Richard Krajewski, WR Consultant and Author of Small Business Workplace Relations: A User-Friendly Guide & An Annotated Dictionary of Industrial Relations Terms & Expressions, joins Legalwise Insights to unpack the civil remedies within the Fair Work Act. Richard discusses the range of statutory contraventions, shedding light on considerations for imposing penalties and the severity of these.
APPLICATION of CIVIL REMEDIES
Civil remedies result from contravention of statutory provision. Such contraventions can then be seen in the issuing of a monetary penalty.
The Fair Work Act (Part 4-1) sets out compliance and enforcement measures available and pursuant though the court system. Where a party breaches an obligation under the Act, this applies to both individuals as well as corporations.
PENALTIES – CONTRAVENTIONS
The effect of breaching statutory obligations and adversely affecting employee entitlements under the Act can be seen in ss.539 and 557 (2) of the Act. Where under s.539 the column 1 of the Table sets out a provision which is a civil remedy with requisite maximum penalty set out in column 4, section 557 sets out the civil remedy provisions.
Section 557 identifies the course of conduct by a party in identifying the respective areas of a statutory breach under the Act. Section 557(2) sets out the civil remedy provision to which the course of conduct rule applies. This subsection (557(2)) brings together various statutory obligations under the Fair Work Act. Commencing with contravention of the National Employment Standards and then referring to other Fair Work Act provisions such as contravention of modern awards and various other orders such as minimum wage orders; equal remuneration orders.
Section 557A provides definition of a serious contravention: a serious contravention of a civil remedy provision occurs if the person involved knowingly contravenes the provision and the person’s conduct constituting the contravention was part of a systematic pattern of conduct relating to one or more other persons.
REMEDIES – examples
Whether a remedy is issued through a pecuniary method due to a breach of legislation or due to other actions such as unlawful termination of employment or denying a worker a workplace right, varying forms of remedy an ensue. In the case of a claim of unfair dismissal, the Fair Work Commission has the power to order reinstatement (s.390 (3)). However, the FWC may also order compensation if reinstatement is not appropriate. In addition to either reinstatement or compensation, the FWC may also order that not only an employee be reinstated, but subject to the circumstances, may also order payment of compensation (Lawrence v Metro Trains Melbourne Pty Ltd [2021] FWC 3789; Boyd v Glenvill Pty Ltd [2021] FCCA 265 (#415)).
Section 772 sets out a range of grounds where an employer must not dismiss an employee. This range of areas includes areas of discrimination and association, leave situations. The Note following s. 772 states that this subsection is a civil remedy provision. The denial of an employee of their workplace rights (e.g., Part 3-1 of the Act): general protections) is another area where civil remedies apply and where the reverse onus principle will apply.
SUMMARY
The following example provides a brief insight into the effects of breaches of statutory obligations and matters for consideration when penalties may emerge regarding such breaches.
In Kelly v Fitzpatrick [2007] FCA 1080 and albeit in relation to the Workplace Relations Act 1996 (Cth) and dealing with a breach of an Award involving underpayment, Justice Tracey issued an Order ordering the first respondent to pay a penalty for the breaches to the Award. In following the decision of Federal Magistrate Mowbray in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7, Tracey J summarised a range of considerations that Mowbray FM identified “… to which regard may be had in determining whether particular conduct calls for the imposition of a penalty” [14]. Those considerations were:
- the nature and extent of the conduct which led to the breaches;
- the circumstances in which that conduct took place;
- the nature and extent of any loss or damage sustained as a result of the breaches;
- whether there had been similar previous conduct by the respondent;
- whether the breaches were properly distinct or arose out of the one course of conduct;
- the size of the business enterprise involved;
- whether or not the breaches were deliberate;
- whether senior management was involved in the breaches;
- whether the party committing the breach had exhibited contrition;
- whether the party committing the breach had taken corrective action;
- whether the party committing the breach had cooperated with the enforcement authorities;
- the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
- the need for specific and general deterrence.
Tracey J considered the application of the “totality principle” in “fixing pecuniary penalties for multiple breaches of statutory stipulations”. In doing so, consideration is given to determining an appropriate total penalty and then looking at a possible division of that total penalty (subject to the circumstances). In the said case, the employee concerned and complaining of the underpayment, was paid the outstanding amount. However, the matter proceeded to the Federal Court on application by the workplace inspector where an Order for penalties, was issued.
Disclaimer
Richard Krajewski’s articles are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication.
Richard Krajewski is an industrial relations specialist with experience across a range of industries, from cafes to paper manufacturing, from small and micro-businesses to large corporations. He has is an Associate Member of the NSW Law Society and holds a degree in Commerce from the University of Newcastle and a Master of Law and Legal Practice from the University of Technology, Sydney. Experience in recent years demonstrated to Richard that while your priority as a small business is making a success of your investments, you often need support and advice in workplace matters.
He specialises in helping small businesses manage their employee obligations and is the author of two books – both now fully-updated second editions for 2023:
- Small Business Workplace Relations: A User-Friendly Guide, written for small businesses with a handful of staff, this book provides the guidance you need to fulfil your employee workplace obligations – allowing you time to focus on creating a happy and productive workplace for your staff and your customers.
- An Annotated Dictionary of Industrial Relations Terms & Expressions comprises definitions, case law, and legislation for words, phrases, and expressions used in the field for industrial relations practitioners, legal practitioners, and students.
Connect with Richard via LinkedIn.
