DFWBII v Vic Metro Brick and Blocklaying Pty Ltd and Ors (No.2)
[2015] FCCA 3223
•9 December 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DFWBII v VIC METRO BRICK AND BLOCKLAYING PTY LTD & ORS (No.2) | [2015] FCCA 3223 |
| Catchwords: INDUSTRIAL LAW – Penalties – underpayments – failure to provide pay slips – complete lack of contrition, co-operation or corrective action – relatively small total amount underpaid. |
| Legislation: Fair Work Act 2009 (Cth) ss.44, 45, 323, 323(1), 536(1), 539(2), 545(1), 545(2)(b), 546(1), 546(2), 546(3), 547(2) |
| Cases cited: Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (2001) ATPR 41-815; [2001] FCA 383 Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 75 FCR 238; (1997) 145 ALR 36; (1997) ATPR 41-562 Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) (2005) 215 ALR 301; (2005) ATPR 42-052; [2005] FCA 265 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) 246 ALR 35; [2008] FCAFC 8 Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228; [2001] FCA 1364 Director of the Fair Work Building Industry Inspectorate v Vic Metro Brick and Blocklaying Pty Ltd (In Liq) & Ors [2015] FCCA 2266 Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331; (2015) 320 ALR 631; (2015) 105 ACSR 403; [2015] FCAFC 59 Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 Mason v Harrington Corp Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; (2008) 247 ALR 714; (2008) 171 IR 455; [2008] FCAFC 70 Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; (2008) 177 IR 243; [2008] FCAFC 170 Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; (2007) 162 IR 444; [2007] FCAFC 65 Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412 |
| Applicant: | DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE |
| First respondent: | VIC METRO BRICK AND BLOCKLAYING PTY LTD (ACN 151 293 453) |
| Second respondent: | VIC METRO BRICK AND BLOCKLAYING AUSTRALIA PTY LTD (ACN 160 943 199) |
| Third respondent: | MEL BONNICI |
| File number: | MLG 2272 of 2013 |
| Judgment of: | Judge Riley |
| Hearing date: | 20 November 2015 |
| Date of last submission: | 20 November 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 9 December 2015 |
REPRESENTATION
| Counsel for the applicant: | Cathy Dowsett |
| Solicitors for the applicant: | Fair Work Building and Construction |
| Counsel for the first respondent: | No appearance |
| Solicitors for the first respondent: | The first respondent was not represented |
| Counsel for the second respondent: | No appearance |
| Solicitors for the second respondent: | The second respondent was not represented |
| Counsel for the third respondent: | No appearance |
| Solicitors for the third respondent: | The third respondent was not represented |
ORDERS
In respect of the contraventions declared by the court on
21 August 2015 at paragraphs 1(a)(ii) and (b), the second respondent pay compensation pursuant to s.545(2)(b) of the Fair Work Act 2009 to Brett Stielow as follows:
(a)$100.68 (gross) in travel allowance;
(b)$1,384.38 (gross) in accrued untaken annual leave
from which income tax is to be withheld at the rate of 49%.
The second respondent pay pre-judgment interest on the amounts referred to in order 1 pursuant to s.547(2) of the Fair Work Act 2009 to Brett Stielow of $182.88.
In respect of the contraventions declared by the court on
21 August 2015 at paragraphs 1(a)(i), (ii) and (b), the second respondent pay compensation pursuant to s 545(2)(b) of the Fair Work Act 2009 to Wesley Keenan as follows:
(a)$215.99 (gross) in wages for ordinary hours of work;
(b)$33.56 (gross) in travel allowance;
(c)$19.65 (gross) in accrued untaken annual leave
from which income tax is to be withheld at the rate of 49%.
The second respondent pay pre-judgment interest on the amounts referred to in order 3 pursuant to s.547(2) of the Fair Work Act 2009 to Wesley Keenan of $33.15.
In respect of the contraventions declared by the court on
21 August 2015 at paragraphs 1(a)(i), (ii) and (b), the second respondent pay compensation pursuant to s 545(2)(b) of the Fair Work Act 2009 to David Sheridan as follows:
(a)$1,366.50 (gross) in wages for ordinary hours of work;
(b)$167.60 (gross) in travel allowance;
(c)$123.29 (gross) in accrued untaken annual leave
from which income tax is to be withheld at the rate of 49%.
The second respondent pay pre-judgment interest on the amounts referred to in order 5 pursuant to s.547(2) of the Fair Work Act 2009 to David Sheridan of $204.10.
In respect of the contraventions declared by the court on
21 August 2015 at paragraphs 1(a)(i), (ii) and (b), the second respondent pay compensation pursuant to s.545(2)(b) of the Fair Work Act 2009 to Thomas McKeown as follows:
(a)$1,494.71 (gross) in wages for ordinary hours of work;
(b)$302.04 (gross) in travel allowance;
(c)$227.43 (gross) in accrued untaken annual leave,
from which income tax is to be withheld at the rate of 49%.
The second respondent pay pre-judgment interest on the amounts referred to in order 7 pursuant to s 547(2) of the Fair Work Act 2009 to Thomas McKeown of $249.27.
Pursuant to s.545(1) of the Fair Work Act 2009, the amounts referred to in orders 1 to 8 be paid within 28 days of the date of this order.
Pursuant to s.545(1) of the Fair Work Act 2009, the amounts referred to in orders 1 to 8 be paid by way of bank cheque made payable to each named individual for the total amounts and be delivered to the Melbourne offices of the applicant.
Pursuant to s.546(1) of the Fair Work Act 2009, the second respondent pay pecuniary penalties in respect of the second respondent’s contraventions of the Fair Work Act 2009 declared by the court on 21 August 2015, in the amount of $19,250.
Pursuant to s.546(3) of the Fair Work Act 2009, the pecuniary penalties referred to in order 11 be paid to the Commonwealth of Australia within 50 days of the date of these orders.
In default of payment of the compensation and/or the pecuniary penalties pursuant to these orders, the applicant have liberty to apply for direction for enforcement of payment of the pecuniary penalties and compensation.
The application otherwise be dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 2272 of 2013
| DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE |
Applicant
And
| VIC METRO BRICK AND BLOCKLAYING PTY LTD (ACN 151 293 453) |
First respondent
| VIC METRO BRICK AND BLOCKLAYING AUSTRALIA PTY LTD (ACN 160 943 199) |
Second respondent
| MEL BONNICI |
Third respondent
REASONS FOR JUDGMENT
Introduction
This matter concerns consequential orders to be made and penalties to be imposed on the second respondent following the finding of certain contraventions of the Fair Work Act 2009 (“the Act”). Those findings were made in Director of the Fair Work Building Industry Inspectorate v Vic Metro Brick and Blocklaying Pty Ltd (In Liq) & Ors [2015] FCCA 2266. The court made the following declarations in that case on 21 August 2015:
(1) The second respondent breached:
(a) s.45 of the Fair Work Act 2009 (“the Act”) by failing to pay correct entitlements, and, in particular:
(i) minimum rates of pay in accordance with clauses 19.1 and 19.3(a) of the Building and Construction General On-Site Award 2010 (“the Award”) to David Sheridan, Wesley Keenan and Thomas McKeown;
(ii) the metropolitan radial areas allowance in accordance with clause 25.2 of the Award to Brett Stielow, David Sheridan, Wesley Keenan and Thomas McKeown; and
(iii) superannuation contributions in accordance with clause 32.2 of the Award on behalf of Brett Stielow, Benjamin Eichner, David Sheridan, Wesley Keenan and Thomas McKeown;
(b) s.44 of the Act by contravening the National Employment Standards by failing to pay Brett Stielow, David Sheridan, Wesley Keenan and Thomas McKeown accrued but untaken annual leave upon termination in accordance with s.90(2) of the Act;
(c) s.323(1) of the Act by failing to pay David Sheridan, Wesley Keenan and Thomas McKeown amounts payable in relation to the performance of work in full and at least monthly; and
(d) s.536(1) of the Act by failing to provide payslips to Benjamin Eichner and Thomas McKeown within one working day of paying them.
The second respondent appeared at the liability hearing, through its sole director, Mr Jesse Bonnici, with the leave of the court. However, the second respondent did not appear at the penalty hearing.
The second respondent has applied to be deregistered. However, the Australian Securities and Investment Commission has put that process on hold pending the outcome of this proceeding at the request of the applicant.
Consequential orders
The applicant proposed that the following orders be made consequential upon the declarations set out above:
1. In respect of the contraventions declared by the Court on 21 August 2015 at paragraphs 1(a)(ii) and (b), the Second Respondent pay compensation pursuant to s 545(2)(b) of the Fair Work Act 2009 (Cth) to Brett Stielow as follows:
a. $100.68 (gross) in travel allowance.
b. $1,384.38 (gross) in accrued untaken annual leave,
from income tax is to be withheld at the rate of 49%.
2. The Second Respondent pay pre-judgment interest on the amounts referred to in Order 1 pursuant to s 547(2) of the Fair Work Act 2009 (Cth) to Brett Stielow of $182.88.
3. In respect of the contraventions declared by the Court on 21 August 2015 at paragraphs 1(a)(i), (ii) and (b), the Second Respondent pay compensation pursuant to s 545(2)(b) of the Fair Work Act 2009 (Cth) to Wesley Keenan as follows:
a. $215.99 (gross) in wages for ordinary hours of work.
b. $33.56 (gross) in travel allowance.
c. $19.65 (gross) in accrued untaken annual leave,
from income tax is to be withheld at the rate of 49%.
4. The Second Respondent pay pre-judgment interest on the amounts referred to in Order 3 pursuant to s 547(2) of the Fair Work Act 2009 (Cth) to Wesley Keenan of $33.15.
5. In respect of the contraventions declared by the Court on 21 August 2015 at paragraphs 1(a)(i), (ii) and (b), the Second Respondent pay compensation pursuant to s 545(2)(b) of the Fair Work Act 2009 (Cth) to David Sheridan as follows:
a. $1,366.50 (gross) in wages for ordinary hours of work.
b. $167.60 (gross) in travel allowance.
c. $123.29 (gross) in accrued untaken annual leave,
from which income tax is to be withheld at the rate of 49%.
6. The Second Respondent pay pre-judgment interest on the amounts referred to in Order 5 pursuant to s 547(2) of the Fair Work Act 2009 (Cth) to David Sheridan of $204.10.
7. In respect of the contraventions declared by the Court on 21 August 2015 at paragraphs 1(a)(i), (ii) and (b), the Second Respondent pay compensation pursuant to s 545(2)(b) of the Fair Work Act 2009 (Cth) to Thomas McKeown as follows:
a. $1,494.71 (gross) in wages for ordinary hours of work.
b. $302.04 (gross) in travel allowance.
c. $227.43 (gross) in accrued untaken annual leave,
from which income tax is to be withheld at the rate of 49%.
8. The Second Respondent pay pre-judgment interest on the amounts referred to in Order 7 pursuant to s 547(2) of the Fair Work Act 2009 (Cth) to Thomas McKeown of $249.27.
9. Pursuant to s 545(1) of the Fair Work Act 2009 (Cth), the amounts referred to in Orders 1 to 8 be paid within 28 days of the date of this order.
10. Pursuant to s 545(1) of the Fair Work Act 2009 (Cth), the amounts referred to in Orders 1 through 8 be paid by way of bank cheque made payable to each named individual for the total amounts and be delivered to the Melbourne offices of the Applicant.
I am satisfied that the proposed orders reflect the reasons and declarations given previously. There will be orders accordingly.
Approach to determining penalty
In view of the decision of the Full Court of the Federal Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331; (2015) 320 ALR 631; (2015) 105 ACSR 403; [2015] FCAFC 59, it is not permitted for the applicant to suggest to the court a range of appropriate penalties. The High Court has granted special leave to appeal from that decision. The appeal has been heard and the High Court’s decision is presently reserved. It was not suggested that my decision in this matter should await the outcome of the High Court appeal. Consequently, I will proceed on the basis of the law as it presently stands. That is, I will form my own view of the appropriate penalty, bearing in mind any comparable decisions of other courts.
In general, the proper approach to determining penalty in cases such as this is as follows. The first step for the court is to identify each separate contravention involved.
Where there are multiple contraventions, the second step is to consider whether any of the various contraventions constituted a single course of conduct, such that multiple breaches should be treated as a single breach.
The third step is for the court to consider the extent, if any, to which two or more contraventions have common elements. A person should not be penalised more than once for the same conduct.
The penalty imposed by the court should be an appropriate response to the contravenor’s conduct.[1] This is a separate process from the application of the totality principle.[2]
[1] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) 246 ALR 35; [2008] FCAFC 8 at [46] (Graham J) (Full Court of the Federal Court of Australia, 20 February 2008, Gray, Graham and Buchanan JJ).
[2] Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; (2008) 247 ALR 714; (2008) 171 IR 455; [2008] FCAFC 70 at [41]-[46] (Stone and Buchanan JJ) (Full Court of the Federal Court of Australia, 7 May 2008, Gyles, Stone and Buchanan JJ)
The fourth step is for the court to consider the appropriate penalty for each breach, treating multiple breaches arising from a course of conduct as a single breach, and taking into account any common elements shared by the various breaches.
In Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 75 FCR 238; (1997) 145 ALR 36; (1997) ATPR 41-562, the court considered the application of the principle of totality in the civil penalty context in the following terms:
The totality principle is designed to ensure that overall an appropriate sentence or penalty is appropriate and that the sum of the penalties imposed for several contraventions does not result in the total of the penalties exceeding what is proper having regard to the totality of the contravening conduct involved. But that does not mean that a court should commence by determining an overall penalty and then dividing it among the various contraventions. Rather the totality principle involves a final overall consideration of the sum of the penalties determined.
…
It is explicit in this statement that a sentencer or penalty fixer must, as an initial step, impose a penalty appropriate for each contravention and then as a check, at the end of the process, consider whether the aggregate is appropriate for the total contravening conduct involved.
A convenient checklist of the factors that the court might consider in determining penalty include the matters that were identified by Mowbray FM in Mason v Harrington Corp Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 at [26]-[59] and adopted by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [14]. That list is as follows, (with paragraph letters inserted):
(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.
(m) The need for specific and general deterrence.
The court must of course be mindful of the caution expressed by Buchanan J in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) 246 ALR 35; [2008] FCAFC 8 at [91] as follows:
Check lists of this kind can be useful providing they do not become transformed into a rigid catalogue of matters for attention. At the end of the day the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations. There is no suggestion in the present case that the learned magistrate made any relevant error in her identification of the matters which she should consider in fixing penalties.
The court will consider the circumstances of the case under the various headings suggested by Mowbray FM, and then consider whether any other matters are relevant.
There was no cross examination of any witness, so I accept all of the affidavit evidence. Where there is a conflict, I accept the more recent evidence.
Step 1: identifying the breaches
The breaches by the second respondent are set out above in the declarations that were made in the liability proceeding. They consisted of failures to meet minimum terms and conditions and failure to provide pay slips.
Step 2: single course of conduct
The applicant said in its written submissions:
34.Subsection 557(1) of the FW Act provides that where two or more contraventions of the same civil remedy provision are committed by the same person and arise out of a course of conduct by that person, the contraventions shall be taken to be a single contravention of the provision.
35. In determining whether section 557 applies, the Court must consider whether the breaches arose out of separate acts or decisions of the Second Respondent, or out of a single act or decision.
36. On the evidence, the Applicant accepts that the Second Respondent is entitled to the benefit of section 557 of the FW Act in relation to the repeated contraventions of each separate term of the Award or section of the FW Act (other than section 45). Accordingly, the Applicant submits that it would be appropriate for the Court to impose pecuniary penalties on the basis of:
36.1. one contravention of section 45 of the FW Act, by failing to pay minimum rates of pay in accordance with clauses 19.1 and 19.3(a) of the Award (a contravention affecting three employees);
36.2. one contravention of section 45 of the FW Act, by failing to pay the metropolitan radial areas allowance (travel allowance) in accordance with clause 25.2 (a contravention affecting four employees);
36.3. one contravention of section 45 of the FW Act, by failing to pay superannuation contributions in accordance with clause 32.2 of the Award (a contravention affecting five employees);
36.4. one contravention of section 44 of the FW Act, by failing to payout accrued but untaken annual leave upon termination of employment in accordance with section 90(2) of the FW Act (a contravention affecting four employees);
36.5. one contravention of section 323(1) of the FW Act, by failing to pay amounts payable in relation to the performance of work in full and at least monthly (a contravention affecting three employees); and
36.6. one contravention of section 536(1) of the FW Act by failing to provide pay slips to employees within one working day of payment (a contravention affecting two employees).
I accept that it is appropriate in this case to apply the course of conduct provisions as the applicant has proposed.
Step 3: grouped breaches
I do not consider that it is appropriate to group the second respondent’s breaches except as has already been done under the course of conduct provisions.
Step 4: the appropriate penalty for the breaches
The nature and extent of the conduct which led to the breach
The nature and extent of the breaches is as contained in the declarations set out above.
The circumstances in which that conduct took place
The five workers who were found to have been the subjects of the second respondent’s contraventions were daily hire employees in the brick laying trade. Three of the five workers who were affected by the breaches were foreign nationals. As such, they were vulnerable employees. The breaches occurred over the period from
25 October 2012 to 14 December 2012.
The nature and extent of any loss or damage sustained as a result of the breaches
The breaches led to an underpayment a little less than $5,500 distributed between five workers.
Whether there had been similar previous conduct by the respondent
It was not suggested that there had been any similar conduct previously by the second respondent.
Whether the breaches were properly distinct or arose out of the one course of conduct
This point has already been addressed.
The size of the business enterprise involved
The second respondent did not provide details of its size or financial position. However, it appears to be a small business with few employees.
Tracey J said in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [28]:
No less than large corporate employers, small businesses have an obligation to meet minimum employment standards and their employees, rightly, have an expectation that this will occur. When it does not it will, normally, be necessary to mark the failure by imposing an appropriate monetary sanction. Such a sanction “must be imposed at a meaningful level” (citation omitted)
Similarly, in Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412, the court said at [27]:
Employers must not be left under the impression that because of their size or financial difficulty that they are able to breach an award. Obligations by employers for adherence to industrial instruments arise regardless of their size. Such a factor should be of limited relevance to the Court’s consideration of penalty. …
Whether or not the breaches were deliberate
The second respondent seemed to be under the misapprehension that the affected employees were not entitled to their various entitlements. It was incumbent on the second respondent to ascertain the correct rates of pay and allowances and pay them. However, I am not persuaded that the second respondent’s conduct in that regard could be described as deliberate.
On the other hand, I consider that the payslip and superannuation contraventions were well understood by the second respondent and in that sense were deliberate.
Whether senior management was involved in the breaches
Jesse Bonnici, as the sole director of the second respondent, was clearly involved in the breaches.
Whether the party committing the breaches has exhibited contrition, corrective action and co-operation with the authorities
The second respondent has not co-operated with the authorities, taken corrective action or exhibited contrition. The application was opposed by the second respondent and required a three day hearing. The second respondent resisted any acknowledgement of wrong doing at every point. The second respondent required all of the affected workers for cross-examination, including some from overseas via videolink. There has been no indication of any apology to the affected workers and no indication of any effort to make amends.
The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements
The second respondent in this case breached the employees’ minimum entitlements. Amounts are set as minimums for good policy reasons. It is imperative that employers not breach those minimums.
The need for specific and general deterrence
In relation to specific deterrence, Gray J observed in Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; (2008) 177 IR 243; [2008] FCAFC 170 at [37] that:
… Specific deterrence focuses on the party on whom the penalty is to be imposed and the likelihood of that party being involved in a similar breach in the future. Much will depend on the attitude expressed by that party as to things like remorse and steps taken to ensure that no future breach will occur. …
In the present case, the complete lack of contrition, co-operation or corrective action suggests a need for significant specific deterrence. The second respondent is likely to be deregistered in the near future. However, it does not seem to me that such a circumstance warrants any reduction in the penalty.
In relation to general deterrence, Lander J noted in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; (2007) 162 IR 444; [2007] FCAFC 65 at [93]:
… In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty… (citations omitted)
Similarly, in Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228; [2001] FCA 1364 at 230-231, Finkelstein J said:
… even if there be no need for specific deterrence, there will be occasions when general deterrence must take priority, and in that case a penalty should be imposed to mark the law's disapproval of the conduct in question, and to act as a warning to others not to engage in similar conduct ….
In Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) (2005) 215 ALR 301; (2005) ATPR 42-052; [2005] FCA 265 Goldberg J held at [39]:
The penalty imposed must be substantial enough that the party realises the seriousness of its conduct and is not inclined to repeat such conduct. Obviously the sum required to achieve this object will be larger where the Court is setting a penalty for a company with vast resources. However, as specific deterrence is only one element and general deterrence must also be achieved, consideration of the party’s capacity to pay must be weighed against the need to impose a sum which members of the public will recognise as significant and proportionate to the seriousness of the contravention.
It is important that the court marks its disapproval of the failure to pay minimum entitlements and the failure to provide payslips as a deterrent to others.
Other issues
I do not consider that there are any other relevant issues in this case.
Step 4: the appropriate penalty
Under s.539(2) of the Act, the maximum penalty for individuals:
a)for each breach of s.44, s.45 and s.323(1) of the Act is 60 penalty units; and
b)for each breach of s.536(1) of the Act is 30 penalty units.
Additionally, under s.546(2) of the Act, the maximum number of penalty units that a corporation can be ordered to pay is five times the maximum payable by an individual.
At relevant times, a penalty unit was $110. Consequently, for each of the five breaches of s.44, s.45 and s.323(1) of the Act, the maximum penalty was $33,000. For the one breach of s.536(1) of the Act, the maximum penalty was $16,500. The total maximum penalty is therefore five times $33,000, which equals $165,000, plus $16,500, which equals $181,500.
Penalties should not be oppressive. Merkel J said in Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) (2005) 215 ALR 301; (2005) ATPR 42-052; [2005] FCA 265 at [9]:
I therefore respectfully agree with the observation of Smithers J, referred to by Burchett and Kiefel JJ in NW Frozen Foods, to the effect that, a penalty that is no greater than is necessary to achieve the object of general deterrence, will not be oppressive.
The applicant provided to the court a document that was described as a table of comparable cases. Unfortunately, I did not find any of those cases to be substantially similar to the present case.
All in all, taking into account all of the aforementioned matters, I consider that an appropriate penalty in this case is $3,500 for each of the five s.44, s.45 and s.323(1) contraventions and $1,750 for the s.536(1) contravention. This seems to me to give due weight to:
a)the underpayments in this case being the relatively small total of a little less than $5,500;
b)the second respondent’s complete lack of contrition, co-operation or corrective action;
c)the need for specific and general deterrence; and
d)the other matters mentioned above.
Step 5: the totality principle
The effect of the above is that the total penalty would be five times $3,500, which is $17,500, plus $1,750, which makes a total of $19,250. In relation to the check that is required by the totality principle, I consider that figure as a total aggregate penalty is appropriate for the whole of the contravening conduct engaged in by the second respondent.
There will be orders accordingly.
I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Judge Riley.
Associate:
Date: 9 December 2015
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