McHenry v Angels Care (Australia) Pty Ltd (No 2)
[2022] FedCFamC2G 352
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
McHenry v Angels Care (Australia) Pty Ltd (No 2) [2022] FedCFamC2G 352
File number(s): MLG 1300 of 2020 Judgment of: JUDGE BURCHARDT Date of judgment: 16 May 2022 Catchwords: INDUSTRIAL LAW – application for imposition of pecuniary penalty following liability judgment – single contravention pursued although arguable multiple contraventions established – consideration of relevant matters identified in Kelly v Fitzpatrick [2007] 166 IR 14 - penalties set in mid-range of those available. Legislation: Fair Work Act 2009 (Cth) Cases cited: Kelly v Fitzpatrick [2007] 166 IR 14
Trade Practices Commission v CSR Ltd (1991) 13 ATPR ¶41–076
Division: Division 2 General Federal Law Number of paragraphs: 23 Date of hearing: 9 May 2022 Place: Melbourne Counsel for the Applicant: Ms Hinchliffe Solicitor for the Applicant: Hinchliffe Princeton Legal Counsel for the Respondents: Mr Schlicht ORDERS
MLG 1300 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: NICOLE RUTH MCHENRY
Applicant
AND: ANGELS CARE (AUSTRALIA) PTY LTD (ACN 615 605 537)
First Respondent
GEOFFREY HARRISON
Second Respondent
ORDER MADE BY:
JUDGE BURCHARDT
DATE OF ORDER:
16 MAY 2022
THE COURT ORDERS THAT:
1.The first respondent is to pay a pecuniary penalty of $35,000.
2.The second respondent is to pay a pecuniary penalty of $7000.
3.The penalties payable pursuant to orders 1 and 2 are to be paid to the applicant, Ms McHenry.
4.The respondents are to pay the applicant interest of $2922.03.
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 BURCHARDT
On 6 April 2022, I gave judgment in this matter. I made orders that the respondents pay the applicant approximately $41,000 in respect of unpaid wages, unpaid annual leave, money in lieu of notice, car allowance and make a contribution in relation to superannuation. I also listed the matter for hearing as to any questions of pecuniary penalties and made an order for written submissions, which both parties have since provided. In my earlier judgment, I described the matter as “a very unusual matter”, and that feature of the proceeding is apparent in what has since emerged.
Although the failure to pay wages and annual leave and superannuation all, prima facie to my way of thinking, constituted contraventions of various provisions of the Fair Work Act 2009 (Cth) (“Act”), the application as pressed before me relates only to the Court’s conclusion that Ms McHenry was the subject of adverse action as a result of her request for a pay increase. During the currency of the penalty hearing, I did raise with counsel for both parties the question as to whether or not my earlier findings might give rise to multiple contraventions rather than just one, but counsel for the applicant was clear that the matter was only pressed insofar as it was set out in her written submissions, and, accordingly, that is the aspect of the matter with which I shall now deal.
The applicant seeks that both respondents be liable for a pecuniary penalty for contravention of a civil remedy provision. The written submissions assert that the respondents have breached section 340 of the Act. It is uncontroversial that the maximum penalty that may be imposed is, in respect of the first respondent, a corporation, $66,600 and, in respect of the second respondent, $13,320.
Given that the Court is concerned with only one contravention, there is no need for the Court, as it otherwise would have to do, to work out each and every contravention, group those contraventions whether at statute or common law and then consider penalty. In this case, the Court can move straight to the question of penalty itself.
It is common cause that the principal object of a pecuniary penalty is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene (Trade Practices Commission v CSR Ltd (1991) 13 ATPR ¶41–076 at 52152 per French J).
The fixing of an appropriate penalty involves consideration of a number of relevant matters. In Kelly v Fitzpatrick [2007] 166 IR 14, Tracey J set out a number of potentially relevant and applicable considerations of which the following, in my view, may be considered in this case:
(a)the nature and extent of the conduct which led to the breaches;
(b)the circumstances in which that conduct took place;
(c)the nature and extent of any loss or damage sustained as a result of the breaches;
(d)whether there had been any similar previous conduct by the respondents;
(e)the size of the business enterprise involved;
(f)whether or not the breaches were deliberate;
(g)whether senior management was involved in the breaches;
(h)whether the party committing the breach had exhibited contrition;
(i)whether the party committing the breach had taken corrective action;
(j)the need for specific and general deterrence.
It should be borne in mind, that lists such as these are not checklists. The discretion in the statute is at large.
Here, there is no question in my mind that the contravention was deliberate. I found (decision at [56]) “I have no doubt that the raising of the pay complaint was the reason for the termination of employment”. This was a deliberate contravention and one only, in my view, exacerbated by the disingenuous subsequent message sent to the applicant suggesting that she had abandoned her employment.
There is no doubt that the applicant suffered loss as a result of the termination of employment, but I failed to grant her any additional remedy arising from the adverse action beyond the one month’s pay that I also ordered. I did so because I found the applicant’s evidence as to her endeavours to obtain alternative employment very unpersuasive. The respondents’ written submissions are wrong to say that the adverse action claim was dismissed. It was upheld, but, rather, the remedy granted was not an additional one to the other remedies which I provided for.
There is no suggestion that there has been any previous similar conduct by the respondents. I have no information of any detail as to the size of the business enterprise involved. I note that a number of other prior employees decamped and set up in competition at or about the time the applicant commenced work. During the currency of the proceeding, Mr Harrison indicated that his business interests (I am not entirely sure in retrospect whether it was the particular respondent company here) were likely to be entering into an extremely advantageous contract in the near future. The respondents have put on very little by way of material as to the circumstances of the company or personal circumstances of Mr Harrison. The Court is therefore not in a position to make much of a conclusion one way or the other as to the size and scope and profitability of the respondent’s business. The assertion that things had gone backwards during Ms McHenry’s employment was one I found readily explicable during the currency of the proceeding, but there has been no updating material filed by the respondents to give me any firm basis upon which to assess this aspect of the matter. The written submissions of the respondents suggest that they may struggle to pay a significant penalty, but there is no evidence in any admissible form to support that proposition.
There is no question that the breach was deliberate. The respondent clearly decided to get rid of the applicant because she had made her pay-rise application and disingenuously sought to buttress that position both at the time and up to judgment.
Senior management was undoubtedly involved in the breaches. How much one should make of this, of course, is qualified by the fact that I have no clear idea as to the size of the respondents’ operations.
The respondents have not exhibited any contrition and have not taken any corrective action. This of course does not operate to increase the penalty to be applied. It merely means they do not obtain the benefit that contrition and compliant might produce.
On the question on specific deterrence, in my view, it is appropriate to bear in mind that the respondents have expressed no contrition, taken no remedial action and not otherwise sought to persuade the Court that there is any intention not to do the same thing again in the future should the same circumstances devolve.
In respect of general deterrence, it is important that employers generally be made to comply with the obligations that the Act imposes in relation to the exercise of workplace rights.
In my view, the calibration of all these relevant considerations suggest that a penalty in the midrange of the available penalties is appropriate. I do not accept that the, as I find it, egregious conduct of the respondents should be assessed at the lower or bottom end of the scale. Equally, however, and bearing in mind that, in my view, other contraventions of the legislation were plainly made out in my judgment, this was not a widespread or systemic course of conduct. It appears to have applied, on the admissible evidence, to Ms McHenry alone.
The respondents’ submission that it is inappropriate to penalise Mr Harrison personally is, obviously totally misconceived. He was very much involved within the meaning of section 550 of the Act with the first respondent’s conduct.
The Court is obliged to apply the totality principal which has been described as an instinctive synthesis at the end of the process. The Court is required, as it were, to take a step back and consider that the penalty proposed is proportionate in all the circumstances and not crushing on the respondents. Where the respondents have put on no material as to their finances, as already indicated, it is difficult to give this latter aspect of the matter a great deal of consideration.
In my view, a penalty on the first respondent of $35,000 and a penalty on the second respondent of $7000 are, indeed, an appropriate outcome in the circumstances.
The parties are agreed that the applicant should be paid interest which I understand it is agreed in the sum of $2922.03.
The respondents’ submission that the application for the imposition of pecuniary penalties is an endeavour to subvert the terms of section 570 of the Act can be dealt with briefly. It is utterly misconceived. On the findings I made in my earlier judgment, it is plain there was a contravention of section 340 by the respondents taking adverse action against the applicant, and she is, of course, entitled to penalties as a result.
The parties had plenty to say by way of the matter of costs. Section 570 of the Act for these purposes relevantly prescribes that costs may only be ordered in respect of an unreasonable action or omission of a party. The general and underlying principle is that section 570 operates to enable parties to pursue their matters to judgment without facing the standard penalties as to costs. While I have roundly failed to believe the respondents’ evidence in respect of the critical aspects of the dispute section 570 in this case means that there ought be no order as to costs. True it is that the matter was bedevilled by the failure of the respondents to comply with orders. Although I have regard to the matters that the applicant has raised at paragraph 15 of her written submissions, on looking at the file, it is not apparent to me that the failures of the respondents to comply from time to time have given rise to costs thrown away that are able to be identified with any precision whatever. The applicant’s written submissions do not identify costs thrown away of this sort. Given that I have formed the view that the overarching position as to the costs of the trial is that section 570 clearly applies, and given the absence of any particular sums thrown away, in my view, the appropriate order is that there be no order as to costs.
Finally, it should be noted that is a standard practice to order that pecuniary penalties be paid to the successful applicant, and I will make that order also. No party has sought declaratory relief, and, accordingly, no such declarations will be made.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Burchardt. Associate:
Dated: 16 May 2022
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