Baldacchino v Bloombird Education Pty Ltd (No 2)
[2023] FedCFamC2G 965
•27 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Baldacchino v Bloombird Education Pty Ltd (No 2) [2023] FedCFamC2G 965
File number(s): SYG 594 of 2023 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 27 October 2023 Catchwords: INDUSTRIAL LAW – assessment of pecuniary penalties for contraventions of ss 44 and 45 of the Fair Work Act 2009 (Cth) and reg 3.42(3)(b) of the Fair Work Regulations 2009 (Cth) – pecuniary penalties ordered. Legislation: Crimes Act 1914 (Cth) s 4AA
Fair Work Act 2009 (Cth) ss 12, 44, 45, 90(2), 539, 546, 557
Fair Work Regulations 2009 (Cth) regs 3.42(3), 4.01A(1), 4.01A(2)
Children’s Services Award 2010 cls 20.2, 24.3
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Baldacchino v Bloombird Education Pty Ltd [2023] FedCFamC2G 691
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97
Contin v The Queen [2012] VSCA 247
Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626
Fair Work Ombudsman v Lohr [2018] FCA 5
Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
R v Holder (1983) 3 NSWLR 245
Royer v Western Australia [2009] WASCA 139
Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4
The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46
Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd [1980] FCA 47; (1980) 44 FLR 149; (1980) ATPR 40-161
Trade Practices Commission v CSR Ltd [1991] ATPR 41-076
Division: Fair Work Number of paragraphs: 40 Date of hearing: 20 October 2023 Place: Sydney Solicitor for the Applicant: Ms J Phillips of Marrickville Legal Centre, by telephone The First and Second Respondents: No appearance by, or on behalf of, the respondents ORDERS
SYG 594 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: CARLA BALDACCHINO
Applicant
AND: BLOOMBIRD EDUCATION PTY LTD ACN 637 957 110
First Respondent
CHRISSANTHY FOUNDIS
Second Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
27 OCTOBER 2023
THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the first respondent pay to the applicant $136,000, being the sum of the pecuniary penalties for the first respondent’s contraventions of the provisions of the FW Act referred to in declaration 1 of the orders made on 4 August 2023.
2.Pursuant to s 546(3)(c) of the FW Act the first respondent pay the pecuniary penalties referred to in order 1 to the applicant within 28 days after the date of these orders.
3.Pursuant to s 546(1) of the FW Act the second respondent pay to the applicant $27,200, being the sum of the pecuniary penalties for the second respondent’s involvement in the first respondent’s contraventions of the provisions of the FW Act referred to in declaration 1 of the orders made on 4 August 2023.
4.Pursuant to s 546(3)(c) of the FW Act the second respondent pay the pecuniary penalties referred to in order 3 to the applicant within 28 days after the date of these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
On 4 August 2023 I made declarations that the first respondent (BEPL) and the second respondent, Ms Foundis, contravened ss 44 and 45 of the Fair Work Act 2009 (Cth) (FW Act), and reg 3.42(3)(b) of the Fair Work Regulations 2009 (Cth) (FW Regulations), and ordered that BEPL and Ms Foundis pay compensation to the applicant, Ms Baldacchino.[1] In these reasons for judgment I consider the pecuniary penalties I should order BEPL and Ms Foundis pay pursuant to s 546(1) of the FW Act.
POWER AND PRINCIPLES
[1] Baldacchino v Bloombird Education Pty Ltd [2023] FedCFamC2G 691
Power
Under s 546(1) of the FW Act this Court may, on application, order a person to pay a pecuniary penalty the Court considers is appropriate if the Court is satisfied the person has contravened a “civil remedy provision”. That expression is defined in s 539(1) of the FW Act to include the provisions identified in column 1 of the table to s 539(2) of the FW Act. Column 1 includes ss 44 and 45 of the FW Act. Further, s 539(3) of the FW Act provides that the regulations may provide that a provision set out in the FW Regulations is a “civil remedy provision”. Subregulation 4.01A(1) of the FW Regulations has provided that reg 3.42(3) is a “civil remedy provision”.
Subsection s 546(2) of the FW Act provides that the pecuniary penalty the Court may impose must not, where the person is an individual, be more than “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)” and, if the person is a “body corporate”, must not be more than five times “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)”. The maximum penalty units specified in the table in s 539(2) of the FW Act for the contraventions of each of s 44 and s 45 of the FW Act during the period of the respondents’ contraventions are 60 penalty units; and the maximum penalty units specified in the table in reg 4.01A(2) of the FW Regulations are 20 penalty units.
Under s 12 of the FW Act, “penalty unit” has the meaning given by s 4AA of the Crimes Act 1914 (Cth). The penalty unit during the time of Ms Baldacchino’s employment with the first respondent was $222. That means the maximum penalty that may be imposed on the respondents are as follows:
Contravention BEPL max penalty Ms Foundis max penalty Section 44 – Annual leave contravention 300 penalty units ($66,600) 60 penalty units ($13,320) Section 45 – Annual leave loading contravention 300 penalty units ($66,600) 60 penalty units ($13,320) Section 45 – Superannuation contravention 300 penalty units ($66,600) 60 penalty units ($13,320) Regulation 3.42(3)(b) – Employee records contravention 100 penalty units ($22,200) 20 penalty units ($4,440) TOTAL $222,000 $44,400 Principles
Object of making orders under s 546(1) of the FW Act
In Australian Building and Construction Commissioner v Pattinson the plurality observed that civil penalty provisions of the kind enacted in s 546(1) of the FW Act have a “statutory function of securing compliance with provisions of the [statutory] regime”;[2] that “whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty . . . is primarily if not wholly protective in promoting the public interest in compliance”;[3] that the “principal, and . . . probably the only, object of the penalties . . . is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act”;[4] and that “deterrence is the “principal and indeed only object” of the imposition of a civil penalty: “[r]etribution, denunciation and rehabilitation have no part to play””.[5] In short, the task of assessing an appropriate penalty under s 546(1) of the FW Act is to assess a “penalty of appropriate deterrent value”.[6]
[2] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [14], quoting from the judgment of the plurality in The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, at [24].
[3] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [15], quoting from The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, at [55].
[4] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [15], quoting from Trade Practices Commission v CSR Ltd [1991] ATPR 41-076, at pages 52, 152.
[5] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [16], quoting from Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97, at [19].
[6] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18].
The objective of deterrence, however, must be considered having regard to “the need for deterrence in respect of the particular case”.[7] The purpose of s 546(1) of the FW Act is “the deterrence of future contraventions of a like kind by the contravenor and by others”;[8] and an “appropriate” penalty “is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case”.[9]
[7] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [46]
[8] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [10] (my emphasis)
[9] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [46] (my emphasis)
Assessing penalty for single contravention – factors
The plurality in Pattinson recognised that, when assessing an appropriate penalty under s 546(1) of the FW Act, the Court may have regard to a number of factors that are relevant to assessing what is necessary for deterrence in respect of the particular contravention in question. That is apparent from the plurality referring,[10] with approval, to the following passage from the judgment of French J in Trade Practices Commission v CSR Ltd:[11]
[10] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
[11] Trade Practices Commission v CSR Ltd [1991] ATPR 41-076, at pages 52,152‑52,153
The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:
1.The nature and extent of the contravening conduct.
2.The amount of loss or damage caused.
3.The circumstances in which the conduct took place.
4.The size of the contravening company.
5.The degree of power it has, as evidenced by its market share and ease of entry into the market.
6.The deliberateness of the contravention and the period over which it extended.
7.Whether the contravention arose out of the conduct of senior management or at a lower level.
8.Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.
9.Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention.
The plurality in Pattinson characterised these as factors that “informed the assessment under the Trade Practices Act 1974 (Cth) of a penalty of appropriate deterrent value”,[12] further noting the following:[13]
It may readily be seen that this list of factors includes matters pertaining both to the character of the contravening conduct (such as factors 1 to 3) and to the character of the contravenor (such as factors 4, 5, 8 and 9). It is important, however, not to regard the list of possible relevant considerations as a “rigid catalogue of matters for attention” as if it were a legal checklist. The court’s task remains to determine what is an “appropriate” penalty in the circumstances of the particular case.
[12] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
[13] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [19] (footnotes omitted)
The approach of most judges when assessing penalties for a single contravention of a provision of the FW Act has been to take into account the non-exhaustive considerations Tracey J identified in Kelly v Fitzpatrick,[14] which his Honour adopted from the judgment of Mowbray FM in Mason v Harrington Corporation Pty Ltd.[15] Those considerations are:
[14] Kelly v Fitzpatrick [2007] FCA 1080, at [14]
[15] Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
(a)the nature and extent of the conduct which led to the breaches;
(b)the circumstances in which that conduct took place;
(c)the nature and extent of any loss or damage sustained as a result of the breaches;
(d)whether there had been similar previous conduct by the respondent;
(e)whether the breaches were properly distinct or arose out of the one course of conduct;
(f)the size of the business enterprise involved;
(g)whether or not the breaches were deliberate;
(h)whether senior management was involved in the breaches;
(i)whether the party committing the breach had exhibited contrition;
(j)whether the party committing the breach had taken corrective action;
(k)whether the party committing the breach had cooperated with the enforcement authorities;
(l)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
(m)the need for specific and general deterrence.
Although these factors have been identified and applied as relevant to the assessment of penalties, they do not constitute a “rigid catalogue of matters for attention”.[16]
[16] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, at [91] (Buchanan J)
Also relevant is the maximum penalty for the contravention provided for by the FW Act; and here I refer to the following passage from the judgment of Flick J in The BKH Contractors Case (No 2):[17]
In undertaking the task of assessing and quantifying the penalties to be imposed, the maximum penalty prescribed by the Commonwealth legislature for a specific contravention serves as a “yardstick” against which the assessment of penalties is generally to proceed . . . .
[17] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563, at [19]
Approach to assessing penalties for multiple contraventions
What I have said so far concerns the assessment of an appropriate penalty for a single contravention. In many cases, however, the Court is required to assess multiple contraventions of civil remedy provisions of the FW Act. The approach to assessing pecuniary penalties in those circumstances was outlined by Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown (New Shanghai) as follows:[18]
(1)Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.
(2)Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.
(3)Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.
(4)Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
(5)Consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO . . . and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary . . .
[18] Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301, at [36]
The first step requires the Court to identify the contraventions in relation to which the appropriate penalties are to be assessed.
The second step requires the Court to consider whether any two or more of the contraventions in question are to be treated as a single contravention under s 557(1) of the FW Act, which provides:
For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a)the contraventions are committed by the same person; and
(b)the contraventions arose out of a course of conduct by the person.
I considered some of the principles relating to s 557(1) of the FW Act in Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor.[19] After reviewing a number of cases, I said:[20]
Two firm principles may be drawn from the cases to which I have referred, one negative, and one positive. The negative principle is that s 557(1) of the FW Act does not apply to contraventions of different terms of modern awards, even if such contraventions arise out of a course of conduct, and even if the contraventions affect only one person. The positive principle is that s 557(1) of the FW Act applies to the multiple contravention of the one term of a modern award, even where the contravention may affect two or more persons. These principles may be extrapolated to contraventions of civil penalty provisions that do not involve the contravention of a term of a modern award. Just as s 557(1) of the FW Act does not apply to the contravention of two or more separate terms of an award, so too does it not apply to contraventions of two or more separate civil remedy provisions that do not involve a breach of a term of an award. On the other hand, s 557(1) of the FW Act applies to multiple contraventions of a single civil penalty provision, even though the contraventions may affect two or more persons.
These principles, important as they are, are limited. The judgments to which I have referred do not explicitly consider the meaning of “course of conduct”. From the words themselves, it may be said that “course of conduct” denotes a series of acts that are connected in some way; and given that it is conduct – namely, acts or omissions of a person – that is required to be connected in some way, the required connection must be sought, at least in substantial part, in the state of mind that the person engaging in the conduct has in relation to the conduct. That a contravener’s state of mind is relevant to determining whether conduct he or she has engaged in is a “course of conduct” is supported by the judgment of Nettle J in Berlyn v Brouskos. In that case, his Honour considered the meaning of “course of conduct” as that expression appears in the definition of “stalking” given in s 21A(2) of the Crimes Act 1958 (Vic). His Honour concluded that “course of conduct” for the purposes of that subsection is a course of conduct as prescribed in the California Penal Code, namely, “a pattern of conduct composed of a series of acts over a period of time however short, evidencing a continuity of purpose”.
Although the question whether conduct amounts to a “course of conduct” is to be determined, at least substantially, by reference to the person’s state of mind, proof of that state of mind may, and usually will be inferred from objective matters existing outside that person’s mind. Of importance would usually be whether the relevant conduct consists of an omission, the number of acts or omissions that are claimed to constitute the course of conduct, the time that separates each act or omission from the other, and whether the acts or omissions are similar or dissimilar, and, if dissimilar, whether they are jointly necessary to the achievement of the conduct that constitutes the contravention.
[19] Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626
[20] Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626, at [32]-[34]
Subsection 557(1) of the FW Act applies only to the civil remedy provisions listed in s 557(2). These include ss 44 and 45 of the FW Act. Paragraph (s) of s 557(2) of the FW Act provides that s 557(1) also applies to any other civil remedy provisions prescribed by the regulations. Subsection 557(1) of the FW Act, therefore, applies to multiple contraventions of reg 3.42(3)(b).
The third step contained in the passage from the judgment of Bromwich J in New Shanghai requires the Court to consider whether there is any overlap “between groups of separate aggregated contraventions” to ensure the same conduct is not penalised twice and, if there is an overlap, whether there should be “further adjustment”. Bromwich J did not expressly describe the nature of the adjustment that may need to be made to avoid a double penalty; but the passage suggests that the adjustment is to be made by further aggregation. That is apparent from the fourth step the passage identifies, namely, the consideration of “the appropriate penalty in respect of each final individual group of contraventions, taken in isolation” (emphasis added).
Given s 557(1) of the FW Act, however, there would appear to be no further room to treat two or more contraventions as one contravention by applying what is often referred to as the “one transaction principle” or the “course of conduct principle”. That is what Bromwich J concluded in Fair Work Ombudsman v Lohr, where his Honour accepted the FWO’s submission that s 557 of the FW Act “is the express statutory manifestation of the one transaction or course of conduct principle”; that by “enacting s 557 Parliament has determined how multiple contraventions arising from a course of conduct are to be treated”; and that, once s 557 has been applied it is not open to “further consolidate the … contraventions into one contravention by applying that principle, in effect, again”.[21] That is also what the Full Federal Court held in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union:[22]
The important point to emphasise is that the course of conduct principle, in the criminal context at least, does not operate to permit a sentencing judge to impose a single sentence in respect of multiple offences on the basis that the offences formed part of a course of conduct. Absent a statutory provision that provides otherwise, a sentencing judge is to impose a separate sentence, albeit with the option of concurrency, for each offence.
. . . .
The important point to emphasise is that, contrary to the Commissioner’s submissions, neither the course of conduct principle nor the totality principle, properly considered and applied, permit, let alone require, the Court to impose a single penalty in respect of multiple contraventions of a pecuniary penalty provision. . . . That is not to say that the Court can impose a single penalty in respect of each course of conduct. Likewise, there is no doubt that in an appropriate case involving multiple contraventions, the Court should, after fixing separate penalties for the contraventions, consider whether the aggregate penalty is excessive. If the aggregate is found to be excessive, the penalties should be adjusted so as to avoid that outcome. That is not to say that the Court can fix a single penalty for the multiple contraventions.
[21] Fair Work Ombudsman v Lohr [2018] FCA 5, at [33]
[22] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, at [114], [148] (Dowsett, Greenwood, and Wigney JJ)
Thus, the third step when assessing multiple contraventions of provisions of the FW Act is to provisionally assess the appropriate penalty for each contravention, including each set of contraventions which, because of s 557(1) of the FW Act, are to be treated as single contraventions.
The fourth step is to consider whether any adjustment should be made to the penalties that have been (provisionally) considered to be appropriate for the contraventions in question. That involves applying what is often referred to as the “one transaction principle”, which has been described as follows:[23]
At its heart, the one transaction principle recognises that, where there is an interrelationship between the legal and factual elements of two or more offences with which an offender has been charged, care needs to be taken so that the offender is not punished twice (or more often) for what is essentially the same criminality. The interrelationship may be legal, in the sense that it arises from the elements of the crimes. It may also be factual, because of a temporal or geographical link or the presence of other circumstances compelling the conclusion that the crimes arise out of substantially the same act, omission or occurrences.
[23] Royer v Western Australia [2009] WASCA 139, at [22]
Lockhart J stated the principle in the context of the imposition of penalties for contraventions of provisions of the Trade Practices Act 1974 (Cth) in Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd:[24]
Guidance is given in the field of sentencing for criminal offences by the well-known principle that where several offences are heard together and arise out of the same transaction it is a sound working rule that the sentences imposed for those offences should be made concurrent; it is inappropriate to sentence consecutively when the offences were all really involved in the same episode . . .
[24] Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd [1980] FCA 47; (1980) 44 FLR 149; (1980) ATPR 40-161, at 42, 277
The Full Federal Court has confirmed the relevance of the “one transaction principle” in the assessment of multiple contraventions of a single civil remedy provision in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union:[25]
There is no doubt that, in an appropriate case involving multiple contraventions, the Court should consider whether the multiple contraventions arose from a course or separate courses of conduct. If the contraventions arose out of a course of conduct, the penalties imposed in relation to the contraventions should generally reflect that fact, otherwise there is a risk that the respondent will be doubly punished in respect of the relevant acts or omissions that make up the multiple contraventions.
[25] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, at [148] (Dowsett, Greenwood, and Wigney JJ)
There are two matters to note about the application of the “one transaction principle”. First, the principle does not relieve the Court from assessing a penalty for each contravention, even if the contravention arose out of a course of conduct.[26] Second, “even if the contraventions are properly characterised as arising from a single course of conduct, a judge is not obliged to apply the principle if the resulting penalty fails to reflect the seriousness of the contraventions”.[27]
[26] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, at [114], [148] (Dowsett, Greenwood, and Wigney JJ)
[27] Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73, at [235] (Allsop CJ, Middleton and Robertson JJ)
The fifth step consists of the application of the “totality principle”. Under that principle, a sentencing judge is required “to impose a sentence or sentences which reflect the overall criminality of the offending for which the offender has been convicted”.[28] In R v Holder Street CJ described the principle as follows:[29]
The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently a straight-forward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences.
[28] Contin v The Queen [2012] VSCA 247, at [38]
[29] R v Holder (1983) 3 NSWLR 245, at page 260
The totality principle has been held to apply to the assessment of pecuniary penalties.[30]
APPLICATION
[30] Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59, at [41]
Identification of contraventions
The declarations identify four contraventions: BEPL’s failure to pay accrued, but untaken, annual leave, contrary to s 90(2) of the FW Act and, therefore, in contravention of s 44 of the FW Act (90(2) contravention); BEPL’s failure to pay the 17.5% loading on that annual leave, contrary to cl 24.3 of the Children’s Services Award 2010 (Award) and, therefore, in contravention of s 45 of the FW Act (Loading contravention); BEPL’s failure to make superannuation contributions, contrary to cl 20.2 of the Award and, therefore, in contravention of s 45 of the FW Act (Superannuation contravention); and BEPL’s contravention of reg 3.42(3)(b) of the FW Regulations by failing to provide Ms Baldacchino with a copy of employee records she had requested (Information contravention).
In her written submissions Ms Baldacchino submits that BEPL’s failure to pay accrued, but untaken, annual leave and its failure to pay the 17.5% loading on that annual leave should be grouped as one contravention. In the light of what I concluded in Australian Wild Tuna, BEPL’s failure to pay accrued, but untaken, annual leave, contrary to s 90(2) of the FW Act and, therefore, in contravention of s 44 of the FW Act, and BEPL’s failure to pay the 17.5% loading on the annual leave, contrary to cl 24.3 of the Award and, therefore, in contravention of s 45 of the FW Act, are not to be grouped under s 557(1) of the FW Act as a single contravention.
Although it is necessary first to assess a penalty for each contravention before I consider any adjustments to them, it would be convenient if I apply each relevant factor to the contraventions considered together.
Nature, extent, circumstances, and deliberateness of the contravening conduct
The 90(2) and the Loading contraventions consisted of BEPL failing to pay to Ms Baldacchino accrued, but untaken, annual leave, and a 17.5% loading on that annual leave. This amounted to $21,320.57. The Superannuation contravention consisted of BEPL’s not making the superannuation contributions it was required to make. And the Information contravention consisted of BEPL’s failure to comply with Ms Baldacchino’s request that she be provided with records relating to her employment. It may be inferred that BEPL did not pay the amounts it was required to pay for annual leave and superannuation because it did not have the means to do so; but the inability to pay does not render its failure to make these payments any the less deliberate. BEPL’s failure to provide the information is also to be assessed on the basis that it constituted deliberate conduct. These matters point to penalties being assessed at the higher end of the scale.
Nature and extent of loss occasioned by contravention; corrective action
As a result of BEPL’s contraventions, Ms Baldacchino did not receive $21,320.57 in relation to accrued, but untaken, annual leave, and superannuation contributions of $7,001.73. These are significant losses. Further, neither BEPL nor Ms Foundis has taken or attempted to take any corrective action.
Specific deterrence
BEPL remains registered; and there is nothing to suggest that Ms Foundis will not in the future be responsible for hiring and managing employees. The penalties, therefore, should incorporate an element for specific deterrence.
General deterrence
Given that the principal purpose for which a pecuniary penalty is ordered is to deter others from contravening the FW Act, each of the pecuniary penalties should be set at a level that should signal to employers, and to persons involved in the management of companies that employ persons, that there will be a significant penalty to pay if they do not comply, or take steps necessary to ensure they comply, with provisions of the FW Act and, in particular, with the minimum requirements provided for by the FW Act and under instruments such as awards that are enforceable under the FW Act.
Assessment (before adjustment)
I assess the following penalties before adjustments:
Contravention BEPL penalty Ms Foundis penalty Section 44 – Annual leave contravention $43,290 (65% of maximum) $8,658 (65% of maximum) Section 45 – Annual leave loading contravention $43,290 (65% of maximum) $8,658 (65% of maximum) Section 45 – Superannuation contravention $43,290 (65% of maximum) $8,658 (65% of maximum) Regulation 3.42(3)(b) – Employee records contravention $16,650 (75% of maximum) $3,330 (75% maximum) TOTAL $146,520 $29,304 Adjustments?
As I have noted earlier, Ms Baldacchino submits there is such an overlap between the 90(2) and Loading contraventions that they should be treated as one contravention. I do not agree. The 90(2) and Loading contraventions relate to two distinct obligations. The first is BEPL’s obligation under s 90(2) of the FW Act to pay to Ms Baldacchino at her base rate the amount of annual leave she would have been entitled to be paid under s 90(1), had she in fact taken the annual leave to which she was entitled but which she had not taken. The second obligation is that arising under cl 24.3 of the Award that BEPL pay 17.5% loading of the amount.
I therefore propose to make no adjustment under the one transaction principle.
I do propose, however, to make an adjustment of around 5% under the totality principle as follows:
Contravention BEPL penalty Ms Foundis penalty Section 44 – Annual leave contravention $40,000 $8,000 Section 45 – Annual leave loading contravention $40,000 $8,000 Section 45 – Superannuation contravention $40,000 $8,000 Regulation 3.42(3)(b) – Employee records contravention $16,000 $3,200 TOTAL $136,000 $27,200
I am satisfied, therefore, that BEPL and Ms Foundis should pay penalties in these amounts.
To whom penalties should be paid
Subsection 546(3)(c) of the FW Act provides that the Court may order that a pecuniary penalty be paid to a “particular person”. Ms Baldacchino is in the position of the applicant in Sayed v Construction, Forestry, Mining and Energy Union:[31]
In this appeal . . . the policy considerations of s 546(3) “speak loudly” in the circumstances to justify the payment of the penalty imposed to the individual affected by the contravention who, under the authority of the FW Act, commenced and maintained this enforcement proceeding. If [the applicant] had not pursued the action, it is unlikely that it would have been pursued. He took on the proceeding at obvious cost to himself.
[31] Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4, at [116]
It is appropriate I make an order under s 546(3)(c) of the FW Act that BEPL and Ms Foundis pay to Ms Baldacchino the penalties I propose to order BEPL and Ms Foundis pay.
DISPOSITION
I propose to order that BEPL and Ms Foundis pay to Ms Baldacchino the pecuniary penalties I have determined it is appropriate that BEPL and Ms Foundis pay, and that they do so within 28 days after the day on which I pronounce my orders.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 27 October 2023
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