Legal

Company director labels Fair Work the “mafia” as watchdog issues more than $30,000 in penalties for ignoring unfair dismissal ruling

Dominic Powell /

A Melbourne-based electrical equipment company and one of its directors now owes almost $60,000, after being hit with more than $30,000 in additional penalties and costs for failing to compensate a former worker that was found to have been unfairly dismissed in 2015.

Monochromatic Engineering Pty Ltd, trading as MCE Lasers, and its director Zoran Crvenkovic were fined more than $25,000 in the Federal Circuit Court for ignoring a Fair Work Commission’s order from October 2015, and ordered to pay $4718 in legal costs to the Fair Work Ombudsman.

In 2015, the company was ordered by the Fair Work Commission to pay $27,124 in compensation to a former employee, after the Commission ruled the business unfairly dismissed the worker via email. The worker, who was on a 485 temporary graduate visa and later a 457 skilled worker visa, was employed by the company between May 2013 and January 2015.

The company now owes a total of $57,762 to the Fair Work Ombudsman and the former employee, but employment lawyer Peter Vitale believes repayment is unlikely.

“It looks like the director has simply stuck his head in the sand in relation to the initial unfair dismissal case, and then chosen to ignore all the additional proceedings,” Vitale told SmartCompany.

“I think he was just hoping to ignore it and it would go away.”

The Ombudsman said it had issued “several requests” for payment to Crvenkovic and the company to no avail. In the court’s judgment, the Ombudsman’s solicitor Nikki Haig claimed Crvenkovic had told her he had “had enough with the FWO”, and he was “refusing” the order.

Haig told the court Crvenkovic also referred to the FWO as “Mafia, Nazi, Communists”, and said he did not recognise the Federal Circuit Court.

FWO warns of consequences of businesses “flouting” the law

Acting Fair Work Ombudsman Michael Campbell said in a statement complying with workplace laws is “not optional” for Australian businesses.

“People cannot pick and choose when they want to abide by their legal obligations,” Campbell said.

“All workplace participants need to understand that we will take action against those that choose to flout the law – and that there will be consequences for doing so.”

Vitale says the vast majority of businesses are aware of the consequences of not cooperating with the Fair Work Ombudsman and it is rare for the Ombudsman’s orders to be ignored.

“There’s a stringent enforcement mechanism, so it ended up costing the business a lot more than if they had complied with the FWC [Fair Work Commission] in the first place,” he says.

Continual failure to comply could place company director sin contempt of court, says Vitale, which could lead to more penalties or imprisonment.

Vitale says this case demonstrates how the Fair Work Ombudsman supports and upholds orders issued by the Fair Work Commission, and there was a “clear trend” of the Ombudsman enforcing the law against individual directors.

SmartCompany contacted MCE Lasers but did not receive a response prior to publication.

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Dominic Powell

Dominic Powell is the lead reporter at StartupSmart.

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  • Michael Ratner

    Let me add fuel to the fire……..

    A report on Fair Work From August 2012……. Yep I said 2012 – 5 years ago.
    1. Unfair dismissal claims have jumped sharply since the introduction of the Fair Work regime.
    2. There has been an increase in the number of cases settled with go-away money.
    3. IR experts professors Anthony Forsyth and Andrew Stewart had
    three recommendations that the review looked at: allow the tribunal to award
    costs against one side or the other; increase compensation payments to make
    employers more willing to fight cases and less tempted just to pay go-away
    money; and empower Fair Work to better hunt out vexatious claims.
    (end of report.)

    And the review suggested….. and this is important….
    The potential for vexatious claims to be made against employers could be greatly reduced if applicants face the prospect of having to meet everyone’s
    legal costs should their claim be found to be unreasonable.

    And here we are 2017 embroiled in negating this years report from the commission.
    All sorts of excuses.
    There is nothing fair about employer – employee relationships.

    Add this to all the other money guzzling futile enquiries, commissions and reports with nothing done and we might fix the deficit.
    A JOKE.

    • Naomi Stephens

      Not sure how your comment is relevant – the employer was found to have unfairly dismissed the employee, so it’s hardly a vexatious claim. The employer chose to thumb his nose at the FWC and he’s being punished for it. Good.

      • Michael Ratner

        Unfortunately or not I don’t have any information on the claim. From those that I have information on the majority have been vexatious claims and if the employers lose so be it but if the employer wins there is still one loser … the employer.
        My main point is as stated, applicants should face the prospect of having to meet everyone’s legal costs should their claim be found to be unreasonable.

      • Michael Ratner

        It might have finished up a successful claim but it started out as a vexatious one.

  • Jackie

    I can tell you what this company director is going to do, since he is ignoring the law already. He’s going to wait till the court order his company into liquidation, shut down and re-birth his business under a new name – phoenix rising to avoid all legal costs.

  • Jan Deane

    I had to settle with an employee ($4000) who I had dismissed on the spot after discovering he had stolen thousands of dollars worth of equipment from our organisation. It was easier to do this than go through the painful Fair Work system which is an absolute lottery. Get rid of it.

  • Justin Tyme

    Yet more cost burden on employment. Win draw or loose, how do you allow for vexatious litigants in you business overhead, and still remain competitive and profitable?