Construction, Forestry and Maritime Employees Union v AMK Images Pty Ltd (in liq) (No 2)
[2024] FCA 1457
•18 December 2024
FEDERAL COURT OF AUSTRALIA
Construction, Forestry and Maritime Employees Union v AMK Images Pty Ltd (in liq) (No 2) [2024] FCA 1457
Appeal from: Construction, Forestry and Maritime Employees Union v AMK Imaging Pty Ltd [2024] FedCFamC2G 361 File number(s): ACD 24 of 2024 Judgment of: GOODMAN J Date of judgment: 18 December 2024 Catchwords: INDUSTRIAL LAW – appeal from orders made by the Federal Circuit and Family Court of Australia (Division 2) imposing penalties for contraventions of the Fair Work Act 2009 (Cth) – whether appeal incompetent by reason of an agreement reached between the parties before the primary judge concerning submissions to be made, or by reason of an estoppel – held appeal competent
INDUSTRIAL LAW – civil penalties – multiple contraventions of a civil penalty provision – whether penalties imposed were manifestly inadequate – orders of the primary judge set aside
Legislation: Fair Work Act 2009 (Cth), ss 45, 323, 536, 545, 546, 550, 557
Federal Court of Australia Act 1976 (Cth), ss 4, 24
Cases cited: Airservices Australia v Civil Air Operations Officers’ Association of Australia [2022] FCAFC 172; (2022) 295 FCR 36
Australian Building and Construction Commissioner v Australian Workers’ Union [2022] FCAFC 143; (2022) 406 ALR 20
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; (2017) 254 FCR 68
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 274 CLR 450
Australian Competition and Consumer Commission v Employsure Pty Ltd [2023] FCAFC 5; (2023) 407 ALR 302
Australian Securities and Investments Commission v Wooldridge [2019] FCAFC 172
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560
Boensch v Pascoe [2019] HCA 49; (2019) 268 CLR 593
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Registered Organisations Commissioner [2020] FCAFC 232; (2020) 283 FCR 404
Construction, Forestry and Maritime Employees Union v AMK Images Pty Ltd (in liq) [2024] FCA 1057
Construction, Forestry and Maritime Employees Union v AMK Imaging Pty Ltd [2024] FedCFam C2G 361
Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman [2023] FCAFC 161; (2023) 299 FCR 334
Davey v Herbst (No 2) [2012] ACTCA 19
Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 413
Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union (Kiama Aged Care Centre Case) (No 3) [2023] FCA 1324
Fair Work Ombudsman v Ho [2024] FCAFC 111
Hili v The Queen [2010] HCA 45; (2010) 242 CLR 520
House v The King (1936) 55 CLR 499
McKinnon v Commonwealth Bank of Australia [2006] FCAFC 10
Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62; (2014) 221 FCR 153
Singh v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1725
Singh v Owners Strata Plan No 11723 (No 3) [2012] FCA 1121; (2012) 207 FCR 390
State Rail Authority of New South Wales v Codelfa Construction Pty Ltd [1982] HCA 24; (1982) 149 CLR 337
Trade Practices Commission v CSR Ltd [1990] FCA 762; (1991) ATPR ¶41-076
Wong v The Queen [2001] HCA 64; (2001) 207 CLR 584
Zegarac v Dellios [2007] FCAFC 58
Division: Fair Work Division Registry: Australian Capital Territory National Practice Area: Employment and Industrial Relations Number of paragraphs: 82 Date of hearing: 29 October 2024 Counsel for the Appellant: Mr P Boncardo Solicitor for the Appellant: Construction, Forestry and Maritime Employees Union, in‑house counsel Counsel for the First Respondent: No appearance by the first respondent Solicitor for the Second Respondent: Mr W Ward of Mills Oakley ORDERS
ACD 24 of 2024 BETWEEN: CONSTRUCTION, FORESTRY AND MARITIME EMPLOYEES UNION
Appellant
AND: AMK IMAGES PTY LTD (IN LIQUIDATION)
First Respondent
ANTHONY GAVRAN
Second Respondent
ORDER MADE BY:
GOODMAN J
DATE OF ORDER:
18 DECEMBER 2024
THE COURT ORDERS THAT:
1.The notice of objection to competency of appeal filed on 2 May 2024 be dismissed.
2.The appeal be allowed.
3.Orders 2 to 6 made by the Federal Circuit and Family Court of Australia (Division 2) on 20 March 2024 be set aside.
4.The proceeding be listed for a case management hearing concerning the re-exercise of the discretion to order the payment of a pecuniary penalty at 9:30am on 5 February 2025.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
GOODMAN J
A. INTRODUCTION
The appellant Union appeals from orders made by a judge of the Federal Circuit and Family Court of Australia (Division 2) (primary judge) imposing penalties upon the first respondent (AMK Images) and its director, the second respondent (Mr Gavran), for contraventions of the Fair Work Act 2009 (Cth) (FW Act).
AMK Images was placed into liquidation after the appeal commenced. On 11 September 2024, I granted leave to the Union to proceed with the appeal as against AMK Images. My reasons for doing so are set out in Construction, Forestry and Maritime Employees Union v AMK Images Pty Ltd (in liq) [2024] FCA 1057. The liquidator has not participated in the appeal and the only active respondent is Mr Gavran, who contends that the appeal is incompetent and otherwise defends the appeal.
For the reasons developed below, the appeal is competent and should be allowed.
B. BACKGROUND
In November 2022, the Union commenced a proceeding in the Court below, alleging, inter alia, that: (1) AMK Images had contravened ss 45, 323 and 536 of the FW Act in connection with the employment by AMK Images of a Mr Jayson Cocos; and (2) Mr Gavran was involved in those contraventions within the meaning of s 550 of the FW Act. The Union sought declaratory relief, orders for compensation under s 545 of the FW Act, and orders for the payment of civil penalties under s 546 of the FW Act. Each of the contraventions carried a maximum penalty of 300 penalty units for AMK Images and 60 penalty units for Mr Gavran. During the period in which the contravening conduct occurred (January 2019 to September 2022) a penalty unit had a value of $210 prior to 1 July 2020 and $222 thereafter.
AMK Images and Mr Gavran defended the proceeding and it was set down for hearing for three days.
On 18 March 2024 the hearing commenced. The Union was represented by Ms Erian of counsel, and AMK Images and Mr Gavran were represented by Ms Costin of counsel. At the commencement of the hearing, counsel asked the primary judge for some time to allow the parties to continue settlement discussions. That request was granted and later that morning the primary judge was told that an agreement had been reached and that the parties envisaged the preparation of a statement of agreed facts ahead of a hearing as to penalties on 20 March 2024. The following exchanges then occurred:
HIS HONOUR: Do you envisage, on the subject of penalties – and I understand if you haven’t yet an opportunity to canvass any such matters – that there might be even if it’s simply some agreed range?
MS COSTIN: I will just – I just want to make sure that I’m not saying something that was discussed on a without prejudice basis, your Honour. My learned friend agrees that I can tell your Honour that that the parties haven’t been able to agree to a figure.
HIS HONOUR: That’s why – that’s why I referred to range rather than a - - -
MS COSTIN: Not even there, your Honour.
HIS HONOUR: - - - precise figure.
MS COSTIN: We’re not. It’s - - -
HIS HONOUR: Yes. No, no, no. That’s fine.
...
MS COSTIN: ... So, again, your Honour, I don’t want to speak on anything that has been discussed on a without prejudice basis but the – part of the discussion and agreements that the parties have reached is that the submissions that your Honour will hear on the range, or on a penalty amount, will be simply from the respondent’s perspective rather than the applicant. The applicant will make no submission to your Honour in relation to that amount.
So it will be in your – it will be – in essence, your Honour, it will be a submission that I will put to your Honour in relation to what the respondents say should be the reasonable amount in that regard and, of course, it will be a matter for your Honour to decide in – without having to hear submissions on a range. Of course, your Honour will hear submissions from the respondents as a – as a general submission on penalty but without having a range proposed by the applicant.
MS COSTIN: - - - and that will be part of the statement of facts and then an order proposed to your Honour in that regard and then the parties – the penalty issue will be, as I said, a matter for submissions at my end in terms of the range. My friend is going to make submissions simply in relation to why – and I’m not – I’m not trying to steal the limelight. It’s simply a question of a penalty I believe should be imposed whatever without pre-empting what my learned friend will say. But, again, the range is not going to be put by my friend at all to your Honour.
HIS HONOUR: Right.
MS COSTIN: But it will be – I will seek instructions as to put such submission to your Honour in relation to a range rather than leave your Honour with no – no submission in that regard.
...
MS COSTIN: Yes. And – and – yes. That’s right. I mean, as I said, my learned friend has agreed there won’t be a range from the applicant’s side.
(emphasis added)
The hearing was subsequently adjourned until 20 March 2024.
On 19 March 2024, the Union filed an affidavit of Mr Cocos. A further affidavit from Mr Gavran, who had made an affidavit on 19 February 2024, had been foreshadowed, but was not filed. On the same day, the parties filed proposed consent orders, and a statement of agreed facts in the following form:
Background
1.This statement of agreed facts (SOAF) is made for the purposes for s 191 of the Evidence Act 1995 (Cth) and any admissions made are only for the purposes of these proceedings.
2.This SOAF sets out the facts that [the Union] and [AMK Images and Mr Gavran] have agreed for the purpose of these proceedings.
Agreed Facts
3.Between 2 January 2019 and 23 September 2022 (the Relevant Period), [AMK Images] was the employer of Jayson Cruz Cocos.
4.Mr Cocos performed work as a painter under a contract of employment with [AMK Images] and was eligible to be a member of [the Union] during some or all of his employment by [AMK Images].
5.[Mr Gavran] was the Director of [AMK Images] and had active managerial control of [AMK Images] during the Relevant Period. [Mr Gavran] knew that an award applied to Mr Cocos’ employment but did not know the contents of the specific award. Mr Cocos advised [Mr Gavran] of the hours he was working, and [Mr Gavran] knew the amount that Mr Cocos was being remunerated.
6.Between 2 January 2019 and 28 February 2021, Mr Cocos’ employment was covered by the Building and Construction General On-Site Award 2010 (the 2010 Award). Between 1 March 2021 and 23 September 2022, Mr Cocos’ employment was covered by the Building and Construction General On-Site Award 2020 (the 2020 Award).
7.[AMK Images] employed Mr Cocos on a full-time basis. Mr Cocos was classified as a CW3 worker under the Award.
8.During his employment, Mr Cocos (a) started and finished work each day on job sites; and (b) frequently worked more than 38 hours per week.
9. During the Relevant Period, [AMK Images]:
(a)did not provide Mr Cocos with copies of the National Employment Standards or the Award, as required by clause 5 of the 2010 Award and clause 3.3 of the 2020 Award; and
(b)did not pay meal allowances to Mr Cocos, as required by clause 20.2 of the 2010 Award and clause 21.2 of the 2020 Award;
(c) did not pay Mr Cocos’s wages on a regular, weekly schedule, as required by clause 31.3 of the 2010 Award and 20.3 of the 2020 Award;
(d)did not provide Mr Cocos with payslips, as required by s 536 of the Fair Work Act 2009 (Cth) (the Act).
10.Between 1 July 2021 and 23 September 2022, [AMK Images] did not pay travel allowances to Mr Cocos, as required by clause 26.1 of the 2020 Award.
11.Between 21 January 2022 and 30 September 2022, [AMK Images] made deductions to Mr Cocos’ wages for rental accommodation which were not agreed to in writing, as required by 324 of the Act.
12.On termination of his employment, [AMK Images] did not make a redundancy payment to Mr Cocos, as required by clause 41.3 of the 2020 Award.
(emphasis in original)
Neither the Union, nor AMK Images and Mr Gavran, filed written submissions ahead of the penalty hearing scheduled for 20 March 2024.
On 20 March 2024, the hearing resumed. After the primary judge indicated that he had had an opportunity to read the documents that had been provided to the Court, the following exchange occurred:
MS EIRAN: Well, if your Honour is content then, I might move straight on to my submissions on penalty. In support of - - -
HIS HONOUR: Sorry, just before you get underway, I had understood a couple of things from the other day...
...
And thirdly, I had understood that there would be no argument regarding range of penalty, and perhaps I had misunderstood Ms Costin, but I had understood her to suggest that whatever submissions she would be making on behalf of the respondents, that there was not going to be any opposition to whatever the submission was in relation to penalties. Have I misunderstood that?
MS EIRAN: There would be no opposition from the applicant – or rather there would be no response from the applicant – in respect of the penalty range, but we do intend to make fairly brief submissions on relevant factors that your Honour would have consideration of when determining an appropriate penalty.
(emphasis added)
Counsel for AMK Images and Mr Gavran also indicated:
... So when, as your Honour has noted, and my learning (sic) friend has already submitted, they will make some brief submissions in relation to penalty, but not in relation to range. So in a way, it’s more of my client’s side of the story to be told before the court.
Counsel for the Union read the affidavit of Mr Cocos (save for one sentence) and made oral submissions on penalty including as to the period over which the contravening conduct occurred, the extent of the underpayments and the need for both general and specific deterrence.
Counsel for AMK Images and Mr Gavran then read parts of Mr Gavran’s affidavit made on 19 February 2024 and made oral submissions including that the Court should impose the following penalties:
(1)a single penalty of $10,000 for the s 45 contraventions;
(2)a penalty of $1,000 for a s 323 contravention;
(3)a penalty of $1,500 for a s 536 contravention; and
(4)a penalty of $5,000 upon Mr Gavran.
After a brief reply from counsel for the Union, the primary judge adjourned at 11:09am, indicating that he would deliver some reasons and make orders at 12:30pm. At 12:32pm, the primary judge delivered extempore reasons for judgment and made notations and orders to the following effect (as recorded in Construction, Forestry and Maritime Employees Union v AMK Imaging Pty Ltd [2024] FedCFamC2G 361 (J, or primary judgment)):
THE COURT NOTES THAT:
A.The parties resolved matters of liability in principle on the first day of the Final Hearing;
B.The matter returned Court to determine matters of penalty, with oral reasons being delivered on 20th March 2024; accordingly,
THE COURT ORDERS THAT:
1.By consent and pursuant to Part 13.3 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021, orders are made in terms of the attached document entitled “Proposed Orders” signed by the parties’ respective lawyers and placed with the Court record as attached hereto.
2.[AMK Images] is to pay a total penalty for the five contraventions of s.45 of the Fair Work Act 2009 (Cth) in the sum of $6,500.
3.[AMK Images] is to pay a penalty for the contravention of s.323 of the Fair Work Act 2009 (Cth) in the sum of $1,000.
4.[AMK Images] is to pay a penalty for the contravention of s.536 of the Fair Work Act 2009 (Cth) in the sum of $1,500.
5.Pursuant to s.550 of the Fair Work Act 2009 (Cth), [Mr Gavran] is to pay a total penalty for the admitted contraventions of the Fair Work Act 2009 (Cth) in the sum of $3,500.
6.The penalties ordered in Orders 1 – 5 hereof be paid to the [Union] within 90 days of this Order.
7.The funds to be paid to Mr Jayson Cocos, as set out in Consent Order 4, being the principal sum plus interest, are to be paid to him within 45 days.
(emphasis in original)
The “Proposed Orders” referred to in Order 1 were in the following form:
1.Pursuant to s 16 of the Federal Circuit Court of Australia Act 1999 (Cth) and s 545 of the Fair Work Act 2009 (Cth) (the Act), the Court declares that:
(a)[AMK Images] contravened s 45 of the Act by failing to provide Mr Cocos with copies of the National Employment Standards or the Building and Construction and General On-Site Award (the Award), as required by the Award;
(b)[AMK Images] contravened s 45 of the Act by failing to pay meal allowances to Mr Cocos, as required by the Award;
(c)[AMK Images] contravened s 45 of the Act by failing to pay Mr Cocos’ wages on a regular, weekly schedule, as required by the Award;
(d)[AMK Images] contravened s 45 of the Act by failing to pay travel allowances for the period of Mr Coco’s employment after 1 July 2021, as required by the Award;
(e)[AMK Images] contravened s 45 of the Act by failing to make a redundancy payment to Mr Cocos, as required by the Award;
(f)[AMK Images] contravened s 323 of the Act by making deductions from Mr Cocos’ wages in the absence of written authorisation of those deductions, as required by s 324 of the Act; and
(g)[AMK Images] contravened s 536 of the Act by failing to provide Mr Cocos with payslips.
2.[Mr Gavran] was by s 550 of the Act involved in each of [AMK Images’s] above contraventions.
3.The Court reserves its decision in relation to penalties in respect of the above contraventions.
4.Pursuant to 545 of the Act, [AMK Images] shall make a payment, less applicable tax, to Mr Cocos in the amount of $28,725.08, plus interest in the amount of $650.00 within 28 days of today’s date.
(emphasis in original)
I will refer to the declarations the subject of paragraph 1 of the “Proposed Orders” as the declarations.
C. THE PRIMARY JUDGMENT
On 24 April 2024, the primary judge published the primary judgment. It is common ground that there is an error in the title to those reasons for judgment and that “AMK Imaging Pty Ltd” should be “AMK Images Pty Ltd”.
In his introduction to the primary judgment, the primary judge set out some of the background to, and procedural history of, the proceeding including that the parties had reached agreement regarding liability and had prepared a statement of agreed facts and agreed orders to that effect (J[1] to [4]). After setting out the statement of agreed facts, the primary judge recorded (at J[6]) that:
At the outset of what I will call the “penalty hearing” on 20th March 2024, and in the light of what had been earlier advised to the Court, the Court sought to clarify with Counsel for the Applicant that in relation to penalties, (a) an Affidavit would be provided by Mr Anthony Gavran (the Third Respondent), (b) there would be no Affidavit provided by the Applicant, and (c) there would be no opposition from the Applicant to the Respondents’ submissions regarding the penalty “range”. It was confirmed that there would indeed be no opposition from the Applicant in respect of the penalty range, however, the Applicant intended to make brief submissions on relevant matters for the Court to consider regarding the determination of penalties. The exchange was as follows (emphasis added):
… I had understood that there would be no argument regarding range of penalty, and perhaps I had misunderstood Ms Costin, but I had understood her to suggest that whatever submissions she would be making on behalf of the respondents, that there was not going to be any opposition to whatever the submission was in relation to penalties. Have I misunderstood that?
MS ERIAN: There would be no opposition from the applicant – or rather there would be no response from the applicant – in respect of the penalty range, but we do intend to make fairly brief submissions on relevant factors that your Honour would have consideration of when determining an appropriate penalty.
(italic emphasis added by the primary judge; bold emphasis added)
The primary judge then summarised, at J[8] to [25], the oral submissions that had been made.
Under the heading “Consideration & disposition”, after referring again to the statement of agreed facts and the agreed orders, the primary judge noted, at J[27], that the only remaining issue for determination was the level of the penalties to be imposed; and that there was no dispute that relevant principles regarding making such a determination had been recently confirmed by the High Court of Australia in Australian Building and Construction Commissioner v Pattinson[2022] HCA 13; (2022) 274 CLR 450. His Honour then set out various passages from Pattinson, as well as referring to the well-known passage in Trade Practices Commission v CSR Ltd [1990] FCA 762; (1991) ATPR ¶41-076 (French J) and to Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 at 579 to 580 [89] (Buchanan J). At J[30] the primary judge returned to Pattinson at 470 ([46] to [48]), where Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ explained:
[46] It is important to recall that an “appropriate” penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case. A contravention may be a “one‑off” result of inadvertence by the contravenor rather than the latest instance of the contravenor’s pursuit of a strategy of deliberate recalcitrance in order to have its way. There may also be cases, for example, where a contravention has occurred through ignorance of the law on the part of a union official, or where the official responsible for a deliberate breach has been disciplined by the union. In such cases, a modest penalty, if any, may reasonably be thought to be sufficient to provide effective deterrence against further contraventions.
[47] The penalty that is appropriate to protect the public interest by deterring future contraventions of the Act may also be moderated by taking into account other factors of the kind adverted to by French J in CSR. For example, where those responsible for a contravention of the Act express genuine remorse for the contravention, it might be considered appropriate to impose only a moderate penalty because no more would be necessary to incentivise the contravenors to remain mindful of their remorse and their public expressions of that remorse to the court. Similarly, where the occasion in which a contravention occurred is unlikely to arise in the future because of changes in the membership of an industrial organisation, a modest penalty may be appropriate having regard to the reduced risk of future contraventions.
[48] It is not necessary to multiply examples further. It is sufficient to say that a court empowered by s.546 to impose an “appropriate” penalty must act fairly and reasonably for the purpose of protecting the public interest by deterring future contraventions of the Act.
(emphasis added by the primary judge)
The primary judge expressed the view at J[31] that paragraph [46] of Pattinson “neatly summarised the situation” before him, “where inadvertence (and ignorance) more so than anything else, seems to have led to the unfortunate circumstances that gave rise to this Application”. The primary judge then stated:
Summarily, I note the following considerations that inform the Court’s determination of penalty in light of the principles set out above:
(a)The total underpayment was approximately $45,000. Of this, [AMK Images and Mr Gavran] have already paid to the [Union] something in the order of $17,000. It is agreed that the balance of funds owing will be paid;
(b)[AMK Images and Mr Gavran] have no prior history of contravention;
(c)[AMK Images and Mr Gavran] are contrite in relation to the errors that led to the under-payments (I mean no offence to anyone, however, Mr Gavran’s religious affiliation or convictions, which are not before the Court, as submitted, have no relevance to his “contrition” before the Court. Among other observations, devout atheists can be, and often are, properly contrite in similar circumstances);
(d)Admissions were reasonably made. The parties reached agreement regarding liability, albeit after the hearing commenced;
(e)The difficult circumstances of the Applicant [sic, Mr Cocos], who supports his family by work in Australia (which continues with another company);
(f)It is agreed that the contraventions, and circumstances that gave rise to them, are at the lower end of seriousness or gravity; and
(g)[AMK Images and Mr Gavran] have shown, certainly before the Court during the hearing, a significant disposition not only of contrition but also of co-operation.
The primary judge then stated at J[32]:
The [Union] has confirmed that it will not oppose [AMK Images and Mr Gavran’s] submissions regarding penalty. I do not take this to mean, necessarily, that they, therefore, put a consent position, regarding the proposed penalties.
His Honour next turned to the penalties to be set. The primary judge dealt first with the contraventions of s 45 of the Act, and stated at J[33]:
There are 5 contraventions of s.45 of the Act admitted. It is also agreed that these should be treated as a single course of conduct. The [Union] submitted that a total penalty of $10,000 should apply to these five contraventions. In the light of the Statement of Agreed Facts, and the High Court’s principles in Pattinson, perhaps especially since this is a “first time offender” (to speak colloquially), in my view, an appropriate penalty for these contraventions should be, in total, $6,500.
I pause to interpolate that there are several areas of controversy in this paragraph. First, there was no agreement that the five contraventions should be treated as a single course of conduct (see [59] to [62] below). Secondly, the Union did not submit that a total penalty of $10,000 should apply to these five contraventions. That submission was made by counsel for AMK Images. Although the primary judge had previously recorded the true position (at J[23]), the juxtaposition of this statement in J[33] to the pronouncement of the lower penalty of $6,500 suggests that the primary judge was operating on the basis that it was the Union that sought a penalty of $10,000. For completeness, I note that counsel for the Union in fact made no submissions to the primary judge as to the quantum of any penalties.
As to:
(1)the contravention of s 323 of the Act, the primary judge stated at J[34]:
I accept [AMK Images and Mr Gavran’s] submissions regarding the admitted contravention of s.323 of the Act. In the light of the agreed factual matters, and the principles set out by the High Court in Pattinson, the penalty here shall be fixed at $1,000. ; and
(2)the contravention of s 536 of the Act, the primary judge stated at J[35]:
In relation to the admitted breach of s.536 of the Act, regarding the failure to provide the Applicant with pay-slips, I also accept [AMK Images and Mr Gavran’s] submissions for the imposition of a penalty of $1,500.
At J[36], the primary judge stated:
In relation to the liability of the company under s.550 of the Act, the penalty for this admitted contravention shall be $3,500.
D. THE NOTICE OF OBJECTION TO COMPETENCY
Mr Gavran relies upon a notice of objection to the competency of the appeal. Although filed in response to the original notice of appeal, it is equally applicable to the amended notice of appeal and the argument before this Court proceeded on that basis. The grounds of objection to the competency of the appeal are as follows:
1.On 18 April 2024, the first morning of the three days scheduled for the hearing, [the Union] and [AMK Images and Mr Gavran] reached an agreement pertaining to the dispensing of the proceeding.
2.The agreement contained the following terms:
a.[AMK Images] will admit to five breaches of the Building and Construction General On-Site Award 2010 and Building and Construction General On-Site Award 2020 (together, ‘the Awards,’)
b.[AMK Images] will admit to two contraventions of the Fair Work Act 2009, (‘Cth’), being sections 323 and 536;
c.[AMK Images and Mr Gavran] to pay Mr Jayson Cocos the sum of $28,725.08, (less applicable tax) plus interest in the amount of $650.00;
d.In respect of penalties, the [Union] will submit to the court that the penalties should be in the low range; and
e.the [Union] will not make any submissions to the court in relation to penalty quantum or specific dollar figures or dollar ranges.
(hereafter the “Agreement”)
3.The above Agreement was consequently reflected in the Statement of Agreed Facts which was jointly prepared by the parties and filed by the [Union] on 19 March 2024 and also the submissions of the [Union’s] counsel.
4.It is the position [of AMK Images and Mr Gavran] that the [Union’s] decision to appeal the penalty judgment for being too small constitutes a clear breach of the Agreement reached between the parties as the grounds of appeal contains submissions in respect of the quantum and size of the penalties that the [Union] believes should be imposed on [AMK Images and Mr Gavran].
5.It is the position of [AMK Images and Mr Gavran] that the Agreement acts as a bar to the [Union] making appeal submissions in respect of penalty quantum and accordingly the [Union] is estopped from making such an appeal.
(emphasis in original)
The essence of the notice of objection to competency is that: AMK Images and Mr Gavran on the one hand, and the Union on the other, reached an agreement which contained the terms described in paragraph 2 of the notice of objection to competency; the Union’s decision to appeal the primary judgment constitutes a breach of that agreement because the grounds of appeal contain submissions as to the level of penalties to be imposed; and by dint of the agreement the Union is estopped from bringing the appeal.
An appeal is incompetent if it is brought in circumstances where it cannot proceed because the law does not allow it to: McKinnon v Commonwealth Bank of Australia [2006] FCAFC 10 at [6] (Black CJ, Stone and Young JJ); and Zegarac v Dellios [2007] FCAFC 58 at [11] (Jessup J).
Such circumstances may include a want of jurisdiction: see, e.g., Singh v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCA 1725 (White J), or where the grounds of appeal are sufficiently incomprehensible: see, e.g., Zegarac at [7]; Singh v Owners Strata Plan No 11723 (No 3) [2012] FCA 1121; (2012) 207 FCR 390 at 396 to 397 ([24] to [31]) (Griffiths J). Other species of incompetence of an appeal were identified by Refshauge J in Davey v Herbst (No 2) [2012] ACTCA 19 at [99]. As his Honour noted at [100], his list was not exhaustive.
In the present case, there is, and can be, no issue that the Court has jurisdiction to entertain the appeal. In this regard:
(1)s 24(1)(d) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) provides:
24 Appellate jurisdiction
(1) Subject to this section and to any other Act, ... the Court has jurisdiction to hear and determine:
...
(d) appeals from judgments of the Federal Circuit and Family Court of Australia (Division 2) exercising original jurisdiction under a law of the Commonwealth other than:
(i) the Family Law Act 1975; or
(ii) the Child Support (Assessment) Act 1989; or
(iii) the Child Support (Registration and Collection) Act 1988; or
(iv) regulations under an Act referred to in subparagraph (i), (ii) or (iii); and
...
(2)the expression “judgment” includes a final judgment or order: s 4 of the FCA Act;
(3)the present appeal is an appeal from final orders made by the Federal Circuit and Family Court of Australia (Division 2) exercising original jurisdiction under a law of the Commonwealth, (namely the FW Act) other than those excluded by s 24(1)(d)(i) to (iv); and
(4)it follows that this Court has jurisdiction to hear the appeal and the appeal is not incompetent for want of jurisdiction.
As noted above, the essence of the present objection to competency is that the appeal is incompetent because of an agreement reached between the parties which gives rise to contractual rights or to an estoppel. Of course, the Court’s jurisdiction is conferred by statute and inter partes actions do not deprive the Court of a statutorily conferred jurisdiction. Neither Mr Ward for Mr Gavran nor Mr Boncardo for the Union located any authority in which it had been found that an appeal was incompetent because of the operation of an inter partes contract or estoppel. My researches have also not disclosed any such authority. I am inclined to the view that the operation of an inter partes contract or estoppel would not render an appeal incompetent in circumstances when the Court otherwise has jurisdiction. That is not to exclude the relevance of inter partes conduct in a particular case to the determination of particular issues on an appeal, or perhaps to an argument that an appeal ought be stayed as an abuse of the process of the Court. Such conduct may of course also be relevant outside of the appeal. In the present case, it may be that the agreement of the Union not to make any submissions to the primary judge in relation to penalty quantum or specific dollar figures or dollar ranges should also constrain the Union in its submissions on any reconsideration of penalty.
This is sufficient to dismiss the notice of objection to competency.
In any event, I am not satisfied that the underlying contract or estoppel has been proven, for the reasons which follow.
It was common ground that an agreement was reached on the morning of 18 March 2024 containing terms as described in sub-paragraphs 2(a), (b), (c) and (e) of the notice of objection to competency (see [27] above). The parties are at issue as to whether the agreement also contained a term as described in sub-paragraph 2(d) of that notice, namely that “in respect of penalties, the Union will submit to the Court that the penalties will be in the low range” (disputed term).
I granted leave to the Union and to Mr Gavran to adduce evidence on the appeal concerning the existence or otherwise of the disputed term. Affidavits of: (1) Mr Fischer, an in-house solicitor employed by the Australian Capital Territory branch of the Construction and General Division of the Union; and (2) Mr Gavran were read. Each was cross‑examined.
Mr Fischer deposed relevantly that:
6.On the morning of 18 March, I attended the Nigel Bowen Commonwealth Law Courts Building at around 9.45am for the hearing. I met with Ms Erian at approximately 10am. Ms Erian and Ms Costin had a brief discussion about asking the Court to delay commencement and continue negotiations. Ms Erian asked me instructions and I agreed to this. This was put to the Court and the Court stood the matter down.
7.We returned to the hallway outside the courtroom, and Ms Erian and Ms Costin continued discussions. After some time, Ms Erian approached me with a proposal. I took notes of my own in relation to the offer, and a photo of the document on which the proposed agreement appeared, signed by Ms Costin. My notes are attached and marked Annexure A, and my photo of the proposed agreement is attached and marked Annexure B.
8.The proposal which is reflected in my contemporaneous notes included:
a.[AMK Images] would admit to 5 contraventions of s 45 of the Fair Work Act 2009 (Cth) in respect of:
i.a failure to provide copies of the National Employment Standards or the Building and Construction Industry General On-Site Award;
ii.a failure to pay meal allowances;
iii.a failure to pay on a regular weekly schedule;
iv.a failure to pay travel allowances (limited to the period after July 1 2021);
v.a failure to make a redundancy payment;
b.[AMK Images] would admit to a contravention of s 324 in respect of deductions made from Mr Cocos’ wages;
c.[AMK Images] would admit to a contravention of s 536 in failing to provide payslips;
d.[Mr Gavran] would admit to contravening each of the above provisions by operation of s 550 of the FW Act in relation to each of the above contraventions.
e.[AMK Images] would make a payment in compensation to Mr Cocos of $28,750, with an additional $650 in interest owed.
f.The [Union], in return, would not press the remaining contraventions of s 45; and make no submissions on a penalty figure or range for the contraventions.
9.I contacted Mr Hiscox at approximately 11.30am, and· explained the proposed deal as I understood it. I was instructed to agree to the proposal in principle.
10.At around 11.45am, I joined Ms Costin, Mr Cocos and Ms Erian in the robing room where the final details of the proposed deal were arranged. It agreed (sic) that the parties would put an agreed statement of facts to the Court reflecting the agreement the following day, and that the payment to Mr Cocos would be within 28 days. I called Mr Hiscox at around this time and we went through the key points of the deal as a group including that the [Union] would not press the remaining s 45 contravention and would not make submissions on a penalty figure or penalty range. I was instructed to accept this proposal.
11.Upon resumption at 12.15pm, each counsel put their understanding of the deal to his Honour. Having clarified to his Honour that all issues in relation to liability and compensation were settled, the parties were instructed to provide a brief agreed statement of facts, and return .on Wednesday 20 March 2024 to make submissions in relation to penalty. Ms Erian confirmed at that time that the [Union] would be limited in relation to its submissions on penalty, excluding what range the [Union] believed appropriate. Ms Erian’s statement to the Court accorded with my understanding of the agreement reached.
(Mr Hiscox is the Union’s Branch Assistant Secretary for the Australian Capital Territory, from whom Mr Fischer was taking instructions.)
Mr Gavran deposed as follows:
The Agreement Between the Parties
12.The matter was listed for hearing on 18, 19 and 20 March 2024, before Neville J in the Federal Circuit and Family Court, Canberra, to determine if more was owed to Mr Cocos.
13.On 18 March 2024, I attended the Canberra location of the Federal Circuit Court at Nigel Bowen Commonwealth Law Courts for the commencement of the first day of the proceedings.
14.On that same day, through my solicitors, Mr. William Ward and Ms. Maria Nazir that [AMK Images and Mr Gavran’s] Legal Counsel, Ms. Anca Costin, and the [Union’s] Legal Counsel, Ms. Stephanie Erian an agreement was reached between the parties (‘the Agreement’) in relation to disposing with the proceedings as to liability. I accepted and entered this Agreement in my capacity as a director of [AMK Images] and also my personal capacity ... It was my understanding that this Agreement would conclude the proceedings in relation to liability.
15.To the best of my knowledge, the Agreement involved the following terms:
a.[AMK Images] would admit to five breaches of the Building and Construction General On-Site Award 2010 and Building and Construction General On-Site Award 2020 (together, ‘the Awards’);
b.[AMK Images] would admit to two contraventions of the Fair Work Act 2009, (‘Cth’) being sections 323 and 536;
c.[AMK Images and Mr Gavran] were to pay Mr Jayson Cocos the sum of $28,725.08 (less applicable tax) plus interest in the amount of $650.00;
d.With regard to penalties, the [Union] would submit to the court that the penalties should be in the low range; and
e.The [Union] would not make any submissions to the Court in relation to penalty quantum or specific dollar figures or dollar ranges.
16.I verbally instructed my Solicitors, Mr. Ward and Ms. Nazir that I accepted the terms of this Agreement. To my understanding, my instructions were communicated by Mr Ward and Ms. Nazir to Ms. Costin, who subsequently confirmed my consent to the Agreement to the [Union’s] Legal Counsel.
17.In accepting the terms of the Agreement, my decision was largely based on my understanding that the [Union] would not be making any submissions regarding the specific figure of the penalties. It was my understanding that one of the terms of the Agreement between the parties was also that the penalties would be in the low range. In reliance of this term, I agreed for [AMK Images and myself] to admit to five breaches of the Award.
18.Later that day, and following my instructions to accept the Agreement, I recall that Judge Neville was informed that the parties had reached an Agreement. I recall that it was Ms. Costin and Ms. Erian who made these submissions to Judge Neville in Court.
19.In response, I understood that Judge Neville ordered that the parties’ agreement be reflected in an ‘Agreed Statement of Facts’ and further, that they jointly prepare a ‘Proposed Court Order.’
20.According to my recollection, these documents were to be provided to the Court by no later than 19 March 2024.
21.On 19 March 2024, I recall having a brief conversation on the phone with my solicitors, Mr. Ward and Ms. Nazir. They advised that they were preparing a ‘Proposed Court Order’ with the [Union] and proceeded to outline the terms to me over the phone. I gave my consent to these terms. As I understand it, the terms that I agreed to consisted of those raised in paragraph 15 of this Affidavit. A copy of the Proposed Court Order is annexed to this affidavit and marked as “AG-1.”
22.I was further advised by my solicitors that the parties would be preparing a joint Statement of Agreed Facts which provided the terms of the Agreement reached between the parties. I verbally instructed my solicitors that they had my instructions to proceed with jointly drafting this document with the [Union] and providing it to the Court.
23.To the best of my knowledge, on 19 March 2024, a copy of the parties’ Agreed Statement of Fact (sic) was emailed by the [Union’s] legal representative, Mr, Thomas Fischer to the Court. A copy of the Agreed Statement of Facts is annexed to this affidavit and marked as “AG-2.”
(emphasis in original)
I am not satisfied that the agreement reached included the disputed term, for the following reasons:
(1)first, the affidavit evidence of Mr Gavran does not establish that such a term was agreed. At its highest, it establishes that Mr Gavran believed that such a term formed part of the agreement. Mr Gavran’s evidence in cross-examination confirmed that he had no actual memory of what was said between those who negotiated the agreement. This is perhaps unsurprising given that he appears to have been on the periphery of the negotiations;
(2)secondly, there is no evidence from any of Mr Gavran’s legal representatives who were apparently involved in the negotiation of the agreement, namely Ms Costin, Mr Ward and Ms Nazir;
(3)thirdly, it is inherently unlikely that the parties by their legal representatives, would have included a term compelling the Union to make submissions to the Court that the penalties should be in the low range, when, as is common ground, it was agreed that the Union would not make any submissions to the Court in relation to ranges of penalties. The inconsistency is stark and telling;
(4)fourthly, the disputed term was not mentioned by counsel for AMK Images and Mr Gavran to the Court when the primary judge was told of the agreement that had been reached between the parties (see [6] above);
(5)fifthly, as the primary judge noted at J[6], and as is recorded in the passages of transcript set out [10] above, it was stated at the commencement of the hearing on 20 March 2024 that there would be no opposition from the Union to the submissions made on behalf of AMK Images and Mr Gavran regarding the penalties “range”; and
(6)finally, had the disputed term formed part of the agreement it might be expected that the failure of counsel for the Union to submit that the penalties should have been in “the low range” would have been the subject of protest. There is no evidence of any such protest.
I note at this point that at J[31(f)] the primary judge stated that “[i]t is agreed that the contraventions, and circumstances that gave rise to them, are at the lower end of seriousness or gravity”. That statement – which is inconsistent with the evidence described above with J[32] (see [22] above), and with the transcript extracted at [10] above – appears to be an error, as Mr Boncardo for the Union contended. Mr Ward, for AMK Images and Mr Gavran did not contest this.
In summary, I am satisfied that the agreement reached included terms to the following effect:
(1)AMK Images would admit to:
(a)five breaches of the Building and Construction General On‑Site Award 2010 (2010 Award) and Building and Construction General On-Site Award 2020 (2020 Award);
(b)a contravention of s 323 of the FW Act;
(c)a contravention of s 536 of the FW Act;
(2)AMK Images and Mr Gavran would pay Mr Cocos the sum of $28,725.08, (less applicable tax) plus interest in the amount of $650.00; and
(3)the Union would not make any submissions to the primary judge in relation to penalty quantum or specific dollar figures or dollar ranges,
but not a term that the Union would submit to the primary judge that the penalties to be imposed should be in the low range.
Mr Gavran’s argument in so far as it is based in contract is that:
(1)as is common ground, the Union agreed not to make any submissions to the primary judge in relation to penalty quantum or specific dollar figures or dollar ranges; and
(2)the Union contravened this agreement by filing a notice of appeal containing submissions as to the level of penalties to be imposed.
I accept that an agreement containing the term described in [42(1)] was reached. However, that term was not breached by the filing of the notice of appeal because the agreement related only to the proceeding before the primary judge and did not preclude the Union from bringing an appeal on the basis that the primary judge erred in the exercise of his discretion. In this regard, I note that there was no contention that there was an implied term that the agreement extended to include any potential appeal regardless of the manner in which the discretion was exercised; and in any event such a term would not satisfy the criteria described in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283 (Lord Simon) and State Rail Authority of New South Wales v Codelfa Construction Pty Ltd [1982] HCA 24; (1982) 149 CLR 337 at 346 to 347 (Mason J). In particular the agreement would be effective without such a term and it is not so obvious that “it goes without saying”. In any event, the filing of the notice of appeal (and the conduct of the appeal) did not involve any submissions to the primary judge (or to this Court) in relation to penalty quantum or specific dollar figures or dollar ranges.
The estoppel argument can be dealt with briefly. Mr Gavran’s evidence includes:
In accepting the terms of the Agreement, my decision was largely based on my understanding that the Applicant would not be making any submissions regarding the specific figure of the penalties. It was my understanding that one of the terms of the Agreement between the parties was also that the penalties would be in the low range. In reliance of this term, I agreed for the Respondents to admit to five breaches of the Award.
(emphasis added)
Thus, Mr Gavran’s reliance was founded upon the disputed term which I have found did not exist, for the reasons set out above. The estoppel claim must fail for reasons including that it cannot have been unconscionable for the Union to resile from an assumption that it did not create.
For the reasons set out above, the notice of objection to competency should be dismissed.
E. THE APPEAL
I turn now to consider the appeal.
The imposition of penalties by the primary judge for the contraventions of ss 45, 323 and 536 of the FW Act involved an exercise of the discretion to order a person to pay an appropriate pecuniary penalty conferred by s 546 of the FW Act. This Court will not interfere on appeal with such an exercise of discretion absent the establishment of an error of the kinds described in House v The King (1936) 55 CLR 499 at 504 to 505 (Dixon, Evatt and McTiernan JJ):
The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
An example of an error of the latter kind – where the manner in which the primary judge reached the result embodied in the order is not apparent, but the unreasonableness or plain injustice of the result is apparent, such that a court may infer that there has been a failure to properly exercise the discretion – is a manifestly inadequate criminal sentence or a civil penalty: see, e.g., Wong v The Queen [2001] HCA 64; (2001) 207 CLR 584 at 605 to 606 [58], (Gaudron, Gummow and Hayne JJ); Hili v The Queen [2010] HCA 45; (2010) 242 CLR 520 at 538 [58], (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ); and Australian Competition and Consumer Commission v Employsure Pty Ltd [2023] FCAFC 5; (2023) 407 ALR 302, (Rares, Stewart and Abraham JJ) at 309 to 310 ([29] to [33]).
In Hili, the plurality explained at 538 to 539 [59]:
As was said in Dinsdale v The Queen, “[m]anifest inadequacy of sentence, like manifest excess, is a conclusion”. And, as the plurality pointed out in Wong, appellate intervention on the ground that a sentence is manifestly excessive or manifestly inadequate “is not justified simply because the result arrived at below is markedly different from other sentences that have been imposed in other cases”. Rather, as the plurality went on to say in Wong, “[i]ntervention is warranted only where the difference is such that, in all the circumstances, the appellate court concludes that there must have been some misapplication of principle, even though where and how is not apparent from the statement of reasons”.
In Australian Securities and Investments Commission v Wooldridge[2019] FCAFC 172, the Full Court of this Court (Greenwood, Middleton and Foster JJ) explained at [53] that where a party contends that a penalty was “manifestly inadequate”:
... the inadequacy must be ‘obvious, plain, apparent, easily perceived or understood and unmistakeable. It must be so far outside the range of reasonable discretionary judgement as to itself bespeak error’: Hanks v The Queen [2011] VSCA 7 at [22]; Zerafa v The Queen [2013] VSCA 42 at [41]. Mere disagreement, or a difference of opinion, between an appellate court and a primary judge over the penalty imposed is not sufficient.
That passage was cited with apparent approval by Moshinsky and O’Callaghan JJ (with whom Snaden J agreed) in Australian Building and Construction Commissioner v Australian Workers’ Union [2022] FCAFC 143; (2022) 406 ALR 20 (ABCC v AWU) at 33 [74] and by Charlesworth, Snaden and Raper JJ in Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman [2023] FCAFC 161; (2023) 299 FCR 334 at 348 [39]. In ABCC v AWU, Moshinsky and O’Callaghan JJ continued at 33 to 34 ([75] to [76]):
[75]The primary judge took into account the facts and matters relied on by the Commissioner in support of higher penalties. His Honour also took into account a number of matters relied on by the respondents that supported lower penalties being imposed. Having regard to the facts and matters considered by the primary judge (and also our observations, below, in relation to grounds of appeal 2 to 8), we are not satisfied that the penalties imposed by the primary judge were manifestly inadequate.
[76] We note that reasonable minds will often differ as to the appropriate pecuniary penalty for the contravention of a civil penalty provision. Given this, a ground of appeal contending that a penalty imposed by a judge is manifestly inadequate (or manifestly excessive) may be difficult to establish in circumstances where the judge has had regard to all relevant considerations and not had regard to any extraneous considerations.
See also Airservices Australia v Civil Air Operations Officers’ Association of Australia [2022] FCAFC 172; (2022) 295 FCR 36 at 40 to 42 ([5] to [7] and [11]). At 41 to 42 [11], Bromberg J explained:
As Moshinsky and O’Callaghan JJ said in ABCC v AWU at [76], given that reasonable minds will differ as to an appropriate pecuniary penalty, an assertion of manifest error will be difficult to establish where the primary judge has not erred in relation to the considerations that the primary judge had regard to. That is so because in that circumstance, an appellant’s complaint with the penalty imposed is no more than a complaint about the weight which was given by the primary judge to the various considerations that the judge correctly took into account. The weight to be accorded to and the balance to be struck between competing considerations is quintessentially a matter for the primary judge. An appellate court should leave such an assessment undisturbed unless positively satisfied that there is an inadequacy or an excess in the penalty imposed which is “obvious, plain, apparent, easily perceived or understood and unmistakeable”: Wooldridge at [53]. The penalty imposed must not simply be outside the range of penalties that the appellate court considers to be apt, it must be “so far outside the range of reasonable discretionary judgement as to itself bespeak error”: Wooldridge at [53].
In assessing whether a penalty is manifestly inadequate, it is necessary to bear in mind the principles relevant to assessing a civil penalty: see Hili at 539 [60] (“... what reveals manifest excess, or inadequacy, of sentence is consideration of all of the matters that are relevant to fixing the sentence”); Employsure at 312 [42]. Those principles relevantly include: (1) the prescribed maximum penalty; (2) the primary purpose of any civil penalty regime, namely to ensure compliance with the statutory regime by providing specific and general deterrence against future contraventions; and (3) the usual position that separate contraventions arising from separate acts or omissions attract separate penalties: see Employsure at 312 to 314 ([42] to [51]).
The Union’s grounds of appeal, as set out in its amended notice of appeal are:
1.The primary erred in imposing a single penalty on [AMK Images] in respect of its five contraventions of s 45 of the Fair Work Act 2009 (Cth) (Fair Work Act) in circumstances where s 546(1) of the Fair Work Act does not permit the imposition of a single aggregate penalty for multiple contraventions.
1A The primary judge erred in concluding that:
a.the parties had agreed that the contravening was at the lowest end of seriousness or gravity when the [Union] never so agreed; and/or
b. the contravening was at the lowest end of seriousness or gravity.
1BThe primary judge erred in attributing to the [Union] a submission that an appropriate penalty for [AMK Images] 5 contraventions of s 45 of the Fair Work Act was $10,000 in circumstances where the [Union] had made no such submissions.
1CThe primary judge mistook the facts in finding that [AMK Images and Mr Gavran] were contrite in circumstances where the respondents did not adduce any evidence of contrition or remorse.
1DThe primary judge mistook the facts in finding that inadvertence and ignorance led to the contraventions in circumstances where [AMK Images and Mr Gavran] did not adduce any evidence that they were ignorant of or failed to advert to the circumstances which resulted in the ss 323 and 536 contraventions and the contraventions of s 45 relating to the failure to provide copies of the Award or National Employment Standards, pay Jayson Cocos regularly and pay Jayson Cocos redundancy.
1EThe primary judge erred in failing to have regard to the applicable maximum penalties.
2.The primary judge erred in imposing a single penalty of $6,500 on [AMK Images] for its five contraventions of s 45 of the Fair Work Act, which was manifestly inadequate in the circumstances.
3.The primary judge erred in imposing a penalty of $1,000 on [AMK Images] for its contravention of s 323 of the Fair Work Act, which was manifestly inadequate in the circumstances.
4.The primary judge erred in imposing a penalty of $1,500 on [AMK Images] for its contravention of s 536 of the Fair Work Act, which was manifestly inadequate in the circumstances.
5.The primary judge erred in imposing a single penalty on [Mr Gavran] in respect of his seven contraventions as accessory under s 550 of the Fair Work Act in circumstances where s 546(1) of the Fair Work Act does not permit the imposition of a single aggregate penalty for multiple contraventions.
6.The primary judge erred in imposing a single penalty of $3,500 on [Mr Gavran] for his seven contraventions of the Fair Work Act, representing less than 3% of the maximum penalty available, which was manifestly inadequate in the circumstances.
(emphasis in original)
These are considered below.
E.1 The contraventions of s 45 of the FW Act by AMK Images – Order 2
Section 45 of the FW Act provides:
45 Contravening a modern award
A person must not contravene a term of a modern award.
The primary judge imposed a penalty of $6,500 upon AMK Images for five contraventions of s 45 of the FW Act (despite AMK Images’s submission that a $10,000 penalty was appropriate). The five admitted contraventions involved a failure to:
(1)provide Mr Cocos with copies of the National Employment Standards or the relevant Award, as required by cl 5 of the 2010 Award and cl 3.3 of the 2020 Award (agreed fact 9(a); declaration 1(a));
(2)pay meal allowances to Mr Cocos, as required by c 20.2 of the 2010 Award and c 21.2 of the 2020 Award (agreed fact 9(b); declaration 1(b));
(3)pay Mr Cocos’s wages on a regular, weekly schedule, as required by cl 31.3 of the 2010 Award and cl 20.3 of the 2020 Award (agreed fact 9(c); declaration 1(c));
(4)pay travel allowances to Mr Cocos, as required by cl 26.1 of the 2020 Award (agreed fact 10; declaration 1(d)); and
(5)make a redundancy payment to Mr Cocos, as required by cl 41.3 of the 2020 Award (agreed fact 12; declaration 1(e)).
By the first ground of appeal the Union contends that the primary judge erred in imposing a single penalty on AMK Images in respect of its five contraventions of s 45 of the FW Act in circumstances where s 546(1) of the FW Act does not permit the imposition of a single aggregate penalty for multiple contraventions.
This ground of appeal relates to J[33], which is set out at [23] above, and in which the primary judge stated that: (1) five contraventions of s 45 of the FW Act had been admitted; and (2) there was an agreement that these contraventions should be treated as a single course of conduct.
The imposition of a single penalty for multiple contraventions is, subject to relevant exceptions, not authorised by s 546 of the FW Act. Rather the Court’s discretion under s 546 is to be exercised with respect to each contravention: see Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 413 at [48] to [58] (White J); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Registered Organisations Commissioner [2020] FCAFC 232; (2020) 283 FCR 404 at 428 ([79]ff) (Bromberg, Rangiah and Bromwich JJ). One such exception is where there is an agreement that multiple contraventions be treated as a single contravention and the Court considers that this is appropriate in all of the circumstances: see Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; (2017) 254 FCR 68 at 99 to 100 ([148] to [149]) (Dowsett, Greenwood and Wigney JJ); Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union (Kiama Aged Care Centre Case) (No 3) [2023] FCA 1324 (Katzmann J).
However, in the present case, and contrary to J[33], there was no such agreement. Notably on this appeal, Mr Ward, who appeared for Mr Gavran, did not seek to defend the primary judge’s conclusion that there was such an agreement.
Mr Ward did, however, seek to rely upon s 557 of the FW Act, which provides in so far as is presently relevant:
557 Course of conduct
(1) 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.
(2) The civil remedy provisions are the following:
...
(b) section 45 (which deals with contraventions of modern awards);
...
I do not accept this submission. Section 557 of the FW Act does not allow contraventions of different award terms (as occurred in the present case) to be treated as one contravention: Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62; (2014) 221 FCR 153; Fair Work Ombudsman v Ho [2024] FCAFC 111 at [16] to [27] and [33] (Raper, Shariff and Dowling JJ).
Thus, the primary judge mistook the facts or allowed an extraneous matter to guide him, and as a result erred in the exercise of the discretion.
Further, I am satisfied that the penalty of $6,500 for five contraventions imposed on AMK Images is manifestly inadequate in that it is so far outside the range of reasonable discretionary judgment, as explained in Wooldridge. In reaching that conclusion, I have had particular regard to:
(1)the principles set out at [48] to [54] above;
(2)the purpose of the imposition of civil penalties being the deterrence of further contraventions, both specific and general;
(3)the evidence that was before the primary judge and in particular the very limited extent to which that evidence demonstrated inadvertence, ignorance or contrition;
(4)the primary judge’s statement at J[31(f)] that there was an agreement that “the contraventions and the circumstances that gave rise to them were at the lower end of seriousness or gravity” being incorrect and that there was no such agreement (see [40] above);
(5)the maximum penalty being a relevant consideration;
(6)the absence of reference in the primary judgment to the maximum penalty;
(7)the maximum penalty for each contravention, which was $63,000 prior to 1 July 2020 and $66,600 thereafter;
(8)the fact that the penalty imposed per contravention ($6,500/5, or $1,300) was approximately two per cent of the maximum penalty; and
(9)the apparent misapprehension by the primary judge that the Union, rather than AMK Images, sought a penalty (for five contraventions) of $10,000, followed by a discounting by more than one-third of the penalty for which AMK Images contended.
It follows that the primary judge’s order imposing a penalty of $6,500 upon AMK Images for its five contraventions of s 45 of the FW Act should be set aside.
E.2 The contravention of s 323 of the FW Act by AMK Images – Order 3
Section 323 of the FW Act provides:
323 Method and frequency of payment
(1) An employer must pay an employee amounts payable to the employee in relation to the performance of work:
(a) in full (except as provided by section 324)
...
The primary judge imposed a penalty of $1,000 on AMK Images for an agreed single contravention of s 323 of the FW Act, with respect to AMK Images making deductions to Mr Coco’s wages for rental accommodation which had not been agreed to in writing (agreed fact 11; declaration (1)(f)).
By the third ground of appeal the Union contends that this penalty was manifestly inadequate. I have again considered the matters set out at [66(1) to (7)] above, together with the fact that the penalty of $1,000 imposed was approximately 1.5 per cent of the maximum penalty.
Having done so, I am comfortably satisfied that the penalty imposed was manifestly inadequate in the sense explained by the Full Court in Wooldridge. It follows that order 3 made by the primary judge should be set aside.
E.3 The contravention of s 536 of the FW Act by AMK Images – Order 4
Section 536 of the FW Act provides:
536 Employer obligations in relation to pay slips
(1) An employer must give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.
...
The primary judge imposed a penalty of $1,500 on AMK Images for a contravention of s 536 of the Act, with respect to the failure by AMK Images to provide Mr Cocos with payslips, as required by s 536 of the FW Act (agreed fact 9(d); declaration 1(g)).
By the fourth ground of appeal the Union contends that this penalty was manifestly inadequate. I have again taken into account the matters referred to at [66(1) to (7)] above, together with the fact that the penalty imposed was approximately 2.3 per cent of the maximum penalty. Again, I am comfortably satisfied that the penalty of $1,500 is manifestly inadequate in the sense explained by the Full Court in Wooldridge. It follows that order 4 made by the primary judge should be set aside.
E.4 The penalty imposed upon Mr Gavran – Order 5
I turn now to consider the penalty of $3,500 imposed upon Mr Gavran. That penalty was imposed in circumstances where Mr Gavran admitted that he was involved in all seven of the contraventions in respect of which AMK Images admitted liability.
Section 550(1) of the FW Act provides:
550 Involvement in contravention treated in same way as actual contravention
(1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
The effect of s 550(1) of the FW Act is to deem a person involved in a contravention of a civil penalty provision to have contravened such a provision. Thus, Mr Gavran is to be taken, by reason of his involvement in the contraventions by AMK Images to have contravened the same civil penalty provisions.
The primary judge’s statement at J[36] that: “[i]n relation to the liability of the company under s 550 of the Act, the penalty for this admitted contravention shall be $3,500” is problematic, as is the form of order 5 as made by the primary judge. There can be no contravention of s 550 of the FW Act. Rather, as noted above, it operates so as to deem liability under a civil penalty provision (relevantly ss 45, 323 and 536). Further, any liability imposed by reason of the operation of s 550 of the FW Act falls upon Mr Gavran, not AMK Images as suggested at J[36]. Nevertheless, it is sufficiently clear that the primary judge was imposing a penalty upon Mr Gavran for the seven admitted contraventions.
By the fifth ground of appeal the Union contends that the primary judge erred in imposing a single penalty upon Mr Gavran in respect of his seven contraventions in circumstances where s 546(1) of the FW Act does not permit the imposition of a single aggregate penalty for multiple contraventions. By the sixth ground of appeal, the Union contends that the penalty imposed was manifestly inadequate.
The primary judge does not expressly state that he treated the seven contraventions as a single contravention, and it is unclear whether he did so. However, it is not necessary to reach a concluded view as to whether the primary judge did so. To the extent that the primary judge did treat the seven contraventions as a single contravention, he erred for the reasons set out at [61] and [62] above. To the extent that the primary judge treated the seven contraventions as individual contraventions, such that the $3,500 penalty should be taken as the product of seven and $500 (7 x $500 = $3,500), then the penalty for each contravention (i.e. $500) was manifestly inadequate, taking into account: the matters described at [66(1) to (6)] above; the fact that the maximum penalty for each contravention was $12,600 prior to 1 July 2020 and $13,320 thereafter; and the fact that the penalty of $500 per contravention was in the order of 3.9 per cent of the maximum penalty. It follows that order 5 made by the primary judge should be set aside.
Finally, in view of the conclusions reached with respect to the grounds of appeal discussed above, which conclusions are dispositive of the appeal, it is unnecessary to address the remaining grounds of appeal: Boensch v Pascoe [2019] HCA 49; (2019) 268 CLR 593 at 600 to 601 ([7] to [8]) (Kiefel CJ, Gageler and Keane JJ).
F. CONCLUSION
The appeal should be allowed and orders 2 to 6 made by the primary judge should be set aside. I will make orders accordingly.
I certify that the preceding eighty-two (82) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman. Associate:
Dated: 18 December 2024
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