Rizk v PVH Brands Australia Pty Ltd (No 2)

[2024] FedCFamC2G 613

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Rizk v PVH Brands Australia Pty Ltd (No 2) [2024] FedCFamC2G 613

File number(s):

SYG 503 of 2020

Judgment of:

JUDGE MANOUSARIDIS

Date of judgment:

12 July 2024

Catchwords:

INDUSTRIAL LAW – assessment of pecuniary penalty for contravention of s 340(1) of the Fair Work Act 2009 (Cth) – pecuniary penalty ordered.

Legislation:

Crimes Act 1914 (Cth) s 4AA

Fair Work Act 2009 (Cth) ss 12, 340(1), 361, 539(1), 539(2), 546(1), 546(2), 546(3)(c)

Cases cited:

Australian Building and Construction Commissioner v Pattinson [2022] HCA 13

Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97

Fair Work Ombudsman v University of Melbourne [2024] FCA 330

Kelly v Fitzpatrick [2007] FCA 1080

Mason v Harrington Corporation Pty Ltd [2007] FMCA 7

Rizk v PVH Brands Australia Pty Ltd [2023] FedCFamC2G 249

Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4

The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46

Trade Practices Commission v CSR Ltd [1991] ATPR 41-076

Division:

Fair Work

Number of paragraphs:

27

Date of hearing:

Decided on the papers

Place:

Sydney

The Applicant:

Appeared in person

Counsel for the Respondent:

Mr B Fogarty

Solicitor for the Respondent:

Clyde & Co

ORDERS

SYG 503 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

CHRISTEN RIZK

Applicant

AND:

PVH BRANDS AUSTRALIA PTY LTD

Respondent

ORDER MADE BY:	JUDGE MANOUSARIDIS
DATE OF ORDER:	12 JULY 2024

THE COURT ORDERS THAT:

1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the respondent pay a pecuniary penalty in the sum of $18,000 for its contravention of s 340(1) of the FW Act referred to in the declaration made on 31 March 2023.

2.Pursuant to s 546(3)(c) of the FW Act the respondent pay the pecuniary penalty referred to in order 1 to the applicant within 28 days after the day on which these orders are pronounced.

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

INTRODUCTION

1. On 31 March 2023, on the basis of reasons for judgment (earlier reasons) I published on that day,[1] I made a declaration that the respondent (PVH) contravened s 340(1) of the Fair Work Act 2009 (Cth) (FW Act) by terminating the employment of the applicant, Ms Rizk, on 14 November 2019; and I ordered that PVH pay Ms Rizk compensation in the amount of $24,200.98. I also made orders for the filing of submissions and evidence on the question of penalty. The parties have filed submissions, and PVH had filed an affidavit to which I refer later; and the parties have elected that I consider the question of penalties on the papers.[2]

   [1] Rizk v PVH Brands Australia Pty Ltd [2023] FedCFamC2G 249

   [2] Ms Rizk filed submissions on 24 April and 26 May 2023; and PVH filed written submissions on 12 May 2023 together with an affidavit made by Mr R Repaci made on 11 May 2023. I will treat Mr Repaci’s affidavit as having been read.

2. In these reasons for judgment, which assume familiarity with the earlier reasons, I consider what penalty, if any, I should order PVH pay for its contravention of s 340(1) of the FW Act.

   POWER AND PRINCIPLES OF ASSESSMENT

   Power

3. Under s 546(1) of the FW Act this Court may, on application, order a person to pay a pecuniary penalty the Court considers is appropriate if the Court is satisfied the person has contravened a “civil remedy provision”. That expression is defined in s 539(1) of the FW Act to include the provisions identified in column 1 of the table to s 539(2) of the FW Act. Column 1 includes s 340(1) of the FW Act.

4. Subsection 546(2) of the FW Act provides that the pecuniary penalty the Court may impose must not, where the person is an individual, be more than “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)” and, if the person is a “body corporate”, must not be more than five times “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)”.

5. The maximum penalty units specified in the table in s 539(2) of the FW Act for the contravention of s 340(1) is 60 penalty units. Under s 12 of the FW Act, “penalty unit” has the meaning given by s 4AA of the Crimes Act 1914 (Cth). The penalty unit as at 14 November 2019, when PVH engaged in the contravening conduct, was $210.[3] That means the maximum penalty that may be imposed on PVH is $63,000.

   [3] Item 1 to Schedule 1 of the Crimes Amendment (Penalty Unit) Act 2017 (Cth)

   Principles

6. In Australian Building and Construction Commissioner v Pattinson the plurality of the High Court observed that civil penalty provisions of the kind enacted in s 546(1) of the FW Act have a “statutory function of securing compliance with provisions of the [statutory] regime”;[4] that “whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty . . . is primarily if not wholly protective in promoting the public interest in compliance”;[5] that the “principal, and . . . probably the only, object of the penalties . . . is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act”;[6] and that “deterrence is the “principal and indeed only object” of the imposition of a civil penalty: “[r]etribution, denunciation and rehabilitation have no part to play”.[7] In short, the task of assessing an appropriate penalty under s 546(1) of the FW Act is to assess a “penalty of appropriate deterrent value”.[8]

   [4] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [14], quoting from the judgment of the plurality in The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, at [24]

   [5] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [15], quoting from The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, at [55]

   [6] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [15], quoting from Trade Practices Commission v CSR Ltd [1991] ATPR 41-076, at pages 52,152

   [7] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [16], quoting from Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97, at [19]

   [8] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]

7. The objective of deterrence, however, must be considered having regard to “the need for deterrence in respect of the particular case”.[9] The purpose of s 546(1) of the FW Act is “the deterrence of future contraventions of a like kind by the contravenor and by others”;[10] and an “appropriate” penalty “is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case”.[11]

   [9] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [46]

   [10] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [10] (my emphasis)

   [11] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [46] (my emphasis)

8. The plurality in Pattinson recognised that, when assessing an appropriate penalty under s 546(1) of the FW Act, the Court may have regard to a number of factors that are relevant to assessing what is necessary for deterrence in respect of the particular contravention in question. That is apparent from the plurality referring,[12] with approval, to the following passage from the judgment of French J in Trade Practices Commission v CSR Ltd:[13]

   [12] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]

   [13] Trade Practices Commission v CSR Ltd [1991] ATPR 41-076, at pages 52,152‑52,153

   The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:

   1.The nature and extent of the contravening conduct.

   2.The amount of loss or damage caused.

   3.The circumstances in which the conduct took place.

   4.The size of the contravening company.

   5.The degree of power it has, as evidenced by its market share and ease of entry into the market.

   6.The deliberateness of the contravention and the period over which it extended.

   7.Whether the contravention arose out of the conduct of senior management or at a lower level.

   8.Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.

   9.Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention.

9. The plurality in Pattinson characterised these as factors that “informed the assessment under the Trade Practices Act 1974 (Cth) of a penalty of appropriate deterrent value”,[14] further noting the following:[15]

   It may readily be seen that this list of factors includes matters pertaining both to the character of the contravening conduct (such as factors 1 to 3) and to the character of the contravenor (such as factors 4, 5, 8 and 9). It is important, however, not to regard the list of possible relevant considerations as a “rigid catalogue of matters for attention” as if it were a legal checklist. The court’s task remains to determine what is an “appropriate” penalty in the circumstances of the particular case.

   [14] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]

   [15] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [19] (footnotes omitted)

10. The approach of most judges when assessing penalties for single contraventions of a provision of the FW Act is to take into account the non-exhaustive considerations Tracey J identified in Kelly v Fitzpatrick,[16] which his Honour adopted from the judgment of Mowbray FM in Mason v Harrington Corporation Pty Ltd. [17] Those considerations are:

    [16] Kelly v Fitzpatrick [2007] FCA 1080, at [14]

    [17] Mason v Harrington Corporation Pty Ltd [2007] FMCA 7

    (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 similar previous conduct by the party committing the breach;

    (e)whether the breaches were properly distinct or arose out of the one course of conduct;

    (f)the size of the business enterprise involved;

    (g)whether or not the breaches were deliberate;

    (h)whether senior management was involved in the breaches;

    (i)whether the party committing the breach had exhibited contrition;

    (j)whether the party committing the breach had taken corrective action;

    (k)whether the party committing the breach had cooperated with the enforcement authorities;

    (l)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and

    (m)the need for specific and general deterrence.

    THE PARTIES’ SUBMISSIONS

11. In the written submissions Ms Rizk filed on 24 April 2023 (Applicant’s April Submissions), Ms Rizk claims that I order PVH pay her $26,614 for the hours she had worked with PVH,[18] $20,000 for future loss of income for 2 months,[19] and $1.5 million “as a punitive [sic] damages”.[20] Ms Rizk also claims that I order PVH provide a letter of apology,[21] and she submits that I should set the maximum penalty and fines because PVH’s witnesses made false statements to the Court.[22] The Applicant’s April Submissions do not address the matters it is relevant to address for the purpose of assessing a penalty, and for these reasons I will have no further regard to them. The written submissions Ms Rizk filed on 26 May 2023 (Applicant’s May Submissions) do, however, address relevant matters, because they are a response to the submissions PVH filed on 12 May 2023 that do address relevant matters.

    APPLICATION

    [18] Applicant’s April Submissions, [1.p.]

    [19] Applicant’s April Submissions, [2.a.]

    [20] Applicant’s April Submissions, end of section 3

    [21] Applicant’s April Submissions, [4]

    [22] Applicant’s April Submissions, last page

    Nature, extent, circumstances, and deliberateness of contravening conduct

12. The contravention consisted of PVH terminating Ms Rizk’s employment because Ms Rizk exercised her workplace rights on three occasions, the first being in the email she sent to Ms Haksever at 11:27 pm on 15 September 2019;[23]  the second being in the email Ms Rizk sent to Ms Haksever at 4:02 am on 11 October 2019;[24] and the third being in the email Ms Rizk sent to Ms Haksever at 12:45 pm on 13 November 2019.[25]

    [23] Rizk v PVH Brands Australia Pty Ltd [2023] FedCFamC2G 249, at [294]

    [24] Rizk v PVH Brands Australia Pty Ltd [2023] FedCFamC2G 249, at [296]

    [25] Rizk v PVH Brands Australia Pty Ltd [2023] FedCFamC2G 249, at [297]

13. In its written submissions (Respondent’s Submissions) PVH refers to a number of matters it submits are relevant to determining the nature, extent, circumstances, and deliberateness of its contravening conduct. These are that the contravening conduct occurred during Ms Rizk’s probationary period; Ms Rizk had made two mistakes in the performance of her role during her probationary period; Ms Haksever had concerns about Ms Rizk’s lack of interpersonal skills; Ms Haksever had not terminated somebody’s contract before; and finding that Ms Rizk would not have remained employed with PVH past the end of her probationary period.[26]

    [26] Respondent’s Submissions, at [12]

14. This part of the Respondent’s Submissions does not address the contravening conduct which the earlier reasons found PVH engaged in: PVH terminated Ms Rizk’s employment because she exercised her workplace rights. There is no room for including in that finding matters relating to Ms Rizk that are said to have been of concern to Ms Haksever. Further, as Ms Rizk in effect submits in the Applicant’s May Submissions, PVH ignores the fact that it was Mr Barnett who approved the termination of Ms Rizk’s employment;[27] and PVH ignores the fact that counsel for PVH did not, when cross-examining Mr Barnett,[28] seek to obtain evidence of the circumstances in which Mr Barnett was approached to make a decision for PVH to terminate Ms Rizk’s employment, or the information on which he relied, or the reasons for which he approved PVH’s terminating Ms Rizk’s employment.

    [27] Rizk v PVH Brands Australia Pty Ltd [2023] FedCFamC2G 249, at [262], [263]

    [28] It should be recalled that Ms Rizk called Mr Barnett as a witness in her case.

15. Perhaps the basis of PVH’s submissions is that my finding that PVH contravened s 340(1) of the FW Act relies on the operation of s 361 of the FW Act and, for that reason, the penalty is not to be assessed on the basis of a positive finding that PVH was actuated by a proscribed reason when it terminated Ms Rizk’s employment. If that is the basis of PVH’s submission, it would be incorrect. Section 361 of the FW Act provides a method of proof; and “the method of proof here does not lessen, or indeed worsen, the seriousness of the contravention”.[29]

    [29] Fair Work Ombudsman v University of Melbourne [2024] FCA 330, at [37] (Downes J).

16. Although there is no evidence that PVH was aware at the time it terminated Ms Rizk’s employment that it did so in contravention of s 340(1) of the FW Act, or of any other law, PVH’s conduct was nevertheless deliberate; and it occurred in circumstances which in the earlier reasons I held caused Ms Rizk distress, hurt, and humiliation.[30] In short, PVH’s contravention of s 340(1) of the FW Act was serious.

    [30] Rizk v PVH Brands Australia Pty Ltd [2023] FedCFamC2G 249, at [312]

    Nature and extent of any loss or damage

17. In the earlier reasons I found that Ms Rizk suffered economic loss of $10,950, and I awarded Ms Rizk $10,000 for distress, hurt, and humiliation. That damage is not insubstantial.

18. It is open to infer, and I find, from Ms Rizk’s not having claimed otherwise after 20 April 2023, that PVH has paid these amounts, together with interest, to Ms Rizk. That means PVH has made good the loss and damage its contravening conduct caused Ms Rizk.

    Specific and general deterrence

19. PVH relies on an affidavit made by Mr Repaci, an employee of PVH who holds the position of General Manager of Human Resources ANZ. Mr Repaci deposes to the implementation of a number of measures to improve the process for handling employee complaints, improve the performance management process, reinforce to managers to promptly engage with PVH’s human resources team, and enhance the skills of members of PVH’s human resources team. I accept that evidence.

20. Given the single contravention, the absence of evidence of PVH having contravened any other provision of the FW Act, and the matters to which Mr Repaci deposes, I am satisfied there is no need for any penalty to incorporate an element for deterrence.

21. General deterrence raises different considerations. As I have noted, PVH’s contravention of s 340(1) was serious. PVH should be ordered to pay a pecuniary penalty, and it should be assessed at a level that would deter employers from engaging in similar conduct as PVH, and to encourage employers to implement procedures that would minimise the risk of their contravening s 340(1) of the FW Act.

    Other matters

22. I have already found that PVH has made good the damage and loss I found its contravening conduct caused Ms Rizk; and I have accepted Mr Repaci’s evidence about the procedures PVH has implemented. These are matters that point to the assessment of a penalty at the lower scale.

    Assessment

23. PVH submits that it should not be ordered to pay any pecuniary penalty or, in the alternative, PVH submits the penalty should be modest. I do not accept these submissions. As I have noted, PVH’s contravention of s 340(1) was serious, and there is a need to set a penalty at a level that will act as a general deterrent to others engaging in the same conduct.

24. I am satisfied that it is appropriate to order that PVH pay a pecuniary penalty; and I am satisfied that $18,000 is the appropriate penalty for PVH’s contravention of s 340(1) of the FW Act.

    To whom penalties should be paid

25. Subsection 546(3)(c) of the FW Act provides that the Court may order that a pecuniary penalty be paid to a “particular person”. Ms Rizk is in the position of the applicant in Sayed v Construction, Forestry, Mining and Energy Union:[31]

    In this appeal . . . the policy considerations of s 546(3) “speak loudly” in the circumstances to justify the payment of the penalty imposed to the individual affected by the contravention who, under the authority of the FW Act, commenced and maintained this enforcement proceeding. If [the applicant] had not pursued the action, it is unlikely that it would have been pursued. He took on the proceeding at obvious cost to himself.

    [31] Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4, at [116]

1. It is appropriate, and I therefore propose, to make an order under s 546(3)(c) of the FW Act that PVH pay to Ms Rizk the penalty I propose to order PVH pay.

   DISPOSITION

2. I propose to order that PVH pay to Ms Rizk a pecuniary penalty in the sum of $18,000, and that it pay that amount to Ms Rizk within 28 days after the day on which I pronounce orders.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis.

Associate:

Dated:       12 July 2024