FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
United Workers Union v ECEC Management Services Pty Ltd (No 2) [2021] FedCFamC2G 55
File number(s): SYG 366 of 2020 Judgment of: JUDGE DRIVER Date of judgment: 29 September 2021 Catchwords: INDUSTRIAL LAW – FAIR WORK – assessment of penalties for established breaches Legislation: Fair Work Act 2009 (Cth), ss 45, 50, 536, 546, 557A Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) (2010) 199 IR 373
Kelly v Fitzpatrick (2007) 166 IR 14
Rojas v Esselte Australia Pty Limited (No 2) (2008) 177 IR 306
United Workers Union v ECEC Management Services Pty Ltd [2021] FCCA 1260
Division: Division 2 General Federal Law Number of paragraphs: 14 Date of hearing: 7 June 2021 Place: Sydney Counsel for the Applicant: Ms L Saunders Solicitor for the Applicant: United Workers Union Respondent: Mr S Abdul, with leave ORDERS
SYG 366 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: UNITED WORKERS UNION
Applicant
AND: ECEC MANAGEMENT SERVICES PTY LTD
Respondent
ORDER MADE BY:
JUDGE DRIVER
DATE OF ORDER:
29 SEPTEMBER 2021
THE COURT ORDERS THAT:
1.The respondent is to pay to the applicant a total penalty of $60,000 under s 546(3)(b) of the Fair Work Act 2009 (Cth).
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review 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 DRIVER:
INTRODUCTION AND BACKGROUND
On 7 June 2021 I gave an ex tempore judgment in this matter concerning contraventions of the Fair Work Act 2009 (Cth) (Fair Work Act).[1] I made declarations identifying breaches of the Fair Work Act and orders for the payment of superannuation benefits to 10 employees. There was no costs order. I reserved judgment in relation to pecuniary penalties.
This judgment deals with the issue of penalties.
CONSIDERATION
The primary purpose of penalty orders is protective; ie to deter a repeat of the conduct by either the contravenor or others.[2] This must be distinguished from questions of “retribution, denunciation and rehabilitation”.[3]
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- Case
- [2021] FedCFamC2G 55
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the court was determining the appropriate level of penalty for ECEC's breaches of the Fair Work Act. The court had to consider various factors, including the nature and extent of the conduct leading to the breach, the circumstances in which the conduct took place, the nature and extent of any loss or damage suffered as a result of the breach, and any antecedent conduct by ECEC. The court also had to consider whether the contraventions were deliberate and premeditated, the contrition shown by ECEC, any corrective action taken, and the extent of cooperation between ECEC and the Union.
The court found that several factors weighed in favour of imposing a penalty on the higher end of the scale. Firstly, the contraventions resulted from a deliberate decision not to make payments of minimum employee entitlements and to misrepresent this to employees. Secondly, the loss sustained by employees was significant in their personal circumstances, and when the importance of compounding in the context of superannuation was considered. Thirdly, although ECEC claimed financial pressure, there was no evidence of impossibility. Fourthly, ECEC had expressed no contrition and had taken no serious steps to correct the contravention, pointing to a particular need for specific deterrence. Finally, ECEC had not cooperated with the Union to resolve the matter or within the proceeding, including by its failure to comply with Court timetables.
The court ordered that ECEC was to pay the Union a total penalty of $60,000 under s 546(3)(b) of the Fair Work Act 2009 (Cth). The form of the order was subject to the entry in the Court’s records. This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors, or to record a variation to the order.
Orders
Orders of the court
THE COURT ORDERS THAT:
1. The respondent is to pay to the applicant a total penalty of $60,000 under s 546(3)(b) of the Fair Work Act 2009 (Cth).
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review 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).
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
This judgment deals with the issue of penalties.CONSIDERATION The primary purpose of penalty orders is protective; ie to deter a repeat of the conduct by either the contravenor or others.[2] This must be distinguished from questions of “retribution, denunciation and rehabilitation”.[3] [2] Commonwealth v Director of the Fair Work Building Industry Inspectorate (Civil Penalties Case) (2015) 258 CLR 482 at [55][3] Construction, Forestry, Maritime, Mining and Energy Union & Anor v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) (2018) 264 FCR 155 at [19] The discretion as to whether to impose a penalty must be exercised in this light. The fact that an employer has not deliberately or consciously contravened a civil remedy provision is of particular significance. However, it is equally important that employers be dissuaded from reckless contraventions, and the importance of careful compliance with industrial instruments be reaffirmed. In assessing the level of penalty, the Court accordingly must determine where the conduct sits on the spectrum of seriousness for contraventions of its kind.[4][4] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) (2010) 199 IR 373 at [5] The factors relevant to assessing penalty include those discussed in Kelly v Fitzpatrick:[5][5] (2007) 166 IR 14 at [14]: cf Rojas v Esselte Australia Pty Limited (No 2) (2008) 177 IR 306 at [64](a)the nature and extent of the conduct which lead to the breach;(b)the circumstances in which the conduct took place;(c)the nature and extent of any loss or damage suffered as a result of the breach;(d)any antecedent conduct by the contravener;(e)the seniority and authority of the persons engaging in the contravention;(f)whether the contraventions were deliberate and premeditated;(g)contrition on the part of the contravener;(h)any corrective action taken by the contravener; and(i)the extent of any cooperation between the contravener and the applicant seeking to enforce the law. Here, a number of factors weigh in favour of a penalty on the higher end of the scale:(a)first, the contraventions have resulted from a deliberate decision to not make payments of minimum employee entitlements of particular importance, and to misrepresent this to employees;(b)secondly, the loss sustained by employees was significant in respect of their personal circumstances, and when the importance of compounding in the context of superannuation is considered;(c)thirdly, although Mr Abdul, the father of the person responsible for the respondent company, ECEC Management Services Pty Ltd (ECEC), and who represented it with leave in this proceeding, has spoken of financial pressure there is no evidence to suggest impossibility;(d)fourthly, ECEC has expressed no contrition and at least up until the date of my principal judgment, had taken no serious steps to correct the contravention, pointing to a particular need for specific deterrence; and(e)finally, ECEC has not co-operated with the applicant, the United Workers Union (Union), to resolve the matter or within the proceeding, including by its failure to comply with Court timetables.