Fair Work Ombudsman v Beil
[2022] FedCFamC2G 737
Federal Circuit and Family Court of Australia
(DIVISION 2)
Fair Work Ombudsman v Beil [2022] FedCFamC2G 737
File number(s): BRG485/2021 Judgment of: JUDGE TONKIN Date of judgment: 5 September 2022 Catchwords: INDUSTRIAL LAW –Appropriate civil penalties to be paid by the Respondents pursuant to section 546 of the Fair Work Act 2009 (Cth). Legislation: Crimes Act1914 (Cth)
Fair Work Act 2009 (Cth)
Fair Work Regulations 2009
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021
Cases cited: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Carr v CEPU [2007] FMCA 1526
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Anor [2015] 258 CLR 482
CPSU, The Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228
Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 407
Fair Work Ombudsman v Blu Hornsby Pty Ltd [2016] FCCA 1150
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Fair Work Ombudsman v Jetstar Airways Ltd [2014] FCA 33
Fair Work Ombudsman v NSH North Pty Ltd [2017] FCA 1301
Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70
Ponzio v B&P Caelli Constructions Pty Ltd (2007) 158 FCR 543
Division: Division 2 General Federal Law Number of paragraphs: 53 Date of hearing: 5 September 2022 Place: Brisbane Solicitor for the Applicant: Office of the Fair Work Ombudsman Solicitor for the Applicant: No Appearance made by the Respondent ORDERS
BRG485/2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: ALLAN JAMES BEIL
First Respondent
BROOKE BEIL
Second Respondent
order made by:
JUDGE TONKIN
DATE OF ORDER:
5 SEPTEMBER 2022
THE COURT DECLARES:
1.The first respondent Allan James Beil contravened:
(a)Section 716 (5) of the Fair Work Act 2009 (Cth) (FW Act) by failing to comply with the compliance notice issued by Fair Work Inspector Adam Corn on 6 July 2021;
(b)Section 536 (1) of the FW Act by failing to give pay slips to Ms Clews within one working day of paying amounts to her in relation to the performance of her work.
2.The second respondent Brooke Beil was involved within the meaning of section 550 (2) of the FW Act in the contravention by Allan Beil of section 536 (1) of the FW Act.
THE COURT ORDERS:
3.Pursuant to section 545 (1) of the FW Act Mr Beil take the steps that were required by the Compliance Notice within 28 days from the date of this order by:
(a)Calculating and paying the outstanding entitlements to Ms Clews including any superannuation; and
(b)Preparing and producing to the applicant a schedule outlining its calculations of the outstanding entitlements required to be paid to Ms Clews and providing proof that the outstanding entitlements were rectified.
4.Pursuant to section 547 (2) of the FW Act Mr Beil pay to Ms Clews interest on the amounts owed to her pursuant to Order 3 above within 28 days of the date of this order.
5.Pursuant to section 546 (1) of the FW Act Mr Beil pay a pecuniary penalty of $8057 to the Commonwealth for the contravention set out in paragraph 1 hereof within 28 days of the date of this order.
6.Pursuant to section 546 (1) of the FW Act Ms Beil pay a pecuniary penalty of $3776 to the Commonwealth for her involvement in the contravention set out in paragraph 2 hereof within 28 days of the date of this order.
7.The applicant be at liberty to apply on 7 days’ notice in the event that any of these orders are not complied with.
NOTATION
A.These Orders were made in the absence of the respondent and pursuant to Rule 17.05(2)(a) of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021, the respondent may apply to have these Orders set aside.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE TONKIN
On 28 October 2021 the Applicant the Fair Work Ombudsman (“FWO”) filed an application seeking declarations and pecuniary penalties against the First Respondent, Mr Allan James Beil (“Mr Beil”), and the Second Respondent, Ms Brooke Beil (“Ms Beil”).
By Statement of Agreed Facts filed on 15 March 2022 (SOAF):
(a)Mr Beil admitted to contravening:
(i)section 716(5) of the Fair Work Act 2009 (Cth) (FW Act), by failing to comply with the compliance notice dated 6 July 2021 (July Compliance Notice) issued by Fair Work Inspector Adam Corn (FWI Corn) pursuant to section 716(2) of the FW Act;[1] and
(ii)section 536(1) of the FW Act, by failing to Ms Alishia Clews (Ms Clews) a pay slip within one working day of paying an amount to her in relation to the performance of work.[2]
(b)Ms Beil has admitted that she was involved, within the meaning of section 550(2) of the FW Act, in the contravention of section 536(1) of the FW Act by Mr Beil.[3]
[1] SOAF 1 (a)
[2] SOAF 1 (b)
[3] SOAF 2
At all relevant times, Mr Beil has operated a bakery known as the Woolshed Bakery in Tara, Queensland (“the business”) and was responsible for compliance with his legal obligations under the FW Act.[4] Ms Beil had actual or apparent responsibility for the operation, management and control of the Business, and for ensuring that Mr Beil complied with his legal obligations under the FW Act.[5]
[5] SOAF 5
The FWO submitted that mid-range penalties of $7,160.40 to $8,953.20 for Mr Beil and $3,596.40 to $4,795.20 for Ms Beil should be imposed by the Court. Relevant factors supporting the proposed penalty include:
(a)there is a strong need for deterrence (both specific and general) given that the Business is still operating and the low rates of non-compliance in the retail industry;
(b)the contraventions are serious and deliberate and caused the FWO to commence proceedings in circumstances where litigation could have otherwise been avoided;
(c)there is no evidence of any change in practices by the Respondents and in particular, the Compliance Notice issued at the time of the hearing has still not been complied with such that Ms Clews remains unpaid.
Documents relied on
The FWO relied on the Court Book filed on 1 August 2022 which included:
(a)Agreed Statement of Facts of 15 March 2022;
(b)Applicant filed 28 October 2021;
(c)Statement of Claim filed 28 October 2021;
(d)Affidavit of Adam Charles Douglas Corn filed 5 May 2022 and
(e)Applicant’s submissions on penalty filed 5 May 2022.
Background
Mr Beil employed Ms Clews to work in the business from 6 March 2020 to 4 May 2020 (Contravention period).[6]
[6] SOAF 6
In about September 2020 an investigation into Mr Beil commenced in respect of Ms Clews employment.[7]
[7] SOAF 8; Affidavit of Mr Corn [5], [7] and Annexure AC2
On 30 November 2020 an Infringement Notice dated 27 November 2020 was issued to Mr Beil for his failure to issue pay slips to Ms Clews, under section 536(1) of the FW Act.[8]
[8] Affidavit of Mr Corn [11] Annexure AC5
Mr Beil failed to pay the penalty amount specified in the Infringement Notice by 4 January 2021 the due date.[9] The Infringement Notice was later withdrawn when the FWO commenced proceedings against Mr Beil for contravening section 536(1) of the FW Act.
[9] Affidavit of Mr Corn [12]
Mr Beil was originally put on notice regarding matters contained in the Compliance Notice issued in July 2021 by way of two earlier Compliance Notices issued to Mr Beil on 30 November 2020 and 9 April 2021 by Fair Work Inspector Margot Pidgeon.[10] The initial Compliance Notices were withdrawn by the FWO due to administrative errors. The FWO contends that Mr Beil’s failure to comply with two earlier notices is relevant.[11]
[10] Affidavit of Mr Corn [11] and [17] Annexure AC5 and AC10
[11] Affidavit of Mr Corn [12] and [18]
On 6 July 2021, FW Inspector Corn in July 2021 issued Mr Beil with a Compliance Notice.[12] Before doing so, FW Inspector Corn formed a reasonable belief that, during the Contravention Period, Mr Beil had contravened various provisions of the General Industry Retail Award 2010 (“Award”) in respect of Ms Clews, by underpaying her the payment of night shift allowance and weekend shift work penalty rates for casual baking production employees.[13]
[12] SOAF 11; Affidavit of Mr Corn [22] Annexure AC 13
[13] SOAF 9; Affidavit of Mr Corn [22]
The Compliance Notice was personally served on Mr Beil by a process server, who left a copy of the Notice with an employee of Mr Beil at his business 38 Day Street, Tara Queensland.[14] The Notice required Mr Beil to rectify alleged contraventions by 10 August 2021 and provide proof of doing so to the FWO by 17 August 2021. Mr Beil did not take either of those steps by the due dates.[15]
[14] SOAF 12; Affidavit of Mr Corn [23]
[15] SOAF 15; Affidavit of Mr Corn [25]
On 18 August 2021 the applicant sent correspondence to Mr Beil headed “Failure to Comply with Compliance Notice”.[16]
[16] Affidavit of Mr Corn [26]; Annexure AC15
On 1 September 2021 the applicant sent Mr Beil correspondence headed “Final Opportunity to Rectify Non-Compliance with the Compliance Notice”.[17]
[17] Affidavit of Mr Corn [28]; Annexure AC17
To date Mr Beil has not provided any evidence to demonstrate that he has complied with the Compliance Notice issued in July 2021.
Approach to penalty
The Court may impose penalties pursuant to section 546 of the FW Act if it is satisfied that a person has contravened a civil remedy provision. Sections 536(1) and 716 (5) of the FW Act are civil remedy provisions.
The primary purpose of civil penalties is to promote the public interest in compliance and to attempt to put a price on a contravention that is sufficiently high to deter repetition by the contravener and by others who are in a position to contravene legislation.[18] To achieve this end, the Court should fix a penalty that ‘it considers fairly and reasonably to be appropriate to protect the public interest from future contraventions’.[19]
[18] Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Anor [2015] 258 CLR 482; [2015] HCA 46, [55], citing Trade Practices Commission v CSR Ltd [1990] FCA 521, [40]. See also Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (Pattinson) at [15]-[17]
[19] Pattinson at [48].
The Court has a broad discretion to assess the appropriate penalty. The factors the Court may take into account when setting a penaltyare well settled[20] and include matters relevant to both the character of the contravening conduct and of the contravener.[21] Each penalty factor has the potential to have an aggravating or mitigating impact on determining the appropriate penalty to be imposed.[22]
Maximum penalty and assessment
[20] See, for example, Fair Work Ombudsman v Jetstar Airways Ltd [2014] FCA 33 at [28]; Fair Work Ombudsman v NSH North Pty Ltd t/a New Shanghai Charlestown [2017] FCA 1301 (NSH North) at [36]; Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at [64]; Ophthalmic Supplies at [91]
[21] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (Pattinson) at [15]-[17]; [55]
[22] Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 407 at [91] (Tracey J)
Pursuant to section 539(2) of the FW Act, in this matter the Court may impose the following maximum penalties:
(a)$6,660 in relation to Mr Beil’s contravention of section 716(5) of the FW Act;
(b)$13,320 in relation to Mr Beil’s contravention of section 536(1) of the FW Act;
(c)$13,320 in relation to Ms Beil’s involvement in Mr Beil’s contravention of section 536 (1) of the FW Act.
In Pattinson the High Court more recently said that “the power conferred by section 546 of the Act is not subject to constraints drawn from the criminal law and there is no place for a “notion of proportionality” in the sense in which the Full Court used that term in a civil penalty regime. Further and relatedly their Honours were misled by the view that the Act required that the maximum penalty be reserved for only the most serious examples of the offending comprehended by section 349 (1) and that this principle could prevent the Court from imposing the maximum penalty even though a penalty in that amount might reasonably be considered to be necessary to deter future contraventions of a like kind. Nothing in the text, context or purpose of section 546 requires the maximum penalty be reserved for the most serious examples of misconduct within section 349 (1). What is required is that there be “some reasonable relationship between the theoretical maximum and the final penalty imposed. That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of section 546: the deterrence of future contraventions of a like kind by the contravenor and by others.”[23]
Nature, extent, and circumstances of the contravening conduct
[23] Pattinson [10]
The contravening conduct which Mr Beil admits is his failure to comply with the Compliance Notice issued in July 2021 by the due dates in August 2021, or at all. He admits he also failed to issue pay slips to Ms Clews in accordance with the FW Act. Ms Beil told Fair Work Inspector Pidgeon in October 2020 that pay slips were not automatically issued to employees but only generated if an employee requested a pay slip.[24] Ms Beil was responsible for the operation, management and control of the business[25] and for ensuring that Mr Beil complied with his legal obligations under the FW Act. Her responsibilities included ensuring that employees were provided with pay slips within one day of being paid for work performed. Ms Beil admits she was involved in contravening section 536 (1) of the FW Act.
[24] Affidavit of Mr Corn [8], Annexure AC3
[25] SOAF 5 (b)
The applicant contends that Mr Beil’s failure to comply with two Compliance Notices subsequently withdrawn through administrative error is a relevant consideration on penalty in so far as he was on notice of the contraventions contained in the Compliance Notice issued in July 2021 in November 2020 and April 2021 respectively.[26] I accept Mr Beil was no notice of his failure to comply with the provisions of the FW Act though the initial compliance notices were withdrawn. Fair Work Inspectors made efforts, unsuccessfully to secure Mr Beil’s compliance with the Initial Compliance Notices[27] but no steps were taken in response.[28]
[27] Affidavit of Mr Corn at [13-16] and [19-20], Annexures ACAC6 to AC9 and AC11 to AC12
[28] Affidavit of Mr Corn at [12] and [18]
The applicant submits that a relevant factor in relation to the breach with respect to the respondents’ failure to provide pay slips to Ms Clews is the fact that Mr Beil was originally requested to pay a penalty of $420 for that contravention through an Infringement Notice issued in November 2020.[29] Despite the Fair Work Inspectors’ efforts to secure compliance and avoid litigation the penalty was not paid.[30] Had he done so litigation may have been avoided.
[29] Affidavit of Mr Corn at [11], Annexure AC5
[30] Affidavit of Mr Corn at [12]
When the Compliance Notice was issued on 6 July 2021 the applicant said numerous attempts were again made by the FWO to secure Mr Beil’s compliance, including sending two warnings letters setting out his failure to comply and the consequences of the non-compliance.[31] Mr Beil failed to take any steps in response, and neither of the Respondents engaged with the FWO until the current proceedings commenced.
Subsequent to the respondents admissions with respect to contravening the FW Act Mr Beil has failed to provide any calculations or evidence of any rectification of the contraventions set out in the Compliance Notice. This demonstrates a disregard by Mr Beil for his workplace relations obligations.
The applicant submits that the contravening conduct has resulted in the FWO having to spend time and public resources in an attempt to secure Mr Beil’s compliance, having no option but to institute proceedings at the public’s expense in order to recover Ms Clews proper entitlements under the Award. No reparation has been made to Ms Clews to date.
Deterrence
It is well established that the need for specific and general deterrence is central to the imposition of penalties under the FW Act. The High Court has held that a primary purpose of civil penalties is to promote the public interest in compliance, and to attempt to put a price on a contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the same legislation.[32] Both specific and general deterrence are important considerations.[33]
[32] Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 (Cth v FWBII) at [55] citing Trade Practices Commission v CSR Ltd (1991) ATPR 41-76 at [52],[152]; [1990] FCA 521 at [40]. See also NSH North at [89]
[33] NSH North at [89]
There is a need for specific deterrence in this case. The respondents business continues to operate. Mr Beil has failed to comply with the Compliance Notice for over 12 months and it is now almost 20 months since he was first notified of his failure to comply. Mr Beil made did not appear at the scheduled penalty hearing on 3 August 2022 and has made no submissions on penalty nor provided any evidence that he has changed the practice of the business to ensure pay slips are issued in accordance with the FW Act. Ms Clews has still not received her proper entitlements under the Award. I accept the submission of the FWO that a penalty should be fixed at a level which specifically deters Mr Beil and Ms Beil from engaging in further contravening conduct.
General deterrence is also an important factor in that is directed to ensuring that the penalty imposed for contravening the FW Act will act as a deterrent to others who may be likely to offend.[34] It is important to send a message that contraventions of the sort under consideration are serious and not acceptable.[35] I accept the FWO’s submission that the appropriate penalty to be fixed should not be regarded by others as an acceptable cost of doing business.
[34] Ponzio v B&P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [93].
[35] NSH North at [90]
In Fair Work Ombudsman v VS Investment Group Pty Ltd[36] Judge Jarrett observed the seriousness of a compliance notice contravention and that recipients of such notices should be left under no misapprehension about their obligations to comply with those notices. When assessing the need for general deterrence it is important to consider practices or compliance levels in the particular industry.[37] The FWO’s Industry Profile for the Bakery Product Manufacturing (Non Factory Based) industry for July 2017 to December 2021 reported that while the dispute rate for this industry is relatively low (at 39 disputes per 1000 businesses):
(a)20% of all disputes in the industry occur in Queensland; and
(b)contraventions involving wages and conditions comprise the equally highest number of disputes in this industry.[38]
[36] 2013] FCCA 208 at [51]
[37] NSH North at [133]-[134]
[38] Affidavit of Mr Corn at [32], Annexure AC19
I am satisfied that there is a need to send a message to employers generally and to the relevant industry in particular that a failure to comply with a compliance notice is a serious matter and “recipients of such notice should be left under no misapprehension about their obligations to comply”[39].
Nature and extent of the loss
[39] In Fair Work Ombudsman v VS Investment Group Pty Ltd at [51]
Ms Clews was employed by Mr Beil for a relatively short period of time from 6 March to 4 May 2020.[40] The Court is unable to quantify the nature and extent of her loss due to Mr Beil’s failure to comply with the Compliance Notice though the FWO indicated the amount is likely to be relatively small. In Fair Work Ombudsman v Zillion Zenith International Pty Ltd, Judge O'Sullivan observed that: "It is no answer to addressing the gravity of the conduct and loss involved in the aggregate to seek to emphasise the individual amounts for some of the employees. 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." I adopt the remarks of Judge O’Sullivan and regard a failure to pay low paid employees their entitlements under the Award as a significant matter where those individuals often have little or no discretionary income remaining after the payment of non - discretionary expenses and often live at a subsistence level.
[40] SOAF 6
In Fair Work Ombudsman v Viper Industries Pty Ltd,51 Judge Emmett observed at [42] that:
…intentional failure to comply with a mandatory notice issued by the workplace regulator is "conduct ... [which] undermines the utility and effectiveness of a fundamental object" of the FW Act. The failure to comply undermines and frustrates the powers conferred on Fair Work Inspectors, which are conferred for the purposes of providing an effective means of enforcing compliance with lawful minimum entitlements. There is a significant cost to the public by reason of the need to bring this matter before the court to enforce compliance.
Size and financial resources of the business
The applicant acknowledged that Mr Beil is the operator of a small business though no evidence was adduced regarding the financial circumstances of the business. In any event regardless of the size of the business the respondents were required to comply with the statutory provisions under the FW Act.
Prior conduct, contrition, co-operation and corrective action
I take into account on the issue of penalty that the respondents admitted the contraventions at an early opportunity. Subsequently both respondents failed to appear at the hearing scheduled for 3 August 2022 and made no submission on penalty. I take into account that to date Mr Beil has still not complied with Compliance Notice issued in July 2021 nor provided any evidence of a change in their practice in relation to pay slips. The Full Court of the Federal Court observed in relation to discounts with respect to admissions that “the benefit of such a discount should be reserved for cases where it can be fairly said that an admission of liability: (a) has indicated an acceptance of wrongdoing and a suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate to course of justice.” [41]
[41] Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70 at [76]
I consider the discount should be no more that 10% given the respondents subsequent failure to comply with the Notice in excess of 12 months notwithstanding their early admission that they had contravened the FW Act.
Compliance with minimum standards
The applicant argued that significant weight should be placed on an employer’s obligation to comply with minimum standards given one of the stated principal objects of the FW Act is the preservation of an effective safety net for employee entitlements and effective enforcement mechanisms (section 3 of the FW Act). The FWO argued that it was vital to ensure compliance with a safety net of modern Awards to create an even playing field and ensure all employees are appropriately remunerated for the work they perform and the substantial penalties set by the legislature for contraventions of the FW Act demonstrate the importance Parliament placed on employers complying with their minimum obligations. The applicant observed that Courts have recognised that compliance notices provide a mechanism for the efficient and cost-effective rectification of identified contraventions of the FW Act including underpayments to employees.[42] Had Mr Beil complied with the Compliance Notice issued in July 2021 the FWO would have been prevented from bringing civil remedy proceedings against him pursuant to section 716(4A) of the FW Act and Mr Beil would not have been taken to have admitted that he contravened a civil remedy provision.
Pay slip contraventions
[42] Fair Work Ombudsman v Blu Hornsby Pty Ltd [2016] FCCA 1150 at [29] (Judge Smith): Fair Work Ombudsman v Nobrace Centre Pty Ltd (No. 2) (Nobrace) [2019] FCCA 2144 at [19] (Judge Blake); Fair Work Ombudsman v Scott Redmond t/as Cleaning Excellence [2019] FCCA 3697 at [21] (Judge Obradovic)
An employer has a statutory obligation to provide pay slips[43] to safeguard against underpayment, overwork and mistreatment of employees. Employers are required to record employees’ hours or work, the dates on which those hours of work occurred, the employee’s ordinary rate of pay, any loading, penalty rates or allowances which apply, superannuation contributions made by the employer and the gross and net payments made by the employer. By employers documenting this information, employees are able to see and understand how their pay is calculated. It also allows for employees’ entitlements to be reviewed by others and, where necessary, for employees to obtain independent legal and financial advice. Pay slips provide the most practical check on false record keeping and underpayments and allow for genuine mistakes or misunderstandings to be identified quickly. Employers who fail to provide pay slips “disempower employees, impede oversight and regulation and intentionally or otherwise create a system within which breaches of industrial laws can be easily perpetrated.”[44]
[43] Section 536 of the FW Act requires an employer to give an employee a pay slip within one day if the form prescribed by the FW Regulations
[44] Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 at [548], citing with approval Fair Work Ombudsman v Taj Palace Tandoori Restaurant Pty Ltd [2021] FMCA 258 at [66-67]
Totality
The applicant sought a penalty at a meaningful level to promote compliance with the minimum standards to which all national employers and Award covered employees are entitled. While any penalty imposed by the Court must strike a reasonable balance between deterrence and oppressive severity the applicant argued the appropriate range of $7,160.40 to $8,953.20 for Mr Beil and $3,596.40 to $4,795.20 for Ms Beil, as calculated were penalties proportionate to the conduct of the respondents and the circumstances of the case and achieve the required balance.
Consideration
In Fair Work Ombudsman v NSH North Pty Ltd [2017] FCA 1301 at [36], Bromwich J summarised the approach to be taken when determining an appropriate penalty:
(1) Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.
(2) Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.
(3) Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.
(4) Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
(5) Consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO (as permitted by Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (CFMEU Civil Penalties Case) at [64]) and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary: See Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14 at [30]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560 at [23]. [71] and [102].
In Carr v CEPU [2007] FMCA 1526 where the parties had agreed on penalty the Court observed at [6]:
(a)the Court bears the ultimate responsibility for penalty, is not bound by the parties agreement and must consider for itself what constitutes an appropriate penalty;
(b)determining the quantum of an appropriate penalty is not an exact science and within a permissible range a particular figure is not necessarily more appropriate than another figure;
…
(e)in determining an appropriate penalty the Court will examine all the circumstances including an agreed statement of facts and if appropriate may act on that statement…
I adopt the submissions of the FWO as discussed above. Mr Beil contravened the provisions of the General Industry Retail Award 2010 (“Award”) in respect of Ms Clews who worked in Woolshed Bakery in Tara, Queensland between 6 March and 6 May 2020 by underpaying her the payment of night shift allowance and weekend shift work penalty rates for casual baking production employees.[45] In addition Mr Beil admitted contravening section 716 (5) in failing to comply with the Compliance Notice issued in July 2021. I am satisfied that the two contraventions should be taken as a single contravention with respect to the imposition of penalty.
[45] SOAF 9; Affidavit of Mr Corn [22]
Since admitting the contraventions Mr Beil has taken no steps to comply with the Compliance Notice nor has he provided any information as requested to the FWO. It has now been almost 2 years since Mr Beil was notified regarding his failure to comply with the provisions of the FW Act. He has provided no evidence that he has addressed the business’ failure to provide pay slips in circumstances where he continues to operate the business and continues to employ other workers. The rate of pay under the Award is modest. Mr Beil’s employees are entitled to be paid the Award rate and be provided with information that records their hours of work, rate of pay, loading, penalty rates, superannuation contributions and tax paid. In Ms Clews case no reparation has been paid to date.
Given Mr Beil’s failure to take any further steps to address the contraventions I am satisfied the penalty imposed should reflect the seriousness of the offending conduct and send a message to other employers that each employer is required to meet their statutory obligations and a failure to do so may result in litigation and the imposition of significant pecuniary penalties. The penalty I impose is intended to ensure that Mr Beil does not continue to breach the legislative provisions under the FW Act and Award.
I note that Mr Beil is a small business owner however no information has been adduced regarding the financial circumstances of the business. He has provided no explanation for his ongoing failure to comply with the Notice nor did he appear at the hearing of the matter listed on 3 August 2022 nor provide any explanation for his absence.
Ms Beil admitted to being involved in Mr Beil’s contravention of section 536 of the FW Act. Ms Beil had actual or apparent responsibility for the operation, management and control of the Business, and for ensuring that Mr Beil complied with his legal obligations under the FW Act.[46] Ms Beil did not appear at the hearing of the matter listed on 3 August 2022 however she provided the FWO’s solicitor an explanation that she had suffered a recent bereavement as the reason she did not appear at the hearing of the matter.
[46] SOAF 5
Conclusion as to penalty
The imposition of a penalty under the FW Act is designed fundamentally to serve the public interest in acting as a deterrent to employers such as the Respondents from engaging in the offending conduct.
Finkelstein J in CPSU, The Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228; [2001] FCA 1364 at [25]- [28] said:
it cannot be doubted that employer and employee organisations play a legitimate and important role in seeing that there is compliance with the provisions of the Workplace Relations Act…an individual employee will rarely have the ability to fund a proceeding for a contravention. If unions do not bring such proceedings, contraventions will go unpunished.
Given the failure of the respondents to take any further steps following their admissions regarding contraventions had the FWO not brought these proceedings it is likely the Respondents would have gone unpunished. The ability of an individual to bring proceedings in circumstances where an employee has been significantly underpaid acts as a deterrent to employers contemplating ignoring the requirements of the FW Act and applicable Awards are a reminder that should an employer fail to comply with the FW Act they risk incurring a pecuniary penalty.
With respect to penalty the High Court said “what is required is that there be ‘some reasonable relationship between the theoretical maximum and the final penalty imposed. That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of section 546: the deterrence of future contraventions of a like kind by the contravenor and by others.”
The FWO provided the Table below to support the range contended for:
Provision & Description
Max penalty
Penalty range sought
Penalty (min)
Penalty (max)
Penalty after 10% discount (min)
Penalty after 10% discount (max)
Mr Beil
s716(5)
Failure to comply with July Compliance Notice
$6,600
60% to 70%
$3,960
$4,620
$3,564
$4,158
s536(1)
Failure to make and keep pay slips
$13,320
30% to 40%
$3,996
$5,328
$3,596.40
$4,795.20
TOTAL
$19,920
-
$7,956
$9,948
$7,160.40
$8,953.20
Ms Beil
s536(1)
Failure to make and keep pay slips
$13,320
30% to 40%
$3,996
$5,328
$3,596.40
$4,795.20
With respect to the contravention by Mr Beil of section 716 (5) of the FW Act where the maximum penalty is $6600 I am satisfied that an appropriate penalty is 65% of the maximum or $4290. With respect to the contravention of section 536 I am satisfied that the appropriate penalty is 35% of the maximum of $13,320 being $4196. The total amount $8952 I discount by 10% due to the early admission by Mr Beil where he conceded liability and impose a penalty of $8057.
With respect to the contravention by Ms Beil of section 536 I am satisfied that the appropriate penalty is 35% of the maximum of $13,320 being $4196. I discount that amount by 10% as she too conceded liability and impose a penalty of $3776.
I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Tonkin. Associate:
Dated: 5 September 2022
[4] SOAF 4 (c )
[26] Affidavit of Mr Corn [11] and [17], Annexures AC5 and AC 10
[31] Affidavit of Mr Corn at [24-29], Annexures AC14 to AC18
0