The claimant, an Industrial Inspector with the Department of Local Government, Industry Regulation and Safety, brought a claim in the Industrial Magistrates Court of Western Australia (Court) against Downings Pty Ltd (first respondent) and its sole director (second respondent). The claimant alleged that the first respondent failed to comply with a compliance notice issued under s 84Q of the Industrial Relations Act 1979 (WA) (IR Act) requiring payment of $7,251.52 in outstanding long service leave entitlements (LSL entitlement) to a former employee (the employee), thereby contravening s 84T(1) of the IR Act. The claimant also alleged that the second respondent was knowingly involved in the contravention and sought civil penalties under s 83E(1)(a) and (b) of the IR Act against both respondents, as well as an order that the outstanding LSL entitlement be paid, with the respondents jointly and severally liable.

The respondents did not file formal responses to the claim within the specified time, and a default judgment was entered, requiring the respondents to pay the outstanding LSL entitlement and costs. The claim continued to a final hearing where the Court was required to determine the appropriate civil penalty. The evidence established the employee had been employed by the first respondent from 2011 to 2023 and, upon resignation, was owed LSL entitlements. Although the respondents initially made partial payments totalling $10,000, a balance of $7,251.52 remained unpaid despite repeated requests and the subsequent issuance of a compliance notice.

The Court accepted that the respondents’ failure to comply with the compliance notice arose from financial incapacity, noting the business had ceased trading following its sale and had no assets or income. While the respondents’ engagement with the Industrial Inspector was limited after September 2023, they had made partial payments, and the second respondent expressed contrition. The Court also gave limited weight to the respondents’ failure to comply with a compliance notice in the federal jurisdiction (for the non-payment of annual leave), as it arose from the same factual background. Further, the Court held that in the circumstances, specific deterrence was of lesser significance given that the first respondent had ceased trading and the second respondent was unlikely to resume business operations.

Notwithstanding this, the Court emphasised the importance of compliance notices as an enforcement mechanism under the IR Act and the need for general deterrence to ensure compliance with statutory obligations. The Court also noted the ongoing loss suffered by the employee, including financial and personal impacts arising from the prolonged non-payment of LSL entitlements.

Having regard to all relevant factors, including the seriousness of the contravention, the respondents’ circumstances, and the need for general deterrence, the Court ordered the first respondent to pay a penalty of $30,000 and the second respondent a penalty of $4,000, both payable to the claimant.

The full decision can be read here.