The Federal Circuit and Family Court has imposed a $7,500 pecuniary penalty on Barco Traders Pty Ltd, a family-owned dairy business, for failing to comply with a Fair Work Ombudsman compliance notice (a notice requiring an employer to take specified steps to remedy a suspected contravention). The regulator had proposed a penalty of $19,950.
At a glance
- Parties: Fair Work Ombudsman v Barco Traders Pty Ltd (the second respondent is an individual who operates the business through the company)
- Citation: [2026] FedCFamC2G 1657, Judge Egan, Brisbane, 28 August 2026
- Provisions: s.716(5) of the Fair Work Act 2009 (failure to comply with a compliance notice); s.550(2) (involvement in a contravention); ss.545 and 546
- Outcome: Company ordered to pay a pecuniary penalty of $7,500 to the Commonwealth Consolidated Revenue Fund
- Who it affects: Small employers subject to Fair Work Ombudsman compliance notices
The compliance notice was issued on 19 December 2023. On 25 May 2026 the Court declared that the company had contravened s.716(5) of the Fair Work Act 2009 by failing to comply with the notice, and that the second respondent was involved in that contravention within the meaning of s.550(2), so was taken to have contravened s.716(5) himself.
Those orders also required the company to pay the outstanding amount of $4,664.85 (gross) to the Commonwealth within 28 days, for remittance to the affected employee, and required the second respondent to pay a pecuniary penalty of $3,990. Penalty against the company was left for a separate half-day hearing, held on 21 August 2026.
At that hearing, counsel for the Fair Work Ombudsman told the Court that $300 had been paid and $4,364.85 remained outstanding, the payment having been made under an agreement for weekly instalments of $300.
that the respondents had not genuinely engaged with the regulator, had left its correspondence unanswered, had not honoured undertakings to fix the employee’s underpayment, and had offered explanations for non-compliance without evidence to back them. The maximum penalty available against the company was $46,950. The regulator proposed 50 per cent of that maximum ($23,475), less a discount of up to 15 per cent for the company’s belated admissions, producing a proposed penalty of $19,950.
that he had allowed orders to be made against himself and the company even though the underlying claim was disputed, because he could not afford lawyers to contest a matter involving so small an amount. He described running a family-owned dairy business through the company and being barely able to make ends meet.
that the proposed penalty “would be crushing upon the first respondent, and would only result in the applicant incurring further legal costs associated with the winding up of the first respondent”, and that the company was unlikely to be able to meet any penalty in any event. The Court said it had “some degree of sympathy with the plight of the respondents”.
While accepting that the regulator had given the respondents time and opportunity to fix the non-compliance before litigating, the Court said it could not have expected compliance where the respondents had no financial capacity to make the ordered payments.
Judge Egan accepted the public interest in deterring employers from breaching the Act, noting that general deterrence rests on a penalty not being viewed as “the cost of doing business”, and cited the High Court in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 at [9], [10] and [71].
The judgment also recorded a view about the conduct of the litigation itself.
“The Court nevertheless perceives that the amount of legal fees incurred by the applicant in the present matter far exceeds the amount of the underpayment the subject of the proceedings. In circumstances such as the present, the Court finds that questions of proportionality also apply to the vigour with which the applicant seeks to proceed against an impoverished corporate entity.” Judge Egan
The penalty against the company sits alongside the earlier orders of 25 May 2026, including the personal penalty imposed on the second respondent as a person involved in the contravention under s.550. The reasons weigh the company’s capacity to pay in a regime where Pattinson held there is “no place for a ‘notion of proportionality’” drawn from the criminal law, and record the Court’s view that proportionality also bears on how vigorously the regulator pursues a company without the means to pay.
Source: [2026] FedCFamC2G 1657
General information only. OnNotice reports developments in Australian industrial relations, human resources and workplace law. This article is for education purposes only and is not intended to form professional advice. Always confirm against the primary source and seek specific advice relating to your circumstances.