FEDERAL COURT OF AUSTRALIA Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Kentz Pty Ltd (No 2) [2020] FCA 1073 File number: NTD 15 of 2019 Judge: REEVES J Date of judgment: 28 July 2020 Catchwords: INDUSTRIAL LAW – penalties – where the respondent company contravened s 50 of the Fair Work Act 2009 (Cth) (the Act) – where general deterrence is an important factor – where the contravention is considered a single contravention under s 557 of the Act – where the company had no prior contraventions – where the parties proposed an agreed penalty – $15,000 penalty imposed Legislation: Fair Work Act 2009 (Cth) Cases cited: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Kentz Pty Ltd [2020] FCA 581 Fair Work Ombudsman v Hu (No 3) [2020] FCA 936 Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336; [2016] FCAFC 4 Date of hearing: Determined on the papers Registry: Northern Territory Division: Fair Work Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 7 Solicitor for the Applicant: Mr L Tiley of Hall Payne Lawyers Solicitor for the Respondent: Mr A Cardell-Ree of Thomson Geer ORDERS NTD 15 of 2019 BETWEEN: COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA Applicant AND: KENTZ PTY LTD Respondent JUDGE: REEVES J DATE OF ORDER: 28 July 2020 THE COURT ORDERS THAT: 1. The respondent pay the applicant $15,000 for its contravention of s 50 of the Fair Work Act 2009 (Cth). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT REEVES J: 1 In May 2020, I delivered judgment in relation to the liability aspect of this matter: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Kentz Pty Ltd [2020] FCA 581 (the liability judgment). These reasons concern the remaining penalty issue. 2 In the liability judgment, I found, in summary, that Kentz Pty Ltd had contravened s 50 of the Fair Work Act 2009 (Cth) (the Act) by failing to pay the electrical licence allowance to three of its employees in accordance with cll 13.2 and 13.3 of the Kentz Pty Ltd Ichthys Onshore Construction Greenfields Agreement (the Agreement). The factual background to that finding is set out at [3]–[15] of the liability judgment and does not require repeating here. 3 Accordingly, on 11 May 2020, I made orders that: THE COURT DECLARES THAT: 1. The respondent contravened s 50 of the Fair Work Act 2009 (Cth) (the Act) by breaching cll 13.2 and 13.3 of the Kentz Pty Ltd Ichthys Onshore Construction Greenfields Agreement (the Agreement) by failing to pay Mr Luke Brown, Mr Farib Parra Moreno and Mr Vipul Pathak the Electrical Licence Allowance, as required by cl 13.2 of the Agreement, for each and every hour that they worked as part of their base rate of pay. THE COURT ORDERS BY CONSENT THAT: 2. Pursuant to s 545 of the Act the respondent pay compensation and interest as follows: Name Compensation Interest Total Mr Brown $13,106.14 $1,952.59 $15,058.73 Mr Moreno $10,679.55 $1,739.70 $12,419.25 Mr Pathak $5,039.33 $625.54 $5,664.87 … 4 Subsequent to the above orders, the parties filed joint submissions on the remaining penalty issue in which they jointly proposed that Kentz should be ordered to pay a civil penalty of $15,000 and that the penalty should be paid to the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia. 5 The principles pertaining to the fixing of a penalty of this kind are well-established. A convenient summary of them was provided recently by Rangiah J in Fair Work Ombudsman v Hu (No 3) [2020] FCA 936 at [6]–[11]. It is also well-established that the "usual order" is that any penalty imposed on a party in these circumstances should be awarded to the successful applicant (see Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336; [2016] FCAFC 4 at [101]). 6 In adopting the monetary penalty advanced by the parties in this matter, I have had regard to the principles mentioned above and to all of the factors that were highlighted in the joint submissions of the parties and, in particular, the following: (a) In the circumstances of this matter general deterrence is an important factor. Hence the penalty must be set at a sufficiently high level to deter both Kentz and other employers from engaging in similar behaviour. (b) The maximum penalty applicable to the contraventions is $63,000. (c) Under s 557 of the Act, the matter should be treated as involving only one contravention. (d) While Kentz's conduct was deliberate, it did not intend to act unlawfully. The contraventions were, therefore, not flagrant, wilful or deliberate and did not arise from any attempt by Kentz to avoid its obligations under the Agreement. (e) The contravening conduct took place over the course of the employees' entire employment at the Project. However, only three employees were affected by Kentz's contravening conduct. (f) Kentz has no prior contraventions. (g) While each of the employees suffered pecuniary loss, the quantum of that loss was not, in all the circumstances, substantial and Kentz moved quickly, following the Court's decision, to compensate them for that loss. (h) Kentz has co-operated in the conduct of the proceeding throughout and acted promptly at all times, including by agreeing all of the relevant facts and, upon liability being established, the penalty amount. 7 For these reasons, I propose to make orders in the terms sought by the parties. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves. Associate: Dated: 28 July 2020