When a company goes into liquidation, Fair Work obligations don't disappear
A company director has been ordered to pay nearly $30,000 personally over unpaid leave entitlements and an ignored unfair dismissal order.
The Federal Circuit and Family Court of Australia handed down its decision on 9 April 2026 in Clyne v Ituau-Puletua (No 2), ordering Villi Royd Ituau-Puletua to pay a combined $29,751.82, comprising $21,000 in pecuniary penalties, $5,104.75 in interest, and $3,647.07 in costs.
Gavin Clyne had worked as a full-time air-conditioning technician at Surelinc Services Pty Ltd from 24 November 2014, with the Electrical, Electronic and Communications Contracting Award applying to his employment throughout his tenure. After 10 years with the company, he received a formal termination notice on 26 February 2024 from Surelinc's general manager, signed by the respondent, with his last day of employment recorded as 4 March 2024.
On termination, Surelinc failed to pay Clyne his accrued annual leave of $7,258.87 and his accrued pro-rata long service leave of $14,439.96. Two days after receiving the termination notice, on 28 February 2024 and before his employment had formally ended, Clyne filed an unfair dismissal claim with the Fair Work Commission. On 4 July 2024, Deputy President Cross issued an order requiring Surelinc to pay Clyne $27,707.66 plus superannuation, equivalent to 14 weeks' pay, as compensation for a dismissal found to be harsh, unjust and unreasonable within the meaning of s 387 of the Fair Work Act, with payment due within 21 days. Neither Surelinc nor the respondent appealed the order, and neither paid the compensation. In total, Clyne was left out of pocket by $49,406.49.
Surelinc went into administration in July 2024, and joint liquidators were appointed on 19 July 2024. With the company in liquidation, Clyne pursued Ituau-Puletua personally. The court accepted that as the sole director, secretary and 50% shareholder of Surelinc, Ituau-Puletua was the directing mind of the company and personally involved in each of the contraventions.
In assessing the penalties, Judge Kaur-Bains found the failures were deliberate. In the words of the judge: "Therefore, I conclude that Surelinc knew it was required to pay the applicant accrued annual and pro-rata long service leave but chose deliberately not to do so upon termination of the applicant's employment."
The failure to pay the leave entitlements was treated as one group of contraventions, attracting a penalty of $8,000. The failure to comply with the FWC order was treated as a separate and more serious matter, attracting a penalty of $13,000. As Judge Kaur-Bains put it: "I find that the failure to follow an order of a duly constituted commission such as the FWC is serious and should not be encouraged."
The respondent did not appear at any stage of the court proceedings. While he had engaged to a limited extent in the unfair dismissal proceedings before the Fair Work Commission, his complete disengagement from the penalty proceedings, combined with no expression of contrition, weighed against him in the penalty assessment. All penalty amounts were ordered to be paid directly to Clyne as the party who initiated the proceedings.
There are a few things worth noting from this case. Termination pay calculations, including accrued leave and pro-rata long service leave, are legal obligations that must be completed accurately and in full at the point of exit. Where a company is in liquidation, those obligations do not simply disappear; directors found to be the directing mind of a company can be held personally liable for Fair Work contraventions. And once a Fair Work Commission order is issued, compliance is not optional. In this case, ignoring the FWC order attracted the steepest penalty of the two groups of contraventions assessed by the court.
