Jail term imposed in FWO’s first contempt of court case

A Queensland business operator has been jailed – and then released pending the outcome of his appeal – as a result of the Fair Work Ombudsman’s first contempt of court action.

On Thursday May 10, the Federal Circuit Court sentenced Leigh Alan Jorgensen – the owner-operator of Trek North Tours – to a 12-month jail term and fined him $84,956 for committing contempt of court by contravening a freezing order that applied to funds in his company’s accounts. The Court eventually ordered Jorgensen’s jail term be suspended after he had spent 10 days in jail on the condition of payment of the fine.

Jorgensen sought an urgent stay of the orders in the Federal Court and lodged an appeal against his conviction and sentence. In accordance with her model litigant obligations, the Fair Work Ombudsman agreed to the stay on conditions.  A Court date has not yet been set for the appeal hearing but an order has been made that it be expedited.

The matter is the first time the Fair Work Ombudsman has commenced a contempt of court action and the first time a jail term has been imposed as a result of the Agency’s actions. Judge Salvatore Vasta imposed the jail term after finding Jorgensen had committed contempt of court when he contravened a freezing order the Fair Work Ombudsman secured against his company in 2015 for underpaying five backpackers on 417 working holiday visas in 2013 and 2014. The relevant orders were for Jorgensen to pay a $12,000 penalty and his company to pay a $55,000 penalty and back-pay the backpackers in full, all by 17 July, 2015.

The Fair Work Ombudsman took the step of securing freezing orders against both Jorgensen and his company after both failed to pay the amounts owed by the due date and receiving information that gave rise to concerns that Jorgensen would divert company assets to avoid payment of the penalties and back-pay. At the time, Jorgensen’s communications with the Fair Work Ombudsman suggested he was prepared to ‘bankrupt’ his company to avoid paying the penalties and back-pay order.

Jorgensen had also previously told Fair Work inspectors investigating the underpayments that the backpackers “would not get a cent” in back-pay. After the freezing orders were imposed, he paid the penalty imposed on him personally into Court, resulting in the freezing order against him being lifted. However, Jorgensen’s company failed to pay its penalty and failed to back-pay the workers, resulting in the freezing order against his company remaining in place.

The Fair Work Ombudsman commenced legal action against Jorgensen for contempt of Court last year, alleging that Jorgensen committed the offence of contempt of court in August 2015 when he contravened the freezing order against his company by transferring a total of $41,035 from two frozen accounts into his family trust account.

Judge Vasta found that the Fair Work Ombudsman had presented evidence to prove that Jorgensen committed the offence. Pending the outcome of his appeal, the Federal Court has released Jorgensen on conditions including that he surrender his passport, remain in Queensland and report to Police twice a week.

Fair Work Ombudsman Natalie James says that the commencement of these proceedings demonstrates that her Agency is prepared to use every tool at its disposal to ensure justice is served.

“We will use every lever open to us to ensure the integrity of the administration of justice and compliance with court orders imposed under the Fair Work Act 2009. This includes taking unprecedented new actions available to us across the legal framework such as this one,” Ms James said.

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