Elvin v Fair Work Ombudsman

THE COURT ORDERS THAT, UNTIL DETERMINATION OF THE AMENDED NOTICE OF APPEAL FILED ON 6 JULY 2024 AND THE AMENDED NOTICE OF CROSS-APPEAL FILED ON 19 JULY 2024, OR FURTHER ORDER OF THE COURT:

1. Orders 1, 2, 4(b) and 5 of the Orders of Justice Katzmann made on 10 May 2024 be stayed to the extent that they affect Mr Colin Kenneth Elvin. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLLIER J: 1 On 10 May 2024 Katzmann J gave final judgment in Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liquidation) (No 8) [2024] FCA 483. The respondents were found to have contravened the Fair Work Act 2009 (Cth) in multiple respects referable to, inter alia, minimum rates of pay for employees and record keeping. Mr Elvin was the second respondent in that case, being the director of the first respondent Foot & Thai Massage Pty Ltd ACN 147 134 272, a company now in liquidation (the company). Her Honour appointed a referee to calculate the extent of underpayment of employees' entitlements, and adopted the referee's report (to which Mr Elvin unsuccessfully objected). Her Honour made orders including the payment of compensation, interest and pecuniary penalties by the company and Mr Elvin. 2 By Amended Notice of Appeal filed on 6 July 2024, Mr Elvin appealed the judgment of Katzmann J given on 14 October 2021 (Liability Decision) and the final judgment given on 10 May 2024 (Penalty Decision). 3 Further, by Amended Notice of Cross-Appeal filed on 19 July 2024, the Fair Work Ombudsman appealed part of the Liability Decision and Penalty Decision, materially referable to the finding of Katzmann J that the Hair and Beauty Award did not cover and apply to relevant employees of the company. 4 On 12 July 2024 Mr Elvin filed an interlocutory application in which he sought the following order: 1. An order staying execution of the judgment of Justice Katzmann dated 14 October 2021 (Liability judgment) and 10 May 2024 (Penalty judgment). 5 Both Mr Elvin and the Fair Work Ombudsman have filed written submissions. Both parties also rely on affidavit material filed in the proceeding. 6 In summary, Mr Elvin submitted: Justice Katzmann erred in her Honour's reasons in relying on the Health Professionals and Support Services Award 2010 (HP Award); He would be disadvantaged if a stay were not granted because the Fair Work Ombudsman indicated steps may be taken to enforce the Penalty Decision, and he would be compelled to answer enforcement proceedings while also pursuing his appeal; He has very limited resources compared with those available to the Fair Work Ombudsman, and could not answer both proceedings simultaneously; He was the active respondent in the proceedings at first instance; Any prejudice to Mr Elvin should the orders of her Honour not be stayed would outweigh any prejudice to the Fair Work Ombudsman if the stay were granted; and Mr Elvin initiated proceedings in the Supreme Court against the external administrators of the company seeking orders that those administrators for orders that they be held liable for the orders made in Katzmann J's judgments, and is currently awaiting judgment by the Supreme Court. This is a compelling reason why a stay should be granted. 7 Mr Elvin's affidavit filed 12 July 2024 gave evidence essentially reiterating his submissions. 8 The Fair Work Ombudsman submitted, in summary: Mr Elvin's grounds of appeal lack substantial merit, in that they primarily concern procedural fairness points which misunderstand the role of the court when dealing with unrepresented litigants, and a claim of apprehended bias in respect of actions which were open to Katzmann J; The balance of convenience does not favour the grant of a stay, because it weighs heavily in favour of ensuring that relevant employees of the company, who were found to be vulnerable employees, receive their entitlements as soon as possible; The Fair Work Ombudsman has cross-appealed the judgment of Katzmann J, only in the event that Mr Elvin's appeal is successful; Mr Elvin's affidavit filed on 12 July 2024 in support of the interlocutory application did not provide adequate evidence regarding his financial circumstances nor address evidence that between 2020 and 2022, Mr Elvin sold three properties for a total of $2,165,000, and that it therefore appears that he has sufficient funds to pay the outstanding amounts due under the orders of Katzmann J; There is a risk that Mr Elvin may dispose of or dissipate any assets he holds during the course of the appeal proceedings; The penalties imposed against Mr Elvin served to act as an appropriate deterrent to both Mr Elvin and more generally to wrongdoers in similar circumstances. Stay of the orders of Katzmann J would nullify or impair the deterrent effect of the penalties imposed; If granted, the orders sought in the interlocutory application would also prevent the Fair Work Ombudsman from enforcing the orders of Katzmann J against the other parties to the proceedings, including the payment plan which has already been agreed with one of the respondents to the primary proceedings, which would further amplify the prejudice occasioned to the Fair Work Ombudsman and the relevant employees; Refusal of a stay to Mr Elvin would not render his appeal rights nugatory, as any amounts recovered could be returned to Mr Elvin in the event his appeal was successful; and Mr Elvin's submission that an external administrator of the company could be ordered by the Supreme Court to pay compensation and penalties is misconceived because those orders were directed at Mr Elvin personally.