[2025] FCA 1401
General information, not legal advice.
Federal Court of Australia
2025-11-18
Bennett J
Original judgment source is linked above.
(a) within 28 days of these orders, paying the amount of $44,877.25 owed to 13 of the former employees, as identified in Column D of Table 1 in Annexure B attached to the notice of appeal;
(b) within 7 days after compliance with order 1(a), providing evidence to the Appellant that the payment required by order 1(a) was made.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
(1) s 718A(1) of the FW Act, by knowingly or recklessly producing false or misleading records to an inspector;
(2) s 535(1) of the Act, by failing to make or keep records relating to the termination of employment of the Former Employees; and
(3) s 716(5) of the Act, by failing to comply with the Compliance Notice.
(a) The First Respondent pay a pecuniary penalty of $15,000 for his contraventions of the Act per declarations 1(a), (b) and (c);
(b) The Second Respondent pay a pecuniary penalty of $12,500 for his contraventions of the Act per declarations 2(a), (b) and (c); and
(c) The Third Respondent pay a pecuniary penalty of $4,000 for his contravention of the Act per declaration 3.
716 Compliance notices
Application of this section
(1) This section applies if an inspector reasonably believes that a person has contravened one or more of the following:
(a) a provision of the National Employment Standards;
(b) a term of a modern award; ...
Giving a notice
(2) The inspector may, except as provided by subsection (4), give the person a notice requiring the person to do either or both of the following within such reasonable time as is specified in the notice:
(a) take specified action to remedy the direct effects of the contravention referred to in subsection (1) (including to calculate and pay the amount of any underpayment);
(b) produce reasonable evidence of the person's compliance with the notice.
(a) set out the name of the person to whom the notice is given; and
(b) set out the name of the inspector who gave the notice; and
(c) set out brief details of the contravention; and
(d) explain that a failure to comply with the notice may contravene a civil remedy provision; and
(e) explain that the person may apply to the Federal Court, the Federal Circuit and Family Court of Australia (Division 2) or an eligible State or Territory Court for a review of the notice on either or both of the following grounds:
(i) the person has not committed a contravention set out in the notice;
(ii) the notice does not comply with subsection (2) or this subsection; and
(f) set out any other matters prescribed by the regulations.
Relationship with enforceable undertakings
(4) An inspector must not give a person a notice in relation to a contravention if:
(a) the person has given an undertaking under section 715 in relation to the contravention; and
(b) the undertaking has not been withdrawn.
Relationship with civil remedy provisions
(4A) An inspector must not apply for an order under Division 2 of Part 4‑1 in relation to a contravention of a civil remedy provision by a person if:
(a) the inspector has given the person a notice in relation to the contravention; and
(b) either of the following subparagraphs applies:
(i) the notice has not been withdrawn, and the person has complied with the notice;
(ii) the person has made an application under section 717 in relation to the notice that has not been completely dealt with.
Note: A person other than an inspector who is otherwise entitled to apply for an order in relation to the contravention may do so.
(4B) A person who complies with a notice in relation to a contravention of a civil remedy provision is not taken:
(a) to have admitted to contravening the provision; or
(b) to have been found to have contravened the provision.
Person must not fail to comply with notice
(5) A person must not fail to comply with a notice given under this section.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(6) Subsection (5) does not apply if the person has a reasonable excuse.
717 Review of compliance notices
(1) A person who has been given a notice under section 716 may apply to the Federal Court, the Federal Circuit and Family Court of Australia (Division 2) or an eligible State or Territory Court for a review of the notice on either or both of the following grounds:
(a) the person has not committed a contravention set out in the notice;
(b) the notice does not comply with subsection 716(2) or (3).
(2) At any time after the application has been made, the court may stay the operation of the notice on the terms and conditions that the court considers appropriate.
(3) The court may confirm, cancel or vary the notice after reviewing it.
545 Orders that can be made by particular courts
Federal Court and Federal Circuit and Family Court of Australia (Division 2)
(1) The Federal Court or the Federal Circuit and Family Court of Australia (Division 2) may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.
Note 1: For the court's power to make pecuniary penalty orders, see section 546.
Note 2: For limitations on orders in relation to costs, see section 570.
Note 3: The Federal Court and the Federal Circuit and Family Court of Australia (Division 2) may grant injunctions in relation to industrial action under subsections 417(3) and 421(3).
Note 4: There are limitations on orders that can be made in relation to contraventions of subsection 463(1) or (2) (which deals with protected action ballot orders) (see subsection 463(3)).
(2) Without limiting subsection (1), orders the Federal Court or Federal Circuit and Family Court of Australia (Division 2) may make include the following:
(a) an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;
(b) an order awarding compensation for loss that a person has suffered because of the contravention;
(1) The Former Employee's name, role (classification), employment status and employment period.
(2) The clause of the Award or NES alleged to have been breached, the amount of the underpayment alleged, and the hours for which the individual was underpaid.
(3) A calculation identifying the total outstanding underpayment to each Former Employee.
(1) First, her Honour considered that such an order was not within the Court's jurisdiction, because the loss suffered by the Former Employees was not caused by the Respondents' contravention of s 716(5). Her Honour stated that (at PJ[80]):
...any underpayment is a loss occasioned by the failure to pay an entitlement for work performed in accordance with the relevant modern award and/or the NES. Those entitlements variously arose some time before the statutory compliance notice was issued (spanning 2017 to 2021 according to the FWO Inspector's reasonable belief).
(2) Second, her Honour stated that in any event she would not have been minded to exercise the discretion to order compensation in the present case. It is useful to set out her Honour's reasoning on this issue in full (at PJ[82]-[86]):
The application in this matter sought relief for contraventions of ss.718A, 535(1) and 716(5) of the Act. The pleadings do not articulate, nor have the Respondents admitted, contravention(s) of obligations to pay minimum terms and conditions - such as of s.44 (contravening the NES) and/or s.45 (contravening a modern award) of the Act - or involvement in such contravention. The findings of contraventions that I have made above are limited to contraventions of ss.718A, 535(1) and 716(5).
As observed in Fair Work Ombudsman v Carers Portland Inc [2023] FedCFamC2G 620 per Blake J, the Act expressly sets out a pathway for pursuing contraventions of an award, an enterprise agreement or the NES. It would potentially undermine the integrity of that framework were an application for contravention of civil remedy provision(s) to result in a compensation order directed at rectifying a separate and distinct contravention of a civil remedy provision(s) which was not part of the originating claim or pleadings.
In the present case, the statutory compliance notice was not withdrawn and was not complied with. The FWO is not apparently precluded (by operation of s.716(4)) from making application for orders in relation to contraventions of s.44 (contravening the NES) and s.45 (contravening a modern award).
It is not, in my view, appropriate to exercise the discretion where a proceeding for contravention of ss.718A, 535(1) and 716(5) is essentially a vehicle to pursue a remedy to rectify a different contravention. The Respondents' admissions, whilst relevant to the present case, do not justify a different result in the form they were made.
The penalties in this case will be ordered to be paid to the Commonwealth of Australia. It will be a matter for the FWO whether it elects to direct any of the proceeds of the penalties obtained in these proceedings toward compensating the former employees.
In determining that it was not appropriate to exercise the Court's discretion to make orders under s 545 of the Fair Work Act 2009 (Cth) (FW Act) that the First and Second Respondents compensate the Employees for the loss that occurred by the First and Second Respondents' failure to comply with the Compliance Notice, the learned primary judge:
- erred in finding that the compensation sought was caused by breaches of an Award or the National Employment Standards rather than the First and Second Respondents' failure to comply with the Compliance Notice and that there was no causal connection between the compensation sought and the failure to comply with the Compliance Notice;
- erred in finding, in the alternative, that it was not appropriate to grant compensation orders on a discretionary basis, because:
- the Appellant had failed to prove contraventions of the Award or the National Employment Standards when the Appellant had no such obligation to do so;
- the Appellant retained the ability to make an application for orders in relation to contraventions of an Award or the National Employment Standards; and
- the Court had imposed civil penalties on the First and Second Respondents, including in finding that the Appellant had the ability to direct any of the proceeds of the penalties obtained toward compensation.
- Initial Partial Payment: The Respondent made partial payments totalling $12,800 on 22 December 2022.
- Record-Keeping: The Respondent did retain some employee records, despite claims of full non-compliance with s 535(1) of the Fair Work Act.
erred in finding that the compensation sought was caused by breaches of an Award or the National Employment Standards rather than the First and Second Respondents' failure to comply with the Compliance Notice and that there was no causal connection between the compensation sought and the failure to comply with the Compliance Notice;
(1) The failure to comply with the Compliance Notice need not be the only cause of the loss: it must be a cause of the loss and damage sustained (Transport Workers' Union of Australia v Qantas Airways Limited (Compensation Claim) [2024] FCA 1216; 334 IR 187 (Qantas) at [76] (Lee J), citing Patrick Stevedores Holdings Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union (No 4) [2021] FCA 1481 at [27] (Lee J)). Thus, the fact that the loss may be properly said to have been caused by a failure to comply with (for example) s 44 of the FW Act, does not exclude the conclusion that s 716(5) could also be a relevant cause of the loss.
(2) Principles relevant to causation are set out in Luong at [70]-[80]. I refer to and incorporate that analysis in full, but, by way of summary, note that the causation inquiry could be said to involve consideration of the counterfactual, i.e. an examination not of what did happen but of what would or might have occurred but could no longer occur because of the contravention (Qantas at [70]-[71], citing Maritime Union of Australia v Fair Work Ombudsman [2015] FCAFC 120 at [28] (Allsop CJ, Mansfield and Siopis JJ)).
(3) Fixing compensation under s 545 is a statutory task, and the court must not substitute that task with approaches derived from the general law (Dafallah v Fair Work Commission [2014] FCA 328; 225 FCR 559 (Dafallah) at [149] (Mortimer J, as her Honour then was)).
(1) Paragraphs [9]-[14] of the SOAF admit that the Respondents failed to take "specified actions" and produce evidence of having done so, and accordingly, that they failed to comply with the Compliance Notice.
(2) The "specified actions" are defined in the SOAF to include performing the required calculations and making payment.
(3) Paragraph 45 of the SOAF identifies the amount of $44,887.25 of outstanding entitlements that remain unpaid. When read with paragraph [47(a)] of the SOAF, which recommends that the Court make a compensation order in the amount of $44,887.25, it can be inferred that the parties agreed that the calculations would have resulted in an obligation to pay that amount.
(1) the Appellant had failed to prove contraventions of the Award or the NES, when, the Appellant argues, it had no such obligation to do so;
(2) the Appellant retained the ability to make an application for orders in relation to contraventions of an Award or the NES; and
(3) the Court had imposed civil penalties on the First and Second Respondents, and the Appellant had the ability to direct any of the proceeds of the penalties obtained toward compensation.
(1) Section 716(1) operates where an inspector reasonably believes that a person has contravened any one of a number of terms of employment instruments, including for example, a provision of the NES or a term of a modern award. Thus, the existence of a reasonable belief as to the existence of such a contravention is a pre-condition to issuing a compliance notice.
(2) Section 716(2) makes clear that a compliance notice can require a person to take a specified action to remedy "the direct effects of the contravention referred to", including, for example, a breach of the NES or term of a modern award. In this respect, it can be seen that the purpose of a compliance notice is, in part, to remedy the direct effects of the contraventions listed in s 716(1). Carrying out calculations, and making payments are identified as steps which a compliance order can require (s 716(2)).
(3) Section 716(5) is specifically identified as a civil remedy provision, to which the full suite of remedies available under s 545 apply.
Reading the Act as a whole, there does not appear to me to be any reason for holding that Parliament intended to give the Court two powers, entirely different in scope, to order 'preference'. I do not think that the Legislature intended that, in a case in which preference was in dispute, the Court should be free to make any award it deemed fit and that the award might be entirely unconditional, whereas, in a case in which preference was not in dispute, the court should be fettered and its award moulded by the provisions of s 40.
Anthony Hordern and the subsequent authorities have employed different terms to identify the relevant general principle of construction. These have included whether the two powers are the 'same power', or are with respect to the same subject matter, or whether the general power encroaches upon the subject matter exhaustively governed by the special power. However, what the cases reveal is that it must be possible to say that the statute in question confers only one power to take the relevant action, necessitating the confinement of the generality of another apparently applicable power by reference to the restrictions in the former power.
(1) Proceedings for breach of s 716(5) may only be commenced by an inspector, whereas proceedings for breach of ss 44, 45 and 50 are available to employees, employee organisations, or inspectors.
(2) If a person complies with a compliance notice, then they cannot be subject to proceedings under ss 44, 45 and 50, which each carry more substantial penalties (600 penalty units for a serious contravention or 60 penalty units for other contraventions) than those available for a breach of s 716(5) (30 penalty units in all instances) (s 716(4A)(b)(i)). Nor could it be said in subsequent proceedings that they had been found to have breached ss 44, 45 and 50 (s 716(4B)).
(3) Section 717 provides a process by which a person can challenge the notice, including on the basis that the person has not committed a contravention set out in the notice, or that it fails to comply with certain formal requirements. That process is available in addition to any judicial review process.
Where the subject matter of the contravention is a breach of an agreement closely connected to the termination of a person's employment for poor performance, as is the case here, the Court must, in exercising power under s 545(1), be careful not to undermine the operation of the unfair dismissal provisions, and the limits Parliament has placed on them. That is especially so in circumstances where unfair dismissal proceedings have been unsuccessfully pursued, as is the case here. An order for compensation which has such an effect may not, in my opinion, be an "appropriate" order for the purposes of s 545(1).
The governing consideration is what the Court considers "appropriate": Dafallah v Fair Work Commission [2014] FCA 328; 225 FCR 559 at [148]-[161] (Mortimer J, as her Honour then was). The statutory requirement that an order is "appropriate" highlights the necessity that any order is one the Court considers to be judicially appropriate, or "just": Patrick Stevedores Holdings Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union (No 4) [2021] FCA 1481 at [18] (Lee J). Such a power leaves room for a Court to find in a given case that less than full compensation might be appropriate: Dafallah at [157].
(1) I am satisfied that the amount of $44,877.25, being the loss to Former Employees due to underpayment, was causally connected to the failure to comply with the Compliance Notice.
(2) The Respondents agreed before the Court below that it was appropriate to make the orders sought (indeed, they joined in "recommending" that they be made).
(3) I do not perceive, in this case, that there is any sound concern that making the orders sought would undermine any protection or process otherwise conferred by the FW Act (particularly given the factual substratum underpinning this case was relevantly agreed).
(4) While I understand that these proceedings have been ongoing for a prolonged period of time, and have caused the First Respondent stress, in circumstances where there is no dispute as to the amounts in question, it is not appropriate that the Respondents retain the benefit of the failure to comply with the Compliance Notice by not compensating the relevant Former Employees.
2.2 Parties and their lawyers should expect that when, pursuant to s 51A(1)(a), interest in respect of a pre-judgment period is to be included in a judgment, the Court will have regard to the following rates, being rates agreed upon by the Discount and Interest Rate Harmonisation Committee established following a referral by the Council of Chief Justices of Australia and New Zealand:
(a) in respect of the period from 1 January to 30 June in any year - the rate that is 4% above the cash rate last published by the Reserve Bank of Australia before that period commenced; and
(b) in respect of the period from 1 July to 31 December in any year - the rate that is 4% above the cash rate last published by the Reserve Bank of Australia before that period commenced.
2.3 Parties and their lawyers should also expect that when, pursuant to s 547(2) of the Fair Work Act, interest in respect of a pre-judgment period is to be included in an order (other than a pecuniary penalty order) for payment of an amount under the Fair Work Act or a fair work instrument, the Court will have regard to the rates set out in paragraph 2.2 of this practice note.
(1) pursuant to s 545(1) of the FW Act, Mr Taing and Mr Bui, jointly and severally, remedy the effects of their contravention of s 716(5) of the FW Act by:
(a) paying the amount of $44,877.25 owed to 13 of the Former Employees, as identified in Column D of Table 1 in Annexure B attached to the notice of appeal, within 28 days of this order;
(b) pursuant to section 547(2) of the FW Act, Mr Taing and Mr Bui, jointly and severally, pay interest on the compensation owed to the Former Employees pursuant to the order contemplated in paragraph [54(1)(a)] above.
I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bennett.
Fair Work Ombudsman
Taing [2025] FCA 1401
(1932) 47 CLR 1