Clyne v Ituau-Puletua

(a) section 44 of the Fair Work Act 2009 (Cth) (FW Act) by failing to pay the applicant his accrued annual leave;

(b) section 323(1) of the FW Act by failing to pay the applicant his accrued pro-rata long service leave; and

(c) section 405 of the FW Act by contravening the order made by the Fair Work Commission (FWC) dated 4 July 2024 (FWC Order), in Surelinc's failure to pay the applicant the amount awarded in respect of compensation for unfair dismissal.

1. Further, the Court on 21 August 2025 made the following compensation orders pursuant to s 545(1) of the FW Act that the respondent pay within 21 days of the date of the orders the amount of $49,406.49 comprising:

(a) $7,258.87 in respect of the applicant's unpaid accrued annual leave;

(b) $14,439.96 in respect of the applicant's unpaid accrued pro-rata long service leave; and

(c) $27,707.66 in respect of the applicant's unpaid compensation pursuant to the order made by the FWC Order dated 4 July 2024.

1. The matter came back before me at 10am on 16 February 2026 for the penalty, costs and interest hearing. Mr William Clarke (Mr Clarke), solicitor at Marrickville Legal Centre (MLC), appeared for the applicant. The respondent did not appear. The applicant relied on his affidavit deposed on 19 June 2025.

1. This Court has power to order the payment of pecuniary penalties in respect of contraventions pursuant to s 546(1) of the FW Act which provides:

...the Federal Circuit and Family Court of Australia (Division 2) or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.

1. Section 539(1) of the FW Act provides that a "civil remedy provision" is a provision referred to in column 1 of an item in the table in s 539(2) of the FW Act. Relevantly in this case, each of the contraventions identified, being ss 44, 323(1) and 405 of the FW Act, are civil remedy provisions within the meaning of s 539(1), in that the said provisions are referred to in column 1 of an item in the table in s 539(2).

Relevant legal principles to the assessment of pecuniary penalties

1. In Transport Workers' Union of Australia v Qantas Airways Limited (Penalty) [2025] FCA 971 (Qantas), his Honour Justice Lee at [26] summarised the well-settled legal principles applicable to the approach to determining an appropriate civil penalty, which I summarise as follows:

(a) The primary (if not sole) purpose of a civil penalty is the promotion of public interest in compliance with the provisions of the FW Act by deterrence, both general and specific. The Court emphasised that this purpose is protective, not punitive, and is directed to securing future compliance through deterrence. The question is whether the penalty is "appropriate" in the circumstances of the case.

(b) The power to order a person to pay a pecuniary penalty is a discretionary one, which must be exercised judicially, congruently with the aims and purposes of the Act.

(c) In Trade Practices Commission v CSR Limited (1991) ATPR 41-076 (at 52, 152 and 153) (CSR Ltd), French J (as his Honour then was) set out the following non-exhaustive list of relevant factors for assessing a pecuniary penalty of appropriate deterrent value:

(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 contraventions 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 in question], as evidenced by educational program[me]s 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 question] in relation to the contravention.

(d) The Court must arrive at a figure to ensure that the penalty is not such as to be regarded as "an acceptable cost of doing business".

(e) It has been said that even if a company is in liquidation, it may still be appropriate to order that it pay penalties as a measure of the Court's disapproval of the contraventions, and the seriousness of the contraventions. The justification of any such order is not because of retribution but because a penalty in such circumstances can further the aim of general deterrence.

1. In Markarian v R (2005) 228 CLR 357 (Markarian) at 372, Gleeson CJ, Gummow, Hayne and Callinan JJ observed that:

[C]areful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick.

1. As noted by Katzmann J in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 at [391], it is beyond doubt that the observations in Markarian apply equally to the imposition of civil penalties.
2. In Fair Work Ombudsman v NSH North Pty Ltd (t/as New Shanghai Charlestown) (2017) 275 IR 148; [2017] FCA 1301, Bromwich J at [36] accepted that the process of determining the appropriate penalty involved the following five steps:

(a) identify the separate contraventions involved, with each breach of obligation being a separate contravention, and each breach of a term of the Award being a separate contravention;

(b) 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 s 557 of the 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;

(c) 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 (that is, 'common law course of conduct');

(d) consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation; and

(e) consider the overall penalties arrived at, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct which led to the contraventions when viewed as a whole, making such adjustments as are necessary (that is, the 'totality principle'): see Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [30] per Tracey J; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8 at [23] per Gray J, [71] per Graham J, and [102] per Buchanan J.

1. I will now turn to consider the factors relevant in this matter as identified in CSR Ltd.

1. The respondent at all material times was the sole director and secretary of Surelinc and a 50% shareholder in that company. The respondent was responsible for the overall operation and control of Surelinc, including that Surelinc complied with its legal obligations and compliance with the fair work legislation. During the applicant's employment, the Electrical, Electronic and Communications Contracting Award (Award) applied to his employment.
2. On 26 February 2024, the applicant's employment with Surelinc was terminated after 10 years of employment with his last day of employment being 4 March 2024. On 28 February 2024, the applicant filed an unfair dismissal claim against Surelinc in the FWC, alleging that the termination of his employment was harsh, unjust and unreasonable (unfair dismissal proceedings). The respondent was the primary point of contact on behalf of Surelinc in the unfair dismissal proceedings.
3. On 4 July 2024, Deputy President Cross issued the FWC Order to Surelinc, requiring it to pay the applicant the sum of $27,707.66 plus superannuation within 21 days, as compensation for the dismissal of the applicant in circumstances which were harsh, unjust and unreasonable within the meaning of s 387 of the FW Act. The sum of $27,707.66 represented the amount of compensation for 14 weeks' pay. Neither Surelinc nor the respondent appealed to the Full Bench of the FWC or complied with the FWC Order.
4. On 12 July 2024, Mr Graeme Robert Beattie (Mr Beattie) of Worrells was appointed administrator of Surelinc. On 19 July 2024, Mr Christopher Damien Darin (Mr Darin) of Worrells was appointed administrator of Surelinc. On the same day, both Mr Beattie and Mr Darin of Worrells were appointed joint liquidators of Surelinc.
5. I find that Surelinc and the respondent as the directing mind of Surelinc were aware of the Award. I find the non-payment of accrued annual leave and pro-rata long service leave on the termination of the applicant's employment was deliberate in so far as the respondent chose not to pay the applicant any entitlements on termination without explanation or acknowledgement.
6. I find the s 405 contravention in failing to comply with the FWC Order was also a deliberate choice made by the respondent who was aware of and participated albeit to a limited extent in the application before the FWC.

1. The total amount of loss to the applicant was in the total sum of $49,406.49 as set out at [4] of this judgment which comprised of unpaid accrued annual leave, unpaid accrued pro-rata long service leave and unpaid compensation for unfair dismissal.

1. There is no evidence before me as to the financial standing of Surelinc.

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

1. The contraventions arose out of the conduct of senior management, being the respondent, who was the sole director and directing mind of Surelinc.

Whether the company has a corporate culture conducive to compliance with the FW Act

1. There is no evidence before me as to whether Surelinc had a corporate culture conducive to compliance with the FW Act, as there is no evidence before me as to any educational programs or other measures to ensure compliance with the FW Act.

Whether the respondent has exhibited contrition, taken corrective action and co-operated with the enforcement authorities

1. I find the respondent has not exhibited contrition as he failed to engage at any level with the current proceedings, which demonstrates a lack of remorse or consideration for the impact of Surelinc's actions on the applicant. I do note that the respondent did engage with the FWC albeit to a limited extent.
2. I will now turn to each of the contraventions to determine the appropriate penalty, addressing the five steps identified at [11] of this judgment.

Step 1: Identify the separate contraventions and maximum penalty

Contravention of s 44 of the FW Act - Accrued annual leave

1. Surelinc failed to pay the applicant accrued annual leave entitlements under s 90(2) of the FW Act in the amount of $7,258.87, thereby contravening s 44 of the FW Act.

1. At the time of the contravention on 5 March 2024 (being the last day of the applicant's employment) the penalty unit was 60 units for an individual: s 546(2)(a) and item 1, column 4 of s 539(2) of the FW Act. Mr Clarke submitted that the contravention was not a serious contravention. "Penalty unit" has the meaning given by s 4AA(1) of the Crimes Act 1914 (Cth) (Crimes Act). Pursuant to s 4AA(3) of the Crimes Act and s 5 of the Crimes (Amount of Penalty Unit) Instrument 2023 (Cth) (Crimes Instrument), one penalty unit was $313 at the time of the contravention. Accordingly, the maximum penalty that could be sought by the applicant for the respondent's contravention of s 44 is $313 x 60 units = $18,780.

Contravention of s 323(1) of the FW Act - Accrued pro-rata long service leave

1. Surelinc failed to pay the applicant's accrued pro-rata long service leave of 8.0222 weeks under ss 4, 10A and 10B of the Long Service Leave Act 1955 (NSW) in the amount of $14,439.96, thereby contravening s 323(1) of the FW Act by failing to pay the applicant for his performance of work.

1. At the time of the contravention on 5 March 2024 the penalty unit was 60 units for an individual: s 546(2) and item 10, column 4 of s 539(2) of the FW Act. Mr Clarke submitted at the hearing before me that the contravention was not a serious contravention. Pursuant to s 4AA(3) of the Crimes Act and s 5 of the Crimes Instrument, one penalty unit was $313 at the time of the contravention. Accordingly, the maximum penalty that could be sought by the applicant for the respondent's contravention of s 323(1) is $313 x 60 units = $18,780.

Contravention of s 405 of the FW Act - Failure to comply with the FWC Order

1. On 4 July 2024, Deputy President Cross issued the FWC Order to Surelinc, requiring it to pay the applicant the sum of $27,707.66 plus superannuation within 21 days.

1. At the time of the contravention on 25 July 2024 (the order dated 4 July 2024 stipulated that payment had to be made within 21 days) the penalty unit was 60 units for an individual: s 546(2) and item 13, column 4 of s 539(2) of the FW Act. Pursuant to s 4AA(3) of the Crimes Act and s 5 of the Crimes Instrument, one penalty unit was $313 at the time of the contravention. Accordingly, the maximum penalty that could be sought by the applicant for the respondent's contravention of s 405 is $313 x 60 = $18,780.

Accrued annual leave and accrued pro-rata long service leave - cumulative contraventions

1. I find that Surelinc's failure to pay the applicant his accrued annual leave and accrued pro-rata long service leave should be considered as cumulative contraventions. This is because the contraventions arose from one course of conduct, being Surelinc's failure to pay the applicant payments related to leave entitlements which were both payable on the applicant's last day of employment.

Failure to comply with FWC Order - separate contravention

1. I find Surelinc's failure to comply with the FWC Order should be considered as a separate contravention because it concerned conduct in relation to the applicant's unfair dismissal after 10 years of employment.

Step 3: Consider whether further adjustment needs to be made to ensure no double penalty imposed as a result of overlap

1. In this case, I find that the factual matters in relation to the failure to comply with the FWC Order did not arise from substantially the same conduct as that referred to in relation to the contraventions as to the failure to pay accrued annual leave and accrued pro-rata long service leave and therefore no further adjustment is required.

Step 4: Consider the appropriate penalty in respect of each final individual group of contraventions

1. In relation to the group of two contraventions of ss 44 and 323(1) of the FW Act, the loss the applicant suffered was in the amount of $21,698.83. The applicant had been employed for 10 years by Surelinc, during which time Surelinc had paid the applicant accrued annual leave and was aware that long service leave had been accrued. Therefore, I conclude that Surelinc knew it was required to pay the applicant accrued annual and pro-rata long service leave but chose deliberately not to do so upon termination of the applicant's employment. There is no evidence that Surelinc failed to pay these amounts at the time of the applicant's termination for any other reasons. Given those matters and in the circumstances set out at [13] to [23] of this judgment, I find the appropriate penalty for this group of contraventions, to reflect the need for both general and specific deterrence is $8,000.
2. In relation to the s 405 contravention, being the failure to comply with the FWC Order, I find that the failure to follow an order of a duly constituted commission such as the FWC is serious and should not be encouraged. In addition to that, Surelinc and the respondent have made no attempt to demonstrate contrition or provide any excuse to the FWC as to the unfair dismissal of the applicant after the applicant had been employed for nearly 10 years. Given those matters and in the circumstances set out at [13] to [23] of this judgment, where I have found that the non-payment was deliberate and in circumstances where the respondent has shown no contrition, I find the appropriate penalty, to reflect the need for both general and specific deterrence, for this contravention is $13,000.

Step 5: Consider the overall penalties arrived at to ensure the penalties are appropriate and proportionate to the conduct

1. The overall penalty for the respondent is $21,000. In circumstances where the applicant was effectively out of pocket in the sum of $49,406.49, and applying the totality principle to ensure the penalties are appropriate and proportionate to the contravening conduct, I do not think the penalties require an adjustment.

Whether penalty should be paid to the applicant

(3) The court may order that the pecuniary penalty, or a part of the penalty, be paid to:

(a) the Commonwealth; or

(b) a particular organisation; or

(c) a particular person.

(4) The pecuniary penalty may be recovered as a debt due to the person to whom the penalty is payable.

1. In Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336; [2016] FCAFC 4, Tracey, Barker and Katzmann JJ said at [101]:

Given the legislative history of ss 539(2) and 546(3) of the FW Act, since the enactment of ss 44 and 45 in the pioneering 1904 Act, and the manner in which the "usual order" was articulated in such early cases as the Ve_hicle Builders' Employees' Federation_ case and Seymour, which is reflected in the Explanatory Memorandum, we consider that the power conveyed by s 546(3) is ordinarily to be exercised by awarding any penalty to the successful applicant. We accept that there may be cases (of which this is not one) where the penalty, or a part of the penalty, should be paid to another person in the circumstances described by Gray J in Plancor at [44] (as set out at [96] above).

1. His Honour Gray J in Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; [2008] FCAFC 170 at [44] said:

The correct view is that the initiating party is normally the proper recipient of the penalty as part of a system of recognising particular interests in certain classes of persons (now specified in s 718 of the WR Act) in upholding the integrity of awards and agreements the subject of penal proceedings. Where a public official vindicates the law by suing for and obtaining a penalty, it is appropriate that the penalty be paid to the Consolidated Revenue Fund. Otherwise, the general rule remains appropriate, that the penalty is to be paid to the party initiating the proceeding, with the Gibbs exception that the penalty may be ordered to be paid to the organisation on whose behalf the initiating party has acted.

1. The applicant in this case initiated the proceedings and I find that the amount of the penalty be paid to the applicant.

1. Section 547 of the FW Act makes provision for pre-judgment interest as follows:

(1) This section applies to an order (other than a pecuniary penalty order) under this Division in relation to an amount that a person was required to pay to, or on behalf of, another person under this Act or a fair work instrument.

(2) In making the order the court must, on application, include an amount of interest in the sum ordered, unless good cause is shown to the contrary.

(3) Without limiting subsection (2), in determining the amount of interest, the court must take into account the period between the day the relevant cause of action arose and the day the order is made.

1. Annexure "A" to this judgment sets out the pre-judgment interest in accordance with the rate identified in the "Interest on Judgments Practice Note (GPN-INT)" from the date the relevant cause of action arose to the date of the compensation orders, being 21 August 2025.
2. I am satisfied that the calculation of pre-judgment interest is in the sum of $5,104.75.

1. The applicant seeks costs from the respondent in the amount of $6,500 pursuant to s 570(2)(b) of the FW Act, which provides:

(2) The party may be ordered to pay the costs only if:

(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

(b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or

(c) the court is satisfied of both of the following:

(i) the party unreasonably refused to participate in a matter before the FWC

(ii) the matter arose from the same facts as the proceedings.

1. Mr Clarke submitted that the respondent's unreasonable acts and omission caused the applicant to incur additional costs, as the respondent failed to comply with the Court's orders by not communicating or engaging with the applicant or the Court during the proceedings.
2. I am satisfied that the respondent's unreasonable acts and omission in not engaging with the court proceedings resulted in the applicant incurring additional expenses after the filing of the application. Therefore, it is appropriate that the respondent be ordered to pay those additional costs incurred by the applicant. In the absence of any evidence that the legal costs incurred by the applicant was in the sum of $6,500, I find that the sum of $3,647.07 is fair and reasonable, calculated based on the scale of costs applicable under Schedule 2 to the previously applicable 2021 GFL Rules (for work performed before 1 September 2025) and Schedule 2 to the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth) (for work performed on and after 1 September 2025), and reflects the work reasonably undertaken in the conduct of these proceedings after the application was filed:

(a) Directions hearings on 2 June 2025, 4 July 2025 and 22 July 2025 (item 9): $342.19 x 3 = $1,026.57.

(b) Hearings on 21 August 2025 and 16 February 2026 (item 9): $1,255.75 + $1,364.75 = $2,620.50.

1. Accordingly, I order costs fixed in the amount of $3,647.07.

1. Accordingly, I make the orders set out at the commencement of this judgment.

I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Kaur-Bains.