A recent penalty decision of the Federal Circuit and Family Court of Australia (the Court) has provided a useful reminder to employers that genuine remedial action can have an effect on the penalties in the event they are found to have contravened the Fair Work Act 2009 (Cth) (the FW Act).
Civil penalties under the FW Act serve important deterrence and compliance purposes. For this reason, the question of whether or not penalties should be imposed requires consideration of (amongst other things) an employer’s subsequent conduct.
In the decision of Dimitropoulos v South Eastern Melbourne Primary Health Network Ltd (No 2) [2026] FedCFamC2G 1567, the Court was required to determine whether penalties should be imposed on South Eastern Melbourne Primary Health Network Ltd (the Employer) after it was found to have breached the FW Act.
The Employer had contravened its enterprise agreement (and therefore the FW Act) in two respects:
In the penalty proceedings, the Employer provided substantial evidence of the remedial steps it had taken after the Court’s adverse findings, to prevent future contraventions.
The evidence was provided by the Employer’s CEO who set out in considerable detail the Employer’s response to the findings as well as his own personal response.
From an organisational perspective, the Employer:
From a personal perspective, the Employer’s CEO provided an apology for his involvement in the contraventions. The Court heard his regret and acknowledgement that he should have handled the decision differently and that his conduct fell short of the standards expected of him.
The Court also heard that the CEO had personally undertaken extensive training, obtained external advice, oversaw the consultation overhaul and psychosocial safety initiatives, and had a new KPI added to his CEO performance plan which required an independent audit of the People & Culture function, with Board-level oversight.
The Court described these steps taken by both the Employer and the CEO as an “exemplar” of how to respond proactively and insightfully to findings of a contravention, noting its “commendable level of detail and humility”.
The Court did not agree with the employee’s submissions that there had been no demonstration of contrition, remorse or reflection. Evidently, the Employer’s previous processes were not enough to prevent unlawful conduct; however, the Court accepted that this did not diminish the remedial steps taken by the Employer to prevent such unlawful conduct being repeated in the future. It was that type of unlawful conduct that “needs to be called out and dealt with by explicit education, training and policies, including policies directed specifically to psychosocial welfare”.
The Court ultimately determined to order pecuniary penalties at 35% of the maximum (instead of the 75% being sought by the employee), amounting to $46,620 paid to the employee.
Remedial action will not result in the undoing of a contravention. However, this decision shows that the steps taken by an employer after a contravention can materially influence any penalty that may be imposed as a result of that contravention.
It also provides some very clear examples of steps that can be taken by employers to prevent any contravention from occurring in the first place.
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