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Fair Work Ombudsman v New Switch Electrical Pty Ltd - Unpaid Wages Compensation Appeal

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Summary

Fair Work Ombudsman Appeal, Unpaid Wages Compensation

What changed

The Federal Court of Australia allowed the Fair Work Ombudsman's appeal against New Switch Electrical Pty Ltd, finding the primary judge erred in holding the court lacked power to make compensation orders under s 545(1) of the Fair Work Act 2009. The employer contravened the applicable Award and National Employment Standards by failing to pay wages, superannuation and accrued annual leave, and subsequently failed to comply with a compliance notice.\n\nEmployers should note that courts have power under s 545(1) to order compensation for losses caused by Award/NES contraventions combined with non-compliance with FWO compliance notices. The appeal concerned whether orders in default were interlocutory or final, and whether leave was required under s 24(1A) Federal Court of Australia Act 1976. This ruling confirms the FWO's ability to obtain compensation orders for affected employees.

What to do next

  1. Review employment records for Award and NES compliance
  2. Ensure all unpaid wages, superannuation and leave entitlements are paid
  3. Seek legal advice on compensation obligations under s 545 FW Act

Penalties

Court may order compensation for unpaid wages, superannuation contributions and accrued annual leave under s 545(1) Fair Work Act 2009

Archived snapshot

Apr 10, 2026

GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.

Original Word Document (96.7 KB) Federal Court of Australia

Fair Work Ombudsman v New Switch Electrical Pty Ltd (Appeal) [2026] FCA 415

| Appeal from: | Fair Work Ombudsman v New Switch Electrical Pty Ltd (No 2) [2025] FedCFamC2G 1634 |
| | |
| File number(s): | VID 1453 of 2025 |
| | |
| Judgment of: | WHEELAHAN J |
| | |
| Date of judgment: | 10 April 2026 |
| | |
| Catchwords: | INDUSTRIAL LAW – appeal from part of the orders of the Federal Circuit and Family Court of Australia (Division 2) – whether the Circuit Court erred in failing to make orders for compensation pursuant to s 545(1) of the Fair Work Act 2009 (Cth) (FW Act) – alleged contraventions of s 716 of the FW Act in relation to a compliance notice seeking rectification of unpaid wages, superannuation and accrued annual leave – the Circuit Court entered default judgment in favour of the appellant – the respondents failed to appear at the hearing of the appeal and the hearing below – whether the Circuit Court’s orders in default were interlocutory or final – whether leave is required to appeal pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (Cth) – oral application for leave to appeal made and granted – primary judge erred in holding that the Court did not have power to make the compensation orders sought – contraventions of applicable Award and National Employment Standards and subsequent failure to comply with notice were concurrent causes of employee’s loss – had the first respondent taken action specified in the notice employee would have been paid the specified amounts – appellant entitled to relief substantially in terms sought |
| | |
| Legislation: | Federal Circuit and Family Court of Australia Act 2021 (Cth) s 143

Federal Circuit Court of Australia Act 1999 (Cth) s 17A

Federal Court of Australia Act 19 76 (Cth) ss 24(1A), 24(1D), 31A, 37M

Fair Work Act 2 009 (Cth) ss 44, 45, 545(1), 545(2), 550(1), 570, 716(2), 716(5)

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 13.05(2)

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth) rr 5.11, 24.04(c)

Federal Court Rules 2011 (Cth) rr 39.05(c), 41.06 |
| | |
| Cases cited: | Applicant A184 of 2003 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1076; 210 ALR 543

Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; 161 FCR 513

Baines v State Bank of New South Wales (1985) 2 NSWLR 729

Bienstein v Bienstein [2003] HCA 7; 195 ALR 225

Carr v Finance Corporation of Australia Ltd [1981] HCA 20; 147 CLR 246

Chamberlain v Deputy Commissioner of Taxation (ACT) [1988] HCA 21; 164 CLR 502

CNIP Pty Ltd v Chan & Naylor Norwest Pty Ltd (No 2) [2011] FCA 1170

Dai v Michael Roberts Strata Management Services Ltd [2000] FCA 680

Dent v Australian Electoral Commissioner [2008] FCAFC 111; 249 ALR 523

Deputy Commissioner of Taxation v Hua Wang Bank Berhad (No 3) [2012] FCA 594

Ex parte Bucknell [1936] HCA 67; 56 CLR 221

Fair Work Ombudsman v Blue Sky Kids Land Pty Ltd (in liq) (No 3) [2024] FCA 785

Fair Work Ombudsman v Carers Portland Inc (No 2) [2024] FedCFamC2G 72

Fair Work Ombudsman v Cobra Security Services Pty Ltd [2024] FedCFamC2G 336

Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557

Fair Work Ombudsman v LROC Builders Pty Ltd [2025] FedCFamC2G 1516

Fair Work Ombudsman v New Switch Electrical Pty Ltd (No 2) [2025] FedCFamC2G 1634

Fair Work Ombudsman v New Switch Electrical Pty Ltd [2024] FedCFamC2G 1124

Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301

Fair Work Ombudsman v Mai [2025] FCA 421

Fair Work Ombudsman v Taing [2025] FCA 1401

Hall v Nominal Defendant [1966] HCA 36; 117 CLR 423

Henville v Walker [2001] HCA 52; 206 CLR 459

Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60; 167 FCR 372

Kazal v Thunder Studios Inc (California) [2023] FCAFC 174; 416 ALR 24

Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; 178 FCR 401

Linprint Pty Ltd v Hexham Textiles Pty Ltd (1991) 23 NSWLR 508

Luck v University of Southern Queensland [2009] FCAFC 73; 176 FCR 268

Luong v Fair Work Ombudsman [2025] FCA 1400

Macatangay v New South Wales (No 2) [2009] NSWCA 272

NAOU of 2002 v Minister for Immigration & Multicultural and Indigenous Affairs [2002] FCAFC 406

Port of Melbourne Authority v Anshun Pty Ltd [1980] HCA 41; 147 CLR 35

Re Luck [2003] HCA 70; 203 ALR 1

Rogers v Legal Services Commission (SA) (1995) 64 SASR 572

Salter Rex & Co v Ghosh [1971] 2 QB 597

Searson v Salmon [2014] FCA 748

Singh v Minister for Immigration, Citizenship and Multicultural Affairs [2022] FCA 905

Tampion v Anderson (1973) 3 ALR 414

Toben v Jones [2003] FCAFC 137; 129 FCR 515

Transport Workers’ Union of Australia v Qantas Airways Limited (Compensation Claim) [2024] FCA 1216; 334 IR 187

Wills v Australian Broadcasting Corporation [2009] FCAFC 6; 173 FCR 284

Yeo v Damos Earthmoving Pty Ltd, Re Beachwood Developments Pty Ltd (in liq) [2011] FCA 1129 |
| | |
| Division: | Fair Work Division |
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| Registry: | Victoria |
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| National Practice Area: | Employment and Industrial Relations |
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| Number of paragraphs: | 54 |
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| Date of hearing: | 10 April 2026 |
| | |
| Counsel for the appellant: | Mr T Goodwin |
| | |
| Counsel for the respondents: | The respondents did not appear |

ORDERS

| | | VID 1453 of 2025 |
| | | |
| BETWEEN: | FAIR WORK OMBUDSMAN

Appellant | |
| AND: | NEW SWITCH ELECTRICAL PTY LTD (ACN 646 823 396)

Respondent | |

| order made by: | WHEELAHAN J |
| DATE OF ORDER: | 10 april 2026 |
THE COURT ORDERS THAT:

  1. To the extent necessary there be leave to appeal the orders of the Federal Circuit and Family Court of Australia (Division 2) made 8 October 2025 in matter MLG 576 of 2024.

  2. By 4.00 pm 17 April 2026 the appellant email to the Chambers of the Hon Justice Wheelahan a minute of proposed orders to give effect to these reasons together with an accompanying memorandum of submissions addressing the form of orders.

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

REASONS FOR JUDGMENT

WHEELAHAN J:

1 This is an appeal by the Fair Work Ombudsman (FWO) from orders of a judge of the Federal Circuit and Family Court of Australia (Division 2) (the Circuit Court). The proceeding below concerned alleged contraventions by an employer of an obligation to comply with a notice given by a Fair Work Inspector under s 716(2) of the Fair Work Act 2009 (Cth) (FW Act). The notice related to unpaid wages, superannuation, and pay on account of accrued but untaken annual leave.

2 The respondents did not participate in the proceeding below and have taken no part in this appeal. Upon the primary judge being satisfied that there had been a default by the respondents, her Honour made orders against the respondents which were dispositive of the FWO’s claims. However, the primary judge did not make orders to the extent that the FWO sought, and that is the subject matter of this appeal.

Background

3 The first respondent (New Switch) operates an electrical business. The second respondent (Mr Tan) is its sole director.

4 The application at first instance was supported by a statement of claim which was summarised by the primary judge in Fair Work Ombudsman v New Switch Electrical Pty Ltd [2024] FedCFamC2G 1124 (FJ) at [27]. Material to the appeal, the FWO made allegations in the statement of claim to the following effect –

(a) the FWO had investigated New Switch’s compliance with the FW Act;

(b) a Fair Work Inspector had formed a reasonable belief that an employee, Anh Tuan Do, was employed by New Switch between 9 August 2021 and 28 September 2022 and that New Switch had not paid the employee in accordance with the applicable Award, being the Electrical, Electronic and Communications Contracting Award 2020, and had not paid the employee on account of accrued but untaken annual leave when the period of employment ended;

(c) the Fair Work Inspector gave New Switch a notice under s 716(2) of the FW Act requiring it to remedy the direct effects of the contraventions, including by –

(i) calculating and paying the outstanding amounts due in respect of the contraventions;

(ii) calculating additional superannuation contributions required to be paid pursuant to clause 19.2 of the Award in respect of the underpayments and paying such contributions to the employee’s superannuation fund; and

(iii) making a record of the amounts calculated and paid as referred to above;

(d) the notice under s 716(2) also required New Switch to produce reasonable evidence of its compliance with the Compliance Notice by producing a copy of certain records and proof that full payment had been made to the employee and his superannuation fund;

(e) New Switch failed to comply with the notice and thereby contravened s 716(5) of the FW Act;

(f) the amounts that New Switch would have paid to the employee had it taken the action specified by the notice were –

(i) $1,157.48 (gross) on account of the employee’s all-purpose rate entitlement under the Award; and

(ii) $3,653.08 (gross) on account of the employee’s entitlement to pay in lieu of accrued leave;

(g) the outstanding amount owed by New Switch to the employee pursuant to the notice was therefore $4,810.56;

(h) the second respondent (Mr Tan) was the sole director of New Switch;

(i) Mr Tan had actual knowledge of the notice and other material elements, was an intentional participant in New Switch’s failure to comply with the notice and was therefore involved, within the meaning of s 550(2)(c) of the FW Act, in the contravention by New Switch of s 716(5) of the FW Act; and

(j) pursuant to s 550(1) of the FW Act Mr Tan was taken to have contravened s 716(5).

5 The relief sought by the FWO in the statement of claim included –

(a) declarations of contravention;

(b) an order that New Switch take the action required by the compliance notice which was sought in 21 of the statement of claim in the following terms –

(a)    pursuant to section 545(1) of the FW Act, within 28 days of this order, the First Respondent [New Switch] take the action required by the Compliance Notice by:

(i)    paying the Outstanding Amount to the Applicant [the Fair Work Ombudsman];

(ii)    paying the additional superannuation contribution to the Employee’s nominated superannuation fund as required by clause 19.2 of the Award in respect of the Outstanding Amount;

(iii)    providing evidence to the Applicant [the Fair Work Ombudsman] of the payment to the Employee’s nominated superannuation fund as referred to in paragraph 21(a)(ii) above;

(c) an order for interest, which was sought in 21 of the statement of claim in the following terms –

(b)    pursuant to either section 545(1) or 547(2) of the FW Act, within 28 days of this order, the First Respondent [New Switch] pay interest on any amount payable to the Employee pursuant to the order sought in paragraph 21(a) above at the applicable prejudgment rate;

(d) orders that New Switch and Mr Tan pay penalties to the Commonwealth.

6 New Switch and Mr Tan failed to comply with orders requiring them to file a notice of address for service and a defence and response to the statement of claim, failed to appear at directions hearings, and failed to defend the proceeding with due diligence. These defaults were the subject of findings by the primary judge at FJ [11]–[15], [25].

The orders made upon default

7 The appellant applied to the primary judge pursuant to r 13.05(2) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) for orders against the respondents on the ground that they were in default. See now: Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth), r 5.11. Judgment against a respondent in default does not require proof of the claim by evidence but only requires that an applicant appears on the basis of the statement of claim to be entitled to the relief sought and that the Court is satisfied that it has power to grant the relief. See in relation to the cognate rules of this Court: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; 161 FCR 513 (Dataline.Net.Au Pty Ltd) at 42; Yeo v Damos Earthmoving Pty Ltd, Re Beachwood Developments Pty Ltd (in liq) [2011] FCA 1129 at 9 and the cases cited therein; CNIP Pty Ltd v Chan & Naylor Norwest Pty Ltd (No 2) [2011] FCA 1170 at [18]–19; Searson v Salmon [2014] FCA 748 at [6]–9; Kazal v Thunder Studios Inc (California) [2023] FCAFC 174; 416 ALR 24 at 212.

8 The FWO’s interlocutory application for orders in default was made by a formal application in a proceeding filed 23 October 2024 which the primary judge found at FJ [17] was sent to the registered office of New Switch and to its email address which the FWO had used in the past to communicate with Mr Tan. The orders sought in the interlocutory application included –

3.    Pursuant to section 545(1) of the FW Act, within 28 days of this order, the First Respondent [New Switch] take the action required by the Compliance Notice by:

(a)    paying the amount of $4,810.56 (Outstanding Amount) to the Applicant [the Fair Work Ombudsman].

(b)    paying an additional superannuation contribution to Mr Anh Tuan Do’s (Employee) nominated superannuation fund as required by clause 19.2 of the Electrical, Electronic and Communications Contracting Award 2020 in respect of the Outstanding Amount.

(c)    providing evidence to the Applicant [the Fair Work Ombudsman] of the payment to the Employee’s nominated superannuation fund as referred to in paragraph 3(b) above.

9 The respondents did not appear at the hearing of the application for orders in default. The primary judge determined to grant the declaratory relief sought by the FWO: FJ at [33]–[34]. However, her Honour adjourned for further hearing that part of the application that sought orders requiring that specific payments be made on account of wages, accrued leave, and superannuation, together with the question of penalty: FJ [35]–[38]

10 Upon the further hearing of the matter before the primary judge there was again no appearance for the respondents. The primary judge determined to impose penalties on the respondents for the contraventions of the FW Act that were alleged in the statement of claim. New Switch was ordered to pay a penalty of $24,750 and Mr Tan was ordered to pay a penalty of $4,950. In each case the penalty represented 60% of the maximum: Fair Work Ombudsman v New Switch Electrical Pty Ltd (No 2) [2025] FedCFamC2G 1634 (SJ) at [35].

11 The primary judge also determined to order pursuant to s 545(2)(d) of the FW Act that by 5 November 2025 New Switch take the steps that were required by the compliance notice, which reflected to some extent the relief sought by the FWO in [21] of the statement of claim, and [3] of the orders sought in the interlocutory application, but without identifying the sums that the FWO claimed were outstanding. Further, the terms of the orders, which reflected the terms of the compliance notice, did not require that specified sums be paid to the FWO but required New Switch to calculate the entitlements owing to the employee and pay those amounts to the employee and to the employee’s nominated superannuation fund in accordance with the steps set out in the compliance notice.

The impugned elements of the primary judge’s decision

12 The primary judge addressed a submission by the FWO that the Court should make an order to compensate the employee for lost wages and superannuation. These submissions were directed to the orders sought in 21 of the statement of claim and [3] of the interlocutory application that New Switch pay specified sums to the FWO, pay a sum to the employee’s nominated superannuation fund, and pay interest.

13 The primary judge held that the Court did not have power to make the orders in the terms sought by the FWO: SJ [51]. At the time of the decision, there were conflicting decisions of the Circuit Court on the question whether an order consequent upon a contravention of s 716(5) of the FW Act might include orders requiring the payment of specified sums by way of compensation. The decisions were identified by her Honour in an earlier judgment, Fair Work Ombudsman v LROC Builders Pty Ltd [2025] FedCFamC2G 1516 (LROC Builders) at [65]-[67]. That conflict in authority in the Circuit Court has now been addressed by two decisions in the appellate jurisdiction of this Court: Luong v Fair Work Ombudsman [2025] FCA 1400 (Luong) (Bennett J) and Fair Work Ombudsman v Taing [2025] FCA 1401 (Bennett J).

14 The primary judge applied her Honour’s earlier decision in LROC Builders and held at SJ [51] that there was not a connection between the loss that the affected employee suffered and the contravention. Her Honour held that a contravention of an obligation to comply with a compliance notice resulted in a lost opportunity to have an employee’s entitlements reviewed, and if necessary redressed, which opportunity lapsed at the end of the period of compliance with the notice. Her Honour rejected a submission that the compliance notice created a “secondary obligation” to pay amounts owing to the affected employee. Her Honour emphasised a distinction between a failure to comply with a compliance notice, and an anterior obligation to comply with an award or enterprise agreement by making payments which are enforceable in proceedings brought for breach of s 44 or 45 of the FW Act. Her Honour held that any loss resulting from a failure to make payments required by an award or enterprise agreement had crystallised at the time the notice was given and was not “because of” a failure to comply with the terms of a compliance notice. Her Honour’s reasoning on these issues was set out in LROC Builders at [95]-[102] which, because of its centrality to the grounds of appeal, I will set out –

95    The argument that I continue to resist however is that the giving of the Compliance Notices to LROC and Mr Oliver created a secondary obligation to pay amounts to the Employees which could later be enforced through a compensatory order.

96    Instead, I consider that the only obligation imposed on the respondents by the Compliance Notices was that they take the steps identified in the relevant notice which included to identify the number of hours worked during the relevant period by the affected employee, identify the amount paid to the employee during this period and in the event of a negative difference between the amount in fact paid and the amount to which the employee was entitled, make a payment of the amount outstanding to the individual.

97    Self-evidently, the taking of each these steps might or might not result in the identification of a monetary amount owed to the employee that the employer would be required to pay to fully comply with the compliance notice. However, in terms of characterisation, the loss to the affected employee by the failure of the respondents to comply with the Compliance Notices was the lost opportunity to have their entitlements reviewed and if necessary, redressed, through the FWO’s enforcement processes. The monetary loss occasioned by the alleged failure by the respondents to comply with workplace laws and/or industrial instruments had already crystallised as at the date upon which the obligation arose and occurred “because of” this failure.

98    Section 545(2)(d) of the FW Act is legislative recognition that in circumstances where a monetary loss has not been established to the standard of proof ordinarily required in the civil jurisdiction (the “reasonable belief”), the appropriate remedy is an order requiring the recalcitrant employer to take the steps that remained unperformed under the compliance notice. In some cases, this would require the employer to take each of the steps identified. In other cases, where calculations had been performed and an underpayment identified, the Court would be empowered to make an order that the identified payment be made to the affected employee. However, its character strictly would not be compensatory but rather one more akin to specific performance.

99    An order of this kind would not subvert the operation of the compliance notice regime as it would be one directed principally at enforcement of the notice itself. An order of this kind would recognise that the relevant loss to the affected employee was the lost opportunity to have their entitlements reviewed and if necessary redressed, by their employer which opportunity (co-existent with the obligation) lapsed as at the expiry of the date of compliance. An order made under s 545(2)(d) would have the effect of reviving that obligation and making it the subject of a court order.

100    While this analysis might be seen by some as an exercise in semantics, it can be defended by reference to arguments of the kind that have been rehearsed in decisions including Carers Portland and Cobra Security and which emphasise the different character of compliance notice proceedings, compared with, for example, proceedings that allege and are required to prove, breaches of ss 44 or 45 of the FW Act.

101    On this analysis, the FWO is not without redress. She can seek penalties which, as this case demonstrates, can be substantial. The FWO can also seek orders which may result, through performance of the steps identified in the compliance notice, in affected employees being paid any unpaid entitlements. The right of the FWO to take direct action to recover outstanding entitlements is also preserved.

102    I decline in these circumstances to make the compensatory orders sought by the FWO because I am not satisfied that the Court has the power to make them.

15 The primary judge adopted and applied the above reasons to the present case at SJ [52]-[54].

Were the primary judge’s orders interlocutory?

16 I will address a threshold issue, which is whether leave to appeal is required.

17 Under s 24(1A) of the Federal Court of Australia Act 1976 (Cth) an appeal from an interlocutory order of the Circuit Court must not be brought without leave. The primary judge’s decision was not an order for summary judgment under s 17A of the Federal Circuit Court of Australia Act 1999 (Cth) which would be taken to be an interlocutory decision under s 24(1D)(ca) of the Federal Court of Australia Act. See now, s 143 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) which has not been picked up by s 24(1D) of the Federal Court of Australia Act.

18 In many jurisdictions default judgment may be entered administratively with a right to apply to the court to set aside a default judgment. In this case the primary judge’s orders were made in the exercise of judicial power conferred by procedural rules upon default being made by the respondents. The issue is whether the orders were interlocutory under ordinary principles. In cases that are not the subject of authority, the distinction between an interlocutory and final order can be notoriously difficult: see Tampion v Anderson (1973) 3 ALR 414 at 416 (PC), citing Salter Rex & Co v Ghosh [1971] 2 QB 597 at 601 (Lord Denning MR).

19 The principles to be applied have been stated by the High Court in Hall v Nominal Defendant [1966] HCA 36; 117 CLR 423 at 440 (Taylor J, Owen J agreeing); Port of Melbourne Authority v Anshun Pty Ltd [1980] HCA 41; 147 CLR 35 at 38 (Gibbs J, Mason J and Murphy J agreeing); Carr v Finance Corporation of Australia Ltd [1981] HCA 20; 147 CLR 246 at 248 (Gibbs CJ), 256 (Mason J); Bienstein v Bienstein [2003] HCA 7; 195 ALR 225 at 25; and Re Luck [2003] HCA 70; 203 ALR 1 at 4. The Court looks to the character of the orders rather than the character of the application which led to the orders. The test is whether as a matter of law the orders finally dispose of the rights of the parties in a principal cause pending between them. In applying the test, the Court has regard to the legal rather than the practical effect of the orders.

20 Applying the test in these terms, it is open to say that an order for judgment in favour of an applicant upon the occurrence of a default by a respondent is a final order. In saying this, I have not lost sight of the fact that both this Court and the Circuit Court have powers to vary or set aside an order once entered if the order was made in the absence of a party. But that power applies to any order made in the absence of a party, whether interlocutory or final following an undefended trial. And where a judgment is final on its face, the ability to apply to have it set aside on the ground that it was given in the absence of one of the parties does not convert it into a provisional judgment incapable of giving rise to a res judicata: Linprint Pty Ltd v Hexham Textiles Pty Ltd (1991) 23 NSWLR 508 at 518 (Kirby P). Further, a judgment for a claimant without an adjudication on the merits is capable of giving rise to a res judicata because the claim merges in the judgment, and its legal effect is final for the purpose of that doctrine: Chamberlain v Deputy Commissioner of Taxation (ACT) [1988] HCA 21; 164 CLR 502; see also, Singh v Minister for Immigration, Citizenship and Multicultural Affairs [2022] FCA 905 at 16. On the other hand it has been held that the dismissal of a proceeding for default, such as want of prosecution or failure to take a specified step in a proceeding, might not support a plea of res judicata in a subsequent proceeding: Rogers v Legal Services Commission (SA) (1995) 64 SASR 572 at 594 (Lander J, Cox J agreeing and Prior J substantially agreeing); Baines v State Bank of New South Wales (1985) 2 NSWLR 729 at 738 (Powell J). But the situation might be different where the default is the failure by a respondent to defend or appear on the rationale that the respondent has thereby consented or acquiesced to judgment being given: Applicant A184 of 2003 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1076; 210 ALR 543 at 113.

21 There are decisions of this Court that shed some light on the content and application of the test for determining whether orders are interlocutory and which hold that for the purpose of appeals an order made upon default is interlocutory and not final with the consequence that leave to appeal is required, and with the further consequence that the order might be recalled on the ground that it is an interlocutory order: see r 39.05(c) of the Federal Court Rules and r 24.04(c) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth).

22 In Dai v Michael Roberts Strata Management Services Ltd [2000] FCA 680 the Full Court (Beaumont, Whitlam and Lehane JJ) applied the reasoning of Taylor J in Hall v Nominal Defendant at 440 to hold that orders by the primary judge dismissing an application in default of the applicant complying with orders for the service of a statement of claim and attendance at a directions hearing were interlocutory and required leave to appeal.

23 In NAOU of 2002 v Minister for Immigration & Multicultural and Indigenous Affairs [2002] FCAFC 406, the Full Court (Spender, Ryan and Whitlam JJ) held that an order dismissing an application for judicial review on the ground that the applicant had failed to attend directions hearings was interlocutory.

24 Toben v Jones [2003] FCAFC 137; 129 FCR 515 was an appeal from orders granting summary relief to an applicant in the proceeding below. Allsop J held that leave to appeal was required, stating at [81] –

The orders by the primary judge were in the nature of default orders. As such they were interlocutory: Hall v Nominal Defendant (1966) 117 CLR 423 at 440; Wickstead v Browne (1992) 30 NSWLR 1 at 11; Dart v Norwich Union Life Australia Ltd [2002] FCA 168 at [2]; and Maher v Commonwealth Banking Corporation [2002] FCAFC 104.

25 The other members of the Court in Toben v Jones, Carr J (at [8]) and Kiefel J (at [49]), did not find it necessary to decide whether leave to appeal was required but held that if leave was required, they would grant it.

26 However, Dataline.Net.Au Pty Ltd, to which I referred earlier, bears some similarities to the present case. The appellant, a regulator, obtained orders from the primary judge upon default. The appellant was dissatisfied with the extent of relief that was obtained and appealed, but there is no reference in the judgment of the Full Court to leave having been sought or obtained.

27 Prior to the insertion of s 24(1D) of the Federal Court of Australia Act by the Access to Justice (Civil Litigation Reforms) Amendment Act 2009 (Cth) the question whether an order under s 31A of the Federal Court of Australia Act granting final relief to an applicant by way of summary judgment was interlocutory or final attracted different views. In Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60; 167 FCR 372 (Jefferson Ford), Finkelstein J at [2] and Gordon J at [173] concluded that while an order refusing summary judgment was interlocutory, an order giving summary judgment in relation to all claims was final. However, this was not the ratio of the decision because Rares J held that all summary judgments are interlocutory, Gordon J decided the case on the point that the summary judgment was given only in relation to part of the claim and was therefore interlocutory, and Finkelstein J differed from Gordon J on that point and therefore was in dissent. Subsequent Full Courts declined to follow the views of Finkelstein J and Gordon J in Jefferson Ford, preferring the views of Rares J: Wills v Australian Broadcasting Corporation [2009] FCAFC 6; 173 FCR 284 at 15, [28]–29; Luck v University of Southern Queensland [2009] FCAFC 73; 176 FCR 268 (Luck) at 58, 109; Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117; 178 FCR 401 at 40. See also Dent v Australian Electoral Commissioner [2008] FCAFC 111; 249 ALR 523 at 28.

28 At the heart of the reasons of Rares J in Jefferson Ford for holding that orders granting summary judgment are interlocutory is that in giving summary judgment the Court decides only that the claim, or the defence, has no reasonable prospects of success. Rares J at [45] characterised summary judgment on these grounds as an exercise by the Court of summary powers to protect its own processes and not a final determination of the claim on the merits. This reasoning is consistent with those cases that have held that dismissal of a proceeding on the grounds of abuse of process does not have final effect because there is no triable issue: Macatangay v New South Wales (No 2) [2009] NSWCA 272 at 11. The same might be said to apply to an order for judgment upon default. An order made upon default does not determine the claim on the merits but is made in the exercise of a power that exists to enable the Court to regulate its own processes. Rares J in Jefferson Ford also examined at [61] the legislative purpose of the power to give summary judgment in s 31A of the Federal Court of Australia Act. Adapting that reasoning to the powers of this Court and the Circuit Court to make orders upon default, it would undermine the purpose of those powers if a right of appeal existed from the summary disposition of claims in the circumstances of default that engage those powers, and this purpose should inform the construction of the word “interlocutory” in s 24(1A) of the Federal Court of Australia Act.

29 In light of the authorities, I favour the view that while an order dismissing a proceeding without adjudication on the merits would usually be treated as interlocutory when regard is had to its legal effect, orders made upon default which give an applicant a remedy on a pleaded claim are not interlocutory. The legal effect of a judgment giving relief to an applicant in default of appearance or defence is, for this purpose, no different to a consent judgment with the consequence that the claim merges in the judgment thereby giving rise to a res judicata. This has the result that orders upon default granting an applicant relief on a claim have a quality of legal finality for the purpose of the principles laid down by the High Court in the cases to which I referred at [19 ] above. This conclusion has to be reconciled with the summary judgment cases that have applied the reasoning of Rares J in the Full Courts in Jefferson Ford and Luck to the extent that they hold that an order for summary judgment which gives an applicant the entirety of the relief sought on a claim is interlocutory: eg, Deputy Commissioner of Taxation v Hua Wang Bank Berhad (No 3) [2012] FCA 594 at 19. For this reason, I prefer not to express a concluded view on the question in the absence of full contested argument. I will take the pragmatic approach of entertaining an application for leave to appeal to the extent that leave might be necessary.

Leave to appeal is granted

30 The FWO submitted that the primary judge’s orders were final but during the hearing made an oral application for leave to appeal to accommodate the prospect that the primary judge’s orders were interlocutory. I determined to dispense with the requirement of a formal application. The respondents have been served with all the papers in the appeal, and they have chosen not to appear. The possibility of an application for leave to appeal is something that was objectively on the cards. In these circumstances, dispensing with a formal application gives effect to the overarching purpose in s 37M of the Federal Court of Australia Act.

31 This is a clear instance where leave to appeal should be granted. The orders of the primary judge under challenge had the practical effect of finally determining the rights of the FWO in the matter: Ex parte Bucknell [1936] HCA 67; 56 CLR 221 at 225 (Latham CJ, Rich, Dixon, Evatt and McTiernan JJ). For the reasons appearing below the appeal has merit and, on the supposition that the primary judge’s orders were made in error, there is the prospect of injustice if leave were not granted.

The grounds of appeal

32 On this appeal, the FWO challenges the primary judge’s decision not to make orders against New Switch requiring payment of specified sums. The grounds of appeal are as follows –

1.    In determining not to make orders under s 545 of the FW Act that the First Respondent [New Switch] compensate the employee, Mr Anh Tuan Do, for the loss to Mr Do that was caused by the First Respondent’s failure to comply with the Compliance Notice, the learned trial judge:

(a)    erred in finding the Court did not have power to make an order for compensation (at [52]);

(b)    erred in finding that there was no causal connection between the compensation sought and the failure to comply with the Compliance Notice (at [51]);

(c)    erred in finding that:

(i)    the First Respondent’s [New Switch’s] failure to comply with the Compliance Notice did not create a “secondary obligation” to compensate Mr Do in compliance with the Compliance Notice, and rather the loss was merely a “lost opportunity” to have Mr Do’s entitlements reviewed and if necessary redressed (at [52]); and or

(ii)    in the alternative to sub-paragraph (c)(i), the “lost opportunity” did not cause a compensable monetary loss (at [52]); and

(d)    erred in rejecting that the counterfactual on the evidence would require Mr Do be compensated in compliance with the Compliance Notice (at [53]-[54]).

The appeal should be allowed

33 The primary judge was wrong to hold that the Court did not have power to make the compensation orders substantially in the terms sought by the FWO. The primary judge gave conscientious attention to the issues before her and determined the matter in a way that was consistent with decisions of some other judges of the Circuit Court which her Honour was persuaded to follow. However, by doing so her Honour made three errors.

The first error

34 The first error was to treat the failure to comply with the notice under s 716(2) of the FW Act as causally not relevant to the employee’s loss. Her Honour considered that the notice was not a cause of the loss because the loss had already crystallised upon the contraventions of the Award and the National Employment Standards.

35 Section 545 is a broad section conferring a relatively unconfined discretion to identify and apply remedies in response to contraventions that qualify as civil remedy provisions which includes compensating victims for the consequences of the contravention: Luong at [70]; Transport Workers’ Union of Australia v Qantas Airways Limited (Compensation Claim) [2024] FCA 1216; 334 IR 187 (Qantas) at [64]. One of the remedies that is specifically authorised is an order for compensation: s 545(2)(b).

36 Causation is a required element of the power to make an order for compensation under s 545(2)(b) because compensation is awarded for loss that a person has suffered “because of” the contravention. However, “[i]t is unnecessary to prove some sort of sole cause to establish the necessary causal connexion; it is enough to demonstrate that the contravention of a relevant provision of the Act was a cause of the loss and damage sustained”: Qantas at 76. This follows as a result of the application of the general principles of causation in a relevantly similar statutory context essayed in Henville v Walker [2001] HCA 52; 206 CLR 459 at [14]–15, 97, and [163]–164.

37 In this case, the anterior contravention of the Award and the National Employment Standards, and the subsequent failure to comply with the notice given under s 716(2) of the FW Act were concurrent causes of the employee’s loss. Each contravention was a breach of a legal norm which was a sufficient cause of loss and that is enough to engage the causation requirement in s 545(2)(b) of the FW Act.

The second error

38 The second error was to apply her Honour’s earlier reasons in LROC Builders and to characterise the consequences of the employer’s failure to comply with the notice as giving rise merely to a lost opportunity to have the employee’s entitlements reviewed and if necessary redressed. That is not how the FWO pleaded the case. The FWO pleaded the causation and loss case at [15] of the statement of claim by alleging that, had New Switch taken the action specified in the notice under s 716(2) to remedy the direct effects of its contraventions, it would have paid the employee the specified amounts which it pleaded, namely –

(a)    in respect of the All-purpose Rate Entitlement, $1,157.48 (gross)

(b)    in respect of the Annual Leave Entitlement, $3,653.08 (gross)

39 This allegation was supported by the affidavit of the Fair Work Inspector. The affidavit evidence provided support for the allegations in the statement of claim, but evidence was not necessary for the Court to act on the allegations. It was by reference to these specific allegations in the statement of claim that the primary judge should have addressed the FWO’s claim for relief. The primary judge should have determined whether – on the basis of the statement of claim – the FWO appeared to be entitled to the relief sought: see the cases cited in [7 ] above.

The third error

40 The third error was to treat as relevant what was said to be a difference in character between compliance notice proceedings and proceedings for contravention of ss 44 or 45 of the FW Act in respect of obligations under an award or enterprise agreement. Her Honour referred to this suggested difference in LROC Builders at [101] which I set out under [14 ] above. Her Honour cited decisions of the Circuit Court in Fair Work Ombudsman v Carers Portland Inc (No 2) [2024] FedCFamC2G 72 (Carers Portland) and Fair Work Ombudsman v Cobra Security Services Pty Ltd [2024] FedCFamC2G 336 (Cobra Security) in support.

41 Carers Portland was the subject of the cross-appeal considered by Bennett J in Luong where at [93] her Honour held that the primary judge in Carers Portland had elided the contraventions of the Award provisions and the National Employment Standards with the causation analysis required in relation to the failure to comply with a notice in contravention of s 716(5). Her Honour held that the judge had misapprehended the statutory task.

42 In the second case, Cobra Security, another judge held at [191] –

In my opinion, proceedings seeking a penalty for a failure to comply with a compliance notice cannot be used as a proxy for a substantive award breach prosecution. A Court may well consider it appropriate to order payment of compensation to employees where a substantive contravention has been established. But it is inappropriate for the Court to make such an order in a case where the asserted factual and legal basis for doing so does not rise above the inspector’s reasonable belief.

43 These statements involve two errors. The first error is the assumption that the assessment of compensation would be based only upon the inspector’s reasonable state of belief. That is not so. The existence of the inspector’s reasonable belief is relevant to the validity of the notice and in turn whether s 716(5) of the FW Act has been contravened. However, any loss suffered “because of” a contravention in failing to comply with a notice would, at the trial of a proceeding, have to be established by evidence in the normal way. And as I have explained, in the case of orders upon default the Court is entitled to act on the allegations in the statement of claim. But this leads to no incoherence as the reasons in Cobra Security would suggest.

44 The second error in [191] of Cobra Security is to treat an anterior breach of an award as a “substantive contravention” and to treat the failure to comply with a notice given under s 716(2) as some sort of lesser or subordinate contravention for which compensation for unpaid wages cannot be awarded. For the reasons I have given earlier, a failure to comply with a notice given under s 716(2) of the FW Act is capable of being a concurrent cause of loss to an employee.

Re-exercise of the power to make orders in default

45 Upon the above errors being established, this Court should determine for itself the relief to which the FWO appears to be entitled in relation to the loss that the employee has suffered because of the contravention of s 716(5) of the FW Act based upon the allegations in the statement of claim. I have concluded that, subject to the following observations relating to the form of orders, the FWO is entitled to relief substantially in the terms sought but rejected by the primary judge.

Conclusions

46 The appeal will be allowed.

47 Paragraph 1 of the orders made by the primary judge will be set aside and orders made in lieu which give effect to these reasons.

48 The FWO will be ordered to prepare a minute of proposed orders to give effect to these reasons and to submit an accompanying memorandum of submissions in relation to the form of orders.

49 It is appropriate in the exercise of the discretionary power under s 545(1) of the FW Act to shape a remedy to order New Switch to pay compensation for unpaid wages, pay in lieu of accrued leave, and interest to the FWO who should then be ordered to remit those sums to the employee within 60 days. An order that payment be made to the FWO enables the FWO to monitor compliance and to enforce the order if necessary. That is a course that has been adopted in several other decisions of this Court, noting that some of them involve multiple employees: Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 (Katzmann J); Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 (Bromwich J); Fair Work Ombudsman v Blue Sky Kids Land Pty Ltd (in liq) (No 3) [2024] FCA 785 at 899; Fair Work Ombudsman v Mai [2025] FCA 421 (McDonald J).

50 I wish to hear further from the FWO as to whether the order for payment should be based upon unpaid monies net of tax, or in gross sums. I wish to have considered submissions on this issue.

51 In presenting a minute of order, the FWO should calculate a sum for interest, explain the basis for the calculation, and calculate an accruing daily rate.

52 In the amended notice of appeal, the FWO seeks an order that New Switch pay an additional superannuation contribution to the employee’s nominated superannuation fund “as required by cl 19.2 of the Electrical, Electronic and Communications Contracting Award 2020 in respect of the Outstanding Amount”. I consider an order in this form, which amounts to a mandatory order to perform an act, to be imprecise. It would be better if an amount on account of superannuation could be calculated by reference to the actual percentage required and that the calculation be explained to the Court. The minute of proposed order should specify a time by which the payment of superannuation should be made and include a reporting mechanism requiring notification to the FWO that is expressed with certainty.

53 Because at least the requirement to pay the superannuation would require New Switch to do an act or thing, the order should carry an endorsement pursuant to r 41.06 of the Federal Court Rules.

54 I will hear from the FWO on the question of costs, noting s 570 of the FW Act.

| I certify that the preceding 54 (fifty-four) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan. |
Associate:

Dated: 10 April 2026

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Named provisions

s 545(1) Fair Work Act 2009 - Compensation orders s 716 Fair Work Act 2009 - Compliance notices

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Last updated

Classification

Agency
FCA
Filed
April 10th, 2026
Instrument
Enforcement
Legal weight
Binding
Stage
Final
Change scope
Substantive
Document ID
[2026] FCA 415
Docket
VID 1453 of 2025
Supersedes
Fair Work Ombudsman v New Switch Electrical Pty Ltd (No 2) [2025] FedCFamC2G 1634

Who this affects

Applies to
Employers Legal professionals Government agencies
Industry sector
2361 Construction
Activity scope
Wage theft investigation Superannuation compliance Annual leave entitlements
Geographic scope
Australia AU

Taxonomy

Primary area
Employment & Labor
Operational domain
Legal
Topics
Occupational Safety

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