Fair Work Ombudsman v 85 Degrees Coffee Australia Pty Ltd [2024] FCA 576

Fair Work Ombudsman v 85 Degrees Coffee Australia Pty Ltd [2024] FCA 576

A very substantial overall penalty is required and appropriate for the admitted breaches, reflecting the need for general deterrence in the franchising and food retail sector, especially where vulnerable workers are affected, prior contraventions exist, and the franchisor failed to prevent repeated non-compliance despite constructive and later actual knowledge. Grouping of contraventions under s 557(1) is determined in line with statutory language and Rocky Holdings, with record-keeping breaches under reg 3.33 treated as a single contravention per franchisee. The appropriate penalty, after a 15% discount for cooperation and admission post-defence, is $1,440,000.

Jurisdiction
Australia
Judgment Date
04 June 2024
Procedural Posture
Civil Penalty Proceedings / Judgment on Penalty After Admissions
Outcome
Declarations of contraventions made; civil penalties imposed.
Legal Topics
['franchisor Liability' 'record Keeping Obligations' 'underpayment of Wages' 'civil Penalties' 'fair Work Act Enforcement' 'general Deterrence' 'secondary Liability in Employment Law']
['employment Law' 'industrial Law'] ['franchisor Liability' 'record Keeping Obligations' 'underpayment of Wages' 'civil Penalties' 'fair Work Act Enforcement' 'general Deterrence' 'secondary Liability in Employment Law']

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Procedural Posture

Civil Penalty Proceedings / Judgment on Penalty After Admissions

Legal Issues

  1. 1 ['The determination of appropriate civil penalties for admitted breaches of s 558B(1) of the Fair Work Act 2009 (Cth) by the franchisor' 'Whether breaches of record keeping obligations could be considered a single contravention by operation of s 557(1)' 'Applicability of Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62 to franchisor secondary liability under s 558B(1)' 'Interpretation of record keeping obligations under Fair Work Regulations as a single contravention for s 557(1) purposes' 'The significance of prior contraventions and enforceable undertakings by the respondent' 'The relevance of industry context and vulnerable workers to general deterrence' 'Assessment of cooperation and contrition in penalty discounting']

Ratio Decidendi

A very substantial overall penalty is required and appropriate for the admitted breaches, reflecting the need for general deterrence in the franchising and food retail sector, especially where vulnerable workers are affected, prior contraventions exist, and the franchisor failed to prevent repeated non-compliance despite constructive and later actual knowledge. Grouping of contraventions under s 557(1) is determined in line with statutory language and Rocky Holdings, with record-keeping breaches under reg 3.33 treated as a single contravention per franchisee. The appropriate penalty, after a 15% discount for cooperation and admission post-defence, is $1,440,000.

Court Disposition

Declarations of contraventions made; civil penalties imposed.

Orders

  • ['The respondent, 85 Degrees Coffee Australia Pty Ltd, is ordered to pay a civil penalty of $1,440,000 to the Commonwealth within 60 days of the order (by or before 3 August 2024), as set out in the attached schedule.' 'Declarations are made in terms of the admitted contraventions detailed in the reasons for...