Hornyak v Sims Integrated Solutions Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

Hornyak v SIMS Integrated Solutions Pty Ltd [2022] FedCFamC2G 509  

File number: SYG 3733 of 2016
Judgment of: JUDGE CAMERON
Date of judgment: 27 June 2022
Catchwords:

INDUSTRIAL LAW – Breaches of civil remedy provisions of the Fair Work Act 2009 (Cth) – imposition of pecuniary penalties – relevant considerations.

INDUSTRIAL LAW – Accessorial liability for breaches of civil remedy provisions of Fair Work Act 2009 – imposition of pecuniary penalties.

INDUSTRIAL LAW – Costs – relevant considerations.
Legislation:

Fair Work Act 2009 (Cth) ss.45, 323, 535, 539, 546, 550, 557, 570

Crimes Act 1914 (Cth) s.4AA

Fair Work Regulations 2009 (Cth) reg.3.33
Cases cited:

Hornyak v SIMS Integrated Solutions Pty Ltd & Ors [2020] FCCA 1764

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157

Gibbs v Mayor, Councillors and Citizens of City of Altona (1992) 37 FCR 216

Kelly v Fitzpatrick (2007) 166 IR 14

McIver v Healey [2008] FCA 425

Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153

Fair Work Ombudsman v Lohr (2018) 356 ALR 424

Johnson v The Queen (2004) 78 ALJR 616

Fair Work Ombudsman v Lifestyle SA Pty Ltd [2014] FCA 1151

Australian Competition and Consumer Commission v Yazaki Corporation (2018) 262 FCR 243

Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560

Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Number of paragraphs: 76
Date of hearing: 18 February 2021
Place: Sydney
Counsel for the Applicant: Mr A. Gerard
Solicitor for the Applicant: Crawford de Carne
Counsel for the Respondents: Ms L. Andelman
Solicitor for the Respondents: Turner Freeman

ORDERS

SYG 3733 of 2016
BETWEEN:

ATTILA HORNYAK

Applicant
AND:

SIMS INTEGRATED SOLUTIONS PTY LTD

First Respondent

IMRE HORNYAK

Second Respondent

CATHERINE HORNYAK

Third Respondent

ORDER MADE BY:

JUDGE CAMERON

DATE OF ORDER:

27 JUNE 2022

THE COURT ORDERS THAT:

1.The first respondent pay a penalty of $10,000 for its contraventions of ss.45 and 323 of the Fair Work Act 2009 (Cth).

2.The first respondent pay a penalty of $6,000 for its contravention of s.535 of the Fair Work Act 2009 (Cth).

3.The second respondent pay a penalty of $2,000 for his contraventions as an accessory of ss.45 and 323 of the Fair Work Act 2009 (Cth).

4.The second respondent pay a penalty of $1,200 for his contravention as an accessory of s.535 of the Fair Work Act 2009 (Cth).

5.The penalties be paid to the applicant.

6.The penalties be paid within 28 days.

7.The applicant have liberty to apply in the event that any of orders 1 to 6 is not complied with.

8.The first and second respondents pay 60% of the applicant’s costs as agreed or as assessed in accordance with pt.1 of sch.1 to the Federal Circuit Court Rules 2001 (Cth) as it stood on 1 January 2018, in relation to which the parties have liberty to…

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Details
Case
[2022] FedCFamC2G 509
Decision Date

CaseChat Overview and Summary

In the case of Hornyak v Sims Integrated Solutions Pty Ltd, the primary dispute revolves around the penalties to be imposed on SIMS Integrated and Imre for their contraventions of the Fair Work Act (FW Act) and associated modern award obligations. The case also involves the parties' applications for costs. The contraventions in question included the failure to pay Attila Hornyak, an electrical worker, for his time, superannuation contributions, and prescribed records in relation to his employment. Imre was found liable as an accessory to these contraventions.

The court was tasked with determining the appropriate penalties for the contraventions identified and assessing whether the penalties imposed would adequately serve the purpose of deterrence. The court also had to consider whether multiple contraventions arising from the same course of conduct should be treated as a single contravention for penalty purposes. Furthermore, the court was required to assess the totality of the penalties to ensure they appropriately reflected the gravity of the contraventions.

The court first identified the separate contraventions involved, each being a distinct obligation under the Award and the FW Act. It considered whether these contraventions should be treated as a single contravention under the course of conduct principle. The court determined that while multiple contraventions arose from the same course of conduct, they warranted separate consideration to ensure the penalties were proportionate and effective in serving their deterrent purpose. The court then assessed the appropriate penalty for each contravention, taking into account various factors such as the gravity of the contraventions and the need for deterrence. The aggregate penalty was reviewed to ensure it was an appropriate response to the contravening conduct.

The court ordered SIMS Integrated to pay Attila Hornyak penalties for each contravention, and Imre was also ordered to pay penalties as an accessory. The court's final orders included both pecuniary penalties and costs, ensuring that the penalties imposed served their intended deterrent function effectively.

Orders

Orders of the court

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Background

Background to the litigation

These reasons concern the penalties to be imposed on SIMS Integrated and Imre for their respective contraventions. It also concerns the parties’ applications for costs pursuant to s.570(2) of the FW Act. FACTS AND FINDINGS The facts and findings in this matter are set out in the First Judgment and can relevantly be summarised as follows: (a)Attila held a licence which qualified him to “sell, install, maintain, repair and service security equipment” and so could provide SIMS Integrated with those services; (b)in April 2013 Attila and Imre agreed that Attila would work for SIMS Integrated on an ad hoc basis;(c)Imre told Attila that he would pay him for his work;(d)the agreement was not void for uncertainty; (e)Attila attended SIMS Integrated worksites with Imre to perform paying work for SIMS Integrated, not as an observer providing voluntary assistance; (f)SIMS Integrated charged clients for Attila’s time. (g)Attila was an Electrical worker grade 5 under the Award; (h)SIMS Integrated did not pay Attila for his time worked, in contravention of cls.16, 17.2(a), 17.2(b), 22.1 and 26 of the Award and s.45 of the FW Act; (i)SIMS Integrated did not, at least monthly, pay Attila for his time worked, in contravention of s.323 of the FW Act; (j)SIMS Integrated did not pay Attila superannuation contributions related to his time worked, in contravention of cl.23.2 of the Award and s.45 of the FW Act; (k)SIMS Integrated did not make and keep prescribed records in relation to Attila’s employment, in contravention of s.535 of the FW Act; and (l)Imre was involved in SIMS Integrated’s contravening conduct and liable as an accessory. The Award relevantly made provision in relation to the following matters:(a)cl.16.2: the minimum weekly wages for a Grade 5 Electrical Worker;(b)cl.17.2(a): industry allowance to be paid as a percentage of the standard weekly rate as compensation for difficulties and inconveniences associated with on–site work;(c)cl.17.2(b): tool allowance to electrical workers at grade 5 and beyond;(d)cl.22.1: wages to be paid weekly or fortnightly; (e)cl.23.2 employer to make superannuation contributions; and(f)cl.26: overtime rates.LEGISLATIONPenaltyFair Work Act Section 45 of the FW Act provides that a person must not contravene a term of a modern award. Section 323(1) relevantly provides that an employer must pay an employee no less frequently than once a month. Section 535(1) of the FW Act provides that an employer must make records of a prescribed kind in relation to each of its employees and keep those records for 7 years. By virtue of s.539 of the FW Act each of those provisions is a civil remedy provision. At the relevant times the combined effect of ss.539(2) and 546(2) of the FW Act was that:(a)contraventions of s.45 carried a maximum penalty of 300 penalty units ($51,000) for corporations and 60 penalty units ($10,200) for individuals; (b)contraventions of s.323(1) carried a maximum penalty of 300 penalty units ($51,000) for corporations and 60 penalty units ($10,200) for individuals; and(a)contraventions of s.535(1) carried a maximum penalty of 150 penalty units for a corporation ($25,500) and 30 penalty units ($5,100) for individuals.At all relevant times a penalty unit was worth $170: s.4AA Crimes Act 1914 (Cth).

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Cathy submitted that the proceeding against her was “incompetent or hopeless” because the statement of claim failed to particularise material facts supportive of the allegation that she had “aided”, “abetted”, “counselled”, “procured”, “induced” or was “knowingly concerned in or a party to” the contraventions and the situation was not improved by her day-long cross-examination.CONSIDERATIONPenalty In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157, Kiefel CJ, Keane, Nettle and Gordon JJ said:… the principal object of an order that a person pay a pecuniary penalty under s 546 is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners. (at 195 [116]) In this case, the question of penalty is to be determined as follows:(a)the Court is to identify the separate contraventions involved. Each contravention of a separate obligation in the Award and the FW Act is a separate contravention: Gibbs v Mayor, Councillors and Citizens of City of Altona (1992) 37 FCR 216 at 223; Kelly v Fitzpatrick (2007) 166 IR 14 at 17 [11]; McIver v Healey [2008] FCA 425 at [16]; Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 at 159 [13]; Fair Work Ombudsman v Lohr (2018) ALR 424 at 436 [29];(b)the Court should consider whether contraventions resulting from any particular course of conduct ought to be treated as a single contravention under s.557(1) of the FW Act; (“course of conduct”);(c)because a contravener should not be penalised twice for what is, in substance, the same conduct, to the extent that two or more contraventions arise out of the same course of conduct or the one transaction, that fact should be taken into account when considering whether a “concurrent” or single penalty should apply to those contraventions: Johnson v The Queen (2004) 78 ALJR 616 at [4]-[5]; Fair Work Ombudsman v Lifestyle SA Pty Ltd [2014] FCA 1151 at [61] - [63]. Australian Competition and Consumer Commission v Yazaki Corporation (2018) 262 FCR 243 at 294-296 [226]-[234], (the “course of conduct” or “grouping” principle). These considerations are distinct from the totality principle: Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383 at 396 – 398 [41]-[46] (per Stone and Buchanan JJ);(d)the Court should determine an appropriate penalty to impose in respect of each contravention that is to be penalised (whether a single contravention, a course of conduct or group of contraventions) having regard to all of the circumstances of the case; and(e)having fixed an appropriate penalty for each contravention or group of contraventions, the Court should consider the aggregate penalty to determine whether it is an appropriate response to the contravening conduct: Kelly v Fitzpatrick at 21 - 22 [30]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560, (the “totality principle”).