Federal Court of Australia

Cropper v Energy Action (Australia) Pty Ltd (No 4) [2025] FCA 1605

ORDERS

THE COURT ORDERS THAT:

1.    The respondent pay to the applicant pecuniary penalties totalling $29,925.00.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

SNADEN J:

1    By his originating application dated 27 January 2021, the applicant, Mr Cropper, moved the court for relief (relevantly) in the form of statutory compensation and pecuniary penalties relating to what he claimed was his employment by the respondent (“EAAPL”). As is orthodox, the trial of his application was bifurcated so as first to address Mr Cropper’s employment claims (and the statutory consequences that would arise in the event that they were accepted).

2    Those claims are the subject of two judgments. The first was pronounced on 23 June 2025: Cropper v Energy Action (Australia) Pty Ltd (No 2) [2025] FCA 663 (the “Liability Judgment”; Snaden J). There, the court made a series of findings, largely by way of acceptance of the claims that Mr Cropper agitated. The second was pronounced on 14 August 2025: Cropper v Energy Action (Australia) Pty Ltd (No 3) [2025] FCA 950 (Snaden J). By that judgment, I quantified the compensation that should be paid to Mr Cropper in consequence of the Liability Judgment. The reasons that follow assume some familiarity with the reasons given for those two judgments.

3    Central to the Liability Judgment was the court’s finding that the work that Mr Cropper performed for EAAPL between January 2006 and February 2020 was performed pursuant to a contract of service, as he contended; and not pursuant to a contract for services, as EAAPL had contended. Additionally, it was concluded that Mr Cropper’s employment was permanent in nature; not casual, as EAAPL had contended in the alternative to its primary defence. From those conclusions (and from other facts that were not materially contested), it followed that EAAPL had engaged in conduct that contravened what is referred to in the Fair Work Act 2009 (Cth) (the “FW Act”) as the National Employment Standards. Specifically, three species of contravention were identified (and were the subject of findings), namely that:

(1)    by failing to pay to Mr Cropper, at the conclusion of his employment, $91,129.22 of accrued but untaken annual leave, EAAPL had contravened s 90(2) of the FW Act;

(2)    by failing, on 44 occasions, to pay Mr Cropper in respect of his absence from work on public holidays, EAAPL had contravened s 116 of the FW Act; and

(3)    by failing, on two occasions, to pay Mr Cropper in respect of his absence from work on personal/carer’s leave, EAAPL had contravened s 99 of the FW Act.

4    Each of those three species of conduct was, so I found, engaged in in contravention of s 44(1) of the FW Act (which requires that employers not engage in conduct that contravenes a provision of the National Employment Standards). That provision is a “civil remedy provision”: FW Act, s 539(1). The court is authorised by s 546(1) of the FW Act to impose pecuniary penalties in respect of conduct that is engaged in in contravention of such provisions.

5    That issue—whether (and, if so, the extent to which) the court should impose pecuniary penalties in respect of the three species of conduct in which EAAPL engaged in contravention of s 44(1) of the FW Act—is one of two matters that remain for the court’s consideration. The other concerns the question of costs (and, specifically, whether the court should make a costs order in Mr Cropper’s favour notwithstanding the hurdle that is erected in that regard by s 570(1) of the FW Act).

6    Those matters were the subject of a further hearing on Monday, 8 December 2025. There, Mr Cropper relied upon two affidavits: one that he swore on 29 September 2025; and another affirmed by his solicitor, Ms Sonia Chandra, on 29 September 2025. EAAPL relied upon an affidavit affirmed by its Executive Director, Mr Bruce Macfarlane, on 24 October 2025. Objections to that affidavit were taken and addressed at the hearing on Monday, 8 December 2025. Mr Macfarlane was the only witness required for cross-examination.

7    For the reasons that follow, I have determined to impose upon EAAPL pecuniary penalties totalling $29,925.00 in respect of its contravening conduct. There should (and will) be no order as to costs.

Pecuniary penalties

Principles to be applied

8    The principles that guide the court in fashioning pecuniary penalties to be imposed in respect of conduct that is engaged in in contravention of a civil remedy provision of the FW Act are notorious and not in contest. By his written outline of submissions filed prior to the hearing of 8 December 2025, Mr Cropper contended (references omitted, emphases original):

A.    THE CORRECT APPROACH

5.    The amount of any civil penalty is to be determined by using a five-step process:

(1)    Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.

(2)    Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the Fair Work Act 2009 (Cth) (FW Act) provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.

(3)    Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.

(4)    Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.

(5)    Consider the overall penalties arrived at, including by reference to…what is proposed by [the parties], and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary...

B.    PRINCIPLES RELEVANT TO PENALTY

6.    The power to impose pecuniary penalties is found in s 546 of the FW Act.

7.    The approach of the Court in determining the quantum of penalties is well established.

8.    Deterrence is the primary purpose of civil penalties to promote the public interest in compliance by attempting to put a price on a contravention that is sufficiently high to deter repetition by the contravenor and by others who are in a position to contravene legislation. To achieve this end, the Court should fix a penalty that ‘it considers fairly and reasonably to be appropriate to protect the public interest from future contraventions’.

9.    The appropriate deterrent value of a penalty may be assessed by reference to the non-exhaustive list of the factors identified by Justice French in Trade Practices Commission v CSR Ltd. This list is well-settled but not a ‘rigid catalogue of matters for attention’. It includes matters relevant to both the character of the contravening conduct and of the contravenor.

C.    MAXIMUM PENALTY

10.    It is appropriate for the Court to consider the “ordained maximum” penalties that could be imposed on the respondent as an indication of the legislature’s view of the seriousness of the conduct, and as part of a comparative exercise of determining where the contraventions sit as a “yardstick” against the maximum.

11.    At the time of the contraventions (February 2020), for a body corporate under s 546(2)(b) of the FW Act, the maximum penalty was $63,000 per contravention.

9    None of that is controversial and I gratefully adopt it.

The competing arguments

10    Mr Cropper submits that the court should impose penalties as follows, namely:

11    EAAPL accepts that the conduct in which it has been found to have engaged warrants the imposition of pecuniary penalties; but submits that they should be “…at the low end of the scale”.

Application

12    As is customary in matters such as this one, both parties were concerned to identify a suite of considerations that typically guide the court when fashioning pecuniary penalties. Without wishing to downplay the industry attending those submissions, much of what they record is uncontroversial and I have taken careful account of all of the considerations to which they advert.

13    There are, to my eye, three considerations that stand out above all others so as to warrant particular attention in these reasons.

14    The first concerns the “deliberateness” of the conduct in which EAAPL engaged. Mr Cropper seeks to impress upon the court that EAAPL’s treatment of him as a contractor, rather than an employee, was deliberate. He maintains that that should stand as an “aggravating factor”, which should reflect in the setting of penalties higher than what might otherwise be appropriate.

15    There can be no doubt that EAAPL’s treatment of Mr Cropper as a contractor throughout the lengthy period of his engagement was deliberate. As history now records, it was wrong to maintain that posture; but so to observe is not to suggest that EAAPL’s conduct reflected anything other than a genuine belief, on the part of its officers, that Mr Cropper was, in fact, engaged on that basis. As the Liability Judgment makes clear, there were circumstances that were apt to support that belief, not the least of which being that Mr Cropper was, on both narratives, initially engaged (and treated) expressly as a contractor. Not even Mr Cropper himself could say with certainty how or when the contractual terms of his engagement were amended. The uncertainty surrounding his engagement was regrettable; but both sides acknowledged (and, at least to a degree, contributed to) it.

16    I accept that EAAPL’s treatment of Mr Cropper—which is to say its non-payment to him of the National Employment Standards amounts that, by the Liability Judgment, I accepted that it was obliged to pay—was deliberate, in the sense that it quite plainly reflected a belief that was held about the nature of his engagement. This, however, is not a case that obviously or apparently involves any deliberate flouting of statutory obligations; nor any equivalent recklessness. Though uncertainty abounded, I do not doubt that EAAPL’s adherence to the view that Mr Cropper was engaged pursuant to a contract for services reflected a genuine belief that that was so.

17    I should pause at this point to say something about the state of the evidence. In his affidavit, Mr Macfarlane sought broadly to depose as to EAAPL’s opinion or state of mind (and, on occasion, the opinions and states of mind of others): specifically, as to the existence of an understanding or belief about the basis upon which Mr Cropper had been retained. Objection was taken to that evidence and, with respect, fairly so. It was received only insofar as it might be understood as evidence of Mr Macfarlane’s opinions or state of mind. I accept that, throughout the course of his time at EAAPL (which dates back to approximately August 2019), and to the extent that it was a matter of which he was cognisant, Mr Macfarlane was of the view that Mr Cropper’s engagement was one of principal and contractor rather than one of employment.

18    There is at least some evidence that is consistent with recognition, on EAAPL’s part, that Mr Cropper was, in truth, engaged as an employee. That evidence is recorded in the Liability Judgment. It is presently uncontroversial and I needn’t replicate it. It suffices to acknowledge that there were multiple respects in which, over the course of his engagement, EAAPL’s treatment of Mr Cropper was consistent with his having been engaged as an employee. By a combination of circumstances—including the effluxion of time, staff turnover and the relatively small size of EAAPL’s business—the evidence as to how those things came to be was, to say the least, inexact. The extent to which they shed light on some collective or corporate state of belief as to the nature of Mr Cropper’s engagement is difficult to pinpoint.

19    There is, though—as counsel for Mr Cropper, with respect, fairly observed—at least some reason to suppose that at least some officers within EAAPL might, at some time or times, have taken the view that Mr Cropper was or might have been engaged not as an independent contractor but as an employee. At various points throughout his retention—including at its end—aspects of EAAPL’s treatment of him was consistent with an appreciation that he was employed, which casts at least some doubt on its assertion that it genuinely believed (via the agency of its officers) that Mr Cropper was engaged pursuant to a contract for services. Surveying that somewhat precarious evidential landscape, Mr Cropper invites the court to reject EAAPL’s assertion that its treatment of him as a contractor reflected a genuine belief that that was the basis upon which it had retained him. That contention is not without force. It was noted—again, I think fairly—that there was no direct evidence of EAAPL’s corporate state of belief about the nature of Mr Cropper’s engagement.

20    To my eye, however, there is little room to doubt that EAAPL’s treatment of Mr Cropper reflected a belief on its part—genuinely held—that Mr Cropper had been engaged as an independent contractor. That that belief might not have been universally reflected in the manner in which Mr Cropper was treated over the lengthy period of his engagement may be accepted. That, though, is but one species of circumstance apt to bear upon the question of its genuineness. As has already been observed, Mr Cropper’s engagement was the subject of considerable uncertainty that arose from multiple sources, including Mr Cropper himself (as he properly conceded). It is not the case that the evidence pointed without deviation to his having been engaged as an employee and there is no evidence to suggest that EAAPL proceeded to prefer the alternate narrative knowing that it was false or reckless as to its falsity. The circumstances point overwhelmingly to its having genuinely adhered—and I accept that it did genuinely adhere—to the view that Mr Cropper was engaged as an independent contractor.

21    That belief was wrong; but it was not wholly without foundation. Perhaps EAAPL ought to have done more to document or educate itself about the nature of Mr Cropper’s retention. Its failure in that regard is a consideration of which it is appropriate that regard be taken when fixing the penalties that I will fix. Nonetheless, there is no occasion to suppose that that failure was deliberate, in the sense that EAAPL deliberately fostered the uncertainty that attended Mr Cropper’s engagement. I regard EAAPL’s wrongdoing here—that is to say, the three species of omission by which I have found that it contravened s 44(1) of the FW Act—as very much toward the “innocent” end of the deliberateness spectrum.

22    So to observe is not to excuse. EAAPL ought better to have ensured that it was paying Mr Cropper as the law required. It is important that the penalties that the court here imposes serve not only to incentivise EAAPL to acquit itself properly in the future; but also to afford other employers—particularly those that labour under equivalent beliefs, howsoever genuinely—a similar incentive to make sure that they’re right. Neither EAAPL nor any other employer can escape penalty merely through inadvertence, howsoever innocent.

23    None of that is changed by EAAPL’s adherence to its alternative defence: namely that, if he was employed at all, Mr Cropper was employed on a casual basis. On the relevant statutory test, that contention was “as good as impossible” to substantiate: Liability Judgment, [155]. Nonetheless, the day-to-day particulars of Mr Cropper’s engagement bore at least a passing resemblance to what many conceptualise as casual employment. He was, for example (at least at times), paid an hourly amount and only in respect of the hours that he worked. Again, the suggestion that he was employed on a casual basis was wrong; but that is not to doubt that EAAPL genuinely believed that it had a basis to agitate that alternative defence (which, it must be noted, was mounted prior to the enactment of the legislative amendments that applied with retrospective effect to defeat it).

24    The second significant consideration that warrants particular attention is EAAPL’s contrition. By his affidavit, Mr Macfarlane deposed:

Apology to Mr Cropper and his Family

5.    The Board and I wish to extend an apology to Mr Cropper and his family on behalf of the Respondent.

6.    We acknowledge that Mr Cropper has experienced a great deal stress and anxiety throughout the course of the proceeding, and the sum of money found to be owed to Mr Cropper is of significance to him and his wife.

7.    Further, the Respondent deeply apologises to Mr Cropper for the lack of clarity and the confusion caused in relation to his employment status with the Respondent. We imagine that this would have been frustrating to Mr Cropper and would have caused him distress.

8.    As I state later in my affidavit, it was never the Respondent's intention to deprive Mr Cropper of any entitlements. We genuinely believed that he was a contractor (as he was engaged in January 2005) and there was no change to such an arrangement.

9.    We accept that our assessment and understanding of Mr Cropper being a contractor beyond January 2006 was wrong, and acknowledge that His Honour has now determined that Mr Cropper was an employee from that point up until the termination date of 28 February 2020.

10.    We also acknowledge and accept that the termination of Mr Cropper's employment would have been disheartening, stressful and anxiety-inducing. Mr Cropper has always been held in high regard in his work with the Respondent, and the termination of his employment was in no way due to any personal reasons. It is simply the case that our business no longer required his service.

11.    The Respondent hopes that Mr Cropper, his wife, and his family have some form of closure as a result of the findings in the proceeding.

25    As I have noted, those passages are of no assistance insofar as they purport to record the opinions or states of mind of others. Nonetheless, the apology is made on EAAPL’s behalf and there was no challenge to Mr Macfarlane’s authority to offer it. With respect, it reflects well both on EAAPL and Mr Macfarlane.

26    It is, of course, the case that EAAPL defended Mr Cropper’s proceeding and it has indicated an intention to consider an appeal. It was and is entitled to do both. It also is yet to pay what it has been ordered to pay. That is a matter of greater concern; though, for the reasons to which I shall shortly come, not one that materially informs my assessment of appropriate penalties.

27    Mr Cropper sought to undermine the genuineness of Mr Macfarlane’s apology by reference to evidence that he gave during cross-examination. Mr Macfarlane confirmed that EAAPL was considering an appeal against the Liability Judgment, which, he said, reflects a belief on its part that it “did [not] do anything wrong”; and possibly Mr Macfarlane’s view that “if it looks like a duck, it quacks like a duck, it walks like a duck, it’s a duck” (which I have understood to reflect his own view that the circumstances that attended Mr Cropper’s engagement were such as to indicate a relationship of principal and contractor. Mr Cropper also sought to stigmatise EAAPL’s historical reactions to his attempts to clarify the basis upon which he was retained. It was said that Ms Sedrak, in particular (EAAPL’s Human Resources Executive Manager), had proved disinterested in assisting that endeavour.

28    I do not accept those contentions. It is relatively easy for an employer, having unsuccessfully prosecuted a defence to charges of statutory contravention, to offer a hollow expression of regret in order to secure a reduced penalty; but I do not consider that that is what has happened here. Mr Macfarlane was at pains to acknowledge the “lack of clarity” and the “distress” that was likely to have been visited upon Mr Cropper. The apology that has been offered sits comfortably alongside a continued belief that Mr Cropper was engaged pursuant to a contract for services and an intention to pursue that contention on appeal.

29    Similarly, I am not persuaded that much can be made of Ms Sedrak’s reaction to Mr Cropper’s claims that he was an employee (see Liability Judgment, [44]-[59]). Ms Sedrak plainly adhered to the view that Mr Cropper was not an employee and she said so. No doubt Mr Cropper might have preferred a more expansive response or a greater degree of engagement with (or, indeed, acceptance of) his contrary contention; but I do not accept that the absence of those things should be understood to reflect indifference or any other basis upon which to question Mr Macfarlane’s expression of regret.

30    More troubling is EAAPL’s refusal to pay what it has been ordered to pay; but, that too, is explicable otherwise than by any relevant want of contrition. Mr Macfarlane cited concerns about any subsequent appeal being rendered nugatory because amounts paid to Mr Cropper might not be recovered. I needn’t attempt any assessment as to whether those concerns are well-founded. At the risk of gratuity, two observations spring to mind: first, that EAAPL would not be the first unsuccessful employer to form that view; and second, that that is unlikely to excuse what may or may not be brazen defiance of the court’s orders. I acknowledge without comment what was suggested at the hearing as to the interlocutory nature of the existing orders.

31    I accept that EAAPL acknowledges and regrets its contribution to Mr Cropper’s situation. It has taken steps to ensure that it is not repeated (most obviously by its decision no longer to engage contractor personnel directly). Its contrition reflects an acknowledgment of its contribution to the regrettable uncertainty that has led the parties to their present predicament and an intention that it should not be repeated.

32    That is a circumstance that should properly inform my assessment of what penalties are appropriate. EAAPL does not present as a business that is indifferent or reckless as to its obligations as an employer. It was wrong to treat Mr Cropper as it did. It ought to have avoided the uncertainty that plagued his engagement and it should pay a penalty for its mistake; but, overall, its mistake was at the lower end of the seriousness spectrum.

33    The third matter of significance that warrants particular attention concerns the so-called “course of conduct” principle. EAAPL maintains that the court should, when fashioning appropriate penalties, take account of the fact that its contraventions all arose from the same mistaken belief that Mr Cropper was engaged pursuant to a contract for services. By application of the common law course-of-conduct principle (rather than its statutory analogue, s 557 of the FW Act), it is said that the court should impose lower penalties than might otherwise be appropriate.

34    I do not accept that contention. The contravening conduct in this case inheres in omissions: specifically, in EAAPL’s failure to pay Mr Cropper amounts to which the National Employment Standards entitled him. Those omissions were different (in that, for example, the failure to afford public holiday pay involved conduct different to that which constituted the failure to pay accrued leave on termination). The omissions that constitute EAAPL’s contravening conduct lack the legal and factual connections that might otherwise suffice to engage the common law course-of-conduct principle (assuming, for present purposes, that it is available at all).

35    That all of EAAPL’s contravening harks back to its mistaken belief that Mr Cropper was engaged pursuant to a contract for services may be accepted. That is a circumstance best considered in the application of the so-called “totality principle”; it is not something that suffices to engage the closely-related “course-of-conduct” principle.

36    I turn, then, to address Mr Cropper’s contention that appropriate penalties in the present case should be set at or around a level equivalent to 60% of the available maximum. It is agreed that, as at February 2020, the maximum penalty that was available to be imposed upon a corporate wrongdoer was $63,000.00, although it was lower at some of the times that Mr Cropper was not paid for absences on public holidays or for periods of paid personal/carer’s leave. That latter reality must (and will) be borne in mind in setting a penalty in respect of the conduct constituting those contraventions: Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557, [394]-[401] (Katzmann J).

37    Respectfully, 60% of the available maximum well exceeds what is appropriate. It may be accepted that EAAPL’s contravening conduct has resulted in Mr Cropper’s being significantly underpaid (to the tune of more than $110,000.00). That is, quite obviously, a relevant circumstance. Nonetheless, a penalty fixed at 60% of the maximum available will rarely be appropriate to impose upon a first-time contravening, contrite employer of EAAPL’s size and resources in respect of conduct that arose from a mistaken but genuine belief not wholly beyond what might fairly have been defended and that has been the subject of at least some corrective action. A penalty at that level, in those circumstances, would not strike “…a reasonable balance between deterrence and oppressive severity”: Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450, 468 [41] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ).

38    Insofar as concerns EAAPL’s failures to pay Mr Cropper his accrued but untaken annual leave and in respect of absences on public holidays, I consider that the court should impose penalties at the same level. Although the contravening conduct in those cases visited different levels of loss (respectively, $91,129.22 and $20,176.85), it seems to me that each was substantial in its impact upon Mr Cropper in a way that is deserving of equivalent sanction. So much is consistent with the submission that Mr Cropper advanced and EAAPL did not obviously take issue with it.

39    I consider that that contravening conduct should attract pecuniary penalties set at 17.5 per cent of the maximum (or $11,025.00 in each case). In saying so, I take account of the lower maximum penalty amounts that applied throughout the courses of the conduct by which EAAPL failed to pay Mr Cropper in respect of public holiday and personal/carer’s leave absences. I consider that penalties at that level represent an appropriate balance between deterrence (both general and specific) and oppressive severity.

40    Insofar as concerns EAAPL’s failure to pay Mr Cropper for two occasions on which he took personal/carer’s leave, I consider that a smaller penalty is appropriate. On any view, that conduct was substantially less significant in terms of its impact upon Mr Cropper and I consider that a “discount” (relative to the other penalties) is appropriate. In saying so, I should not be misunderstood as downplaying the significance of the contravening. I will set the penalty to be paid in respect of that conduct at 12.5 per cent of the maximum (or $7,875.00). That is a significant sum in respect of conduct that visited only the most modest of loss; but I consider that it is appropriate to achieve the deterrent effect that the court must strive to realise.

41    The total amount of all three penalties comes to $29,925.00. Looking at that figure in its totality (and against all of the circumstances attending the contravening conduct), I am satisfied that it represents an appropriate means of incentivising compliance—both by EAAPL and by other employers—with the important requirements of the FW Act and the need to afford the benefits that Mr Cropper was wrongly denied.

Costs

42    In addition to the imposition of pecuniary penalties, Mr Cropper seeks an order for costs in his favour. Standing in the way of that endeavour is s 570 of the FW Act, which relevantly provides as follows:

570 Costs only if proceedings instituted vexatiously etc.

(1)    A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.

Note:    The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.

(2)    The party may be ordered to pay the costs only if:

…

(b)    the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or

…

43    By his written submissions in support of his application, Mr Cropper observed (omitting references):

41.    It is accepted that the policy behind s 570 reflects a choice on the part of the legislature that costs should not ordinarily follow the event, but rather that they should ordinarily be borne by the party incurring them. It has been said that the policy ensures that the spectre of costs being awarded if a claim is unsuccessful does not loom so large in the mind of potential applicants (in particular) that those with genuine grievances and an arguable evidentiary and legal basis for them are put off commencing or continuing proceedings.

42.    The discretion must be exercised with caution because of the exceptional nature of the power in an otherwise no-costs jurisdiction, and a case for its exercise should be clearly demonstrated. However, it is not necessary to prove that there are exceptional circumstances warranting the making of an order.

44    Each of those constituent propositions is supported by authority and I accept them all.

45    Central to Mr Cropper’s contention are certain offers of compromise that he made over the course of the litigation; and, in particular, an offer that he made on 1 November 2021 to resolve the litigation for the sum of $120,000.00. It is to be recalled that, by the two judgments preceding this one, the court accepted the bulk of Mr Cropper’s claims and awarded him damages and statutory compensation totalling a little over $130,000.00.

46    The rejection of an offer of compromise is not rendered unreasonable merely because what is offered later turns out to be better than what is achieved: see, for example, Tran v Kodari Securities Pty Ltd (No 2) [2020] FCA 1819 (Bromwich J); Enkel v We R Finance Pty Ltd (No 2) [2021] FCA 529 (Jackson J). Nonetheless, it is well established that the rejection of a reasonable offer of compromise may constitute an unreasonable act or omission for the purposes of s 570(2) of the FW Act: Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221, 255 [166] (Tracey, Gilmour, Jagot and Beach JJ). In PIA Mortgage Services Pty Ltd v King (No 2) [2020] FCAFC 53 [20] (Rangiah, Charlesworth and Snaden JJ), the full court observed:

The rejection of a reasonable offer to compromise proceedings can (but does not necessarily) constitute an unreasonable act or omission of the kind to which s 570(2)(b) of the FW Act refers: Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221, 255 [166] (Tracey, Gilmour, Jagot and Beach JJ, with whom White J agreed on that issue). Again, whether the rejection of an offer to compromise proceedings can be impugned as unreasonable will be a question of impression and degree, to be informed by all of the circumstances that surround it. At the least, those circumstances will include the objective attractiveness of the offer, whether a more beneficial result was realistically possible and whether the effort required to achieve a more beneficial result was proportionate to any marginal benefit.

47    I am not persuaded that EAAPL’s rejection of Mr Cropper’s offer of 1 November 2021 was unreasonable. Although it did not succeed, the contention that Mr Cropper was engaged pursuant to a contract for services was at least seriously arguable. Given the modest scale of the compromise inherent in what Mr Cropper offered (relative to what he achieved), I do not consider that it was unreasonable of EAAPL proverbially to have chanced its arm. Though real, the deficiencies that attended its contention that Mr Cropper was a contractor were not such that the amount that was offered ought, in all of the circumstances, to have presented as so attractive that its rejection can be impugned as unreasonable. Mr Cropper’s offer was a good one and, with the benefit of hindsight, ought to have been accepted; but that is not reason in itself to conclude that the offer’s rejection was unreasonable.

48    There is, perhaps, a stronger reason not to accept Mr Cropper’s contention. Part of the case that he advanced—a part that does not engage with the imposition of pecuniary penalties under the FW Act—concerned his entitlement to reasonable notice of the termination of his employment. By the Liability Judgment, I accepted that Mr Cropper was entitled to reasonable notice and that, in the circumstances, the period that was reasonable was three months. Those conclusions were not foregone. At the initial trial, EAAPL contended, by reference to supporting authority, that there should be no occasion to imply a contractual term affording Mr Cropper an entitlement to reasonable notice in circumstances where that issue was the subject of legislative stipulation: Liability Judgment, [100]-[105], [158]-[164]. Success on that front would have defeated Mr Cropper’s claim to relief in the form of damages for breach of contract, which were ultimately assessed at $18,764.14.

49    Plainly, had EAAPL succeeded on its contention about the implication of the term, the result would have been judgment in a total sum (albeit exclusive of interest) lower than what Mr Cropper offered on 1 November 2021. Given the amount that was offered, the relative strengths and weaknesses of the parties’ cases, and the time, effort and expense that they stood to expend in vindication of their positions, my inclination is unchanged: EAAPL did not trespass beyond what was reasonable by rejecting Mr Cropper’s offer of 1 November 2021.

50    With those observations recorded, I do not consider that Mr Cropper can clear the hurdle erected by s 570(1) of the FW Act.

Disposition

51    I will impose upon EAAPL pecuniary penalties totalling $29,925.00. There shall be no order as to costs.

Associate:

Dated:    18 December 2025