Fair Work Ombudsman v Acute Health Pty Ltd

[2018] FCCA 707

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v ACUTE HEALTH PTY LTD & ANOR [2018] FCCA 707

Catchwords:
INDUSTRIAL LAW – Default judgment – failure to participate in proceeding – late application for an adjournment refused – failure to comply with Award provision and make minimum payments – evidence of non-compliance beyond the date of the contraventions raised in the statement of claim – need for general and specific deterrence.

Legislation:

Fair Work Act 2009 (Cth), ss.45, 323(1) 535(1), (2), 545(2), 546, 550(1), 712(3)

Federal Circuit Court Rules 2001 (Cth), r.13.03B(2)(c)
Fair Work Regulations 2009 (Cth)

Cases cited:

Kelly v Fitzpatrick [2007] FCA 1080

Applicant: FAIR WORK OMBUDSMAN

First Respondent: ACUTE HEALTH PTY LTD

Second Respondent: PAUL TEMPANY

File Number: MLG 1805 of 2017

Judgment of: Judge McNab

Hearing date: 19 March 2018

Date of Last Submission: 19 March 2018

Delivered at: Melbourne

Delivered on: 19 March 2018

REPRESENTATION

Counsel for the Applicant: Ms M. Henry

Solicitors for the Applicant: The Office of the Fair Work Ombudsman

Solicitors for the First Respondent: No appearance

Solicitors for the Second Respondent: No appearance

ORDERS

THE COURT DECLARES THAT:

1. Default judgment is entered for the Applicant against the First Respondent and Second Respondent pursuant to subrule 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth) (“FCCA Rules”).

2. Based on the admissions which the First Respondent is deemed to have made, by reason of its default, the Court declares the First Respondent contravened:

(a)section 45 of the Fair Work Act 2009 (Cth) (“FW Act”) by failing to comply with the following terms of the Health Professionals and Support Services Award 2010 (HPSS Award):

(i)clause 20 of the HPSS Award by failing to pay wages at least fortnightly to Mr Michael Kempe (Mr Kempe), Mr Joshua Newland (Mr Newland), Mr Christian White (Mr White), Mr Benjamin Lawson (Mr Lawson) and Mr Samson Montajes (Mr Montajes);

(ii)clause 14 of the HPSS Award by failing to pay the minimum hourly rate for all hours worked to Mr Kempe, Mr Newland, Mr White, Mr Lawson, Mr Montajes and Ms Rachael Sard (Ms Sard);

(iii)clause 10.4(b) of the HPSS Award by failing to pay weekday casual loading to Mr Kempe, Mr Newland, Mr White, Mr Lawson, Mr Montajes and Ms Sard;

(iv)clause 26.2 of the HPSS Award by failing to pay weekend casual loading to Mr Kempe, Mr Newland, Mr White, Mr Lawson, Mr Montajes and Ms Sard;

(v)clause 28.1 of the HPSS Award by failing to pay overtime to Mr Kempe and Mr White;

(vi)clause 10.4(c) of the HPSS Award by failing to provide a minimum three-hour engagement to Mr Kempe, Mr Newland, Mr White, Mr Lawson and Mr Montajes;

(vii)clause 18.13(b) of the HPSS Award by failing to reimburse Mr White for expenses incurred while travelling in the course of his employment;

(viii)clause 18.3(b) of the HPSS Award by failing to pay laundry allowance to Mr Kempe, Mr Newland, Mr White, Mr Lawson and Mr Montajes;

(b)section 712(3) of the FW Act for failing to comply with:

(i)a Notice to Produce Records or Documents pursuant to section 712(1) of the FW Act (NTP) issued on 14 October 2015;

(ii)a NTP issued on 12 November 2015;

(iii)a NTP issued on 22 December 2015;

(iv)a NTP issued on 16 March 2016;

(v)a NTP issued on 20 December 2016; and

(vi)a NTP issued on 28 February 2017.

(c)section 535(1) of the FW Act by failing to keep records required by the Fair Work Regulations 2009 (FW Regulations) to be kept in relation to Mr Kempe, Mr Newland, Mr White, Ms Bender, Ms Duchene, Mr Lawson, Mr Montajes, Mr Porter and Ms Sard;

(d)section 536(2) of the FW Act for failing to ensure that pay slips issued to Mr Kempe, Mr Newland, Mr White, Mr Lawson and Mr Montajes included information required by the FW Regulations to be included;

(e)section 323(1) of the FW Act by making unauthorised deductions from the wages payable to Mr Lawson and Mr Montajes and thereby failing to pay those wages in full;

(f)Regulation 3.44(1) of the FW Regulations by failing to ensure that records it was required to keep were not false and misleading of its knowledge; and

(g)Regulation 3.44(6) of the FW Regulations by making use of records knowing they contained entries that were false or misleading.

1. Based on the admissions which the Second Respondent is deemed to have made, by reason of its default, the Court declares that the Second Respondent was involved, within the meaning of subsection 550(1) of the FW Act in each of the contraventions of the First Respondent referred to in paragraph (2) above and is thereby taken to have committed the contraventions.

THE COURT ORDERS THAT:

1. Pursuant to section 545(2) and section 547(2) of the FW Act, the First and Second Respondents, jointly and severally, pay to the Applicant within 28 days of the Court’s order:

   (a)the outstanding underpayment and loss amounts as follows:

   (i)Mr Kempe – $1,558.86;

   (ii)Mr Newland – $61.22;

   (iii)Mr White – $3,204.52;

   (iv)Mr Lawson – $1,767.44;

   (v)Mr Montajes – $1,417.56; and

   (vi)Ms Sard – $997.98,

   (collectively, the Underpayment Employees);

   (b)interest on the amounts referred to in order (4)(a) above;

   and that the Applicant will:

   (c)within 28 days of receipt of the amounts in paragraph (4) above, pay to the Underpayment Employees their respective amounts of the underpayments, loss and interest by reference to the amounts in orders (4)(a) and (4)(b) above; 

   (d)in the event that the Applicant receives a partial payment of the amounts in orders (4)(a) and (4)(b) above, distribute the money to the Underpayment Employees in accordance with their respective percentages of the total outstanding underpayment and loss; and

   (e)in the event that the Applicant cannot locate any of the Underpayment Employees, pay the amount due to each Underpayment Employee that cannot be located to the Commonwealth within a further 7 days pursuant to section 559 of the FW Act.

2. Pursuant to section 546(1) of the FW Act:

   (a)the First Respondent pay pecuniary penalties in the amount of $250,000.00 for its contraventions set out in order (2) above;

   (b)the Second Respondent pay pecuniary penalties in the amount of $50,000.00 for his contraventions set out in order (3) above.

3. Pursuant to section 546(3) of the FW Act, the pecuniary penalties pursuant to order (5) be paid to the Applicant within 28 days of these Orders and:

   (a)in the event that some or all of the amounts payable in accordance with order (4) are not paid, the Applicant may remit the penalties, at its discretion:

   (i)to the relevant employees until the amounts in order (4) have been satisfied;

   (ii)if the penalty amounts paid to the Applicant are less than the amounts owing under order (4), to the relevant employees proportionally to their share of the total outstanding amount under order (4);

   (b)if order 6(a) does not apply, or in the event there are penalty amounts outstanding at the conclusion of the processes provided for therein, the Applicant is to remit the penalties to the Consolidated Revenue Fund of the Commonwealth.

4. Pursuant to subsection 545(1) of the FW Act, that the Second Respondent:

   (a)within a period of two months, register with the Applicant’s “My Account” portal at and complete the profile including the HPSS Award options;

   (b)within a further month after the period in subparagraph (7)(a) provide to the Applicant his “My Account” registration number; and

   (c)within a period of two months, register with the Applicant’s Online Learning Centre at complete the courses “Hiring Employees” and “Managing Employees” and provide the Applicant with evidence of completion of those courses within a further one month.

5. Pursuant to section 545(1) of the FW Act, that the First Respondent, at its own expense, engage a third party with qualifications in accounting or workplace relations to undertake an audit of its compliance with the FW Act and the HPSS Award on the following terms:

   (a)the audit period will be the first three fortnightly pay periods commencing in the first accounting quarter after the date of this order (the Audit Period);

   (b)the audit is to be completed within two months of the end of the Audit Period (Audit Completion Date);

   (c)the audit will apply to all employees engaged to perform work for the First Respondent at any time during the Audit Period;

   (d)according to each employee’s classification of work, category of employment and hours of work worked during the Audit Period, the audit will assess the First Respondent’s compliance with the following obligations:

   (i)wages and work related entitlements under the HPSS Award; and

   (ii)record keeping and pay slip obligations in Division 3 of Part 3-6 of the FW Act; and

6. within 30 days of the Audit Completion Date, the First Respondent will provide to the Applicant:

   (i)a copy of the audit report which will include a statement of the methodology used in the audit; and

   (ii)written details of any contraventions identified in the audit, the steps the First Respondent will take to rectify any identified contravention(s) and by when the rectification will occur.

7. Pursuant to section 545(1) of the FW Act and/or section 545(2)(a) of the FW Act, the First Respondent is restrained, whether by its officers, employees, agents or otherwise, from engaging in conduct that contravenes the HPSS Award, sections 535, 536 or 712(3) of the FW Act or Division 3 of Part 3-6 of the FW Regulations.

8. Pursuant to section 545(1) of the FW Act and/or section 545(2)(a) of the FW Act, the Second Respondent is restrained from being in any way directly or indirectly knowingly concerned in conduct that contravenes the HPSS Award, sections 535, 536 or 712(3) of the FW Act or Division 3 of Part 3-6 of the FW Regulations.

9. The Applicant have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.

AND THE COURT NOTES THAT:

1. Pursuant to r.16.05(2)(a), the Court may vary or set aside its order before it has been entered if the order is made in the absence of a party.

PENAL NOTICE

To :  THE RESPONDENTS

IF YOU:

(A)REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR

(B)DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 1805 of 2017

FAIR WORK OMBUDSMAN

Applicant

And

ACUTE HEALTH PTY LTD

First Respondent

PAUL TEMPANY

Second Respondent

REASONS FOR JUDGMENT

(Delivered Ex-Tempore)

1. The first respondent (Acute Health), provides first aid and medical care at public events. Employees of Acute Health were engaged as first responders to provide first response first aid medical care to members of the public attending such events. Acute Health required first responders to have a minimum qualification of certificate II in emergency first response.

2. The second respondent, Mr Tempany is and has since 14 June 2011 been the sole director, secretary and shareholder of Acute Health.

3. The statement of claim alleges underpayments and other award and statutory breaches involving 6 employees of Acute Health between
   July 2015 and November 2016.

The respondents’ application to adjourn the hearing

1. On 16 March 2018, the second respondent filed an application in a case seeking orders that the matter listed for hearing on 19 March 2018 be relisted on or after 90 days from the date of the order to enable the respondent to seek financial assistance, legal representation and obtain documents pertaining to his case and sought an order that the applicant not engage in any media release or public commentary until further order. An affidavit filed in support of that application was sworn

   
   

   16 March 2018 by the second respondent Mr Tempany.

2. The affidavit deposes, in summary, that Mr Tempany looked at the Federal Court website about the upcoming case and saw a number of affidavits and orders which he says he has not received. He says that the Fair Work Ombudsman lodged a number of affidavits as little as six days ago, giving him insufficient time to respond in direct contradiction of previous orders that he saw on the website. He said that he has not filed a defence in the matter due to not receiving orders and affidavits and due to an inability to afford legal defence and ongoing ill health. He said that due to ongoing ill health and financial hardship, he could not afford to seek legal representation in this matter and that he wanted to have representation. He said further that he had attempted to continue to work both in his business and out of the business but this had been largely unsuccessful due to adverse media attention and actions by the complainants.

3. He alleged in his affidavit that the investigation and media attention had caused significant health concerns for him and that he was under the treatment of a number of health professionals, including Dr John Nguyen who he says diagnosed him with severe depression with suicidal ideologies and inclinations. He otherwise referred to the effect of adverse publicity arising from the case.

4. At paragraph 25 he stated:

   I do not know what to do. I do not know who to trust. I fear for my health. I fear for my life. I feel I continue to slide further and further into a dark hole. I simply don’t know what to do which has been the position that has significantly deteriorated.

5. At paragraph 26:

   There is much more to defend and evidence to provide but without good health and financial hardship preventing me from legal representation I’m unable to resolve the matter or defend my position.  My inability to defend myself in this matter is not to be taken as my lack of defence, simply my health and financial situation preventing me from doing so.

6. Mr Tempany forwarded a medical certificate on 19 March 2018, which certificate was dated 18 March 2018, which was from Dr Mohamed Gabr of the Altona Medical Deputising Service. The certificate dated 18 March 2018 certifies:

   According to the history obtained today in my opinion he has been and/or will be unfit for work/school from 19 March 2018 to 23 March 2018 inclusive.

7. That certificate does not provide any detail such as would persuade a court that it is appropriate to adjourn the proceeding. No medical evidence has been filed that explains the lack of engagement in the proceeding.

History of proceeding and this application for default judgment

1. The affidavits filed on behalf of the Fair Work Ombudsman go to great detail as to the efforts that have been made by officers of the Fair Work Ombudsman and solicitors employed by the Ombudsman to deal with the issues that are raised by the statement of claim and bring matters to the attention of the first and second respondents.

2. There has been a failure on the part of the second respondent to engage in any meaningful way with the Fair Work Inspector, John Kevin O’Leary, since about April 2016 and there has been no meaningful engagement with this proceeding since it was filed.

3. Paragraphs 45 and 46 of an affidavit of Mr O’Leary sworn 1 March 2018 deposes:

   The second respondent was initially responsive to communication from me and other FWIs during the early stage of the investigation between August 2015 and April 2016. During this period the second respondent expressed himself to be eager to resolve the issues raised by the various referrals for action.  During this period, the FWO received 27 emails from the second respondent, spoke with him on the telephone on 13 occasions and met with him in person on three occasions.  Save for the Du Sheen reference for action, these communications did not result in the resolution of the employee’s referrals for action.

4. Paragraph 46:

   Subsequent to April 2016 despite the Fair Work Ombudsman making 18 attempts to contact the second respondent by email we received responses from him on only 10 occasions. During this period the second respondent’s communications became increasingly sporadic with periods of non‑responsiveness. For example, the second respondent sent four emails to the FWO between 12 and 18 August and then did not respond to subsequent correspondence until 11 October 2016. The second respondent contacted the FWO five times between 2 and 15 December and then did not respond to correspondence until 27 January 2017.

5. Paragraph 47:

   I’ve not received any further email correspondence from the second respondent since 27 January 2017. My last telephone conversation with the second respondent was on 8 April 2016.

6. The Fair Work Ombudsman has been required to obtain orders for substituted service on the second respondent and the affidavits are replete with examples of efforts to communicate with the second respondent and deal with the matter with him but without any particular success.

7. The history of the proceedings is set out in paragraphs 14 to 26 of the outline of submissions filed on behalf of the Fair Work Ombudsman which were provided to the respondents by email on 15 March. These provide:

   14.The history of these proceedings up to and including

   
   

   14 February 2018, and relevant evidence concerning the Applicant’s attempts to engage with the First and Second Respondents, is set out in the First and Second Carter Affidavits and the Stirling Affidavit. The Applicant has summarised the attempts to communicate with the Respondents in the Chronology at Annexure A to these Submissions. The Applicant relies on the whole of the Chronology but highlights the key facts below.

   15.The Applicant sent its Application and Statement of Claim in these proceedings (Originating Documents) to the First Respondent on 18 August 2017, by way of pre-paid post sent to the First Respondent’s registered office. The date of presumed delivery of this correspondence was 24 August 2017. This constituted service on the First Respondent for the purposes of section 109X(1)(a) of the Corporations Act 2001 (Cth) and Rule 6.08(2)(a) of the FCC Rules.

   16.Also on 18 August 2018, the Applicant sent the Originating Documents to the Second Respondent’s email address, post office box and residential address (as listed with the Australian Securities and Investments Commission). On 13 September 2017, the Second Respondent sent the Applicant an email acknowledging receipt of the Originating Documents on 12 September 2017.

   17.From 14 September to 6 October 2017, the Applicant made numerous attempts to obtain the Second Respondent’s cooperation to facilitate personal service of the Originating Documents. On 18 September 2017, the Second Respondent advised by email that he was no longer a resident in Victoria but did not provide an alternative address. He noted some dates and general locations in which he could be served but thereafter failed to respond when the Applicant sought to fix a date and place for service. The email of 18 September 2017 was the Applicant’s last contact from the Second Respondent.

   18.Ultimately, the Applicant applied for orders for substituted service. On 21 November 2017, the Court made orders deeming service on the Second Respondent to have been effected on 12 September 2017 (November Orders). The Respondents did not attend the hearing on 21 November 2017.

   The November Orders also required the Respondents to file and serve a defence by 15 December 2017. The Applicant served those orders on the Respondents by email and post on 23 November 2017.

   20.The Respondents did not file a defence by 15 December 2017 or at any time thereafter. On 21 December 2017, the Applicant sent correspondence to the Respondents by email and post noting that no defences had been filed and that continued failure to do so may result in the matter being determined on an undefended basis.

   21. The Respondents did not acknowledge the Applicant’s correspondence of 23 November or 21 December 2017 and took no steps to seek any amendment to the November Orders or explain their non-compliance.

   22.On 2 February 2018, the Applicant obtained orders (February Orders) allowing for the filing of this Default Application and the Applicant’s evidence in respect of penalty. The February Orders stated that the Respondents must file any affidavits in response to the Default Application or in respect of penalty by 7 March 2018.

   23.Prior to making this Default Application, the Applicant made multiple attempts to speak to the Second Respondent by telephone. On 2 February 2018, the Applicant advised the Respondents that it intended to file the application by 15 February 2018 and served a copy of the February Orders.

   24.Despite the Applicant leaving messages with the First Respondent’s office and on the Second Respondent’s personal voicemail, the Respondents did not contact the Applicant and did not respond to the correspondence of 2 February 2018.

   25.Since the commencement of these proceedings up until the filing of the Default Application, the Applicant has made repeated efforts to contact and engage with the Respondents, including via the Second Respondent’s personal email address and phone number. It is apparent from both the Frawley and Deale Affidavits that the Second Respondent was still using the email and mobile number known to the Applicant as late as January 2018. The Second Respondent conducted extensive communication with Mr Deale, primarily via his mobile phone, but also from his email (as omitted). The Applicant’s communications, meanwhile, have continually gone unanswered.

   26. As at the date of these submissions, the Respondents have not filed any material in response to the Default Application. The Henry Affidavit details further unsuccessful attempts to contact the Respondents sine the filing of the Default Application.

1. In light of background circumstances, the Court is of the view that for the purposes of sub‑rule 13.03A(2)(b)(iii) of the FCCA Rules, the respondents have failed to comply with court orders, being the

   
   

   21 November 2017 orders, by failing to file and serve a defence by

   
   

   15 December and for the purposes of sub‑rule 13.03A(2)(b)(vii) of the FCCA Rules, failed to defend the proceedings with due diligence.

2. The Court notes that the respondents have:

   a)not satisfied the applicant’s claim;

   b)not filed defences as required by the 21 November 2017 orders or at all;

   c)not sought additional time to comply with the orders of the Court save by an application filed very shortly before the hearing;

   d)consistently failed to engage with or respond to the applicant over the course of the proceedings; and

   e)failed to engage with the Court or to take any steps at all in the proceedings save to make application shortly before the hearing.

3. For those reasons, the Court is satisfied that the applicant is entitled to judgment pursuant to sub-rule 13.13C(2)(d) of the FCCA Rules based on the matters set out in the statement of claim and the contraventions which are alleged in the statement of claim have been established.

4. The FWO relied on the following documents in support of its application for default judgment:

   4.In respect of the Default Application, the Applicant relies upon the following documents:

   (a)Statement of Claim, filed on 18 August 2017 (SOC);

   (b)Affidavit of Megan Anne Louise Carter (Ms Carter), filed on 9 November 2017 (First Carter Affidavit);

   (c)Affidavit of Jessica Margaret Stirling, filed on 20 November 2017 (Stirling Affidavit); and

   (c)Affidavit of Ms Carter, filed on 14 February 2018 (Second Carter Affidavit).

5. The following affidavits were relied upon by the FWO the in relation to penalty:

   5.In respect of penalty, the Applicant also relies on the following documents:

   (a)Affidavit of Fair Work Inspector John O’Leary (FWI O’Leary), sworn and filed on 1 March 2018 (O’Leary Affidavit);

   (b)Affidavit of Ryan

   Geoffrey Deale, affirmed on

   
   

   28 February 2018 and filed on 1 March 2018 (Deale Affidavit);

   (c)Affidavit of Samson Callera Montajes Jnr, affirmed on 28 February 2018 and filed on 1 March 2018 (Montajes Affidavit);

   (d)Affidavit of Belinda Marija Petkovski, sworn and filed on 1 March 2018 (Petkovski Affidavit);

   (e)Affidavit of Benjamin

   Charles Lawson, affirmed on

   
   

   28 February 2018 and filed on 1 March 2018 (Lawson Affidavit);

   (f)Affidavit of Michael Thomas Kempe, affirmed on
   28 February 2018 and filed on 1 March 2018 (Kempe Affidavit);

   (g)Affidavit of Jacinta Margaret Frawley, affirmed on
   27 February 2018 and filed on 2 March 2018 (Frawley Affidavit);

   (h)Affidavit of Rachael Ann Sard, affirmed on 2 March 2018 and filed on 5 March 2018 (Sard Affidavit);

   (i)Affidavit of Joshua Luke Newland, affirmed and filed on 5 March 2018 (Newland Affidavit);

   (j)Affidavit of Christian White, affirmed on 8 March 2018 and filed on 9 March 2018 (White Affidavit); and

   (k)Affidavit of Miriam Marie Henry affirmed and filed on 15 March 2018 (Henry Affidavit).

6. The Court has had regard to affidavits which have been filed for the purpose of this application for default judgment, and in particular, an affidavit of Jacinta Frawley sworn on 27 February 2018.

7. Ms Frawley gives evidence that she is 24 years of age, that she is employed as a doctor and is currently doing her intern year through Eastern Health. She was employed by the first Acute Health from

   
   

   11 February to 23 December 2017 as a first responder and that she held a level 2 first aid certificate. Her duties were to provide first aid medical care to patients.

8. She worked at a variety of events throughout her employment with Acute Health, which events included the Victoria Multicultural Festival on 25 March 2017, the West Footscray Festival of Colours on

   
   

   26 March 2017 and the Diwali Indian Festival on 14 October 2017.

   
   

   She had also worked for a rehearsal for Vision Australia’s Carols by Candlelight on 23 December 2017 and had been required to work at sporting events.

9. She gives evidence of not being paid in a timely way and not being provided with payslips. She says that on 3 July 2017, nearly five months after working her first shift for Acute Health, she received a first pay in the amount of $436.20 by electronic transfer and she did not receive a payslip. The affidavit then gives evidence of her efforts to receive payment and that evidence indicates that payment was intermittent and she never received any payslips or a proper explanation as to how the pay was calculated. On 16 January 2018, she emailed the second respondent because she had not been paid for her last shift and also she had not received a group certificate for a previous financial year.

10. This evidence indicates that the type of conduct which was experienced by the underpaid employees who are referred to in the statement of claim has continued well into 2017.

11. The affidavits relied upon in the application are those referred to in paragraphs 4 and 5 of the outline of submissions and I have had regard to those affidavits. The affidavits demonstrate a course of conduct by the first and second respondents in relation to employees where employees were paid a flat rate of pay of $25.00 per hour for all hours worked, save for Mr Lawson who was also promised $33.00 per hour on a Sunday. These rates which were promised failed to meet the minimum requirements of the HPSS Award.

12. The respondents failed to operate a payroll system or the system that did operate was poorly organised. The employees were not paid for all time worked and when they were paid they were paid late or without any proper explanation as to how pay was calculated.

13. Employees were put in a position of having to buy a uniform, being a T‑shirt, for a cost of $100. There are frequent references in the affidavit material of employees having to fund their own transport to interstate events and then not being property reimbursed for that cost.

14. There is also evidence of the employees of the stresses that have arisen from the pattern of non‑payment including; the stresses that has put them under with their relationships; their inability to fund their lives whilst they are studying; being put in a position of having to fund their own transport to events and then not being paid for some lengthy periods afterwards, either for their wages or for reimbursement.

15. There is a pattern of conduct here which becomes apparent when the affidavits are read. It seems to be a well‑practised methodology that the respondents have used with these employees and there is a flagrant disregard for the rights of those employees.

16. It is also apparent that the first respondent has continued to trade, notwithstanding the claimed incapacity on the part of its sole director and shareholder, Mr Tempany. The services are provided at large events and members of the public are relying upon the employees to provide services and there no doubt would be an expectation amongst members of the public that these employees would be properly paid for their work and in a timely way. In my view, this is a case where specific and general deterrence is a significant factor.

17. I have had regard to the submissions filed on behalf of the Fair Work Ombudsman in relation to penalty. This is a case where the under payments are not significant in dollar amounts, but in terms of the effect that those underpayments have had on the individual employees, they are significant. The persons underpaid were generally students who were relying on the income to fund living expenses whilst studying. The underpayments represent a major percentage of the entitlements as demonstrated by this table prepared by the FWO:

Employee	Period of employment	Underpayment	Underpayment as % of total entitlements
Michael Kempe	15 March 2014 – 26 January 2015 (7 weeks and 5 days)	$3,175.97	42.25%
Joshua Newland	22 April 2015 to 14 June 2015 (17 weeks and 5 days)	$404.10	33.09%
Christian White	3 April 2015 to 4 August 2015 (17 weeks and 5 days)	$3,223.79	65.23%
Benjamin Lawson	7 October 2015 to 6 December 2015 (8 weeks and 5 days)	$3,517.86	54.40%
Samson Montajes	7 October 2015 to 10 December 2015 (9 weeks and 2 days)	$2,2,395.13	80.86%
Rachael Sard	27 November 2015 to 29 November 2015 (3 days)	$997.98	100%

1. This is not a case where the respondents have actively sought to cooperate with the Fair Work Ombudsman to rectify underpayments or to properly assist in the investigation of matters raised. It would appear that there has been some pretended cooperation with the Ombudsman but there has been no repayment of monies owed, there has been no participation in this proceeding and it would appear that conduct has continued beyond the dates of the underpayment period which concludes in about November 2016.

2. I accept the submission in relation to groupings put by the Fair Work Ombudsman, although I think there should be some allowance for reducing the amounts sought by the Fair Work Ombudsman to take into account there is a degree of similarity between a number of the matters. In particular the failure to comply with the notice to produce which constitutes grounds 13 to 17. Whilst I accept the submission that these should not be grouped because of the nature of the contravention, I will take the similarity of the breaches into account in fixing a total penalty.

3. The Fair Work Ombudsman submitted that the maximum penalty for the 20 contraventions is in the sum of $944,000 in respect of the first respondent and $188,800 in respect of the second respondent.

   
   

   The proposed penalty range was in the sum of $268,700 to $357,700 in respect of the first respondent and $53,740 to $71,540 for the second respondent.

4. There has been a repeated failure to pay in accordance with the award in terms of the frequency of payment. There has been a failure to provide pay for minimum engagement periods. There has also been a failure to reimburse travel expenses as discussed earlier. Similarly, there has been a failure to pay laundry allowances and there has been unauthorised deductions from wages.

5. The respondents have not been the subject of prior court proceedings, but the Court does note that there have been prior investigations of the respondents by the applicant and in particular, the applicant received referrals for actions from four former employees of the first respondent employed between August 2011 and 23 December 2014 and in that regard I refer to the affidavit of Mr O’Leary at paragraphs 7 to 9.

   
   

   In those referrals, there is an alleged underpayment of minimum wages and the failure to pay travel allowances correctly.

6. As a result of those referrals for action, the FWO provided the respondents with education about their legislative and award obligations in July 2012 and again in February 2015. On the latter occasion, the education was specifically focused on the requirements of the HPSS Act. Notwithstanding the efforts of the FWO to educate the respondents, it appears that there has been no satisfactory change to the mode by which this company operates in relation to the way it treats its employees.

7. I have regard to the decision of Tracey J in Kelly v Fitzpatrick [2007] FCA 1080 at [10] in considering the factors that go to fixing an appropriate penalty. In my view, an appropriate penalty in this case, adopting some allowance for the totality principle, the Court orders that the penalties be imposed on the first respondent in the sum of $250,000 and on the second respondent in the sum of $50,000. It is less than the penalty sought by the FWO however by any measure it is a significant penalty.

8. Otherwise the Court will make orders in the terms of the proposed formal final orders, save that the orders will be amended to include the reference to the penalties. The orders are appropriate for the reasons outlined.

9. The Court will also make an injunction in the terms of paragraphs

   
   

   9 and 10. The Court does so in circumstances where there has been prior investigation, some attempt to educate and a continued breach of the award. In those circumstances, the public is entitled to be protected by the orders in the form of an injunction.

10. The Court makes those orders because it is mindful that members of the public, in particular people who are undertaking important work areas where matters of public health are concerned, should be protected from operators of this kind and prospective employees should be also protected from respondent employers who frequently breach industrial awards.

11. The penalties are significant but in my view entirely appropriate and give proper expression to the legislative intent behind Parliament fixing penalties at a high rate for these types of contraventions. It also reflects the need for general and specific deterrence.

I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Judge McNab

Associate: 

Date:  27 March 2018