[2025] FCA 1605
General information, not legal advice.
Federal Court of Australia
2025-12-18
Snaden J
Original judgment source is linked above.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
(1) by failing to pay to Mr Cropper, at the conclusion of his employment, $91,129.22 of accrued but untaken annual leave, EAAPL had contravened s 90(2) of the FW Act;
(2) by failing, on 44 occasions, to pay Mr Cropper in respect of his absence from work on public holidays, EAAPL had contravened s 116 of the FW Act; and
(3) by failing, on two occasions, to pay Mr Cropper in respect of his absence from work on personal/carer's leave, EAAPL had contravened s 99 of the FW Act.
A. THE CORRECT APPROACH
- The amount of any civil penalty is to be determined by using a five-step process:
(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 Fair Work Act 2009 (Cth) (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...what is proposed by [the parties], 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...
B. PRINCIPLES RELEVANT TO PENALTY
6. The power to impose pecuniary penalties is found in s 546 of the FW Act.
The approach of the Court in determining the quantum of penalties is well established.
Deterrence is the primary purpose of civil penalties to promote the public interest in compliance by attempting to put a price on a contravention that is sufficiently high to deter repetition by the contravenor and by others who are in a position to contravene legislation. To achieve this end, the Court should fix a penalty that 'it considers fairly and reasonably to be appropriate to protect the public interest from future contraventions'.
The appropriate deterrent value of a penalty may be assessed by reference to the non-exhaustive list of the factors identified by Justice French in Trade Practices Commission v CSR Ltd. This list is well-settled but not a 'rigid catalogue of matters for attention'. It includes matters relevant to both the character of the contravening conduct and of the contravenor.
MAXIMUM PENALTY
It is appropriate for the Court to consider the "ordained maximum" penalties that could be imposed on the respondent as an indication of the legislature's view of the seriousness of the conduct, and as part of a comparative exercise of determining where the contraventions sit as a "yardstick" against the maximum.
At the time of the contraventions (February 2020), for a body corporate under s 546(2)(b) of the FW Act, the maximum penalty was $63,000 per contravention.
Section 90(2) of the FW Act, by failing to pay Mr Cropper $91,129.22 of accrued but untaken annual leave
Section 116 of the FW Act, by failing to pay Mr Cropper $20,176.85 for public holidays not worked (on 44 occasions)
Section 99 of the FW Act, by failing to pay Mr Cropper $628.39, for personal/carer's leave absences on two occasions
Apology to Mr Cropper and his Family
The Board and I wish to extend an apology to Mr Cropper and his family on behalf of the Respondent.
We acknowledge that Mr Cropper has experienced a great deal stress and anxiety throughout the course of the proceeding, and the sum of money found to be owed to Mr Cropper is of significance to him and his wife.
Further, the Respondent deeply apologises to Mr Cropper for the lack of clarity and the confusion caused in relation to his employment status with the Respondent. We imagine that this would have been frustrating to Mr Cropper and would have caused him distress.
As I state later in my affidavit, it was never the Respondent's intention to deprive Mr Cropper of any entitlements. We genuinely believed that he was a contractor (as he was engaged in January 2005) and there was no change to such an arrangement.
We accept that our assessment and understanding of Mr Cropper being a contractor beyond January 2006 was wrong, and acknowledge that His Honour has now determined that Mr Cropper was an employee from that point up until the termination date of 28 February 2020.
We also acknowledge and accept that the termination of Mr Cropper's employment would have been disheartening, stressful and anxiety-inducing. Mr Cropper has always been held in high regard in his work with the Respondent, and the termination of his employment was in no way due to any personal reasons. It is simply the case that our business no longer required his service.
The Respondent hopes that Mr Cropper, his wife, and his family have some form of closure as a result of the findings in the proceeding.
570 Costs only if proceedings instituted vexatiously etc.
(1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.
(2) The party may be ordered to pay the costs only if:
...
(b) the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or
...
The rejection of a reasonable offer to compromise proceedings can (but does not necessarily) constitute an unreasonable act or omission of the kind to which s 570(2)(b) of the FW Act refers: Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20; (2015) 229 FCR 221, 255 [166] (Tracey, Gilmour, Jagot and Beach JJ, with whom White J agreed on that issue). Again, whether the rejection of an offer to compromise proceedings can be impugned as unreasonable will be a question of impression and degree, to be informed by all of the circumstances that surround it. At the least, those circumstances will include the objective attractiveness of the offer, whether a more beneficial result was realistically possible and whether the effort required to achieve a more beneficial result was proportionate to any marginal benefit.
I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Snaden.
Cropper
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