Fair Work Ombudsman v AIMG BQ Pty Ltd
[2016] FCCA 1024
•31 May 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
FAIR WORK OMBUDSMAN v AIMG BQ PTY LTD & ANOR [2016] FCCA 1024
Catchwords:
INDUSTRIAL LAW – Determination of penalties to be imposed in relation to admitted or undisputed contraventions of the Fair Work Act 2009 – relevant principles – where the matter proceeded undefended – where injunction granted under s.545 of the Fair Work Act 2009.
Legislation:
Crimes Act 1914 (Cth), s.4AA
Fair Work Act 2009 (Cth), ss.3, 44, 45, 90, 96, 323, 535, 536, 539, 546, 550, 557, 712Fair Work Regulations 2009
Federal Circuit Court of Australia Act 1999 (Cth), s.15
Industrial Relations Act 1998 (Cth), s.178
Workplace Relations Act 1996 (Cth), s.719
Cases cited:
Australian Competition and Consumer Commission v Dataline.net.auPty Ltd and Ors (2006) 236 ALR 665
Australian Competition and Consumer Commission v Yellow Page Marketing
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 246 ALR BV (No 2) [2011] FCA 352Blandy v Coverdale NT Pty LtdACN102 611 423 [2008] FCA 1533
Cotis v MacPherson [2007] FMCA 2060
CPSU, The Community and Public Sector Union v Telstra Corporation Limited [2001] FCA 1364
Darlaston v Risetop Construction Pty Ltd [2011] FMCA 220
David Armstrong v VK Holdings Pty Ltd [Unreported, Chief Industrial Magistrates court, Sydney, 28 November 1997]
Fair Work Ombudsman v Crocmedia Pty Ltd [2015] FCCA 140
Fair Work Ombudsman v EA Fuller & Sons Pty Ltd [[2013] FCCA 5
Fair Work Ombudsman v Lycamobile Pty Ltd [2013] FCCA 2132
Fair Work Ombudsman v Maclean Bay Pty Ltd (No 2)[ 2012] FCA 557
Fair Work Ombudsman v Nicole Patrice Dawe [2013] FMCA 191
Fair Work Ombudsman v Orwill Pty Ltd & Ors [2011] FMCA 730
Fair Work Ombudsman v Promoting U Pty Ltd & Anor [2012] FMCA 58
Fair Work Ombudsman v Tiger Telco Pty Ltd (in liq) [2012] FCA 479
Fair Work Ombudsman v VS Investment Group Pty Ltd & Anor [2013] FCCA 208
Fair Work Ombudsman v Zillion Zenith International Pty Ltd [2014] FCCA 433
Fryer v Yoga Tandoori House Pty Limited [2008] FMCA 288
Johnson v R (2004) 205 ALR 346
Kelly v Fitzpatrick (2007) 166 IR 14
Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7
McIver v Healey [2008] FCA 425
Olsen v Sterling Crown Pty Ltd [2008] FMCA 1392
Pearce v R (1998) 194 CLR 610
Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543
Re: StephenGibbs v The Mayor, Councillors and Citizens of the City of Altona [1992] FCA 374
Secretary, Department of Health and Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545
Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550
Workplace Ombudsman v Saya Cleaning Pty Ltd [2009] FMCA 38
Applicant: FAIR WORK OMBUDSMAN
First Respondent: AIMG BQ PTY LTD (ACN 148 012 284)
Second Respondent: ZHAO QING JIANG
File Number: SYG 1559 of 2015
Judgment of: Judge Altobelli
Hearing date: 15 March 2016
Date of Last Submission: 15 March 2016
Delivered at: Sydney
Delivered on: 31 May 2016 REPRESENTATION
Solicitors for the Applicant: The Office of the Fair Work Ombudsman
There was no appearance by or on behalf of the Respondents ORDERS
THE COURT DECLARES THAT:
(1)The First Respondent contravened the following civil remedy provisions:
(a)section 45 of the FW Act by the First Respondent failing to classify Ms Shen and Ms Ma pursuant to Schedule B of the Clerks Award, and failing to advise the Employees in writing of their applicable classifications in accordance with clause 15.1 of the Clerks Award;
(b)section 45 of the FW Act by the First Respondent failing to agree in writing, upon engagement of a part-time employee, Ms Shen, the pattern of hours and days that were to be worked as required by clause 11.3 of the Clerks Award;
(c)section 45 of the FW Act by the First Respondent failing to pay Ms Shen minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, to Ms Shen during the First Shen Employment Period;
(d)section 45 of the FW Act by the First Respondent failing to pay to Ms Shen and Ms Ma minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, to the Employees during the Second Shen Employment Period and the Ma Paid Employment Period;
(e)section 45 of the FW Act by the First Respondent failing to pay casual loading in accordance with clause A.5.4 of Schedule A to the Clerks Award, by reference to clause 12.2 of the Clerks Award, to Ms Shen during the First Shen Employment Period;
(f)section 45 of the FW Act by the First Respondent failing to pay overtime in accordance with clause 27.1 of the Clerks Award to Ms Ma during the Ma Paid Employment Period;
(g)section 45 of the FW Act by the First Respondent failing to pay weekend penalty rates for time worked on a Sunday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 27.2 of the Clerks Award, to Ms Ma during the Ma Paid Employment Period;
(h)section 45 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma the appropriate penalty rate for work undertaken on a designated public holiday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 31.3 of the Clerks Award, during the Second Shen Employment Period and the Ma Paid Employment Period;
(i)section 45 of the FW Act by the First Respondent failing to make superannuation contributions to a superannuation fund for the benefit of Ms Shen and Ms Ma in accordance with clause 24.2 of the Clerks Award during the Second Shen Employment Period and the Ma Paid Employment Period;
(j)section 44 of the FW Act by the First Respondent failing to pay any amount on account of annual leave taken by Ms Ma at the minimum rate of pay for her ordinary hours of work in accordance with subsection 90(1) of the FW Act, during the Ma Paid Employment Period;
(k)section 45 of the FW Act by the First Respondent failing to pay annual leave loading in accordance with clause 29.3 of the Clerks Award to Ms Ma during the Ma Paid Employment Period;
(l)section 44 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma minimum rate of pay for absences on a public holiday in accordance with section 116 of the FW Act during the Second Shen Employment Period and the Ma Paid Employment Period;
(m)section 44 of the FW Act by the First Respondent failing to pay personal/carer’s leave to Ms Ma in accordance with section 96(1) of the FW Act during the Ma Paid Employment Period;
(n)section 44 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma in lieu of the minimum periods of notice the First Respondent was required to provide on termination of their employment in accordance with section 117 of the FW Act;
(o)section 44 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma their accrued but untaken annual leave on termination of employment in accordance with subsection 90(2) of the FW Act;
(p)section 45 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma their annual leave loading upon termination of employment in accordance with clause 29.3 of the Clerks Award;
(q)section 323 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma wages at least monthly;
(r)subsection 712(3) of the FW Act by the First Respondent failing to comply with a Notice to Produce Records or Documents;
(s)section 535 of the FW Act by the First Respondent failing to comply with sub regulation 3.34 and 3.40 of the FW Regulations; and
(t)subsection 536(1) of the FW Act by failing to issue payslips to Ms Shen and Ms Ma within one day of payment.
(2)The Second Respondent was involved in the First Respondent’s contravention outlined at paragraph (1)(r) above, within the meaning of section 550(1) of the FW Act.
THE COURT ORDERS THAT:
(3)Pursuant to subsection 546(1) of the FW Act, the First Respondent pay pecuniary penalties in the amount of $272,850 in respect of the contraventions set out at paragraph (1) above.
(4)Pursuant to subsection 546(1) of the FW Act, the Second Respondent pay pecuniary penalties in the amount of $8,160 in respect of the contravention set out at paragraph 2 above.
(5)An order pursuant to subsection 546(3)(a) of the FW Act that all pecuniary penalties ordered to be paid by the First and Second Respondents are paid into the Consolidated Revenue Fund of the Commonwealth within 28 days from the date that the orders for the payment by the First and Second Respondents of pecuniary penalties are made.
(6)Orders pursuant to subsection 545(1) of the FW Act and/or subsection 545(2)(a) of the FW Act, that for a period of 3 years from the date of this Order, the Second Respondent is restrained from:
(a)aiding, abetting, counselling or procuring; or
(b)being in any way directly or indirectly knowingly concerned in,
conduct in respect of employees employed by the First Respondent and/or any of its associated entities (within the meaning of section 50AAA of the Corporations Act 2001 (Cth)) that contravenes the Clerks – Private Sector Award, the Fair Work Act 2009 (Cth) and the National Employment Standards contained in Part 2-2 of the FW Act.
(7)An order that the Applicant have liberty to apply on 7 days’ notice in the event that any of the preceding orders are not complied with.
(8)Within 7 days the Applicant is to notify the Respondents of the Orders made today at their last known address.
THE COURT NOTES THAT:
A.These Orders are made in the absence of the First Respondent and Second Respondent and they are at liberty to make such application as they may be advised pursuant to Rule 16.05 of the Federal Circuit Court Rules 2001.
FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEYSYG 1559 of 2015
FAIR WORK OMBUDSMAN Applicant
And
AIMG BQ PTY LTD (ACN 148 012 284) First Respondent
ZHAO QING JIANG Second Respondent
REASONS FOR JUDGMENT
Introduction and Background
1.These Reasons for Judgement explain the declarations and Orders made in this matter. The case proceeded on an undefended basis. These Reasons are substantially based on the Applicant’s Outline of Submissions on Penalty.
2.The Applicant seeks the imposition of pecuniary penalties on the Respondents in relation to contraventions of the Fair Work Act 2009 (Cth.) (FW Act) and the Fair Work Regulations 2009 (Cth.) (FW Regulations).
3.On 24 September 2015, the parties filed a Statement of Agreed Facts (SOAF).This document is reproduced in the first schedule to these Reasons for Judgement.
4.The contraventions concern the employment of Nan Shen (Ms Shen) and Yue ‘Cindy’ Ma (Ms Ma). Ms Shen was employed by the First Respondent, AIMG BQ Pty Limited (AIMG) from 28 November 2013 to 19 June 2014. Ms Ma was employed by AIMG from 21 October 2013 to 23 June 2014 [SOAF, at [10-11]].
5.AIMG carries on a business in the media and communications industry which sells and develops Chinese print media in New South Wales [SOAF, at [5]].
6.The Second Respondent, Zhao Qing Jiang (Mr Jiang) is a director of AIMG and was (and is) responsible for its overall direction, management and control [SOAF, at [6]].
7.From 28 November 2013 to 31 March 2014, Ms Shen was engaged as an “Events Coordinator Intern” although she was in fact a casual employee. She was not paid at all during this period (First Shen Employment Period) [SOAF, at [10], [15], [23(a)] and [56(a)]].
8.From 1 April 2014 to 19 June 2014, Ms Shen was employed as a permanent part-time Events Coordinator (Second Shen Employment Period) [SOAF, at [8]].
9.From 21 October 2013 to 23 June 2014, Ms Ma was employed as a permanent full-time Events Coordinator (Ma Paid Employment Period) [SOAF, at [10]].
10.Ms Shen and Ms Ma’s primary duties were to provide general clerical services to AIMG in relation to events it was marketing and/or hosting [SOAF, at [18] to [20]].
11.The Applicant contends that AIMG failed to provide Ms Shen and Ms Ma with the following entitlements under the Clerks - Private Sector Award 2010 (Clerks Award) [SOAF, at [22]] and thereby contravened section 45 of the FW Act:
a)minimum rates of pay;
b)casual loading to Ms Shen;
c)overtime to Ms Ma;
d)penalty rates;
e)annual leave loading;
f)classifying Ms Shen and Ms Ma in writing;
g)agreeing in writing the pattern of hours of work for Ms Shen, as a part-time employee;
h)annual leave loading on termination;
i)superannuation [SOAF, at [59] to 63], [64] to [67], [68] to [73], [74] to [79] (for work performed on a public holiday) and [80] to [83] (for work performed on a weekend), [92] to [95], [103] to [105], [106] to [108], [120] to [124] and [135] to [139], respectively].
12.The Applicant also contends that AIMG also contravened section 44 of the FW Act by failing to:
a)pay annual leave;
b)pay public holiday pay when Ms Shen and Ms Ma were absent;
c)pay personal leave;
d)pay accrued annual leave on termination;
e)pay in lieu of notice of termination;
f)pay at least monthly;
g)keep and maintain records of the kind required by the FW Regulations;
h)issue payslips within one day of payment;
i)comply with a Notice to Produce [SOAF, at [84] to [91], [96] to [102], [109] to [115], [116] to [119], [125] to [134], [145] to [147], [140] to [144], [148] to [150] and [151] to [154], respectively].
13.Ms Shen was underpaid the amount of $8,387.72 in wages and entitlements as a result of the contraventions [SOAF, at [155] and Schedule A].
14.Ms Ma was underpaid the amount of $10,380.10 in wages and entitlements as a result of the contraventions [SOAF, at [155] and Schedule A].
15.AIMG rectified the total underpayment owing to the Employees of $18,767.82 on 23 March 2015 [SOAF, at [155-156].
16.The Applicant submits and the Court ultimately accepts, that the conduct of AIMG in this matter is particularly serious in that it involves:
a)a complete failure to pay Ms Shen during the First Shen Employment Period, even though Ms Shen completed 180 hours of productive work for AIMG;
b)the exploitation of Ms Shen on the basis that she was a young student seeking to gain experience in the event management industry;
c)a failure to provide both Ms Shen and Ms Ma with minimum entitlements;
d)deliberate contraventions; and,
e)an absence of contrition and acceptance of wrongdoing until over 12 months after the alleged breaches came to the attention of the Fair Work Ombudsman.
17.These Reasons for Judgement explain why the Court is satisfied that the contraventions were deliberate, and are likely to be repeated unless meaningful penalties are imposed. This is a case where the Court should impose meaningful penalties and should mark its disapproval of the conduct in question and set a penalty which serves as a warning to others [R v Thompson(1975) 11 SASR 217 cited in CPSU, The Community and Public Sector Union v Telstra Corporation Limited [2001] FCA 1364 at [9]].
18.The Court does, in its discretion, consider that a discount in penalty is appropriate in this matter, in recognition of the rectification of the underpayment and the admissions made by the Respondents.
Material Before the Court
19.The Applicant relies upon the following documents:
a)Application and Statement of Claim filed 9 June 2015;
b)the SOAF;
c)Affidavit of Nan Shen affirmed on 12 November 2014 (Shen Affidavit); and
d)Affidavit of Dane Stefan Robert Stella affirmed 5 November 2015 (Stella Affidavit).
e)Outline of Submissions filed 6 November 2015.
The Respondents filed a Defense on 7 August 2015, in effect putting the Applicant to proof. Nothing else was filed on behalf of the Respondents.
Declarations and Orders
Declarations
20.The Court has a wide discretionary power to make declarations, pursuant to section 16 of the Federal Circuit Court Act 1999 (Cth) (FCC Act) [Australian Competition and Consumer Commission v Dataline.net.auPty Ltd and Ors (2006) 236 ALR 665 (ACCC v Dataline) at [58]; Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352 (ACCC v Yellow Page (No 2)) at [65]] which states:
1)The Federal Circuit Court of Australia may, in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.
2)A proceeding is not open to objection on the ground that a declaratory order only is sought.
21.The declarations sought by the Applicant in Exhibit “A3”, the Minute of Proposed Orders has been framed to identify the contravening conduct accurately and concisely [ACCC v Dataline at [63]; ACCC v Yellow Page (No 2) at [68]]. Exhibit “A3” is reproduced in the second schedule to these Reasons for Judgement.
22.The Court believes that there is utility in making the declarations sought by the Applicant because they clearly identify the contravening conduct. There is a public interest to be served in making the declarations sought, in that they will help to educate employers about their obligations to employees and warn them of the consequences of failing to comply with the FW Act, assisting in achieving general deterrence. Making the declarations sought also marks the Court’s disapproval of the Respondents’ conduct [ACCC v Yellow Page (No 2) at [69]].
Penalty Provisions
23.The Applicant has standing to bring these proceedings, insofar as they relate to contraventions of the FW Act and the Clerks Award pursuant to subsection 539(2) of the FW Act [SOAF, at [3(c)]].
24.Subsection 546(1) of the FW Act enables the Court, on application, to order a person to pay a pecuniary penalty that the Court considers appropriate if the person has contravened a civil remedy provision. “Civil remedy provisions” include:
a)sections 44 and 45 of the FW Act, being the contravention of a term of the National Employment Standards and a modern award respectively,
b)subsection 323(1)(c) of the FW Act, being a contravention of the requirement to pay the Employees at least monthly;
c)section 535 of the FW Act, being a contravention of record keeping requirements,
d)section 536 of the FW Act, for failing to issue payslips; and
e)subsection 712(3) of the FW Act, for failing to comply with a Notice to Produce Records or Documents.
25.Under subsection 546(2)(b) of the FW Act, the Court may impose on AIMG, being a body corporate, a maximum penalty of 300 penalty units [A penalty unit was defined as $170 under section 4AA of the Crimes Act 1914 (Cth) after 28 December 2012] or $51,000 for contraventions of sections 44, 45, subsection 323(1)(c) and subsection 712(3) of the FW Act. There is a maximum penalty of 150 penalty units or $25,500 for each contravention by a body corporate of section 535 and section 536 of the FW Act. The maximum penalty units are set out in subsection 539(2) of the FW Act.
26.Under subsection 546(2)(a) of the FW Act, the Court may impose on Mr Jiang, a maximum penalty of 60 penalty units or $10,200.00 for a contravention of subsection 712(3) of the FW Act.
27.Subsection 546(3) of the FW Act allows the pecuniary penalty, or part of the penalty, to be paid to a particular person.
28.In light of the admissions made by the Respondents, as well as the facts and circumstances outlined in the SOAF, the Applicant sought and the Court granted, that penalties be imposed on the Respondents based on the reasons set out below.
The Court’s Approach to Penalty
29.The authorities establish that the appropriate penalties are to be determined as follows.
30.The first step for the Court is to identify the separate contraventions involved. Each contravention of each separate obligation found in the FW Act is a separate contravention of a civil remedy provision for the purposes of subsection 539(2) of the FW Act [Re: StephenGibbs v The Mayor, Councillors and Citizens of the City of Altona [1992] FCA 374 at [25](Gibbs); McIver v Healey [2008] FCA 425 at [16] (unreported, Federal Court of Australia, 7 April 2008, Marshall J)].
31.Second, the Court should consider whether the contraventions arising in the first step constitute a single course of conduct so as to attract the operation of section 557 of the FW Act [Subsection 557(1) of the FW Act].
32.Third, to the extent that two or more contraventions have common elements, this should be taken into account in considering what an appropriate penalty is in all the circumstances for each contravention. The Respondents should not be penalised more than once for the same conduct. The penalties imposed by the Court should be an appropriate response to what the Respondents did [Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 246 ALR 35[46] (Graham J) (Merringtons)].
33.Fourth, the Court will consider an appropriate penalty to impose in respect of each contravention having regard to all of the circumstances of the case.
34.Finally, having fixed an appropriate penalty for each contravention, the Court should take a final look at the aggregate penalty, to determine whether it is an appropriate response to the contravening conduct [See Kelly v Fitzpatrick (2007) 166 IR 14 at [30] (Tracey J) (Kelly); Merringtons, supra at [23] (Gray J), [71] (Graham J) and [102] (Buchanan J)]. The Court should apply an “instinctive synthesis” in making this assessment [Merringtons, supra at [27] (Gray J) and [55] and [78] (Graham J)]. This is known as the “totality principle”.
Admitted Contraventions
35.AIMG admits that it contravened section 45 of the FW Act by:
a)failing to pay Ms Shen minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, during the First Shen Employment Period;
b)failing to pay Ms Shen and Ms Ma minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, during the Second Shen Employment and the Ma Paid Employment Period;
c)failing to pay casual loading in accordance with clause A.5.4 of Schedule A to the Clerks Award, by reference to clause 12.2 of the Clerks Award, to Ms Shen during the First Shen Employment Period;
d)failing to pay overtime in accordance with clause 27.1 of the Clerks Award to Ms Ma during the Ma Paid Employment Period;
e)failing to pay Ms Shen and Ms Ma the appropriate penalty rate for work undertaken on a designated public holiday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 31.3 of the Clerks Award, during the Second Shen Employment Period and the Ma Paid Employment Period;
f)failing to pay weekend penalty rates for time worked on a Sunday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 27.2 of the Clerks Award, to Ms Ma during the Ma Paid Employment Period;
g)failing to pay annual leave loading on taken leave in accordance with clause 29.3 of the Clerks Award to Ms Ma during the Ma Paid Employment Period;
h)failing to classify Ms Shen and Ms Ma pursuant to Schedule B of the Clerks Award, and failing to advise the Employees in writing of their applicable classifications in accordance with clause 15.1 of the Clerks Award;
i)failing to agree in writing, upon engagement of a part-time employee, Ms Shen, the pattern of hours and days that were to be worked as required by clause 11.3 of the Clerks Award;
j)failing to pay Ms Shen and Ms Ma their annual leave loading upon termination of employment in accordance with clause 29.3 of the Clerks Award; and
k)failing to make superannuation contributions to a superannuation fund for the benefit of Ms Shen and Ms Ma in accordance with clause 24.2 of the Clerks Award during the Second Shen Employment Period and the Ma Paid Employment Period [SOAF, at [57] to [56] and 63, [54] and [57] to 63], [64] to [67], [68] to 73], [74] to [79], [80] to [83], [92] to [95], [103] to [105], [106] to [108], [120] to [124] and [135] to [139]].
36.AIMG admits that it contravened section 44 of the FW Act by:
a)failing to pay any amount on account of annual leave taken by Ms Ma the minimum rate of pay for her ordinary hours of work in accordance with subsection 90(1) of the FW Act, during the Ma Paid Employment Period;
b)failing to pay Ms Shen and Ms Ma the minimum rate of pay for absences on a public holiday in accordance with section 116 of the FW Act during the Second Shen Employment Period and the Ma Paid Employment Period;
c)failing to pay personal/carer’s leave to Ms Ma in accordance with subsection 96(1) of the FW Act during the Ma Paid Employment Period;
d)failing to pay Ms Shen and Ms Ma their accrued but untaken annual leave on termination of employment in accordance with subsection 90(2) of the FW Act; and
e)failing to pay Ms Shen and Ms Ma in lieu of the minimum periods of notice that it was required to provide on termination of their employment in accordance with section 117 of the FW Act [SOAF, at [84] to [91], [96] to [102], [109] to [115], [116] to [119] and [125] to [134], respectively].
37.AIMG also admits that it contravened the FW Act as follows:
i)subsection 323(1) of the FW Act by failing to pay Ms Shen and Ms Ma wages at least monthly;
ii)section 535 of the FW Act by failing to comply with sub regulations 3.34 and 3.40 of the FW Regulations;
iii)subsection 536(1) of the FW Act by failing to issue payslips to Ms Shen and Ms Ma within one day of payment; and
iv)subsection 712(3) of the FW Act by failing to comply with a Notice to Produce Records or Documents [SOAF, at [145] to [147], [140] to [144], [148] to [150] and [151] to [154], respectively].
38.Mr Jiang admits to being ‘involved in’ (within the meaning of subsection 550(2) of the FW Act) AIMG’s contravention of subsection 712(3) of the FW Act and therefore to have himself contravened that subsection, pursuant to subsection 550(1) of the FW Act [SOAF, at [157] to [158]].
Grouping of Contraventions
Course of Conduct
39.As set out at paragraph 31 above, two or more contraventions may, depending upon the particular circumstances attract the operation of the course of conduct provisions contained in section 557 of the FW Act.
40.The Applicant submitted, and the Court accepted, that the First Respondent is entitled to the benefit of the course of conduct provisions in relation to repeated breaches of each relevant provision in respect of each employee; for instance, the multiple contraventions of the minimum wage provisions arising from the failure to pay an employee’s wages should be treated as a single contravention.
41.The contraventions of the respective provisions set out at paragraphs 34 to 36 above were each contravened repeatedly by the First Respondent over a period of time between about 21 October 2013 to 23 June 2014 [being the Ma Paid Employment Period which also covers the First and Second Shen Employment Periods].
42.In regard to multiple employees, it is accepted that contraventions may be grouped together under section 557 of the FW Act provided there is a course of conduct which is the result of a single decision made by the employer.
43.The Court adopts the approach adopted by His Honour, Judge Jarrat, in Fair Work Ombudsman v VS Investment Group Pty Ltd & Anor [2013] FCCA 208 at [19]:
Moreover, in my view s 557(1) does not require the Court to treat the alleged contraventions of s 45 of the Fair Work Act (by failure to pay basic rates of pay for example) in respect of multiple employees, as one contravention. The failure to pay a basic rate of pay to one employee over time might properly be seen as a course of conduct. However, the failure to pay a basic rate of pay to a number of employees should not, in my view, be seen as a “course of conduct” for the purposes of s 557(1) unless it is the result of a single decision made by the employer. The failures to pay basic rates of pay to a number of different employees are several and separate courses of conduct in respect of each employee which is dependent upon the decision made in respect of that employee. So much seems to be accepted by the approach of Marshall J in McIver v Healy (above).”
44.In this instance, the Applicant accepts that AIMG has the benefit of the statutory course of conduct provision in relation to the multiple breaches of each separate provision with respect to each of the employees.
Common Element
45.The Applicant relies on the principles developed in consideration of subsection 178(2) of the Industrial Relations Act 1998 (Cth) (predecessor legislation to section 719 of the Workplace Relations Act 1996 (WR Act)), which establishes that each individual obligation gives rise to a separate contravention [Gibbs at [24], Blandy v Coverdale NT Pty LtdACN102 611 423 [2008] FCA 1533 at [56]].
46.The Applicant recognised, however, that it is open to the Court to group separate contraventions together where the contraventions may be said to overlap with each other or involve the potential punishment of the respondents for the same or substantially similar conduct [Pearce v R (1998) 194 CLR 610 at [40], Johnson v R (2004) 205 ALR 346 at [27] – [34], Merringtons, supra at [46], [72] (Graham J) and [93] (Buchanan J) and Fair Work Ombudsman v Tiger Telco Pty Ltd (in liq) [2012] FCA 479 at [24] – [25[ (Bromberg J)].
47.Based on the above, the Applicant submits and the Court accepts, that the Respondents are entitled to the benefit of further grouping on the basis of common elements. In this case, the failure to pay annual leave loading on annual leave as required by the Clerks Award, arose from the failure to pay annual leave taken and annual leave on termination of employment. These contraventions can therefore be grouped for common elements on the basis that the contraventions arise from the same criminality. The Applicant submits and the Court accepts, that the remaining contraventions should not be grouped. The Applicant’s proposed groupings are set out in the table which is reproduced in the third schedule to these Reasons for Judgement. The Court accepts this proposal.
48.The Court accepts that based on the 18 contraventions outlined in the table reproduced in the third schedule, the maximum penalty that the Court could impose on the AIMG is $867,000 [16 contraventions with a maximum penalty of $51,000 and 2 contraventions with a maximum penalty of $25,500]. The maximum penalty that the Court could impose on Mr Jiang is $10,200.00 for his involvement in AIMG’s contravention of subsection 712(3) of the FW Act.
Factors Relevant to Penalty
49.A non-exhaustive list of factors relevant to the imposition of a penalty was usefully summarised by Federal Magistrate Mowbray in Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [[2007] FMCA 7 at [26]-[55]] (Pangaea). Those factors include:
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 Respondents;
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, taken corrective action and cooperated with the enforcement authorities;
j)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
k)the need for specific and general deterrence
50.This summary was adopted by Tracey J in Kelly [Kelly, supra at [14]]. While the summary is a convenient checklist, it does not prescribe or restrict the matters which may be taken into account in the exercise of the Court’s discretion [Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550, at [11]; Merringtons, supra at [91] (Buchanan J)].
51.The factors which the Applicant submits (and the Court accepts) are material to this matter and the question of appropriate penalties are addressed below.
Nature and extent of the contravening conduct
52.The contraventions in this matter are serious and comprise multiple types of underpayment, record-keeping contraventions and a failure to provide documents in response to a Notice to Produce Records or Documents. Most significantly, the contraventions involved two employees being deprived of their most basic entitlements and AIMG’s failure to comply with minimum obligations required under the FW Act.
53.The Court finds that in late November 2013, Ms Shen replied to an advertisement for the position of ‘Event Planner internship’ at AIMG and she was ultimately successful in obtaining the position.
54.It was a requirement of the internship that Ms Shen complete 180 hours of unpaid work prior to being offered paid employment [SOAF, at [11-15]].
55.Ms Shen performed more than 180 hours of productive work for AIMG during the internship, involving organising events, editing the magazine, reception duties, telephone and email correspondence regarding event partnerships and general office cleaning, for which she was not paid [Shen Affidavit, at [20] and SOAF, at [15], [18] and [56(c)]].
56.The internship did not have any affiliation or connection with the tertiary studies undertaken by Ms Shen [Shen Affidavit, at [11]].
57.On 1 April 2014, Ms Shen was offered paid employment as a permanent part time employee earning $100 per day. Ms Shen performed the same duties she did during the unpaid internship period [Shen Affidavit, at [25] and [26] and SOAF, at [17] and [19]].
58.Upon engaging Ms Shen as a permanent part-time employee, AIMG failed to classify Ms Shen or agree in writing the hours to be worked, in accordance with the Clerks Award [SOAF, at [103] to [108]]. Failing to do so later compromised the calculations of Ms Shen’s entitlements, as the Applicant was unable to determine whether Ms Shen was entitled to overtime [See clause 11.6 of the Modern Award in relation to overtime for part time employees].
59.Ms Shen was only paid the sum of $2,000.00 during her paid employment period with AIMG [SOAF, at [58(c)]]. This amounted to an average salary of $50.00 per day [SOAF, at [16] and [58(a) and (c)], based on 304.77 hours, divided by 7.6 hour day totals 40.1 days. Then $2000 payment divided by 40.1, totals $49.88 per day].
60.On 9 June 2014, Ms Shen asked for leave for two weeks as she had university exams. This was approved by a manager employed by AIMG. Ms Shen was not paid during this period of leave.
61.Ms Shen’s employment came to an end on 19 June 2014. Ms Shen was informed that she was “fired…[and that she was] not required to come back to work” [Shen Affidavit, at [39] and [40]]. She was not paid notice or annual leave entitlements upon the termination of her employment [SOAF, at [123] and [125] to [129]].
62.Ms Ma was employed by AIMG on a permanent full-time basis and received remuneration of $100.00 per day [SOAF, at [16]and [60]].
63.Ms Ma’s employment came to an end on 23 June 2014 and she was not paid in lieu of notice of termination or annual leave entitlements upon termination [SOAF, at [122, [125] and [130] to [133]].
64.At no time during Ms Shen or Ms Ma’s employment did AIMG keep records of overtime worked or in relation to their termination of employment; nor did it issue payslips to either employee [SOAF, at [145] to [147]and [148] to [150]].
65.During the Applicant’s investigation of AIMG, on 31 July 2014, Fair Work Inspector Dane Stella (Inspector Stella) issued a Notice to Produce Records or Documents (Notice to Produce) to AIMG. The Notice to Produce was served personally on Mr Jiang as director of AIMG and required AIMG to produce documents by 14 August 2014. AIMG did not produce the required documents within the required timeframe or at all, and did not provide a reasonable excuse for not doing so [SOAF, at [32] to [34] and [45]; Stella Affidavit at [32] to [36]].
Circumstances in which the conduct took place
66.The contraventions occurred in circumstances where both AIMG’s associated entities and Mr Jiang had numerous interactions with the Applicant, both prior to and during Ms Shen’s and Ms Ma’s employment, and AIMG was therefore well aware of its obligations with respect to employment and vocational placements. The Court takes into account the following:
a)in January 2013, AIMG Holdings Pty Ltd (AIMG Holdings), a company which is part of the same corporate group as AIMG, being at the time the majority owner of AIMG [Stella Affidavit at [12(c)] and Annexure “DS-5”] and being a company of which Mr Jiang had also been a director since June 2008 (and the sole director since May 2011)[ Stella Affidavit at [12(e)] and Annexure “DS-5”], received a letter from Fair Work Inspector Katherine Goonan setting out the tests under the FW Act by which a person could be lawfully engaged in a vocational placement. A second copy of Fair Work Inspector Goonan’s letter was later sent on 23 October 2013 to Canaan Lawyers, legal representatives for 3CW Chinese Radio Pty Ltd (3CW), another associated entity of AIMG, and another company of which Mr Jiang was a director.
b)on 23 September 2013, Inspector Stella sent the Proper Officer of 3CW a “Determination of Contravention” letter. That letter also set out information about what constituted an employment relationship (compared to a volunteer engagement), but also referred to:
i)Modern Awards;
ii)subsections 536(1) and (2) of the FW Act, in relation to pay slips;
iii)subsection 712(3) of the FW Act, in relation to notices to produce; and
iv)subsection 323(1) of the FW Act, in relation to the requirement to pay employees in full at least monthly [Stella Affidavit, [17] and Annexure “DS-9”].
c)on 30 October 2013, in a letter responding to Inspector Stella’s letter, Canaan Lawyers indicated that their client:
i)was “now fully aware of its obligations under section 45 of the FW Act not to contravene the terms of a Modern Award, and is aware of its other obligations under the FW Act more generally”; and
ii)“looks forward to fully cooperate and work with the Fair Work Ombudsman ... both to rectify all determined contraventions and to comply in the future with all of Australia’s workplace law” [Stella Affidavit, [19] and Annexure “DS-11”].
d)on 3 December 2013, Canaan Lawyers again wrote to Inspector Stella indicating that not only would 3CW ensure that it would comply with its own workplace relations obligations, but also its related entities. In that letter, Canaan Lawyers stated that “we would be able to report to the FWO that all the related entities [of 3CW] are in compliance with Australia’s workplace laws within a 3 month period” [Stella Affidavit, [20] and Annexure “DS-12”], and
e)on 23 July 2014, 3CW entered into a formal enforceable undertaking under section 715 of the FW Act with the Applicant (3CW Enforceable Undertaking). The 3CW Enforceable Undertaking was personally signed by Mr Jiang in his capacity as director of 3CW. The terms of the 3CW Enforceable Undertaking required 3CW and Mr Jiang, among other things to take reasonable steps to ensure that 3CW and its associated entities (including AIMG) complied at all times, with Commonwealth workplace laws and instruments, including the FW Act, and to develop and implement demonstrable systems and processes to ensure employees received the correct minimum rates of pay and entitlements, keep accurate and complete records, and issue pay slips within one working day of paying an amount to each employee [SOAF at [51] to [53]; Stella Affidavit at [21] and Annexure “DS-13”].
67.Mr Jiang, a director of AIMG and the person with overall direction, management and control of AIMG, was a director of both AIMG Holdings and 3CW at all relevant times. The Court infers that, at least from January 2013 and in particular after 3CW gave various undertakings for future compliance with the FW Act, AIMG, through its director Mr Jiang, should have been fully aware of its workplace relations obligations. Despite this:
a)Ms Ma was employed at the end of October 2013 on wages which were insufficient to meet her minimum entitlements (and remained employed on that basis until 19 June 2014); and
b)Ms Shen was unlawfully engaged by AIMG in late November 2013 as an intern, in circumstances where she was deprived of all her most basic entitlements, until 31 March 2014, and then employed on insufficient wages and entitlements until 19 June 2014
68.Even despite 3CW and Mr Jiang signing a formal enforceable undertaking under section 715 of the FW Act which included obligations with respect to 3CW’s related entities, AIMG did not rectify the underpayments until 23 March 2015 [SOAF at [156]].
69.In Fair Work Ombudsman v Crocmedia Pty Ltd [2015] FCCA 140 (Crocmedia), Judge Riethmuller was particularly critical of employers who use internships to avoid paying employees who are doing productive work for the benefit of the employer. His Honour stated:
“On balance I am not persuaded that the Respondent has been openly defiant of the law, but rather engaged in an arrangement that the Respondent believed avoided the consequences of the minimum wages requirements under the Act. However, the Respondents cannot avoid the proposition that it is, at best, dishonourable to profit from the work of volunteers, and at worst, exploitative.
[…]
“I am not persuaded that the Respondent engaged in a deliberate strategy to exploit the employees, although it is clear that the Respondent was content to receive the benefits that flowed from the arrangement, and that the arrangement itself, when viewed objectively, as exploitative.
[…]
“Profiting from “volunteers” is not acceptable conduct within the industrial relations scheme applicable in Australia. In some industries, and the media sector, is a good example, the popular appeal of the industry will lure many young people to seek any opportunity to obtain a toehold in the industry” [At [27], [32] and [45]].
70.This Court expresses its complete agreement with these comments.
71.The Court takes into account that AIMG’s failure to comply with the Notice to Produce, in contravention of subsection 712(3), and Mr Jiang’s involvement in that contravention, was especially serious because it occurred after all of the steps outlined above, and despite specific education and instructions provided by Inspector Stella on 31 July 2014, at the time the notice was issued.
72.At the time the Notice to Produce was issued, Inspector Stella discussed with Mr Jiang the date of compliance, the need to provide a reasonable excuse if certain documents could not be produced, the consequences of failure to comply, and an offer to discuss matters if Mr Jiang required any assistance to comply [Stella Affidavit]. Despite further correspondence on 19 August 2014, 23 September 2014, 14 October 2014 and 16 October 2014, in response to which the Respondents could still have provided documents, the required documentation was not produced and no reasonable excuse was provided [SOAF, at [36], [38], [40], [42], [44], [45]].
Nature and extent of the loss
Underpayment contraventions
73.The nature and extent of the loss suffered by Ms Shen and Ms Ma is significant and warrants the imposition of a meaningful penalty because:
a)the underpayment of $18,767.82 is not an insignificant sum, in the context of the short employment periods and the award reliant employees to whom it relates;
b)it involves contravention of minimum standards of the most fundamental kind; the payment of wages and entitlements [Fair Work Ombudsman v Nicole Patrice Dawe [2013] FMCA 191 at [23]];
c)the First Respondent has had the benefit of the underpayment [See for example, Fair Work Ombudsman v Shafi Investments Pty Ltd & ors (No. 2) [2013] FMCA 168 at [15]];and
d)the First Respondent did not take any steps to rectify the underpayments until 23 March 2015[See for example, Fair Work Ombudsman v Extrados Solutions Pty Ltd & Anor [2014] FCCA 815 at [12]].
74.The total underpayment to the two employees of $18,767.82. Although the underpayment is a relatively moderate sum in the context of matters which come before this Court, it was nonetheless very significant to Ms Shen and Ms Ma as it represented a high proportion of their total entitlements. In Fair Work Ombudsman v Zillion Zenith International Pty Ltd [2014] FCCA 433, Judge O’Sullivan noted:
“The amounts involved may seem trifling to some but they were required to be paid to young employees for whom they were far from trifling and for which they’ve had to wait.”[ Fair Work Ombudsman v Zillion Zenith International Pty Ltd [2014] FCCA 433 at [26]].
75.The loss suffered by Ms Shen and Ms Ma was also significant because it involved the failure to pay the most basic minimum entitlements, including minimum wages. Ms Shen and Ms Ma were deprived of the protections of the FW Act and were forced to be reliant on a minimal income with no entitlements to personal or annual leave. In particular, the Applicant contends and the Court finds that by engaging Ms Shen as an “intern”, AIMG intended not to pay Ms Shen anything at all for the productive work that she was required to perform [Given Mr Jiang’s prior knowledge of workplace laws – see 3CW EU at [4(d)]], and exploited Ms Shen in order to obtain a reduction in wage costs.
76.The Courts have previously warned that mischaracterising employment relationships as other types of arrangements, deprives those persons of the basic protections and conveniences that Australian employees would ordinarily be entitled to. In Darlaston v Risetop Construction Pty Ltd [2011] FMCA 220 at [48], Barnes FM (as her Honour then was) held (in the context of sham contracting):
"The indirect avoidance of entitlements by sham contracting cannot be measured in monetary terms. As pointed out, a contractor does not have recourse to paid sick leave. It can be inferred that such a person may be more likely to work when not well than an employee who has the protection of regulated standards of paid sick leave. Matters such as maximum weekly hours, requests for flexible working arrangements, parental leave and related entitlements, annual leave, personal carers' leave and compassionate leave, community service leave, long service leave, public holidays and notice of termination and redundancy pay may be similarly "devalued" and even effectively negated by such sham contractual arrangements. The Award which would have applied to the workers as employees is in evidence before the court. It contains such protections. It may be that other rights that employees have or may have recourse to (such as protections for unfair dismissal) are negated and avoided by such arrangements..."
Although Darlaston involved sham contracting arrangements which did not occur in this case, her Honour’s comments are still appropriate in the context of an employment relationship which is disguised as a vocational or volunteer arrangement.
77.The underpayments to Ms Shen and Ms Ma remained outstanding for some nine months after the commencement of these proceedings, and AIMG received a benefit from the underpayment for this period of time. In Fair Work Ombudsman v Lycamobile Pty Ltd [2013] FCCA 2132 at [16], Judge Burnett specifically considered the issue of depriving employees engaged in ‘basic employment’ of the financial benefit of their employment and stated:
“It does not escape my attention that, in terms of cash flow, the delay in paying basic remuneration to employees engaged in what can only be described as basic employment leads to a very strong inference that the hardship occasioned to those employees would have been greater than might otherwise be expected for higher paid employees, who one would expect to be better financially resourced.”
Record-keeping and Notice to Produce contraventions
78.In addition to the monetary loss arising from the underpayment contraventions, in the context of the record-keeping and Notice to Produce contraventions, loss and damage should be considered in the context of the relevant statutory objective. The First Respondent’s conduct (and Second Respondent’s conduct in respect of the Notice to Produce contravention) is “conduct ... [which] undermines the utility and effectiveness of a fundamental object”[ Secretary, Department of Health and Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545 at [56]; Olsen v Sterling Crown Pty Ltd [2008] FMCA 1392 at [51]].
79.The principal objects of the FW Act include:
a)provide a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions for all employees [FW Act, subsection 3(b)]; and
b)providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms [FW Act, subsection 3(e)].
80.The Respondents’ failures to make and keep proper employment records, failures to make timely provision of accurate payslips to employees, and failures to comply with statutory notices issued by Fair Work Inspectors, undermine the objectives of the FW Act.
81.Accurate records and payslips facilitate the calculation of employees’ entitlements and enable employees to determine the makeup of the pay over a pay period. The failure to keep records and issue payslips undermines the Applicant’s ability to investigate potential exploitation in workplaces and ensure compliance with minimum standards. In Fair Work Ombudsman v Orwill Pty Ltd & Ors [2011] FMCA 730 at [21] the court found:
[21] The consequences of contravening conduct may include loss of, or damage to, the relevant statutory objective. That is, “conduct ... [which] undermines the utility and effectiveness of a fundamental object” of, in this case, the WR Act and WR Regulations. In this case, the failure to make and maintain various records and to issue payslips undermines the utility and effectiveness of the purpose of Part 19 of the WR Regulations which provides for “the inspection of records by workplace inspectors”. The statutory purpose of the WR Regulations ties in with the purposes for which the powers of workplace inspectors can be exercised under s.169 of the WR Act, those purposes including determination of whether various industrial instruments and minimum standards and entitlements, and the requirements of the WR Act and WR Regulations themselves, are being observed. Manifestly, failure to make and maintain records in relation to employee entitlements, undermines the utility and effectiveness of workplace inspectors, and their ability to determine whether or not there has been compliance with minimum standards and industrial instruments, and the provision of effective means for investigation and enforcement of employee entitlements.
82.The FW Act empowers inspectors to issue notices to produce as an effective means of investigating and enforcing compliance with minimum standards and industrial instruments. The Respondents’ conduct in failure to comply with Inspector Stella’s Notice to Produce hindered the Applicant’s investigation into the First Respondent. Again, this conduct undermines the objective to provide effective compliance mechanisms under the FW Act and to enforce the guaranteed safety net of terms and conditions for employees.
Similar previous conduct
83.AIMG has not previously been the subject of legal proceedings by the Applicant for contraventions of workplace laws.
84.However, as set out in paragraph 66, Mr Jiang and 3CW, a company of which Mr Jiang is a director and a related entity of AIMG [SOAF, at [52]], are parties to the 3CW Enforceable Undertaking [Stella Affidavit, at [21] and Annexure “DS-13”].
85.The investigation which led to the entry into to the 3CW Enforceable Undertaking determined that:
a)3CW employed certain employees on a casual basis to host and produce radio programs, but purported to engage the employees as volunteers [3CW Enforceable Undertaking, clauses [6] and [8]];
b)3CW breached the relevant modern award; and
c)3CW underpaid the two employees a total of $60,126.96 [3CW Enforceable Undertaking, clause at [15]].
86.In the 3CW Enforceable Undertaking:
a)3CW admitted that it breached section 45 of the FW Act by contravening certain sections of the relevant modern award including failing to:
i)classify the Employees according to the structures set out in the schedules to the relevant modern award;
ii)inform the Employees of their relevant classification under the relevant modern award;
iii)pay the Employees the minimum rate of pay contained in clause 14.3 of the relevant modern award;
b)3CW admitted that it breached subsection 535(1) of the FW Act by failing to comply with certain record-keeping provisions contained in the Regulations;
c)3CW admitted that it contravened subsection 536(1) of the FW Act by failing to give a pay slip to each of the employees within one working day of paying an amount to the employee in relation to the performance of work;
d)3CW admitted that it contravened subsection 323(1) of the FW Act by failing to pay the employees in relation to the performance of work at least monthly;
e)Mr Jiang admitted that he was involved in the breaches outlined in subparagraphs a) to d) above;
f)Mr Jiang admitted that he “was principally responsible for the overall direction, management and supervision of the operations of 3CW in relation to setting and adjusting pay rates and determining wages and conditions of employment” [3CW Enforceable Undertaking, clause [4(b)]];
g)Mr Jiang admitted that at all material times, he “was aware that employees are entitled to be paid for work performed in accordance with applicable industrial instruments and Commonwealth workplace laws”[ 3CW Enforceable Undertaking, clause [4(d)]].
87.The breaches listed in subparagraphs 86.a) to 86.d) above, which were admitted to by 3CW and its sole director Mr Jiang, mirror those breaches outlined in paragraph 63, 105, 144, 147 and 150 of the SOAF.
88.The 3CW Enforceable Undertaking requires that Mr Jiang and the companies of which he is a director comply with all Commonwealth workplace laws.
89.The conduct by:
a)AIMG in relation to the Employees and all of the admitted contraventions; and
b)Mr Jiang in failing to comply with the Notice to Produce Records and Documents,
arose after Mr Jiang, and the related entity of AIMG, entered into the 3CW Enforceable Undertaking thereby breaching its terms [SOAF, at [51-53]].
Whether the breaches arose out of the one course of conduct
90.See paragraphs 39 to 44.
Size and financial circumstances of the business
91.Searches undertaken by Inspector Stella suggest that AIMG is part of a large corporate group which advertises itself as operating radio, television, print and internet media platforms as well as an event manager, and AIMG is closely linked to its related entities AIMG Holdings and Ostar International Media Group Pty Ltd [Stella Affidavit, at [11]-[12]]. AIMG Holdings owns property in Waterloo, New South Wales [Stella Affidavit, at [13] and Annexure “DS-7”].
92.In addition, the Applicant’s searches did not suggest any issue as to financial incapacity of Mr Jiang. Inspector Stella’s searches show that Mr Jiang jointly owns two properties, one each in New South Wales and Victoria [Stella Affidavit, at [13] and Annexure “DS-7”], and is a director of 33 companies, company secretary of 13 of those companies, and a shareholder in 17 companies [Stella Affidavit, at [11]-[12] and Annexures “DS-5” and “DS-6”].
93.The Respondents did not file any evidence as to their size or financial position. It is clear on the authorities that the size of a business and an employer's financial position at the time of the contraventions are not relevant to the question of penalty. Employers, be they small, medium or large, have an obligation to meet minimum standards in relation to their employees; they cannot overcome financial difficulties by underpaying their employees [Workplace Ombudsman v Saya Cleaning Pty Ltd [2009] FMCA 38 at [26] to [30]].
Ensuring compliance with minimum standards
94.Ensuring compliance with minimum standards is a very important consideration in this case. As set out above, the objects of the FW Act include the maintenance of an effective safety net of minimum terms and conditions, and effective enforcement mechanisms. The substantial penalties set by Parliament and awarded by the Courts for failing to comply with minimum award obligations and statutory notices reinforce the importance placed on compliance with minimum standards and an effective enforcement framework.
95.Ordering penalties at a meaningful level allows the Court to show that there are serious consequences for failing to comply with Commonwealth workplace laws. Failing to impose a substantial penalty will remove the incentive for this employer and other employers to change their practices.
96.The Respondents have admitted to failing to pay minimum wages. In light of Mr Jiang’s prior knowledge of workplace laws, the Court believes that it is appropriate for a substantial penalty to be imposed on the Respondents.
Deliberateness of contraventions
97.The issue of whether a breach is deliberate was considered by Driver FM (as his Honour then was) in Cotis v MacPherson [2007] FMCA 2060 at [17]:
“In issue in this matter is whether the identified breaches were deliberate. I do not think that they were deliberate in the sense of Mr Macpherson setting out with an intention to breach the Workplace Relations Act. However, the facts compel the conclusion that Mr Macpherson was at least reckless in relation to the responsibilities of his company and himself as an employer. Mr Macpherson was made aware of some of the breaches by employees whilst the business was still in operation. He also acknowledged the breaches to the inspector following the closure of the business. Mr Macpherson has no contest with the evidence provided by Ms Cotis.”
98.As in Cotis v MacPherson, there is no evidence to suggest in this matter that the Respondents’ contraventions constituted a deliberate attempt to break the law. However, in light of the circumstances set out at paragraph 66 above and the close links between AIMG and its related entities AIMG Holdings and 3CW (particularly through Mr Jiang), the Applicant contends that AIMG was clearly on notice of their workplace relations obligations prior to the time that Ms Shen and Ms Ma were employed by AIMG, such that they should have known that the terms and conditions under which they were employed were not in accordance with the FW Act, and they should have known that they were required to keep records for them and issue payslips. The Court accepts this contention.
99.Given that the Applicant is not aware of any steps taken by the Respondents to seek advice about the classification of Ms Shen as an “intern”, or to determine the minimum entitlements it was required to pay Ms Shen and Ms Ma during their paid employment periods, the Applicant submits that the AIMG’s conduct was, at the very least, reckless, and it is open to the Court to find that AIMG was wilfully blind in failing to comply with its obligations. The Court accepts this submission.
100.Given that Ms Shen was both young and vulnerable, the Applicant asserts that it is open for the Court to treat this as a factor in aggravation of any penalties imposed on the Respondents. The Court accepts this assertion. The Federal Circuit Court has previously found that young, low-paid employees are particularly vulnerable and that this is a factor relevant to penalty. For example, in Fair Work Ombudsman v EA Fuller & Sons Pty Ltd [[2013] FCCA 5, at [90]], Judge Driver considered the appropriate penalties to apply in relation to employees who were young and low-paid, and where the scope for exploitation was high, and cited with approval the following extract from the decision of Chief Industrial Magistrate Hart in David Armstrong v VK Holdings Pty Ltd [Unreported, Chief Industrial Magistrates court, Sydney, 28 November 1997, at [19]],
“… An employer has an obligation to find out and provide the minimum lawful entitlements prescribed for its employees. When the employee is a young, vulnerable employee, such as a trainee, the obligation upon the employer is even greater.”
101.The Notice to Produce contravention took place a week after Mr Jiang had personally signed, in his capacity as director of 3CW, the 3CW Enforceable Undertaking, a statutory agreement, in which he undertook to ensure that he, and all companies of which he was a director, would comply with the FW Act. Despite that, and despite education being given by Inspector Stella at the time the notice was issued, and several pieces of follow-up correspondence, Mr Jiang failed to ensure that AIMG produced all documents requested by the Fair Work Ombudsman. In this respect, the Applicant contends that AIMG and Mr Jiang were wilfully blind in failing to respond to the Notice to Produce. The Court accepts this.
Involvement of senior management
102.Although the involvement of Mr Jiang in AIMG’s contraventions within the meaning of section 550 of the FW Act is limited to the First Respondent’s contravention of failing to comply with the Notice to Produce in accordance with sub section 712(3) of the FW Act, the Applicant contends and the Court accepts, that Mr Jiang was nonetheless clearly connected with AIMG’s other contraventions, as set out below.
103.Mr Jiang has admitted that he was a director of AIMG and the person responsible for its overall direction, management and control [SOAF, at [6]].
104.The Applicant has set out, at paragraph 66 above, the knowledge of workplace relations obligations received throughout 2013 and 2014 by two other companies Mr Jiang was also a director of, AIMG Holdings and 3CW. Further, in the 3CW EU, Mr Jiang agreed that he was, from at least mid-2013, “aware that employees are entitled to be paid for work performed in accordance with applicable industrial instruments and Commonwealth workplace laws”[ 3CW Enforceable Undertaking, clause 4(d); see Stella Affidavit, at [21] and Annexure “DS-13”].As the director and controlling mind of AIMG, the Court finds that Mr Jiang was responsible for ensuring that AIMG complied with these workplace instruments and laws. Mr Jiang was aware of the resources available to him and AIMG if he was unsure as to the appropriate entitlements to be paid to Ms Ma and Ms Shen, but still did not comply with his responsibilities.
105.As early as December 2013, 3CW’s lawyers undertook to ensure that all related entities of 3CW, including AIMG, complied with the FW Act [Stella Affidavit, at [19] and “DS-11”]. Further, under the 3CW Enforceable Undertaking, Mr Jiang personally undertook “to take all reasonable steps to ensure that 3CW and […AIMG BQ Pty Ltd] comply at all times, and in all respects with applicable Commonwealth workplace laws and instruments, including but not limited to the Modern Award and the FW Act, by developing systems and processes to promote ongoing compliance with those requirements”[ 3CW EU, clause 22(a); see SOAF, [53] and].
106.Despite these undertakings, it appears that Mr Jiang either took no steps, or ignored, his obligations to ensure that AIMG complied with workplace laws.
Co-operation and contrition
107.It is the Applicant’s submission that its investigation into the complaints made by Ms Shen and Ms Ma was protracted due to the conduct of AIMG and Mr Jiang.The Court accepts this submission.
108.The Applicant’s investigation spanned from July 2014 to February 2015 [SOAF, at [29] to [50], during which time:
a)Mr Jiang did not accept the offer of a formal record of interview[SOAF, at [35];
b)AIMG and Mr Jiang failed to provide all of the documents that were the subject of the Notice to Produce despite repeated requests by Inspector Stella and education provided at the time of service[SOAF, at [32]-[45] and [36]-[45]; Stella Affidavit, at [32] to [36] and Annexure “DS-20”]; and
c)the Applicant issued its Findings of Contravention Letter on 7 February 2015 which went unanswered[SOAF, at [48-50]].
109.The Court finds that AIMG and Mr Jiang failed to meaningfully engage with the Applicant during the investigation process. This conduct demonstrates a complete disregard for the Applicant in its role as a Regulator and for their obligations under Commonwealth workplace laws.
110.Further, there is no evidence of contrition on the part of AIMG or Mr Jiang despite the entry into the SOAF and the rectification of the underpayments. The Applicant is not aware of any expression of regret or genuine remorse or any statement of apology by either AIMG or Mr Jiang to Ms Shen and Ms Ma.
Corrective action
111.AIMG rectified the underpayment to Ms Shen and Ms Ma on 23 March 2015[SOAF, at [156]].
112.However, there is no evidence to demonstrate that AIMG and Mr Jiang have altered their business model to ensure that similar contraventions of this nature are not repeated. In fact, the Applicant is concerned that Mr Jiang is in breach of the terms of the 3CW Enforceable Undertaking[Stella Affidavit, at [21] to [28]].
113.In the absence of engagement with the FWO during the investigation, the absence of any evidence of genuine contrition or corrective action, the only inference the Court can draw is that rectification of the underpayment appears more a matter of expediency, a “cost of doing business”, than an acceptance of wrongdoing.
General deterrence
114.It is well established that the need for specific and general deterrence are matters that are relevant to the imposition of a civil penalty[See for example, Pangaea, supra at [51] to [55] and Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543 at 559-60 (Lander J)].
115.In Fair Work Ombudsman v Maclean Bay Pty Ltd (No 2)[ 2012] FCA 557 at [29]], Marshall J observed:
“It is important to ensure that the protections provided by the Act to employees are real and effective and properly enforced. The need for general deterrence cannot be understated. Rights are a mere shell unless they are respected”.
116.The role of general deterrence in determining the appropriate penalty is illustrated by the comments of Lander J in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543, [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: Yardley v Betts (1979) 22 SASR 108. 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: R v Thompson (1975) 11 SASR 217.”
117.The Applicant submits, and the Court accepts, that there is a need to send a message to the community and employers particularly that employers must provide their employees with the correct entitlements, keep and issue the required records and payslips and take steps to respond to notices issued by Government regulators.
118.The Applicant also emphasises the importance of maintaining a level playing field for all employers in an industry, with respect to wage costs. Those employers who fail to comply with minimum obligations gain an unfair competitive advantage over those employers who do comply with their workplace obligations. The Court accepts the legitimacy of this submission.
119.The Applicant accepts that in some circumstances, genuine unpaid internships are a lawful and beneficial mechanism for introducing workers into an industry. This is clearly not so in this case where Ms Shen performed exactly the same work as she did in her paid period of employment [Crocmedia, at [7], where his Honour referred to sections of Stewart and Owens, Experience or Exploitation? The nature, prevalence and regulation of unpaid work experience, internships and trial periods in Australia, Report for the Fair Work Ombudsman, January 2013, Andrew Stewart and Rosemary Owens, Adelaide Law School (Stewart and Owens Report). See Stella Affidavit, at [29]].
120.The Applicant submitted that the use of unpaid internships to exploit workers who are capable of performing productive work, and particularly those who are dependent on visa sponsorship, is of particular concern to the Fair Work Ombudsman [Stella Affidavit, at [29] and “DS-18”]. The Fair Work Ombudsman’s own statistics reveal that inquiries and complaints in relation to internships and unpaid work increased almost threefold between 2011-12 and 2014-15 [Stella Affidavit, at [30]-[31] and Annexure “DS-19”]. Additionally, in 2012, the Applicant engaged Professors Andrew Stewart and Rosemary Owens to undertake some research in relation to the prevalence of unpaid work experience and internships in Australia. The Final Report [Stewart and Owens Report, A summary is found in the Stella Affidavit, at Annexure “DS-18”] presented to the Applicant included the following comments relevant to considerations of general deterrence in this matter:
“Where organisations are systematically using unpaid interns or unpaid job applicants, there is clearly a greater threat to the integrity of the Fair Work legislation. This should be treated as a significant factor in any decision as to whether to investigate a particular matter, or to take action. It is also important to recall that while those who are undertaking unpaid work experience are often amongst the most vulnerable workers, it may be important to pursue investigations even where a person has made a free and informed choice to accept unpaid work to secure greater opportunities in the labour market. The point of enforcing labour laws in this setting is not just to protect the individuals involved. It is to assert a principle – a fair day’s pay for a fair day’s work – that underpins our system of minimum labour standards. It is also to promote the goal of ‘social inclusion’ that is expressly made part of the objects of the Fair Work Act [Stewart and Owens Report, page xxiii (Executive Summary)].
121.The Applicant submitted, and the Court accepts, that employers should be in no doubt that they have a positive obligation to ensure compliance with the obligations they owe to their employees under the law.
Specific deterrence
122.The need for specific deterrence is clearly required in this case. AIMG continues to operate and employ [Stella Affidavit, at [8]-[10] and [11]-[12] and Annexure “DS-5”]. Mr Jiang is an experienced businessman who continues his involvement not only in AIMG and its associated entities, but is a director and company secretary of many other companies [Stella Affidavit, at [11]-[12] and Annexure “DS-6”].
123.The Applicant submits that the need for specific deterrence is high in light of the reckless nature of the conduct, and the absence of any demonstration of contrition or remorse by AIMG and Mr Jiang [Workplace Ombudsman v Saya Cleaning Pty Ltd & Anor [2009] FMCA 38 at [41] citing Merringtons, supra at [17] and; Fryer v Yoga Tandoori House Pty Limited [2008] FMCA 288 at [35]].
124.There is a need to send a serious message to the Respondents that the Court will not countenance attempts to disguise employment relationships as unpaid internships and thus deny employees their required minimum entitlements.
125.Further, as it is clear that the opportunities given to the Respondents for voluntary compliance since 2013 have been largely ignored by the Respondents, there is a need to remind the Respondents that non-compliance is a serious matter, and to ensure that the Respondents actually do take proper steps in future to comply with their workplace obligations.
126.In late 2013, undertakings were made by 3CW’s lawyers that AIMG and its associated entities would be compliant with their workplace relations obligations within three months [Stella Affidavit, at [20] and Annexure “DS-12”], yet the contraventions in these proceedings still occurred. Further, despite the 3CW Enforceable Undertaking, a formal enforcement mechanism under section 715 of the FW Act in July 2014 which Mr Jiang signed and which required AIMG to comply with the FW Act, the Notice to Produce contravention still occurred, rectification only took place 9 months later and it is apparent that there are still concerns about compliance with the 3CW EU [Stella Affidavit, at [22] to [28] and Annexures “DS-14” to “DS-17”].
127.The Applicant submits, and the Court accepts, that it should impose penalties on the Respondents that meaningfully ensure that there is no future non-compliance by AIMG, Mr Jiang or any of AIMG’s related entities.
Totality
128.Having fixed an appropriate penalty for each contravention, the Court should take a final look at the aggregate penalty, to determine whether it is an appropriate response to the conduct which led to the breaches, and is not oppressive or crushing [See Kelly, supra at [30]; Merringtons, supra at [23] per Gray J, [71] per Graham J, [102] per Buchanan J].
129.Whilst the penalty imposed must not be crushing or oppressive, it must nevertheless be proportionate to the seriousness of the conduct engaged in by the Respondents [Fair Work Ombudsman v Promoting U Pty Ltd & Anor [2012] FMCA 58, at [52] to [54]].
Penalty
130.The Applicant’s penalty recommendations became Exhibit “A2”. That document is reproduced in the fourth Schedule to these Reasons.
131.The Applicant submitted, and the Court accepts, that the facts that are most relevant to these proceedings are:
a)characterising the engagement of Ms Shen as an “intern” to avoid employment costs;
b)the repeated nature of the conduct, which involved a disregard for the minimum entitlements under the Clerks Award and the FW Act;
c)Mr Jiang, as director of two related entities of AIMG, had received knowledge throughout 2013 and 2014 in relation to workplace relations obligations, and had made undertakings as early as December 2013 to comply with those obligations, including being a party to the 3CW Enforceable Undertaking with the Applicant in which he undertook not to contravene Commonwealth workplace laws;
d)the failure of the Respondents to demonstrate genuine contrition and remorse; and
e)the need for general and specific deterrence
132.The Court accepts the Applicant’s submissions as to the appropriateness of the penalty range for both Respondents. The Court accepts that a totality discount of 50 per cent is also appropriate. Having regard to all the evidence before it, the Court believes that in each case the penalty range should be at the highest end of the suggested range, i.e 63 per cent in the case of the First Respondent, and 80 per cent for the Second Respondent. This means that the total penalty for the First Respondent, allowing for a totality discount of 50 per cent, is $272,850. For the Second Respondent, no totality principle applies, and the penalty is $8,160.
Injunctions against Second Respondent
133.Order 6 sought by the Applicant is based on s.545(1) and (2) of the Act which states:
(1) The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.
(2) Without limiting subsection (1), orders the Federal Court or Federal Circuit Court may make include the following:
(a) an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;
(b) an order awarding compensation for loss that a person has suffered because of the contravention;
(c) an order for reinstatement of a person.
134.The Court is, in any event, empowered to grant an injunction under s.15 of the Federal Circuit Court of Australia Act.
135.The Applicant submits that the making of the injunction against the Second Respondent may well be more effective than imposing a pecuniary penalty on him, given the evidence about the nature and extent of his control and involvement in corporate entities engaged in the industry in question. It will assist in securing the public interest in compelling compliance with the Fair Work Act. It is an Order that is framed in terms that are proportionate to the evidence of contraventions before the Court. It requires the Second Respondent to do that which he is required to do by law. The Court accepts these submissions. The Court is of the view that the Second Respondent is the architect of the First Respondent’s non-compliance with the relevant processes of the Fair Work Act. There is a significant public interest in seeking to regulate his compliance with the law. A period of three years is appropriate in this regard.
Undefended Proceedings
136.The Court was adequately satisfied that the Respondents were aware of the penalty hearing on 15 March 2016. Exhibit “A1” is evidence of notice to them. On the afternoon of the hearing the Court endeavoured to ring the Respondents on their last known telephone numbers, without success. The Respondents are nonetheless entitled to be informed of the processes available to them under rule 16.05 of the Federal Circuit Court Rules 2001 which states:
(1) The Court may vary or set aside its judgment or order before it has been entered.
(2) The Court may vary or set aside its judgment or order after it has been entered if:
(a) the order is made in the absence of a party; or
(b) the order is obtained by fraud; or
(c) the order is interlocutory; or
(d) the order is an injunction or for the appointment of a receiver; or
(e) the order does not reflect the intention of the Court; or
(f) the party in whose favour the order is made consents.
(3) This rule does not affect the power of the Court to vary or terminate the operation of an order by a further order.
I certify that the preceding one hundred and thirty-six (136) paragraphs are a true copy of the reasons for judgment of Judge Altobelli
ii)did not take any steps, on behalf of the First Respondent, to comply with the NTP by 14 August 2014; and
iii)was aware that the First Respondent did not produce any of the documents as required by the NTP.
bbbbbbb)The Second Respondent admits that he was:
i)directly or indirectly, knowingly concerned in or a party to; or
ii)otherwise involved in (within the meaning of section 550 of the FW Act),
the First Respondent’s contravention of subsection 712(3) of the FW Act and is therefore taken to have himself contravened that subsection of the FW Act, pursuant to subsection 550(1) of the FW Act.
Recommendation as to Declarations and Orders
ccccccc)The Applicant and Respondents have agreed to recommend to the Court the declarations and orders as set out below.
The Court declares that:
1.The First Respondent contravened each of the following provisions:
i)section 45 of the FW Act by the First Respondent failing to classify the Employees pursuant to Schedule B of the Clerks Award, and failing to advise the Employees in writing of their applicable classifications in accordance with clause 15.1 of the Clerks Award;
ii)section 45 of the FW Act by the First Respondent failing to agree in writing, upon engagement of a part-time employee, Ms Shen, the pattern of hours and days that were to be worked as required by clause 11.3 of the Clerks Award;
iii)section 45 of the FW Act by the First Respondent failing to pay to the Employees minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, to Ms Shen during the First Shen Employment Period;
iv)section 45 of the FW Act by the First Respondent failing to pay to the Employees minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, to the Employees during the Second Shen Employment Period and the Ma Paid Employment Period;
v)section 45 of the FW Act by the First Respondent failing to pay casual loading in accordance with clause A.5.4 of Schedule A to the Clerks Award, by reference to clause 12.2 of the Clerks Award, to Ms Shen during the First Shen Employment Period;
vi)section 45 of the FW Act by the First Respondent failing to pay overtime in accordance with clause 27.1 of the Clerks Award to Ms Ma during the Ma Paid Employment Period;
vii)section 45 of the FW Act by the First Respondent failing to pay weekend penalty rates for time worked on a Sunday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 27.2 of the Clerks Award, to Ms Ma during the Ma Paid Employment Period;
viii)section 45 of the FW Act by the First Respondent failing to pay the Employees the appropriate penalty rate for work undertaken on a designated public holiday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 31.3 of the Clerks Award, during the Second Shen Employment Period and the Ma Paid Employment Period;
ix)section 45 of the FW Act by the First Respondent failing to make superannuation contributions to a superannuation fund for the benefit of the Employees in accordance with clause 24.2 of the Clerks Award during the Second Shen Employment Period and the Ma Paid Employment Period;
x)section 44 of the FW Act by the First Respondent failing to pay any amount on account of annual leave taken by Ms Ma at the minimum rate of pay for her ordinary hours of work in accordance with subsection 90(1) of the FW Act, during the Ma Paid Employment Period;
xi)section 45 of the FW Act by the First Respondent failing to pay annual leave loading in accordance with clause 29.3 of the Clerks Award to Ms Ma during the Ma Paid Employment Period;
xii)section 44 of the FW Act by the First Respondent failing to pay the Employees’ minimum rate of pay for absences on a public holiday in accordance with section 116 of the FW Act during the Second Shen Employment Period and the Ma Paid Employment Period;
xiii)section 44 of the FW Act by the First Respondent failing to pay personal/carer’s leave to Ms Ma in accordance with section 96(1) of the FW Act during the Ma Paid Employment Period;
xiv)section 44 of the FW Act by the First Respondent failing to pay the Employees in lieu of the minimum periods of notice the First Respondent was required to provide on termination of the Employees’ employment in accordance with section 117 of the FW Act;
xv)section 44 of the FW Act by the First Respondent failing to pay the Employees their accrued but untaken annual leave on termination of employment in accordance with subsection 90(2) of the FW Act;
xvi)section 45 of the FW Act by the First Respondent failing to pay the Employees their annual leave loading upon termination of employment in accordance with clause 29.3 of the Clerks Award;
xvii)section 323 of the FW Act by the First Respondent failing to pay the Employees’ wages at least monthly;
xviii)subsection 712(3) of the FW Act by the First Respondent failing to comply with a Notice to Produce Records or Documents;
xix)section 535 of the FW Act by the First Respondent failing to comply with sub regulation 3.34 and 3.40 of the FW Regulations; and
xx)subsection 536(1) of the FW Act by failing to issue payslips to the Employees within one day of payment.
ddddddd)The Second Respondent was involved in the First Respondent’s contravention in Declaration 1(r) above, within the meaning of subsection 550(2) of the FW Act, and is therefore taken to have himself contravened subsection 712(3) of the FW Act pursuant to subsection 550(1) of the FW Act.
The Court orders that:
1.Pursuant to subsection 546(1) of the FW Act, the First Respondent pay pecuniary penalties in respect of the contraventions set out at Declaration 1 above.
eeeeeee)Pursuant to subsection 546(1) of the FW Act, an order that the Second Respondent pay pecuniary penalties in respect of the contravention set out at Declaration 2 above.
fffffff)An order pursuant to subsection 546(3)(a) of the FW Act that all pecuniary penalties ordered to be paid by the First and Second Respondents are paid into the Consolidated Revenue Fund of the Commonwealth within 28 days from the date that the orders for the payment by the First and Second Respondents of pecuniary penalties are made.
ggggggg)Orders pursuant to subsection 545(1) of the FW Act and/or subsection 545(2)(a) of the FW Act, that the Second Respondent is restrained from:
i)aiding, abetting, counselling or procuring; or
ii)being in any way directly or indirectly knowingly concerned in,
conduct in respect of employees employed by the First Respondent and/or any of its associated entities (within the meaning of section 50AAA of the Corporations Act 2001 (Cth)) that contravenes the Clerks – Private Sector Award, the Fair Work Act 2009 (Cth) and the National Employment Standards contained in Part 2-2 of the FW Act.
hhhhhhh)An order that the Applicant have liberty to apply on seven days’ notice in the event that any of the proceeding orders are not complied with.
iiiiiii)Such further or other orders as the Court deems necessary.
................................................... ..............................................
Solicitor for the Applicant Solicitor for the Respondents
Date: Date:
Schedule A – Table of underpayments to the Employees
| Contraventions | Ms Shen | Ms Ma | Total underpayment per contravention | |
| Failure to pay minimum rates of pay during First Shen Employment Period | $2,272.01 | N/A | $2,272.01 | |
| Failure to pay minimum rates of pay during Paid Employment | $3,811.96 | $4,680.74 | $8,492.70 | |
| Failure to pay casual loading | $575.80 | N/A | $575.80 | |
| Failure to pay overtime (1st 2 hours) | N/A | $818.62 | $818.62 | |
| Failure to pay overtime (after 2 hours) | N/A | $903.85 | $903.85 | |
| Failure to pay weekend penalty rates | N/A | $274.56 | $274.56 | |
| Failure to pay minimum rates for annual leave taken | N/A | $1,447.41 | $1,447.41 | |
| Failure to pay loading for annual leave taken | N/A | $253.51 | $253.51 | |
| Failure to pay ordinary time for hours absent on a public holiday | $434.80 | $69.59 | $504.39 | |
| Failure to pay public holiday pay for time worked | $277.68 | $376.62 | $654.30 | |
| Failure to pay Personal/carer/s leave | N/A | $724.09 | $724.09 | |
| Failure to pay accrued annual leave upon termination | $479.04 | $90.58 | $569.92 | |
| Failure to pay accrued annual leave loading upon termination of employment | $83.90 | $15.87 | $99.77 | |
| Failure to make payment in lieu of notice | $452.53 | $724.66 | $1,177.19 | |
| Total Underpayment amount per Employee | $8,387.72 | $10,380.10 | TOTAL UNDERPAYMENT = $18,767.82 | |
Schedule 2
Applicant’s Minute of Proposed Orders
IN THE FEDERAL CIRCUIT COURT File number: SYG1559/2015
OF AUSTRALIA
REGISTRY: SYDNEY
FAIR WORK DIVISIONFAIR WORK OMBUDSMAN
Applicant
AIMG BQ PTY LTD (ACN 148 012 284)
First Respondent
ZHAO QING JIANG
Second RespondentMINUTE OF PROPOSED ORDERS
Before: Judge Altobelli
Date:
Made at: Sydney
THE COURT DECLARES THAT:
jjjjjjj)The First Respondent contravened the following civil remedy provisions:
i)section 45 of the FW Act by the First Respondent failing to classify Ms Shen and Ms Ma pursuant to Schedule B of the Clerks Award, and failing to advise the Employees in writing of their applicable classifications in accordance with clause 15.1 of the Clerks Award;
ii)section 45 of the FW Act by the First Respondent failing to agree in writing, upon engagement of a part-time employee, Ms Shen, the pattern of hours and days that were to be worked as required by clause 11.3 of the Clerks Award;
iii)section 45 of the FW Act by the First Respondent failing to pay Ms Shen minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, to Ms Shen during the First Shen Employment Period;
iv)section 45 of the FW Act by the First Respondent failing to pay to Ms Shen and Ms Ma minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, to the Employees during the Second Shen Employment Period and the Ma Paid Employment Period;
v)section 45 of the FW Act by the First Respondent failing to pay casual loading in accordance with clause A.5.4 of Schedule A to the Clerks Award, by reference to clause 12.2 of the Clerks Award, to Ms Shen during the First Shen Employment Period;
vi)section 45 of the FW Act by the First Respondent failing to pay overtime in accordance with clause 27.1 of the Clerks Award to Ms Ma during the Ma Paid Employment Period;
vii)section 45 of the FW Act by the First Respondent failing to pay weekend penalty rates for time worked on a Sunday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 27.2 of the Clerks Award, to Ms Ma during the Ma Paid Employment Period;
viii)section 45 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma the appropriate penalty rate for work undertaken on a designated public holiday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 31.3 of the Clerks Award, during the Second Shen Employment Period and the Ma Paid Employment Period;
ix)section 45 of the FW Act by the First Respondent failing to make superannuation contributions to a superannuation fund for the benefit of Ms Shen and Ms Ma in accordance with clause 24.2 of the Clerks Award during the Second Shen Employment Period and the Ma Paid Employment Period;
x)section 44 of the FW Act by the First Respondent failing to pay any amount on account of annual leave taken by Ms Ma at the minimum rate of pay for her ordinary hours of work in accordance with subsection 90(1) of the FW Act, during the Ma Paid Employment Period;
xi)section 45 of the FW Act by the First Respondent failing to pay annual leave loading in accordance with clause 29.3 of the Clerks Award to Ms Ma during the Ma Paid Employment Period;
xii)section 44 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma minimum rate of pay for absences on a public holiday in accordance with section 116 of the FW Act during the Second Shen Employment Period and the Ma Paid Employment Period;
xiii)section 44 of the FW Act by the First Respondent failing to pay personal/carer’s leave to Ms Ma in accordance with section 96(1) of the FW Act during the Ma Paid Employment Period;
xiv)section 44 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma in lieu of the minimum periods of notice the First Respondent was required to provide on termination of their employment in accordance with section 117 of the FW Act;
xv)section 44 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma their accrued but untaken annual leave on termination of employment in accordance with subsection 90(2) of the FW Act;
xvi)section 45 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma their annual leave loading upon termination of employment in accordance with clause 29.3 of the Clerks Award;
xvii)section 323 of the FW Act by the First Respondent failing to pay Ms Shen and Ms Ma wages at least monthly;
xviii)subsection 712(3) of the FW Act by the First Respondent failing to comply with a Notice to Produce Records or Documents;
xix)section 535 of the FW Act by the First Respondent failing to comply with sub regulation 3.34 and 3.40 of the FW Regulations; and
xx)subsection 536(1) of the FW Act by failing to issue payslips to Ms Shen and Ms Ma within one day of payment.
kkkkkkk)The Second Respondent was involved in the First Respondent’s contravention outlined at paragraph (1)(r) above, within the meaning of section 550(1) of the FW Act.
THE COURT ORDERS THAT:
lllllll)Pursuant to subsection 546(1) of the FW Act, an order that the First Respondent pay pecuniary penalties in respect of the contraventions set out at paragraph (1) above.
mmmmmmm) Pursuant to subsection 546(1) of the FW Act, an order that the Second Respondent pay pecuniary penalties in respect of the contravention set out at paragraph 2 above.
nnnnnnn)An order pursuant to subsection 546(3)(a) of the FW Act that all pecuniary penalties ordered to be paid by the First and Second Respondents are paid into the Consolidated Revenue Fund of the Commonwealth within 28 days from the date that the orders for the payment by the First and Second Respondents of pecuniary penalties are made.
ooooooo)Orders pursuant to subsection 545(1) of the FW Act and/or subsection 545(2)(a) of the FW Act, that the Second Respondent is restrained from:
i)aiding, abetting, counselling or procuring; or
ii)being in any way directly or indirectly knowingly concerned in,
conduct in respect of employees employed by the First Respondent and/or any of its associated entities (within the meaning of section 50AAA of the Corporations Act 2001 (Cth)) that contravenes the Clerks – Private Sector Award, the Fair Work Act 2009 (Cth) and the National Employment Standards contained in Part 2-2 of the FW Act.
ppppppp)An order that the Applicant have liberty to apply on seven days’ notice in the event that any of the proceeding orders are not complied with.
qqqqqqq)Such further or other orders as the Court deems necessary.
Schedule 3
Applicant’s proposed grouping of contraventions
Contravention
Common elements
Number of contraventions after grouping (557 FW Act)
Maximum penalty
section 45 of the FW Act by the First Respondent failing to classify the Employees pursuant to Schedule B of the Clerks Award, and failing to advise the Employees in writing of their applicable classifications in accordance with clause 15.1 of the Clerks Award
No
1
300 penalty units ($51,000) for a corporation
section 45 of the FW Act by the First Respondent failing to agree in writing, upon engagement of a part-time employee, Ms Shen, the pattern of hours and days that were to be worked as required by clause 11.3 of the Clerks Award
No
1
300 penalty units ($51,000) for a corporation
section 45 of the FW Act by the First Respondent failing to pay to the Employees minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, to Ms Shen during the First Shen Employment Period
No
1
300 penalty units ($51,000) for a corporation
section 45 of the FW Act by the First Respondent failing to pay to the Employees minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, to the Employees during the Second Shen Employment Period and the Ma Paid Employment Period
No
1
300 penalty units ($51,000) for a corporation
section 45 of the FW Act by the First Respondent failing to pay casual loading in accordance with clause A.5.4 of Schedule A to the Clerks Award, by reference to clause 12.2 of the Clerks Award, to Ms Shen during the First Shen Employment Period
No
1
300 penalty units ($51,000) for a corporation
section 45 of the FW Act by the First Respondent failing to pay overtime in accordance with clause 27.1 of the Clerks Award to Ms Ma during the Ma Paid Employment Period
No
1
300 penalty units ($51,000) for a corporation
section 45 of the FW Act by the First Respondent failing to pay weekend penalty rates for time worked on a Sunday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 27.2 of the Clerks Award, to Ms Ma during the Ma Paid Employment Period
No
1
300 penalty units ($51,000) for a corporation
section 45 of the FW Act by the First Respondent failing to pay the Employees the appropriate penalty rate for work undertaken on a designated public holiday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 31.3 of the Clerks Award, during the Second Shen Employment Period and the Ma Paid Employment Period
No
1
300 penalty units ($51,000) for a corporation
section 45 of the FW Act by the First Respondent failing to make superannuation contributions to a superannuation fund for the benefit of the Employees in accordance with clause 24.2 of the Clerks Award during the Second Shen Employment Period and the Ma Paid Employment Period
No
1
300 penalty units ($51,000) for a corporation
section 44 of the FW Act by the First Respondent failing to pay any amount on account of annual leave taken by Ms Ma at the minimum rate of pay for her ordinary hours of work in accordance with subsection 90(1) of the FW Act, during the Ma Paid Employment Period
Yes
1
300 penalty units ($51,000) for a corporation
section 45 of the FW Act by the First Respondent failing to pay annual leave loading in accordance with clause 29.3 of the Clerks Award to Ms Ma during the Ma Paid Employment Period
Yes
section 44 of the FW Act by the First Respondent failing to pay the Employees’ minimum rate of pay for absences on a public holiday in accordance with section 116 of the FW Act during the Second Shen Employment Period and the Ma Paid Employment Period
No
1
300 penalty units ($51,000) for a corporation
section 44 of the FW Act by the First Respondent failing to pay personal/carer’s leave to Ms Ma in accordance with section 96(1) of the FW Act during the Ma Paid Employment Period;
No
1
300 penalty units ($51,000) for a corporation
section 44 of the FW Act by the First Respondent failing to pay the Employees in lieu of the minimum periods of notice the First Respondent was required to provide on termination of the Employees’ employment in accordance with section 117 of the FW Act;
No
1
300 penalty units ($51,000) for a corporation
section 44 of the FW Act by the First Respondent failing to pay the Employees their accrued but untaken annual leave on termination of employment in accordance with subsection 90(2) of the FW Act;
Yes
1
300 penalty units ($51,000) for a corporation
section 45 of the FW Act by the First Respondent failing to pay the Employees their annual leave loading upon termination of employment in accordance with clause 29.3 of the Clerks Award;
Yes
section 323(1) of the FW Act by the First Respondent failing to pay the Employees’ wages at least monthly;
No
1
300 penalty units ($51,000) for a corporation
subsection 712(3) of the FW Act by the First Respondent failing to comply with a Notice to Produce Records or Documents;
No
1
300 penalty units ($51,000) for a corporation
60 penalty units ($10,200) for an individual
section 535 of the FW Act by the First Respondent failing to comply with sub regulation 3.34 and 3.40 of the FW Regulations; and
No
1
150 penalty units ($25,500) for a corporation
subsection 536(1) of the FW Act by failing to issue payslips to the Employees within one day of payment.
No
1
150 penalty units ($25,500) for a corporation
Schedule 4
Applicant’s Penalty Recommendations
Penalty recommendations
Contravention
Maximum penalty
Penalty range
section 45 of the FW Act by the First Respondent failing to classify the Employees pursuant to Schedule B of the Clerks Award, and failing to advise the Employees in writing of their applicable classifications in accordance with clause 15.1 of the Clerks Award
300 penalty units ($51,000) for a corporation
20% – 30%
($10,200 to $15,300)
section 45 of the FW Act by the First Respondent failing to agree in writing, upon engagement of a part-time employee, Ms Shen, the pattern of hours and days that were to be worked as required by clause 11.3 of the Clerks Award
300 penalty units ($51,000) for a corporation
20% – 30%
($10,200 to $15,300)
section 45 of the FW Act by the First Respondent failing to pay to the Employees minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, to Ms Shen during the First Shen Employment Period
300 penalty units ($51,000) for a corporation
70% - 80%
($35,700 - $40,800)
section 45 of the FW Act by the First Respondent failing to pay to the Employees minimum rates of pay for ordinary hours worked in accordance with clause 16 of the Clerks Award, to the Employees during the Second Shen Employment Period and the Ma Paid Employment Period
300 penalty units ($51,000) for a corporation
70% - 80%
($35,700 - $40,800)
section 45 of the FW Act by the First Respondent failing to pay casual loading in accordance with clause A.5.4 of Schedule A to the Clerks Award, by reference to clause 12.2 of the Clerks Award, to Ms Shen during the First Shen Employment Period
300 penalty units ($51,000) for a corporation
60% - 70%
($30,600 - $35,700)
section 45 of the FW Act by the First Respondent failing to pay overtime in accordance with clause 27.1 of the Clerks Award to Ms Ma during the Ma Paid Employment Period
300 penalty units ($51,000) for a corporation
40% - 50%
($20,400 - $25,500)
section 45 of the FW Act by the First Respondent failing to pay weekend penalty rates for time worked on a Sunday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 27.2 of the Clerks Award, to Ms Ma during the Ma Paid Employment Period
300 penalty units ($51,000) for a corporation
40% - 50%
($20,400 - $25,500)
section 45 of the FW Act by the First Respondent failing to pay the Employees the appropriate penalty rate for work undertaken on a designated public holiday in accordance with clause A.7.3 of Schedule A to the Clerks Award, by reference to clause 31.3 of the Clerks Award, during the Second Shen Employment Period and the Ma Paid Employment Period
300 penalty units ($51,000) for a corporation
40% - 50%
($20,400 - $25,500)
section 45 of the FW Act by the First Respondent failing to make superannuation contributions to a superannuation fund for the benefit of the Employees in accordance with clause 24.2 of the Clerks Award during the Second Shen Employment Period and the Ma Paid Employment Period
300 penalty units ($51,000) for a corporation
50% to 60%
($25,500 - $30,600)
section 44 of the FW Act by the First Respondent failing to pay any amount on account of annual leave taken by Ms Ma at the minimum rate of pay for her ordinary hours of work in accordance with subsection 90(1) of the FW Act, during the Ma Paid Employment Period
300 penalty units ($51,000) for a corporation
40% to 50%
($20,400 - $25,500)
section 45 of the FW Act by the First Respondent failing to pay annual leave loading in accordance with clause 29.3 of the Clerks Award to Ms Ma during the Ma Paid Employment Period
section 44 of the FW Act by the First Respondent failing to pay the Employees’ minimum rate of pay for absences on a public holiday in accordance with section 116 of the FW Act during the Second Shen Employment Period and the Ma Paid Employment Period
300 penalty units ($51,000) for a corporation
40% - 50%
($20,400 - $25,500)
section 44 of the FW Act by the First Respondent failing to pay personal/carer’s leave to Ms Ma in accordance with section 96(1) of the FW Act during the Ma Paid Employment Period;
300 penalty units ($51,000) for a corporation
40% - 50%
($20,400 - $25,500)
section 44 of the FW Act by the First Respondent failing to pay the Employees in lieu of the minimum periods of notice the First Respondent was required to provide on termination of the Employees’ employment in accordance with section 117 of the FW Act;
300 penalty units ($51,000) for a corporation
50% - 60%
($25,500 - $30,600)
section 44 of the FW Act by the First Respondent failing to pay the Employees their accrued but untaken annual leave on termination of employment in accordance with subsection 90(2) of the FW Act;
300 penalty units ($51,000) for a corporation
50% - 60%
($25,500 - $30,600)
section 45 of the FW Act by the First Respondent failing to pay the Employees their annual leave loading upon termination of employment in accordance with clause 29.3 of the Clerks Award;
section 323(1) of the FW Act by the First Respondent failing to pay the Employees’ wages at least monthly;
300 penalty units ($51,000) for a corporation
70% - 80%
($35,700 - $40,800)
subsection 712(3) of the FW Act by the First Respondent failing to comply with a Notice to Produce Records or Documents;
300 penalty units ($51,000) for a corporation
60 penalty units ($10,200) for an individual
70% - 80%
First Respondent
($35,700 - $40,800)
Second Respondent
($7,140 - $8,160)section 535 of the FW Act by the First Respondent failing to comply with sub regulation 3.34 and 3.40 of the FW Regulations
150 penalty units ($25,500) for a corporation
60% - 70%
($30,600 - $35,700)
subsection 536(1) of the FW Act by failing to issue payslips to the Employees within one day of payment.
150 penalty units ($25,500) for a corporation
60% - 70%
($30,600 - $35,700)
Total
First Respondent - $867,000
Second Respondent - $10,200
$453,900 - $545,700
(52% - 63%)
($7,140 - $8,160)
(70% - 80%)
Less discount of 50% on account of totality principles for First Respondent only.
$226,950 - $272,850
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