Fair Work Ombudsman not paid record $41,182.50 fine as Melbourne gym is put into liquidation

A Melbourne-based gym that was ordered to pay a record $41,182.50 fine in the Federal Circuit Court has collapsed into liquidation and the Fair Work Ombudsman has not received the court-imposed penalty.

On January 17, 2013, Fair Work Commissioner Tim Lee ruled World Gym Sunshine had 14 days to pay $2200 compensation plus interest to a then 23-year-old receptionist, Samaka Sophia Ndege. However, the business chose to ignore several notices from the Fair Work Ombudsman ordering it to comply.

In August last year, the company and its former sole director and part-owner, Wayne George Mailing, faced legal action in the Federal Circuit Court.

In a landmark decision in September, the Federal Circuit Court ordered World Gym Sunshine to pay a $41,182.50 fine, while Mailing was ordered to pay a further $6426 in penalties.

However, SmartCompany understands Mailing sold the assets of World Gym Sunshine, including a gym that continues to trade under that name, in August 2013, with new owners unconnected to Mailing now operating the gym.

With no remaining assets, JP Downey & Co was appointed as liquidator of the company on November 28, 2014, with a first meeting of creditors held on December 16. A final creditors meeting to receive an account showing how the winding up of the company has been conducted and its property has been disposed of is scheduled for April 14.

JP Downey & Co liquidator Murdoch Cooch told SmartCompany Fair Work has not been paid the fine.

“The company sold the business 18 months before the company got sued. In that court case, the company was fined $41,182.50, but had no assets. The employee was paid, but Fair Work wasn’t,” Cooch says.

In a statement, a Fair Work Ombudsman spokesperson confirmed to SmartCompany the fine component ($41,182.50) owed by World Gym Sunshine has not been paid.

“The company complied with the order to pay compensation to the relevant worker in August last year. Mr Mailing has paid the penalty imposed by the Court. World Gym Sunshine Pty Ltd, which went into liquidation late last year, has not paid the penalty imposed by the Court,” the spokesperson says.

Despite numerous attempts, SmartCompany was unable to contact Mailing prior to publication.

Employment lawyer Peter Vitale told SmartCompany there is a reason why individual directors and corporations can face separate litigations.

“I think the reason that there is an ability to separately litigate against directors as individuals is partly because of circumstances such as this, to ensure that if a company cannot be held to account, at least the directors can be,” Vitale says.