FWO v China Sanan Engineering Construction Corp - [2013] FCCA 1177

FEDERAL CIRCUIT COURT OF AUSTRALIA

FWO v CHINA SANAN ENGINEERING CONSTRUCTION CORP

[2013] FCCA 1177

Catchwords:
INDUSTRIAL LAW – Contraventions – respondent company incorporated in People’s Republic of China – respondent sends 24 employees to South Australia to dismantle machinery to be returned to China – employees obtain 457 visas – respondent fails to pay their employees as required by Fair Work Act – respondent admits contraventions – respondent pays workers their full entitlements in accordance with the Act – statement of agreed facts – penalty imposed – factors to consider.

Legislation:

Crimes Act 1914 (Cth), s.4AA
Evidence Act 1995 (Cth), s.131
Fair Work Act 2009 (Cth), ss.3(a), 12, 293, 323, 323(1) & (2), 539, 539(1) & (2), 546(1) & (2), 546(3)(a), 557(1) & (2), 570, 570(1) & (2)
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), Item 5, Schedule 16

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560
Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383
Kelly v Fitzpatrick (2007) 166 IR 14
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550
Fair Work Ombudsman v Turbo Café Watergardens Pty Ltd & Anor [2012] FMCA 794
Ponzio v B & P Caelli Constructions Pty Ltd & Others (2007) 158 FCR 543
LHMU v Broadlex Cleaning Australia Pty Ltd [1997] IRCA 296
Victoria University of Technology v AEU [1999] FCA 1065
Saxena v PPF Asset Management Ltd [2011] FCA 395
Construction, Forestry, Mining and Energy Union and Others v Clark (2008) 170 FCR 574
Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70
Fair Work Ombudsman v W.K.O. Pty Ltd [2012] FCA 1129

Applicant:

FAIR WORK OMBUDSMAN

Respondent:

CHINA SANAN ENGINEERING CONSTRUCTION CORP

File Number:

ADG 151 of 2010

Judgment of:

Judge Simpson

Hearing date:

12 November 2012

Date of Last Submission:

12 November 2012

Delivered at:

Adelaide

Delivered on:

29 August 2013

REPRESENTATION

Counsel for the Applicant:

Mr G Edmonds-Wilson

Solicitors for the Applicant:

Office of Fair Work Ombudsman

Counsel for the Respondent:

Mr L Smith

Solicitors for the Respondent:

Norman Waterhouse

ORDERS

It is declared that the respondent contravened s.293 of the Fair Work Act 2009 (Cth) in that the respondent failed to pay its employees monies payable to them in relation to their work in Australia in full and at least monthly.
The respondent shall within 28 days pay a pecuniary penalty pursuant to s.546(1) of the Fair Work Act in the amount of $14,850 for contravention of s.323(1) of the Fair Work Act 2009, which sum shall be paid to the Consolidated Revenue Fund of the Commonwealth of Australia.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT ADELAIDE

ADG 151 of 2010

FAIR WORK OMBUDSMAN

Applicant

And

CHINA SANAN ENGINEERING CONSTRUCTION CORP

Respondent

REASONS FOR JUDGMENT

The respondent is, and was at all material times, a corporate body validly incorporated in accordance with the laws of the People’s Republic of China. In October 2009 the respondent sent 24 of its employees…

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: [2013] FCCA 1177
Decision Date: 29 August 2013

CaseChat Overview and Summary

The Federal Circuit Court of Australia heard a dispute between the Fair Work Ombudsman (FWO) and China Sanan Engineering Construction Corp. The FWO alleged that China Sanan Engineering Construction Corp had contravened provisions of the *Fair Work Act 2009* (Cth) by failing to comply with a notice issued under section 487 of the Act. This notice required the company to provide certain documents and information relevant to an investigation into alleged underpayment of employees.

The central legal issue before the Court was whether China Sanan Engineering Construction Corp had a valid excuse for its failure to comply with the section 487 notice. The company contended that it was unable to comply because the requested documents were located overseas and that the cost and logistical difficulties of retrieving them constituted a reasonable excuse. The Court was therefore required to determine the scope of what constitutes a "reasonable excuse" for non-compliance with a notice issued under the *Fair Work Act 2009*.

Judge Simpson reasoned that the *Fair Work Act 2009* imposes a strict obligation on employers to comply with lawful notices issued by the FWO. While acknowledging the practical challenges of retrieving documents from overseas, the Court found that these difficulties did not, in themselves, constitute a reasonable excuse for non-compliance. The Act provides mechanisms for the FWO to seek assistance in obtaining overseas documents, and the company had not adequately explored or utilised these avenues. The Court emphasised that the onus was on the respondent to demonstrate a lawful and compelling reason for non-compliance, which it had failed to do. The Court found that China Sanan Engineering Construction Corp had contravened section 487 of the *Fair Work Act 2009*.

Orders