Tan v Commonwealth of Australia

Australian Building and Construction Commissioner v Pattinson & Anor [2022] HCA 13; (2022) 274 CLR 450; (2022) 96 ALJR 426; (2022) 314 IR 301; (2022) 399 ALR 599

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560; (2008) 246 ALR 35; (2008) 60 AILR 100-809

Commonwealth Bank of Australia v Finance Sector Union of Australia [2007] FCAFC 18; (2007) 157 FCR 329; (2007) 161 IR 262; (2007) 59 AILR 100-640

Fair Work Ombudsman v 3 Rundle Mall Pty Ltd [2022] FedCFamC2G 354

Fair Work Ombudsman v ADADN Pty Ltd [2021] FCCA 756

Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128

Fair Work Ombudsman v Althaus Homes Pty Ltd [2021] FCCA 126

Fair Work Ombudsman v Anastasio [2023] FedCFamC2G 827; (2023) 381 FLR 331

Fair Work Ombudsman v Hiyi Pty Ltd & Ors [2016] FCCA 1634

Fair Work Ombudsman v HSCC Pty Ltd [2020] FCA 655

Fair Work Ombudsman v Mai Pty Ltd [2016] FCCA 1481

Fair Work Ombudsman v NSH North Pty Ltd (t/as New Shanghai Charlestown) [2017] FCA 1301; (2017) 275 IR 148; (2017) 69 AILR 102-890

Fair Work Ombudsman v Pioneer Personnel Pty Ltd [2017] FCCA 3223

Fair Work Ombudsman v Rum Runner Pty Ltd & Anor [2018] FCCA 1129

Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290

Finance Sector Union v Commonwealth Bank of Australia [2005] FCA 1847; (2005) 147 IR 462; (2005) 224 ALR 467; (2005) 58 AILR 100-440

Jordan v Mornington Inn Pty Ltd [2007] FCA 1384; (2007) 116 IR 33; (2007) 60 AILR 100-744

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

Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383; (2008) 171 IR 455; (2008) 247 ALR 714

Myers v Myers [1969] WAR 19

PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15; (2020) 274 FCR 225; (2020) 292 IR 317

Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543; (2007) 162 IR 444; (2007) 59 AILR 100-669

Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; (2016) 239 FCR 336; (2016) 259 IR 274

Tan v Commonwealth of Australia (Department of Defence) (2025) FedCFam2G 439

The Commonwealth of Australia v Director, Fair Work Building Inspectorate and Others [2015] HCA 46; (2015) 258 CLR 482; (2015) 90 ALJR 113; (2015) 255 IR 87; (2015) 326 ALR 476; (2015) 67 AILR 102-494

Trade Practices Commission v CSR Ltd (1991) ATPR 41-076; [1990] FCA 762

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

COMMONWEALTH OF AUSTRALIA (DEPARTMENT OF DEFENCE)

1. In respect of the First Respondent's contravention of ss 117(2) and 44(1) of the Fair Work Act 2009 (Cth) by terminating the Applicant's employment with the First Respondent on 29 October 2020 without providing the Applicant with a total of three weeks' notice or payment in lieu of notice the First Respondent is, pursuant to s 546(1) of the Fair Work Act 2009 (Cth), to pay to Ms Tan a pecuniary penalty of $8,325 by 28 August 2025.

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 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

1. In Tan v Commonwealth of Australia (Department of Defence) (2025) FedCFam2G 439 ("Tan No 1") delivered on 26 March 2025 this Court dismissed an application by the applicant, Ms Tan, alleging contravention of the Fair Work Act 2009 (Cth) ("FW Act") by her former employee, the Commonwealth of Australia ("Commonwealth") as represented by the Department of Defence ("Defence") and two Defence employees, Mr Rosam and Ms Martinelli (collectively "Respondents"), save as to an admitted contravention by Defence under ss 117(2) and 44(1) of the FW Act by terminating Ms Tan's employment with Defence without providing her with a total of three weeks' notice or payment in lieu of three weeks' notice ("Admitted Contravention").

1. On 6 June 2025 at a directions hearing, at which Ms Tan did not appear, the matter was listed for a penalty hearing on 21 July 2025 ("Penalty Hearing") with respect to the Admitted Contravention, and the Court also ordered that affidavits and outlines of submissions be filed by Ms Tan and the Respondents ("6 June 2025 Orders"). Later on 6 June 2025 Ms Tan wrote to the Associate to the presiding Judge ("Judge's Associate") and requested an adjournment of the Penalty Hearing, essentially on the basis that she had filed an appeal to the Federal Court ("Federal Court Appeal") in respect of the judgment in Tan (No 1), and that the Federal Court Appeal was pending.
2. On 9 June 2025 the Judge's Associate wrote to Ms Tan advising that:

(a) at the directions hearing on 6 June 2025 attempts had been made to call her on the number listed on the Notice of Address for service and that the matter was also called outside the Court and there was no appearance by or for her; and

(b) if she wished the Court to reconsider the 6 June 2025 Orders she "must forthwith file in this Court an Application in a Proceeding supported by an affidavit".

(a) the Judge's Associate advised the parties that the matter remained listed for the Penalty Hearing on 21 July 2025; and

(b) Ms Tan wrote to the Judge's Associate advising that she understood the matter remained listed for the Penalty Hearing on 21 July 2025 and that she would "attend unless directed otherwise".

1. On 8 July 2025 the Judge's Associate advised the parties that the matter remained listed for the Penalty Hearing on 21 July 2025.
2. On 16 July 2025 Ms Tan wrote to the Judge's Associate:

(a) advising that she had lodged:

(i) an amended draft Notice of Appeal in the Federal Court pursuant to an order made by the Federal Court on 20 June 2025; and

(ii) an interlocutory application in the Federal Court seeking to set aside the judgment in Tan (No 1) and programming orders, including the listing of the Penalty Hearing;

(b) submitted that it would be appropriate to defer the Penalty Hearing; and

(c) advising that she did not intend to file any penalty submissions unless formally required to do so.

In respect to (a) above the Court notes that copies of the lodged documents were not annexed to Ms Tan's email to the Judge's Associate, and in respect of (c) above the Court notes that there had been no setting aside of, or amendment to, the 6 June 2025 Orders.

1. The Judge's Associate replied to Ms Tan on 16 July 2025 advising Ms Tan that the request for an adjournment of the Penalty Hearing would be heard at the commencement of the Penalty Hearing on 21 July 2025 and that the Court would hear from both parties as to the requested adjournment.
2. On 18 July 2025 the Judge's Associate sent to the parties a confirmation of listing details for the Penalty Hearing on 21 July 2025. In response thereto Ms Tan advised that she was experiencing "flu-like symptoms". The Judge's Associate responded advising Ms Tan that leave had been granted for Ms Tan to appear at the Penalty Hearing by telephone or video-link.

1. At the Penalty Hearing on 21 July 2025 Ms Tan appeared by telephone, self-represented, and Ms Stanton appeared in court for the respondents.
2. At the Penalty Hearing:

(a) there was no evidence before the Court as to the grounds in the amended draft Notice of Appeal that Ms Tan had indicated had been filed in the Federal Court Appeal; and

(b) nor were any orders of the Federal Court in relation to the Federal Court Appeal produced to this Court.

1. Ultimately, there was no application filed, or made orally at the Penalty Hearing, by Ms Tan for adjournment of the Penalty Hearing. At the Penalty Hearing:

(a) the following exchange occurred at transcript, p 2:

MS TAN ...I acknowledge the correspondence from the chambers indicating my adjournment request is to be addressed today. I respectfully clarify that I do not seek an adjournment and am prepared to proceed, subject to maintaining my previously reserved position. My Federal Court appeal remains active and contest, among other matters, factual and legal determination relevant to the liability and the scope of any penalty under section 546 and 550 of the Fair Work Act. So, accordingly, I do not wish to make substantive submission regarding quantum or attribution at this stage and I reserve my position in full, pending appellate resolution.

HIS HONOUR: Yes, all right. Yes. Well, I take it from that, Ms Tan, that you don't wish to make any submissions in relation to the issue of penalty today?

MS TAN: That's correct, your Honour.

(b) following submissions on behalf of Defence, Ms Tan was asked if there was anything she wished to reply to and she relevantly said, at transcript pp 5-6, that:

MS TAN: Yes, your Honour. The respondents, through their submission filed - sorry - filed on 15 July, seek to characterise the contravention as a non-serious, isolated error, attributed solely by Ms Barbuto, portrayed as diligent and impartial, involving a small underpayment that was promptly rectified, not warranting substantial penalty or deterrent. They also misrepresented that I failed to engage in conferral, despite my present procedural position. I reserve my position in full, pending the outcome of the Federal Court appeal, which contests the attribution of liability, the scope of contravention, and the legal basis of any penalty under sections 546 and 550 of the Fair Work Act. I do not concede that the conduct was incompetent or non-serious, nor do I accept the characterisation of the decision-making process as procedurally fair.

1. The effect of Ms Tan's oral submissions was not to seek an adjournment of the Penalty Hearing and to somehow seek to reserve her position for argument on the Federal Court Appeal. Strictly speaking it is therefore unnecessary to deal with whether the Penalty Hearing should or should not have been adjourned. The Court did however indicate at the Penalty Hearing that it would not grant an adjournment of the Penalty Hearing and that it would indicate why in any published Reasons for Judgment: transcript, p 3.
2. In relation to any possible adjournment the Court is cognizant that it has a broad discretion in determining whether or not to adjourn proceedings: Myers v Myers [1969] WAR 19 at 21 per Jackson J, but in doing so must consider the interests of justice including issues of case management, delay and wastage of public resources: Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175; (2009) 83 ALJR 951; (2009) 258 ALR 14 ("Aon Risk") at [30] per French CJ and [97]-[98] per Gummow, Hayne, Crennan, Kiefel and Bell JJ.
3. Many of the factors considered in Aon Risk are now referred to in the Court's overarching civil practice and procedure obligations, particularly and relevantly under s 190(1)(b) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) ("FCAFCOA Act") which requires disputes to be resolved as quickly and efficiently as possible, and s 190(2)(b) and (c) of the FCAFCOA Act which require, first the efficient use of the judicial resources of the Court, and, second, the efficient disposal of the Court's overall caseload.
4. In determining the penalty now for the Admitted Contravention the Court will dispose of the entire matter (subject, of course, to the outcome of the Federal Court Appeal), and deal with penalty whilst the judgment in Tan (No 1) is still fresh in the minds of the Court and the parties. Further, determination of penalty for the Admitted Contravention now means that if there is an appeal against the quantum of penalty determined, by either Ms Tan or Defence, the totality of the outcome of the matter can be dealt with by the Federal Court as a whole in one appeal determination rather than it being split between the Federal Court Appeal and any possible further appeal against penalty which might be determined several years apart. Given that the Admitted Contravention is not a large or complex penalty determination it is more appropriate that it be dealt with expeditiously in this Court. And, if the Federal Court Appeal is ultimately successful, there is nothing to prevent this Court from taking into account on remitter any penalty now determined if it has to reassess penalty at some future point in time. In the circumstances determining the penalty now will resolve the dispute as to penalty as quickly and efficiently as possible, utilise the judicial resources of this Court efficiently, and efficiently dispose of the remaining issue in dispute in the case before this Court: FCAFCOA Act, s 190(1)(b) and (2)(b).
5. It was for the above reasons that the Court exercised its discretion not to adjourn the Penalty Hearing.

1. The High Court has explained the primary purpose of the imposition of civil penalties. In The Commonwealth of Australia v Director, Fair Work Building Inspectorate and Others [2015] HCA 46; (2015) 258 CLR 482; (2015) 90 ALJR 113; (2015) 255 IR 87; (2015) 326 ALR 476; (2015) 67 AILR 102-494 ("Agreed Penalties Case") the High Court stated "...whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd [(1991) ATPR 41-076; [1990] FCA 762], is primarily if not wholly protective in promoting the public interest in compliance...": at [55] per French CJ, Kiefel, Bell, Nettle and Gordon JJ. The High Court has further explained in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union and Another [2018] HCA 3; (2018) 262 CLR 157; (2018) 92 ALJR 219; (2018) 273 IR 211; (2018) 351 ALR 190; (2018) 70 AILR 102-917 ("ABCC v CFMEU") at [116] per Keane, Nettle and Gordon JJ, that the "principal object" of deterrence depends on a penalty having the necessary "sting or burden" to secure the specific and general deterrent effects that are the raison d'être of its imposition. That purpose has been reinforced by the judgment of the High Court in Australian Building and Construction Commissioner v Pattinson & Anor [2022] HCA 13; (2022) 274 CLR 450; (2022) 96 ALJR 426; (2022) 314 IR 301; (2022) 399 ALR 599 ("Pattinson") where at [9] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ the purpose of the civil remedy regime in the FW Act was described by the majority as being the promotion of the public interest in compliance with the provisions of the FW Act by way of deterrence of further contravention. In Pattinson at [66] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ the High Court expressed the view that s 546 of the FW Act had, as its underlying theory, the notion that the financial disincentive imposed by way of pecuniary penalty will be such as to encourage compliance with the law by ensuring that contraventions are viewed by the contravener, and others, "as an economically irrational choice". The High Court further observed that the function of the court imposing a penalty was to give effect to the intention of the FW Act in this regard, and that the courts must do what they can to deter noncompliance with the FW Act.
2. In determining what penalty to impose the Court must assess the seriousness of the offending subject to the alleged contravention in the context of all the factual circumstances that arise. In that regard the Court has long had regard to a series of considerations, which are not fixed and which are not a check-list: Pattinson at [18] and [68] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ; Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 ("Kelly") at [14] per Tracey J; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560; (2008) 246 ALR 35; (2008) 60 AILR 100-809 at [91] per Buchanan J. Those considerations include the following:

(a) the nature and extent of the conduct which led to the contravention;

(b) the circumstances in which the conduct took place;

(c) the nature and extent of any loss or damage sustained as a result of the contravention;

(d) whether there has been similar previous conduct by the alleged contravener;

(e) whether the breach was properly distinct or arose out of one course of conduct;

(f) the size of the business enterprise involved;

(g) whether or not the contravention was deliberate;

(h) the involvement of senior management in the contravention;

(i) whether the party committing the contravention had shown contrition;

(j) whether the party committing the contravention has taken corrective action;

(k) whether the party committing the contravention has cooperated with regulatory authorities;

(l) the need to ensure compliance with minimum standards by the provision of an effective means for investigation and enforcement of employee entitlements; and

(m) the need for specific and general deterrence.

Nature and extent of and circumstances in which the conduct which led to the contravention took place

1. The reasons for the termination of Ms Tan's employment on 29 October 2020 were set out in a Determination of Sanction Letter sent to Ms Tan by Ms Barbuto, who was the Director of Conduct and Performance in the Directorate of Conduct and Performance ("Directorate"). The Determination of Sanction Letter from Ms Barbuto says that Ms Tan's entitlement to a payment in lieu of notice of termination was a payment representing 2 weeks' salary: Tan (No 1) at [133], [136] and [185] per Judge Lucev. That error appears to be the cause of the Admitted Contravention.
2. Ms Barbuto's evidence at hearing demonstrated that she took care to ensure that Defence's processes designed to afford procedural fairness to Ms Tan in the process of determining sanction were complied with. For example, she:

(a) caused an error (not hers) in the First Notice of Suspected Misconduct ("First NOSM" and "NOSM" respectively) to be rectified by the First NOSM being set aside and a further, corrected NOSM being sent to Ms Tan for her response: Tan (No 1) at [274] per Judge Lucev;

(b) considered Ms Tan's responses to each of the NOSMs, the findings in a Determination of Breach Letter and the contents of a Work Impact Statement: Tan (No 1) at [283] per Judge Lucev;

(c) provided the Intent to Sanction Letter in which she set out at length her process of reasoning in making findings of misconduct, including by addressing in detail Ms Tan's responses to each of the NOSMs: Barbuto Affidavit, Annexure VB14; Tan (No 1) at [284] per Judge Lucev;

(d) considered Ms Tan's response to the Intent to Sanction Letter: Tan (No 1) at [286] per Judge Lucev; and

(e) set out at considerable length in the Determination of Sanction Letter the reasoning process in determining that termination of Ms Tan's employment was the appropriate sanction: Tan (No 1) at [287]-[290] per Judge Lucev.

1. Ms Barbuto gave no evidence in chief (either on affidavit or orally) about how she made the mistake in specifying the quantum of the relevant notice period and was not cross-examined on the mistake: see Barbuto Affidavit; Transcript, 10 June 2022, pp 179-205.
2. For the penalty hearing there was evidence on affidavit from Harshika Rani Reddy ("Reddy Affidavit"), the Acting Assistant Director of the Directorate (but not a person who was otherwise involved in the Directorate's activities in relation to the termination of Ms Tan's employment) that it is the usual practice of a Sanction Delegate when drafting a Determination of Sanction letter to use a template document, and a copy of the template in use as at the date of Ms Tan's termination of employment on 29 October 2020 was annexed to the Reddy Affidavit ("October 2020 DOS Template"): Reddy Affidavit at [8]-[9], Annexure HRR-1.
3. The October 2020 DOS Template included the heading "Payment in Lieu of Notice Period", under which:

You are entitled to [Insert number of weeks - check if they are 45 yrs and completed at least 2 years of continuous service] pay in lieu of notice.

with the text in the square brackets highlighted; and

(b) there was a comment box which directed the reader to look at "Policy - Termination" and provided a link thereto.

1. The "Policy - Termination" referred to in the comment box in the October 2020 DOS Template is also annexed to the Reddy Affidavit as Annexure HRR-2 and is an "APS People Policy" headed "Termination of Employment" ("Termination of Employment Policy"). At cl 6 the Termination of Employment Policy prescribes that the minimum period of notice an employee is to receive if their employment is being terminated is that outlined in a table which follows, and which prescribes that an employee with continuous service of more than one year and less than three years is entitled to a period of two weeks' notice, and where the employee is over 45 years of age and has completed at least two years of continuous service the period of notice was to be increased by one week. The Termination of Employment Policy thus exactly reflected the entitlement that Ms Tan had under s 117(2) (as calculated under s 117(3)) of the FW Act.
2. The Determination of Sanction letter provided to Ms Tan by Ms Barbuto follows the form of the DOS October 2020 Template, but the calculation of the entitlement to pay in lieu of notice of two weeks is wrong in that it should have been three weeks.
3. Defence asked the Court to infer that Ms Barbuto had been focused on her decision-making task, and the need to explain to Ms Tan the basis for her decision to terminate her employment, and that the Admitted Contravention (an error in correctly identifying the applicable notice period) might be characterised as "falling at the last hurdle" in what had been a lengthy process, otherwise undertaken with care.
4. The Court accepts that it is clear that in calculating Ms Tan's entitlement to notice on termination of employment Ms Barbuto made a mistake, and that this is a case of human error, from someone who otherwise carried out her role and tasks in relation to reviewing Ms Tan's conduct in a thorough and exemplary manner. What is not clear is why in October 2020 a major Commonwealth Department seemingly had in place no system, either human or technological, to check the correctness of termination of employment payments, and particularly so where the payment is a minimum standard under the National Employment Standards: FW Act, s 61(2)(i) and (3). As is evident from the circumstances in this case the October 2020 DOS Template and the Termination of Employment Policy are not mechanisms to check the termination of employment payments directed to be made. Plainly Defence's failure to have in place a system, either human or technological, to check the correctness of termination of employment payments contributed to the Admitted Contravention by failing to prevent it occurring.
5. Ms Barbuto was based in Melbourne, Victoria. Ms Barbuto did not know and had never worked with Ms Tan. It is not apparent that Ms Barbuto was motivated by animus, ulterior motive or improper objective in making the decision to terminate Ms Tan's employment or in relation to the underpayment the subject of the Admitted Contravention.
6. The Court is satisfied that there was no deliberate failure by Defence to comply with s 117(2) of the FW Act and no reckless disregard for the importance of ensuring compliance therewith. The terms of both the October 2020 DOS Template and the Termination of Employment Policy evince an intention that Defence comply with s 117(2) of the FW Act. In the circumstances -which involve simple human error and a failure to have back up checking mechanisms - the Admitted Contravention was not a "serious contravention" for the purposes of s 557A of the FW Act, or otherwise.

1. The underpayment of one weeks' notice to Ms Tan represents an amount of $1465.19: see the affidavit of Cassey Jane Smith sworn 15 July 2025 ("Smith Affidavit") at [4] and Annexure CJS-1 (entry for "Salary in Lieu ETP"). The underpayment is not of itself of a significant amount and was rectified by 10 December 2020 (so within six weeks of its occurrence) at the latest. The Court recognises however that in the context of a termination payment the amount and the failure to have access to it for up to six weeks may have assumed more significance for Ms Tan. Ultimately, however, the nature and extent of the loss are relatively minor.

Size and financial resources of the contravener

1. It is well-established that, regardless of size and financial circumstances, an employer is not exculpated from contraventions of workplace laws: Fair Work Ombudsman v Hiyi Pty Ltd & Ors [2016] FCCA 1634 at [46] per Judge Jones; Fair Work Ombudsman v Rum Runner Pty Ltd & Anor [2018] FCCA 1129 at [102] per Judge Jones; Kelly at [28] per Tracey J. Size and financial circumstances may however be relevant considerations in determining penalty where appropriate evidence is put forward, but this needs to be weighed against the need for general deterrence: Fair Work Ombudsman v Althaus Homes Pty Ltd [2021] FCCA 126 at [35] per Judge Jarrett; Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301; (2017) 275 IR 148; (2017) 69 AILR 102-890 ("New Shanghai Charlestown") at [105]-[106] per Bromwich J. In other words, "capacity to pay is of less relevance than the objective of general deterrence": Jordan v Mornington Inn Pty Ltd [2007] FCA 1384; (2007) 116 IR 33; (2007) 60 AILR 100-744 at [99] per Heerey J, which as a statement of principle was described on appeal as "unimpeachable": Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383; (2008) 171 IR 455; (2008) 247 ALR 714 at [69] per Stone and Buchanan JJ.
2. In this case the size and financial resources of Defence, whilst not the subject of specific evidence, are plainly sufficiently large and significant that proof of them is not required, and Defence is not unfairly prejudiced by this matter of common knowledge being taken into account in consideration of the assessment of penalty: Evidence Act 1995 (Cth), s 144(1). Defence was a sufficiently large and significant employer with sufficient financial resources such that it ought to have had in place a system, either human or technological, to check the correctness of the termination of employment payment made to Ms Tan, and of termination of employment payments generally.

Cooperation, contrition and corrective action

1. This Court places more weight on cooperation (and contrition and corrective action) which is meaningful, active or early: Fair Work Ombudsman v Anastasio [2023] FedCFamC2G 827; (2023) 381 FLR 331 at [32] per Judge Lucev; Fair Work Ombudsman v Pioneer Personnel Pty Ltd [2017] FCCA 3223 at [47] per Judge McNab; Fair Work Ombudsman v Mai Pty Ltd [2016] FCCA 1481 at [145] per Judge Jarrett.
2. Defence rectified the underpayment promptly once it was identified. It would appear that on Sunday 29 November 2020 Defence's Assistant Director, APS Workplace Relations, Ms Sarah McGregor, sent an email ("McGregor Email") to Defence's payroll service (see Smith Affidavit at [5] and Annexure CJS-2):

(a) stating that she had identified the "error";

(b) explaining the nature of the error, that is that the Determination of Sanction Letter "incorrectly stated ... [Ms Tan] was entitled to 2 weeks' pay in lieu of notice, however ... [it] should have been 3 weeks"; and

(c) requesting that the error be rectified by way of an "off cycle payment" and that Ms Tan had "commenced proceedings in the Fair Work Commission and it would be useful to have this error rectified without delay".

1. At hearing it was not in dispute that the underpayment was rectified by 10 December 2020 at the latest (so within 11 days of the sending of the McGregor Email): Tan (No 1) at [185(e)], and thus the Admitted Contravention had been rectified before the commencement of these proceedings on 4 January 2021.
2. Albeit seemingly motivated in part by the proceedings then before the Fair Work Commission, it is apparent that Defence acted in a meaningful manner to quickly correct the effect of the Admitted Contravention.

1. Counsel for the Respondents advised the Court that she had undertaken a search for any prior decisions recording a finding against Defence relating to a contravention of s 117(2) of the FW Act and has not found any prior instance of any such contravention. Otherwise, there was no evidence put before the Court of any contraventions by Defence or the Commonwealth.

1. As indicated at [29] above the Court is satisfied that there was no deliberate failure by Defence to comply with s 117(2) of the FW Act.

1. Ms Barbuto who made the mistake giving rise to the Admitted Contravention was the Director of Conduct and Performance, and thus the Admitted Contravention was the fault of a senior manager within Defence.

(a) this case does not present a need for a penalty to deter government agencies from engaging in deliberate conduct to contravene a civil remedy provision, and that there is no need for specific or general deterrence against reckless disregard for the risk of such contraventions; and

(b) it recognises that pecuniary penalties levied against government agencies may achieve general deterrence in respect of inadvertent error resulting in contraventions of the relevant kind by heightening awareness within such agencies of the importance of ensuring compliance with the civil remedy provisions of the FW Act.

1. There are two dimensions to deterrence, the first being general deterrence directed at the community as a whole, and the second being specific deterrence directed at the contravener the subject of the particular proceedings: Fair Work Ombudsman v 3 Rundle Mall Pty Ltd [2022] FedCFamC2G 354 at [99] per Judge Brown. Both general and specific deterrence are important aspects of the imposition of civil pecuniary penalties under the FW Act: New Shanghai Charlestown at [90] per Bromwich J. The penalty imposed by the Court should accurately and appropriately reflect the need for both general and specific deterrence. It must be set at a level such that it would be likely to act as a deterrent in preventing similar contraventions by like-minded persons. It must have the necessary "sting or burden" to secure "the specific and general deterrent effects that are the raison d'être of its imposition": ABCC v CFMEU at [116] per Keane, Nettle and Gordon JJ: see also Pattinson at [9] and [66] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ.
2. General deterrence must serve a purpose such that the penalty is not seen by others as just "the cost of doing business": Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290 at [27] per Flick J; Fair Work Ombudsman v HSCC Pty Ltd [2020] FCA 655 at [5] per Flick J. In order to be useful as a general deterrent, a penalty "should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like-minded persons or organisations": Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543; (2007) 162 IR 444; (2007) 59 AILR 100-669 at [93] per Lander J; Fair Work Ombudsman v ADADN Pty Ltd [2021] FCCA 756 at [39] per Judge Jarrett.
3. Ther is no dispute that the penalty to be imposed on Defence must reflect an appropriate measure of general deterrence.
4. In relation to specific deterrence the Court considers that the position is more nuanced than that suggested by Defence's submissions, particularly when regard is had to the evidence of Ms Reddy. The effect of the evidence of Ms Reddy: Reddy Affidavit at [8]-[15], is that:

(a) the October 2020 DOS Template and the Termination of Employment Policy set out the correct entitlements (and their current equivalents continue to do so);

(b) the Directorate conducts regular team meetings. During these meetings Directorate staff discuss issues arising and lessons learnt in respect of the Directorate's work including processes relating to the determination of sanctions. The meetings are informal and there are no minutes taken during the course of the meetings;

(c) Ms Reddy cannot recall if the issue of an error in a payment in lieu of notice period was discussed at a team meeting after Ms Barbuto issued the Determination of Sanction Letter to Ms Tan on 29 October 2020, but she is aware that this is the type of issue which has been discussed at the team meeting throughout the period since 29 October 2020; and

(d) she has sought time at the next planned weekly meeting (the Reddy Affidavit was affirmed on 19 July 2025) to discuss the calculation of payment in lieu of notice and to remind all Directorate staff involved in Directorate processes to ensure that, prior to a Determination of Sanction letter being signed, an assigned Senior Investigator and Delegate confirms that they have checked that the calculation of payment in lieu of notice set out in the Determination of Sanction letter is correct at the date of signing.

1. The evidence of Ms Reddy reveals that the October 2020 DOS Template and the Termination of Employment Policy evince an intention on the part of Defence to comply with s 117(2) of the FW Act, and that a process, of sorts, has been adopted by the Directorate to obviate the mistake that gave rise to the Admitted Contravention. There is, however, no explanation of any formal process which has been put in place within the Directorate to obviate the mistake that gave rise to the Admitted Contravention: Ms Reddy merely says, more than four years after the events giving rise to the Admitted Contravention, that she will remind Directorate staff to ensure that the calculation has been signed off by other Directorate staff. There is no indication that there is in place a formalized process, or any policy, or any check list, to prevent a re-occurrence of the Admitted Contravention. There is no evidence that any consideration has been given by Defence to a technological solution via Defence payroll processes and systems, or if such consideration has been given, when it was considered and why it is not possible to have a system to pay employees their lawful entitlements on termination of employment which is dependent upon something more certain than reminders to relevant Directorate staff in the course of "regular" staff meetings.
2. Ensuring that a contravener does not re-engage in the same contravening conduct at some future point requires an appropriate measure of specific deterrence: Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128 ("AJR Nominees (No 2)") at [50] per Gilmour J.
3. In the circumstances the Court is of the view that this is a case in which it is appropriate that the penalty reflect not just a measure of general deterrence but also an appropriate measure of specific deterrence.

1. The maximum penalty for the Admitted Contravention (committed in October 2020) is $33,300. Almost two decades have passed since the Federal Court suggested, against a background of increased legislated penalties for contraventions in the former Workplace Relations Act 1996 (Cth), that the imposition of penalties in industrial law proceedings is no longer to be approached with a light hand: Finance Sector Union v Commonwealth Bank of Australia [2005] FCA 1847; (2005) 147 IR 462; (2005) 224 ALR 467; (2005) 58 AILR 100-440 ("FSU") at [72] per Merkel J (on appeal the penalty imposed in FSU was reduced, but it was suggested that in future the level of penalties may need to "rise appreciably": Commonwealth Bank of Australia v Finance Sector Union of Australia [2007] FCAFC 18; (2007) 157 FCR 329; (2007) 161 IR 262; (2007) 59 AILR 100-640, FCR at [192] per Branson J).
2. In determining an appropriate penalty the Court has had regard for its consideration of the relevant factors, as set out at [19]-[47] above, noting in particular that:

(a) that the Termination of Employment Policy and the DOS October 2022 Template are evidence that Defence knew what the correct entitlement on termination of employment ought to have been for Ms Tan, and that the Admitted Contravention was not deliberate or intended, but rather the Admitted Contravention was a result of a mistake and was a human error, but occurred in circumstances where Defence, a significantly sized and resourced Commonwealth Department, had no human or technological system for checking that the correct entitlement was paid to Ms Tan;

(b) the nature and extent of the loss are relatively minor;

(c) there has been no evidence put before the Court of any prior contraventions by Defence or the Commonwealth;

(d) Defence acted in a meaningful manner to quickly correct the effect of the Admitted Contravention;

(e) although the Admitted Contravention was not deliberate, the mistake was made by a senior manager; and

(f) there is a need for both general deterrence and a measure of specific deterrence.

1. The Court has determined that an appropriate deterrent penalty is 25% of the maximum penalty, that is, $8,325.
2. The usual practice now appears to be that any penalty is to be paid to the applicant, and therefore the penalty is to be paid to Ms Tan: FW Act, s 546(3); PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15; (2020) 274 FCR 225; (2020) 292 IR 317 at [63] per Rangiah and Charlesworth JJ; Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; (2016) 239 FCR 336; (2016) 259 IR 274 at [116]-121] per Tracey, Barker and Katzmann JJ,

1. The Court has concluded that Defence must pay a pecuniary penalty under s 546(1) of the FW Act of $8,325 to Ms Tan, to be paid by 28 August 2025.

I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Lucev.