November 2022 the FWO told WCLS to “hold off” from making the rectification payments. Even after 14 November 2022 if WCLS was to make the rectification payments, there was significant administrative work involved because the FWC’s equal remuneration orders (EROs) made the calculations of amounts due a more involved process than it would otherwise have been. I accept that there was a real challenge for WCLS as a community-based language school which was provided with more than 100 pages of pay rates and tasked to undertake calculations to make rectification payments. Although I accept the process of making rectification payments imposed a real administrative burden on WCLS, it was a burden the law required it to meet. I do not, however, accept any submission that WCLS was high-handed as to how it dealt with the FWO. The Ombudsman submitted that had taken WCLS’s initial cooperation into account in its submissions in support of a “mid-range” penalty (T31:L36). I accept WCLS’s submission that how the FWO had done so was not apparent on the face of the written submissions.
It was only after 14 November 2022 when the fact that it was apparent that the alleged underpayments were of a much greater amount because of EROs — it was submitted “36 per cent higher” (T54: L27) — that WCLS took a different approach and declined to make any rectification payments. Ultimately, after 14 November 2022, and in any event by 13 November 2023, WCLS reached a considered and apparently final decision not to comply with the notice. Only after that date litigation ensued.
Was the non-compliance merely technical?
In circumstances I described in the liability judgment (LJ, [126]–[128]), I refused WCLS’ application to amend its defence at trial to withdraw admissions “previously made that it did not take the specified actions set out in the Notice”. The Compliance Notice issued on 12 September 2022 required calculation and rectification of underpayments by 14 November 2022. WCLS had filed a defence in which it admitted that it did not take the specified actions prescribed in the Compliance Notice. At trial, it sought to amend its defence to withdraw those admissions. I refused permission for it to withdraw those admissions because of the course the litigation had taken before the application was made.
As I noted in the liability judgment, as of 14 November 2022, the deadline for the taking the specified actions set out on the face of the Compliance Notice (there is a typographical error in liability judgment reasons which refers to 14 November 2024) there was an extant representation from the FWO that it was reviewing calculations WCLS had prepared. Moreover, the FWO told WCLS that it should hold off making the underpayments until the FWO’s review of the calculations was complete. In short, Ms Merritt of the FWO said to Mr Chen on the evening of 14 November 2022 that WCLS should “hold off making payment if [it] hasn’t paid yet.” (LJ, [113]; [126]).
WCLS submitted that it either had (or had not) complied with the Compliance Notice as at 14 November 2022 on a “once and for all” basis. WCLS submitted that the basis for my finding that the contravention occurred was merely the admissions made in its defence. That is, its contravention was merely technical. In more detail, it submitted as follows (at [17]):
The compliance by the School with the requirement that it perform calculations (or, at the least, the existence of a reasonable excuse for non-compliance (as was admitted by the Ombudsman at trial)), coupled with the existence of a reasonable excuse for the requirement that it make payments (also admitted by the Ombudsman at trial, and found in obiter in the LJ, as at the compliance date of 14 November 2022), mean that, while the contravention has been proven on the basis of the School’s admissions, the actual underlying conduct of the School would not otherwise have amounted to a contravention. Up until that point, the School had willingly cooperated with the Ombudsman, and was ready and willing to comply with the requirements in the Compliance Notice (though it did not agree that the Award applied to it or its employees).
[Emphasis added]
In the liability judgment, vis-à-vis Mr Chen (because the issue did not strictly arise as to WCLS because of the combination of its admissions made in its defence and my refusal of WCLS’ application to amend it defence to withdraw those admissions) I determined that there was a “continuing breach” of the Compliance Notice after the deadline specified in the notice, namely 14 November 2022. I found (LJ, [144]) referring to the decision of Brammer v Deery Hotels Pty Ltd (1974) 22 FLR 276, that:
Once the time specified in the Notice for action passed - absent a “reasonable excuse” there was a continuing breach so long as the Notice was not complied with.
The fact that Mr Chen knew that the notice had still not been complied with more than 11 months after the deadline specified in the Compliance Notice on 13 November 2023 underpinned my conclusion that he was a knowing participant in the contravention and, as a result, was taken himself to have contravened s. 716(5).
In its submissions as to penalties, WCLS challenges that analysis of a continuing breach. As noted above, WCLS submits that the contravention occurred “once and for all” at a specified time on 14 November 2022 and decisions such as Brammer are not “directly analogous”. WCLS submitted the “more analogous” line of authorities is that Osborne JA referred to in Joseph v Worthington and Another (2018) 272 A Crim R 292; [2018] VSCA 102. Among those authorities to which Osborne JA referred was Sloggett v Adams (1953) 70 WN (NSW) 206, 208 in which Street CJ said:
The question whether the offence which has been committed is a continuing offence, or one which was committed once and for all at a specified time, depends upon consideration of the language of the Act in question. Some offences once committed are complete and concluded and exist only in the past. Other offences, however, are continuing offences and are committed day by day so long as the state of affairs which is forbidden continues to exist, and the person responsible for creating that state of affairs is liable day by day for those offences. …
If my analysis as to a continuing offence is wrong, WCLS finds itself liable to a penalty only for technical reasons and only by dint of admissions made in its defence. It also inheres in its submissions that my analysis as to Mr Chen’s involvement in the contravention because of a continuing offence is in error. Mr Chen was not bound in the liability hearing by WCLS’ admissions in its defence.
I adhere to my analysis in the liability judgment. In considering the nature and extent of the conduct, while, as set out above, I accept that WCLS’ cooperation up until 14 November 2022 mitigates the penalty which might otherwise be appropriate to meet the needs of deterrence, it is appropriate for me to take into account that after 14 November 2022 and continuing now (even after the liability judgment) WCLS has taken no step to comply with the Compliance Notice.
Public funds
The FWO submitted that the regulator has had to spend time and public funds dealing with civil remedy proceedings which would not have been required had compliance occurred. In the particular circumstances of this case, I give that matter limited weight because WCLS did not disregard the notice or proceed on the basis that the obligations in the Compliance Notice did not apply to it. Rather, WCLS, as it was entitled to do, brought an application for review of the Compliance Notice under s. 717 of the FW Act, and advanced arguable grounds as to its position, albeit ultimately its review application has proved unsuccessful before me. WCLS acted in a reasonable way in circumstances in which it disagreed with the notice by bringing an application for review of the Compliance Notice under s. 717 of the FW Act.
No discount for admissions
Because WCLS made no admissions, there can be no discount for admissions. I note, however, an absence of admissions is not an aggravating factor.
Involvement of senior management
I accept the FWO’s submission that senior management was involved in the decision not to comply with the notice because the relevant decision-making body was the WCLS school board.
Size of the First Respondent and financial circumstances
I can (and do) infer from the evidence that WCLS is a relatively small organisation which operates a community language school in the not-for-profit sector. The evidence was that at least one member of its board, Mr Chen, the Second Respondent, is a volunteer. There is no other evidence about WCLS’s financial circumstances.
Deliberateness of the contravening conduct
I accept the FWO’s submission that WCLS made a deliberate decision not to comply with the notice. After 14 November 2022, there was extensive correspondence in which the FWO pressed WCLS to comply with the Compliance Notice. WCLS made a decision not to comply but to bring an application for review of the Compliance Notice.
The FWO has not proved that WCLS attempted to pressure the employees whose underlying entitlements were the subject of the Compliance Notice to withdraw their complaints to the FWO.
Corrective action, cooperation and contrition
The FWO relied on the fact that WCLS has failed to take the action required of it by the Compliance Notice, even following delivery of the liability decision.
There is no discount for contrition. I accept, however, WCLS’ submission that while I do not discount the penalty for contrition absence of contrition is not an aggravating factor (Commissioner of Taxation v Rowntree (No 3) [2021] FCA 306, [32]). WCLS was entitled to contest the matter as it did.
Instinctive synthesis and totality
The fixing of appropriate penalties requires a process of instinctive synthesis. The court must integrate a number of “identified input factors into a single, numerical outcome with the aim of achieving deterrence” (Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25; [2016] FCAFC 181, [175]; Justice Bromwich (writing extra-judicially) and Anna Holtby “What’s in the Box? Instinctive Synthesis in the Determination of Civil Penalties” in The Law of Civil Penalties (Federation Press, 2023, 34). Further as Bromwich J and Ms Holtby noted, instinctive synthesis is not the application of a complex mathematical formula and is “not the incremental development of a numerically consistent set of additions and subtractions for sentencing judges to make based on the nature of each factor present in a case and the weight given to it”.
Appropriate penalty
In all the circumstances, a penalty of 40% of the maximum for WCLS in the amount of $13,320 is appropriate.
ISSUE 2: WHAT IS THE APPROPRIATE PENALTY FOR MR CHEN?
As to Mr Chen, a number of matters I have set out above are also applicable to him.
He was personally involved in WCLS’ cooperation with the FWO up until 14 November 2022. He was, however, also a board member who had a direct involvement in the subsequent decision not to comply with the Compliance Notice.
Mr Chen emphasised that he was a volunteer chairperson of the school council whose role was limited to chairing quarterly meetings. He submitted that he “involuntarily” became involved in discussions with the FWO on behalf of WCLS when another school council board member declined to become involved. He submitted: (T73:L4-8):
… . That’s why I could not accept the punishment imposed on myself by the Fair Work, because this supposed was outside my duty, beyond my responsibility, was because I did it to help the school and at the end got punished.
In submissions on the penalty hearing, he submitted that he had an annual income of approximately $55,000 as the school manager of a community school (T73: L31).
As the FWO submitted, I must be circumspect as to the material as to Mr Chen’s role because he exercised his right not to give any sworn evidence either in the liability hearing or in the penalty hearing.
In the penalty hearing, the FWO submitted that (T40:L41-46):
It is not clear to the – in the evidence the extent to which Mr Chen had real decision-making power. He was clearly involved, and we have now had findings to that effect. But some of the correspondence refers back to decisions being made by the school board. We place more culpability with the school and its board than we do with Mr Chen, and that is the reason for the difference.
I have already noted that the maximum penalty applicable for an individual is $6,660 and that the FWO submitted that a penalty of $1000, being approximately 15% of the maximum, was appropriate for Mr Chen.
Mr Chen was a volunteer at WCLS. The material, as far as it goes, suggests that he had an occasional rather than day-to-day role in the organisation as a chair of quarterly board meetings. He was one member of a wider school board. Mr Chen happened to be the person to whom it fell — involuntarily — to correspond with the FWO and thereby he assumed personal responsibility for collective board decisions and a personal exposure to a civil penalty from which other Board members who did not assume a visible role were protected.
I am satisfied that a penalty of $825 (12.5% of the maximum) is appropriate as to Mr Chen.
By way of a final check and application of the totality principle, I must ensure that the total penalty is not, in all the circumstances excessive. I am satisfied that a penalty of $13,320 for WCLS is appropriate. I am satisfied that a penalty of $825 for Mr Chen is appropriate.
ISSUE 3: ORDER FOR COMPLIANCE WITH THE NOTICE UNDER S. 545
The FWO also sought an order that WCLS take the steps required of it in the Compliance Notice.
Power to make such an order
Both parties accepted I had power to make such an order under s. 545(1) or 545(2)(d) of the FW Act.
Section 545(1) is cast in broad terms. Under s.545(1), I have broad powers to make “any order” that I consider “appropriate.” In Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157; [2018] HCA 3 (the Non-Indemnification Order case) a High Court plurality held at [103] :
the first and most immediate point of significance is the breadth of the terms in which s 545(1) empowers the court to make any order the court considers appropriate. What is "appropriate" for the purpose of s 545(1) falls to be determined in light of the purpose of the section and is not to be artificially limited. As the ABCC submitted, such broad terms of empowerment are constrained only by limitations that are strictly required by the language and purpose of the section
[Footnotes omitted]
The High Court plurality continued in the Non- Indemnification Order Case at [104] to observe that under s. 545(1) “the types of orders that may be regarded as "appropriate" … are … preventative, remedial or compensatory orders, or at least do not include penal orders” (my emphasis).
Orders for a party who has failed to comply with a compliance notice to take the steps required of it in the compliance notice have been routinely made in this Court (see, i.e., Fair Work Ombudsman v Sails Waterfront Bar & Grill Pty Ltd (No 2) [2021] FCCA 2002, [11(f)]). I accept, however, WCLS’s submission that although orders have been routinely made in this court, with the exception of the decision in Sails, orders appear to have been made without the benefit of detailed argument. Further, I accept that in this case the required steps to comply with the notice will require more time and effort than was the case in Sails because a number of employees are involved and the issues arose over an extended period.
As to the source of my power to make such an order, I was also referred to s. 545(2)(d) which is as follows:
(2) Without limiting subsection (1), orders the Federal Court or Federal Circuit and Family Court of Australia (Division 2) may make include the following:
…
(d)an order requiring a person to comply, either wholly or partly, with a notice (other than an infringement notice) given to the person by an inspector or the Fair Work Ombudsman.
I note that s. 545(2)(d) was inserted into the FW Act by amendments under the Fair Work Legislation Amendment (Closing Loopholes No 2) Act 2024 with effect from 27 February 2024, a date after the date on which WCLS failed to comply with the notice under s. 716(5).
Because both parties proceeded on the basis that I had power to make an order under s. 545(1) (and I accept their submissions), it is not necessary to consider issues which may arise as to the whether it is correct to deploy a statutory power under s. 545(2)(d) to order remedies which had not been legislated at the time of the non-compliance.
I will proceed under s. 545(1) rather than s. 545(2)(d).
Should I make an order as a matter of discretion?
WCLS submitted that although I had the power to make such an order as a matter of discretion I ought not to make such an order because there could be no way for it to “know with precision what an order… required it to do for compliance”. It submitted that it could not know “with precision” what was required when the FWO itself had provided to WCLS one set of pay scales which it said contained the applicable Saturday pay rates before 14 November 2022 and then, subsequently, after 14 November 2022 it provided a different set of pay scales which took into account the FWC’s ERO’s. WCLS therefore submitted that an order under s. 545(1) in the nature of a mandatory injunction to take the steps required of it in the Compliance Notice — where exactly what was required was the subject of potential dispute — exposed them to “punishment for contempt”.
In support of its position WCLS referred me to Patrick Stevedores Operations No 2 Pty Ltd v MUA (1998) 195 CLR 1, 46-47 citing Argyll [1998] AC 1, 13-14. In Patrick the High Court majority said at [79] with reference to Argyll:
Lord Hoffmann placed stress on other propositions. First, a person who is subject to a mandatory order attended by contempt sanction (which "must realistically be seen as criminal in nature") ought to know with precision what is required; and, second, the possibility of "repeated applications for rulings on compliance" with orders requiring a party "to carry on an activity, such as running a business over a more or less extended period of time" should be discouraged.
[Footnotes omitted]
The first reason WCLS submitted that I ought not to make an order for it to take the prescribed steps in the Compliance Notice was that “it was not appropriate to enforce compliance with a notice for which the date of compliance has passed with actual compliance”. That submission is based on the contention that there was only technical non-compliance because of the admissions made in WCLS’ defence and that the contravention was complete “once and for all” on 14 November 2022. If I made an order that WCLS take the specified actions in the Compliance Notice, I would be imposing on WCLS an additional burden which was not appropriate. I do not accept the premise of this submission. On my analysis in the liability judgment (to which I adhere) there has not been actual compliance because the Compliance Notice imposed a continuing obligation after 14 November 2022. WCLS has not led any evidence that it has in fact “calculated and rectified underpayments” being the required action under step 1 of the Compliance Notice as at the date of these reasons.
WCLS submitted the second reason I should not make such an order was (RS, [41]):
By virtue of the manner in which the Compliance Notice is drafted, which requires the School to perform calculations over a five year period, and make payments based on those calculations, there is virtually no way that the Court could fashion an appropriate injunction that the notice be complied with.
I do not accept this submission.
A requirement of a compliance notice under s. 716(2)(a) is that an inspector may require a person to “take specified action to remedy the direct effects of the contravention”. In the liability judgment, I also referred to the broader statutory context that:
an employer’s recordkeeping obligations under s. 535 mean that the necessary information to take the “specified action” the notice prescribed ought to be available to an employer from its records.
Contrary to the submission that “there is virtually no way that the Court could fashion an appropriate injunction that the notice to be complied with”, the content of the steps required in the Compliance Notice are sufficiently clear to make it appropriate to order that WCLS comply with it under s. 545(1). The observations of Judge Manousaridis in Sails at [15] that “the orders [for which the FWO contends] do no more than that which the Compliance Notice required [the employer] to do” apply with equal force to this case.
I accept the FWO’s submissions that:
the utility of the orders sought by the FWO is that the orders sought will remedy the direct effects of the contravention in circumstances where no other action to date has resulted in compliance with the Compliance Notice.
The FWO has proved that the Compliance Notice met the requirements of s. 716(2) and 716(3): that is, it was properly issued. It follows that the Compliance Notice set out the “specified action” to be taken by WCLS in accordance with the FW Act. WCLS’ review application under s. 717 has been unsuccessful. As at the date of these reasons, WCLS has not taken the “specified action,” set out in the Compliance Notice. Although I accept that the undertaking of the necessary calculations might be a matter which entails significant time and administrative effort there is a difference between an order which takes significant time and effort so as to comply with it and an order which does not prescribe with sufficient precision what is required. Time and effort is not synonymous with a lack of precision. Another reason which favours the making of the order is that only an order of this kind will be a substantive remedial order as to the non-compliance. The imposition of a penalty alone will not achieve that remedial effect. Although I cannot eliminate the possibility of a future dispute about compliance (see Argyll, above), I do not accept that possibility means such an order is not appropriate. The order imposes a obligation to make calculations and payments and is not one which will involve the court in ongoing supervision.
The order will require WCLS to undertake calculations covering a known specified period, for specified employees in circumstances in which the statute requires them to have maintained employment records as to relevant matters. There is no evidence that any necessary input for the calculations required under the order is not available to WCLS: it knows the employees, its records mean that it knows the hours and Saturdays the Employees worked in the relevant period and it knows the applicable rates (albeit the identification of the applicable rates did occasion some past difficulty because of the ERO’s).
WCLS did not submit to me that I should take any different approach as to additional superannuation contributions. Accordingly, my order for WCLS to take specified action to comply with the Compliance Notice will extend to superannuation contributions.
In conclusion, an order for WCLS to take the specified action required of it in the Compliance Notice is a remedial and appropriate order under s. 545(1). I will make an order substantially in the form submitted by the FWO. I have made orders which allow 42 days for the required steps because of the time and administrative effort required to achieve compliance.
I have also allowed 42 days for the payment of the penalties so as to provide a single deadline under the orders and make the obligations which arise under my orders as clear as possible.
INTEREST
I will make an order for interest under s. 547(2) of the FW Act.
Although the FWO set out in its proposed orders that it sought an order for interest, neither party orally addressed me on the commencement date of interest. Because the specified action has not been taken under the Compliance Notice the exact amounts owing to the employees on which interest would be payable have not yet been calculated. Some complexity arises given that the relevant employment period covers a period between 1 October 2016 and 30 June 2021 and the entitlements arose incrementally over that period. I am, however, making orders because of a failure to comply with the Compliance Notice not to enforce underlying entitlements per se.
In all the circumstances, I will order that interest is paid on the principal amounts of the underpayments from 13 November 2023, a date I noted in the liability judgment by which any reasonable excuse WCLS may previously have had for not complying with the notice was spent (LJ, [142]).
Other matters
In its orders sought, the FWO sought an order that it have liberty to apply. It did not propose a corresponding order that WCLS or Mr Chen have liberty to apply. I do not believe such an order is necessary and therefore have not made it. Subject to the doctrine of functus officio, it would be open to any party to make any application for ancillary relief which does not affect an operative and substantive part of the orders made (Tjiong v Tjiong (No 2) [2018] NSWSC 1981, [105]).
CONCLUSION
I will make orders accordingly.
I certify that the preceding eighty-six (86) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Champion. Associate:
Dated: 24 July 2025
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