Fair Work Ombudsman v Azmy Enterprises Pty Ltd [2026] FedCFamC2G 552

Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557

Fair Work Ombudsman v NSH North Pty Ltd (t/as New Shanghai Charlestown) (2017) 275 IR 148; [2017] FCA 1301

Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080

Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; [2008] FCAFC 170

Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336; [2016] FCAFC 4

Trade Practices Commission v CSR Limited (1991) ATPR 41-076

Transport Workers' Union of Australia v Qantas Airways Limited (Penalty) [2025] FCA 971

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

1. Upon admissions made by the First and Second Respondents:

(a) The First Respondent contravened s 716(5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the compliance notice given to the First Respondent on 30 June 2023.

(b) The Second Respondent was involved, within the meaning of s 550(2) of the FW Act, in the First Respondent's contravention of s 716(5) of the FW Act, and by reason of s 550(1) of the FW Act, is taken to have contravened s 716(5).

1. Pursuant to s 546(1) of the FW Act, the First Respondent pay pecuniary penalty in the amount of $9,390.
2. Pursuant to s 546(1) of the FW Act, the Second Respondent pay pecuniary penalty in the amount of $2,817.
3. Within 28 days of the date of this order, the First Respondent pay the Consolidated Revenue Fund of the Commonwealth pursuant to s 546(3)(a) of the FW Act the amount of the pecuniary penalty in the amount of $9,390 referred to in Order 1.
4. Within 28 days of the date of this order, the Second Respondent pay the Consolidated Revenue Fund of the Commonwealth pursuant to s 546(3)(a) of the FW Act the amount of the pecuniary penalty in the amount of $2,817 referred to in Order 2.
5. The Applicant have liberty to apply on seven (7) days' notice in the event that any of the above orders are not complied with.
6. There be no order as to costs.

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 24.04(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth)), or to record a variation to the order pursuant to r 24.04 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth).

1. In this matter, the applicant is the Fair Work Ombudsman (FWO) and the first respondent is a company that operates a childcare centre, which company has a sole director, the second respondent. By application filed on 15 January 2025, the FWO seeks declarations in relation to a failure by the first respondent to comply with a compliance notice given by a Fair Work Inspector pursuant to s 716(2) of the Fair Work Act 2009 (Cth) (FW Act) and orders for penalties under the provisions.

1. The matter came before me at 2pm on 17 February 2026 for hearing. Ms Ruby Miguntenna (Ms Miguntenna), solicitor at the Office of the FWO, appeared for the FWO. The second respondent, Mr Abanoub Azmy (Mr Azmy), appeared on behalf of the first and second respondents.
2. The evidence before the Court comprised of the compliance notice given by the FWO to the first respondent on 30 June 2023, tendered by the FWO and marked "Exhibit A1".

1. The parties prepared and filed a statement of agreed facts on 28 March 2025 for the purpose of s 191 of the Evidence Act 1995 (Cth) (Statement of Agreed Facts). The agreed facts are summarised as follows.
2. The FWO's claims arose following an investigation conducted on or around 17 October 2022 by the FWO into the first respondent's compliance with the FW Act in respect of an employee of the first respondent, Ms Rebecca Esner (employee), who was employed by the first respondent as an early childhood teacher from 31 July 2017 to 16 September 2022 (employment period). The FWO was investigating an allegation by the employee that the first respondent had failed to pay the employee: the minimum wage payable to the employee; annual leave loading; the educational leader allowance; the base rate of pay for ordinary hours of work during periods of paid annual leave; and accrued and untaken annual leave. Following the investigation, Fair Work Inspector Jody Maree Eleanor Collins (FWI Collins), appointed by the FWO pursuant to s 700 of the FW Act, formed a reasonable belief within the meaning of s 716(1) of the FW Act that the first respondent had contravened (contraventions):

(a) clause 14.2 of the Educational Services (Teachers) Award 2010 (2010 Award) and cl 17.2 of the Educational Services (Teachers) Award 2020 (2020 Award) by failing to pay the employee the minimum wage payable to a full-time employee in accordance with her classification;

(b) clause 23.2 of the 2010 Award and the 2020 Award by failing to pay the employee a leave loading of 17.5% on annual leave taken by the employee during the employment period;

(c) clause 19.4(c) of the 2020 Award by failing to pay the employee the educational leader allowance from the start of the employee's first full pay period starting on or after 1 January 2022;

(d) section 90(1) of the FW Act by failing to pay the employee at the base rate of pay for ordinary hours of work during periods of paid annual leave taken by the employee during the employment period; and

(e) section 90(2) of the FW Act by failing to make payment for accrued and untaken annual leave payable on cessation of the employee's employment.

1. On 30 June 2023, FWI Collins gave the first respondent a compliance notice pursuant to s 716(2) of the FW Act in respect of the contraventions outlined in the preceding paragraph (Compliance Notice), which Compliance Notice required the first respondent to take specified actions to remedy the direct effects of the contraventions, including to calculate and pay the employee the outstanding amounts owed to her and produce reasonable evidence to the FWO of the first respondent's compliance with the Compliance Notice.
2. The first respondent contravened s 716(5) of the FW Act in that it failed to comply with the Compliance Notice, as it failed to take the specified actions by the required date, being 3 August 2023, and failed to produce to the FWO evidence of compliance by the required date, being 10 August 2023. The first respondent admitted that it contravened s 716(5) of the FW Act and the second respondent admitted that he was involved, within the meaning of s 550(2)(c) of the FW Act, in the first respondent's contravention of s 716(5) of the FW Act, and was therefore taken to have contravened s 716(5) of the FW Act.
3. Between 8 September 2022 and 17 November 2022, prior to the Compliance Notice being given to the first respondent, the first respondent made some payments to the employee towards rectifying the conventions. On 3 March 2025, shortly after the commencement of these proceedings, the first respondent made a further payment of $23,036.73 to the employee.

1. By the Statement of Agreed Facts, the parties sought declarations that:

(a) the first respondent contravened s 716(5) of the FW Act by failing to comply with the Compliance Notice given to the first respondent on 30 June 2023; and

(b) the second respondent was involved, within the meaning of s 550(2) of the FW Act, in the first respondent's contravention of s 716(5) of the FW Act, and by reason of s 550(1) of the FW Act, is taken to have contravened s 716(5).

1. Given the Compliance Notice was given to the first respondent pursuant to s 716(2) of the FW Act, the first respondent failed to comply with the Compliance Notice thereby contravening s 716(5) of the FW Act, and the second respondent was the sole director and controlling mind of the first respondent at all relevant times, I make the declarations set out at the commencement of this judgment.
2. I will now turn to consider the claim for penalty.

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, a contravention of s 716(5) of the FW Act is a civil remedy provision within the meaning of s 539(1) of the FW Act, in that the said provision is referred to in item 33 of column 1 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 first respondent was at all relevant times a company incorporated under the Corporations Act 2001 (Cth), a constitutional corporation within the meaning of s 12 of the FW Act, and a national system employer with the meaning of s 14 of the FW Act. The second respondent was at all relevant times the director, secretary and shareholder of the first respondent, a person responsible for ensuring that the first respondent complied with its legal obligations under fair work legislation, the person who communicated with the FWO on behalf of the first respondent and a person whose conduct, engaged in on behalf of the first respondent and within the scope of his actual or apparent authority, is taken to be that of the first respondent: s 793(1) of the FW Act.
2. The employee was employed by the first respondent on a full-time basis as an early childhood teacher between 31 July 2017 to 16 September 2022. During the period 31 July 2017 to 9 September 2020, the 2010 Award applied to her employment, and during the period 10 September 2020 to 16 September 2022, the 2020 Award applied to her employment.
3. Between 31 July 2017 to 16 September 2022, the first respondent failed to pay the employee the minimum wage payable to a full-time employee, leave loading on annual leave taken by the employee, the base rate of pay for ordinary hours of work during periods of paid annual leave, accrued paid annual leave and from 1 January 2022, the first respondent failed to pay the employee's educational leader allowance.
4. On 30 June 2023, the FWO gave the first respondent a Compliance Notice in respect of the contraventions outlined in the preceding paragraph, which Compliance Notice required the first respondent to take specified actions to remedy the direct effects of the contraventions, including to pay outstanding amounts to the employee by 3 August 2023 and to provide the FWO with evidence of compliance with the Compliance Notice by 10 August 2023. The second respondent was the primary point of contact for communicating with the FWO in relation to the Compliance Notice.
5. The chronology of correspondence between the first and second respondents and the FWO discloses that the first and second respondents have co-operated with the FWO in order to complete calculations as to amounts owed by the first respondent to the employee. To the extent that the first and second respondents have engaged with the FWO, it discloses that non-compliance with the Compliance Notice has not been deliberate, in that the first and second respondents attempted to comply with the Compliance Notice, but had difficulty in undertaking the required calculations.

1. The total amount of loss to the employee was in the total sum of $23,036.73, being the amount paid to the FWO in March 2025 albeit one and a half years after the required date of payment specified in the Compliance Notice. The reason for the late payment appears to have been because the first and second respondents were encountering difficulty in calculating the payments due under the Compliance Notice.

1. The second respondent is the sole director of the first respondent. There is no evidence before me as to the financial standing of the first respondent.

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 second respondent, who was the sole director and directing mind of the first respondent at the time of the contravention.

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

1. There is no evidence before me as to whether the first respondent 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. However, the second respondent submitted he had taken active steps to ensure he is now educated as to relevant awards and fair work obligations so as not to repeat what occurred with the employee.

Whether the respondents have exhibited contrition, taken corrective action and co-operated with the enforcement authorities

1. The first and second respondents have engaged with and cooperated throughout the current proceedings, including making full admissions of liability in the Statement of Agreed Facts, and in doing so have reduced the cost and complexity of the proceedings. On 3 March 2025 shortly after the commencement of these proceedings, the first respondent took corrective action in that it made a payment of $23,036.73 to the employee to rectify the first respondent's non-compliance with the Compliance Notice. Further, the chronology filed by the FWO on 27 February 2026 discloses the first and second respondents actively engaged and co-operated with the FWO in order to try and resolve the issues.
2. I will now turn to each of the contraventions to determine the appropriate penalty, addressing the five steps identified at [17] of this judgment.

Step 1: Identify the separate contraventions and maximum penalty

Contravention of s 716(5) of the FW Act - failure to comply with the Compliance Notice

1. There is only one contravention, being that the first and second respondents failed to comply with the Compliance Notice given by the FWO on 30 June 2023, thereby contravening s 716(5) of the FW Act.

1. At the time of the contravention, being 10 August 2023, the penalty unit was:

(a) 30 units for an individual: s 546(2)(a) and item 33, column 4 of s 539(2) of the FW Act; and

(b) 150 units for a body corporate: s 546(2)(b) and item 33, column 4 of s 539(2) of the FW Act.

1. Ms Miguntenna did not submit that the contravention was 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), one penalty unit was $313 at the time of the contravention. Accordingly, the maximum penalties that could be sought by the FWO are for the first respondent's contravention of s 716(5), $313 x 150 units = $46,950, and for the second respondent's contravention of s 716(5), $313 x 30 units = $9,390.

1. Given the first and second respondents' failure to comply with the Compliance Notice is a single contravention of s 716(5) of the FW Act, it is not necessary to consider steps two and three of the five steps identified at [17] of this judgment.

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

1. As outlined in the preceding paragraph, it is not necessary to consider step three of the five steps identified at [17] of this judgment.

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

1. The first and second respondents failed to comply with the Compliance Notice for a period of more than one and a half years and on 3 March 2025 made a late payment of $23,036.73 to the employee to rectify the first respondent's non-compliance with the Compliance Notice. The employee had been employed for over five years by the first respondent, during which period the first respondent had not paid the employee at the minimum wage payable to a full-time employee, leave loading on annual leave taken by the employee, base rate of pay for ordinary hours of work during periods of paid annual leave, accrued paid annual leave and from 1 January 2022 the employee's educational leader allowance. I find the first and second respondents have sought to co-operate with the FWO and a major reason for non-compliance with the Compliance Notice was the difficulty the first and second respondents had with calculating the amount owed to the employee. The first and second respondents have shown true contrition and a real attempt to ensure they are now fully aware of the application of awards and the fair work legislation. Given these matters and in the circumstances set out at [19] to [28] of this judgment, I find the appropriate penalty for the contravention, reflecting the need for both general and specific deterrence is $9,390 (being 20% of the maximum penalty) for the first respondent and $2,817 (being 20% of the maximum penalty) for the second respondent.

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 first respondent is $9,390 and for the second respondent is $2,817. In the circumstances 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.

(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. Given the FWO, being the party who initiated the proceedings, has sought orders that the amount is paid to the Commonwealth, and noting his Honour Gray J's comments in the preceding paragraph, I find it appropriate that the amount of the penalty be paid to the Consolidated Revenue Fund of the Commonwealth.

1. Costs are not sought by the FWO in this matter.

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

I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Kaur-Bains.