Wu v DSMJ (No 3)
[2025] FedCFamC2G 129
•7 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Wu v DSMJ Pty Ltd (No 3) [2025] FedCFamC2G 129
File number: SYG 541 of 2022 Judgment of: JUDGE D HUMPHREYS Date of judgment: 7 February 2025 Catchwords: FAIR WORK - penalty judgment– where the respondent contravened s 45 of the Fair Work Act 2009 (Cth) – no loss or damage occasioned to the applicant – need to ensure - necessary to ensure specific and general deterrence – assessment of penalty. Legislation: Fair Work Act 2009 (Cth) ss 45, 333, 546(3)(c)
Professional Employees Award 2020 cl 3.3
Cases cited: Association of Professional Engineers, Scientists and Managers Australia v Peabody Energy Australia Coal Pty Ltd (2022) 318 IR 113; [2022] FCA 945
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Meat Industries Employees Union v Dick Stone (No 2) [2022] FCA 1263
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560
Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276; [2002] FCA 349
Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482
Fair Work Ombudsman v Nobrace Centre Pty Ltd(in Liquidation) [2019] FCCA 2970
Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301
Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70
Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy Information, Postal, Plumbing and Allied Services Union of Australia & Ors (2001) 110 IR 372
Wu v DSMJ Pty Ltd (No 2) [2023] FedCFamC2G 1056
Wu v DSMJ Pty Ltd (No 2) [2024] FCA 1404.
Division: Division 2 General Federal Law Number of paragraphs: 32 Date of last submissions: 3 February 2025 Place: Parramatta Solicitor for the Applicant: Self-represented litigant Counsel for the First Respondent: Ms Brigden Solicitor for the First, Second, Third, Fourth and Fifth Respondents: Ms Lee (People & Culture Strategies) ORDERS
SYG 541 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: JIANHUA WU
Applicant
AND: DSMJ PTY LTD
First Respondent
JOE COLON
Second Respondent
MEGAN FARRELL (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
JUDGE D HUMPHREYS
DATE OF ORDER:
7 FEBRUARY 2025
THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act2009 (Cth) the Respondent pay a pecuniary penalty to the Applicant with respect to the contravention of s 45 of the Fair Work Act 2009 (Cth) and cl 3.3 of the Professional Employees Award 2020 in the amount of $12,500.00 within 28 days of this order.
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 D HUMPHREYS
INTRODUCTION
This judgement concerns the appropriate penalty to be imposed on the respondent, DSMJ Pty Ltd (“DSMJ”), following a finding that DSMJ contravened s 45 of the Fair Work Act 2009 (Cth) (“the Act”) and cl 3.3 of the Professional Employees Award 2020, by failing to make a copy of the award available to the applicant; (see: Wu v DSMJ Pty Ltd(No 2) [2023] FedCFamC2G 1056).
Judgment on penalty has been delayed due to the applicant appealing to the Federal Court of Australia in respect of the liability judgement which dismissed his assertions of other contraventions of the Act. This appeal was dismissed by Kennett J in Wu v DSMJ Pty Ltd (No 2) [2024] FCA 1404.
Fair Work Penalty
The Court has a broad discretion as to penalty. In Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 at [71] it was said the Court should fix a penalty ‘it considers fairly and reasonably to be appropriate to protect the public interest from future contraventions of the Act’. Further at [10] and [12], the High Court stated that the penalty must not exceed what is ‘reasonably necessary to achieve the purpose of section 546: the deterrence of future contraventions of a like kind by the contravener and by others’.
In Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301 (“NSH”) Bromwich J summarised how the discretion is to be approached at [36], as follows:
(1) Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.
(2) Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.
(3) Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.
(4) Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
(5) Consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO (as permitted by Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (CFMEU Civil Penalties Case) at [64]) and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary: see Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14 at [30]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560 at [23]. [71] and [102].
The purpose of a civil penalty is primarily, if not wholly, promoting the public interest in compliance with the laws that have been contravened, and it does not engage principles of retribution or rehabilitation; (see: Fair Work Ombudsman v Nobrace Centre Pty Ltd(in Liquidation) [2019] FCCA 2970 (“Nobrace”) per Kelly J at [65]). As these principles of retribution or rehabilitation are not involved in the determination of a civil penalty, this intensifies the focus of a civil penalty determination on issues of specific and general deterrence; (see Nobrace: at [66]).
The Act does not set out any mandatory criteria, inclusive or exclusive, that the Court must consider when determining whether to impose a penalty or the amount of any penalty; (see: Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276; [2002] FCA 349 at [88]). The choice of penalty must be guided by the “individual circumstances of a case, not by a line-by-line comparison with another case”; (see: Australian Ophthalmic Supplies Pty Ltd v McAlary Smith (2008) 165 FCR 560 at [12]). The process is an intuitive one by the Court and not an application of a scientific process; (see: Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70 at [60], [63]).
In Mason v Harrington Corporation Pty Ltd [2007] FMCA 7, Mobray FM set out what is a now well accepted set of factors relevant in assessing a pecuniary penalty. They are as follows:
(a)the nature and extent of the conduct which led to the breaches;
(b)the circumstances in which the conduct took place;
(c)the nature and extent of any loss sustained as a result of the breaches;
(d)whether there has been similar previous conduct by the Respondents;
(e)whether the breaches were properly distinct or arose out of 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 enforcement authorities;
(l)the need to ensure compliance with minimum standards by provision of an effective means for the investigation and enforcement of employee entitlements; and
(m)the need for specific and general deterrence.
Merkel J in Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy Information, Postal, Plumbing and Allied Services Union of Australia & Ors (2001) 110 IR 372 (“CEPU”) set out some guiding considerations for the Court at 374:
… matters to be taken into account in determining the appropriate penalty include the cost of the contravention, deterrence, the flagrancy and deliberateness of the breach, the offender’s past record of behaviour and any contrition displayed by the offender.
THE APPLICANT’S SUBMISSIONS
The applicant relies upon submissions and an affidavit filed on 23 January 2025. To the extent that the applicant now complains he was not given access to an Employee Share option, that matter is outside the scope of the proceedings before the Court and has been ignored in the determination of any penalty.
The applicant submits that at no time during the three years of his employment was he provided with a copy of the relevant award. He asserts that the respondent knew of the existence of the board and that the award applied to him.
He notes that the respondent has around 200 employees and contractors and a well structured Human Resources team. He submits that the respondent is a large business with sufficient resources to pay any pecuniary penalty that might be imposed.
He submits that a penalty in the range of 25% to 35% of the maximum, or a penalty within the range of $23,475-$32,865 should be imposed. Pursuant to s 546(3)(c) he asks that any penalty imposed be payable to him.
THE RESPONDENT’S SUBMISSIONS
The respondent relied upon updated submissions filed 3 February 2025 together with the evidence contained within an affidavit of Mr Ting Lim, also filed 3 February 2025.
In written submissions, the respondent notes that it conceded there was no evidence that it made a copy of the award available to the applicant. It was on this basis that the contravention was made out.
In terms of the factors that should be considered in relation to penalty, it was submitted that the applicant’s employment with the respondent parent company extended from only 1 July 2021 until 10 January 2022. This followed the transfer of his employment from Grow Super Ops Pty Ltd to the respondent. Thus, the period during which the award was not made available was approximately six months.
The precise reason for the failure is unknown however there is evidence that the Chief People Officer of the respondent at the time, Ms Farrell, mistakenly believed that the award did not apply to Mr Wu as he was a high-income employee, earning over the high-income thresholds set by s 333 of the Act. In closing submissions however DSM J accepted that it could not press the proposition the award did not apply by reason of Mr Wu’s being a high-income employee following a decision of Wigney J in Association of Professional Engineers, Scientists and Managers Australia v Peabody Energy Australia Coal Pty Ltd (2022) 318 IR 113; [2022] FCA 945.
It was submitted that the Court did not need to follow the Federal Court’s decision in Australasian Meat Industry Employees Union v Dick Stone (No 2) [2022] FCA 1263 as the circumstances of this case can be distinguished rom that judgment. The Court agrees with that submission. In the present case, the Court is satisfied there is remorse and has been corrective action. The aggravating circumstances of that case are not apparent in this matter.
In terms of the nature and extent of any loss or damage sustained as a result of the breach, it was submitted the respondent did not suffer any loss or damage as a result of the contravention. It is not alleged that Mr Wu was not paid his entitlements under his contract of employment.
The first respondent submitted there is no evidence of any similar previous breaches by DSMJ.
It was submitted there was only one contravention and accordingly should be treated as such.
The respondent is a seven-year-old company in the process of moving from a start-up to scale up and now has more than 200 employees, more than double the number it had at the conclusion of the applicant’s employment. There is no evidence before the Court to support the applicant’s submission that DSMJ is a business with “dozens of millions of cash in its bank account”.
It was conceded that Ms Farrell formed the view that the award did not apply to Mr Wu towards the end of his employment. There was no evidence as to the involvement of other senior managers at the time.
In terms of corrective action, the Court was taken to the affidavit of Mr Lim who deposed that the award is now available to all employees through the company’s electronic human resources system. Mr Lim expresses regret that the award was not available to the respondent and apologises to him in his affidavit for that fact. Further, compliance activities are undertaken as a matter now of business-as-usual processes. It was submitted as a result of corrective action taken, further contraventions of the type found in this matter are less likely to occur and a lesser penalty is necessary in order to achieve specific deterrence.
As this was a private prosecution there is no evidence to suggest that DSMJ failed to cooperate in respect of any investigation or enforcement activity by the regulator.
In terms of the need for specific and general deterrence it is accepted however the penalty imposed should strike a reasonable balance between deterrence and oppressive severity and should be no greater than is necessary to achieve deterrence. In this case, the contravention occurred as a result of ignorance rather than any wilful act on the part of the employer.
It was submitted that the correct penalty unit as at the time of the contravention was $222.00 not $313.00 as submitted by the applicant. The maximum penalty therefore available is $66,600.00 It was submitted that a penalty in the range of $10,000.00 to $15,000.00 would be sufficient to ensure both specific and general deterrence given the particular factors in this case.
In terms of payment of the penalty, it was properly submitted that the usual course in proceedings would be for the penalty to be paid directly to the applicant.
CONSIDERATION
This matter involves a single contravention and accordingly it is not necessary to follow the pathway set out by the Bromwich J in NSH.
The Court accepts and adopts the submissions of the respondent insofar as they relate to the considerations related to the assessment of penalty. The Court accepts that this was a case of a mistaken belief that the award was not applicable to the respondent. The Court accepts the apology tendered on behalf of the respondent and notes that corrective action has been taken. The Court notes that there is no actual loss or damage occasioned to the applicant as a result of the contravention.
The Court accepts that the maximum penalty payable in respect of this contravention is $66,600.00. Whilst a technical breach in many aspects, there was still a need to impose a penalty which is such as to ensure there is both specific and general deterrence. It would not be appropriate to impose a nominal penalty only.
Taking all the relevant matters into account, the appropriate penalty in this matter is $12,500.00. The Court is satisfied this is sufficient to act as a deterrent both at a specific level and to act as a general deterent.
This amount is to be paid by the first respondent to the applicant within 28 days.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment of Judge D Humphreys. Associate:
Dated: 7 February 2025
SCHEDULE OF PARTIES
SYG 541 of 2022 Respondents
Fourth Respondent:
LIONG LIM
Fifth Respondent:
ROHAN TRONSON
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