Fair Work Ombudsman v Blu Hornsby Pty Ltd
[2016] FCCA 1150
•27 May 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v BLU HORNSBY PTY LTD & ANOR | [2016] FCCA 1150 |
| Catchwords: INDUSTRIAL LAW – Penalty – contraventions of modern award relating to remuneration –failure to comply with issued Compliance Notice – appropriate penalty to be imposed – relevant considerations – applicable penalty unit. |
| Legislation: Crimes Act 1914 (Cth), s.4AA Fair Work Act 2009, ss.539, 546, 550, 716, 717 |
| Cases cited: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 326 ALR 476; [2015] HCA 46 Fair Work Ombudsman v Anahata Naturals Pty Ltd [2014] FCCA 2954 Fair Work Ombudsman v Hair Industrie Mt Druitt Pty Ltd [2015] FCCA 3426 Fair Work Ombudsman v Syndicate Group Pty Ltd [2015] FCCA 2847 Fair Work Ombudsman v Ultra Tune Australia Ltd (2012) 225 IR 326; [2012] FMCA 560 Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | BLU HORNSBY PTY LTD (ACN 131 513 258) |
| Second Respondent: | ARTHUR ANTONOPOULOS |
| File Number: | SYG 1482 of 2015 |
| Judgment of: | Judge Smith |
| Hearing date: | 3 February 2016 |
| Date of Last Submission: | 3 February 2016 |
| Delivered at: | Sydney |
| Delivered on: | 27 May 2016 |
REPRESENTATION
| Solicitor for the Applicant: | Ms A. Dunn, Office of the Fair Work Ombudsman |
| Counsel for the Respondents: | Mr J. Darams |
| Solicitors for the Respondents: | Andresakis & Associates |
DECLARATIONS MADE BY CONSENT
The first respondent contravened subsection 716(5) of the Fair Work Act 2009 (Cth) (“FW Act”) by failing to comply with the Compliance Notice dated 4 March 2015.
The second respondent was involved in, within the meaning of subsection 550(2) of the FW Act, the first respondent’s contravention of subsection 716(5) of the FW Act and is therefore taken to have committed that contravention pursuant to subsection 550(1) of the FW Act.
ORDERS
Pursuant to section 546(1) of the FW Act:
(a)The first respondent pay a pecuniary penalty of $14,025, in respect of its contravention of section 716(5) of the FW Act; and
(b)The second respondent pay a penalty of $2,805, in respect of his contravention of section 716(5) of the FW Act.
Pursuant to section 546(3) of the FW Act, the penalties so ordered are to be paid into the Commonwealth Revenue Fund within 28 days of the date of this order.
The applicant have liberty to apply on seven days’ written notice in the event that any of the preceding orders are not complied with.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1482 of 2015
| FAIR WORK OMBUDSMAN |
Applicant
And
| BLU HORNSBY PTY LTD (ACN 131 513 258) |
First Respondent
| ARTHUR ANTONOPOULOS |
Second Respondent
REASONS FOR JUDGMENT
The first respondent (“Blu Hornsby”) operated a café called Wild Sage Café in Cammeray, New South Wales. The second respondent, Mr Antonopoulos, was the sole director and shareholder of that business and responsible for the overall direction, management and supervision of the business’ operations.
From 26 November 2012 until 8 May 2014, Blu Hornsby employed Ms Navdeep Kaur as a pastry chef on a full-time basis. Ms Kaur was responsible for working in conjunction with the head chef and/or sous chef, overseeing the cold larder/dessert section of the kitchen, making items from the dessert menu and baking items such as croissants and muffins.
At all material times, Ms Kaur’s employment fell within the scope of Level 4, Cook Grade 3 (Tradesperson) pursuant to cl.B.3.6 of sch.B to the Restaurant Industry Award 2010.
On 24 July 2014, Ms Kaur lodged a complaint with the applicant (“Ombudsman”) in respect of unpaid wages and entitlements arising from her employment with Blu Hornsby. An investigation was then carried out by two inspectors employed by the Ombudsman, including Inspector Ying Zheng. After concluding the investigation, Inspector Zheng formed a reasonable belief that Blu Hornsby had contravened terms of the Modern Award in respect of Ms Kaur’s employment.
On 4 March 2015, Inspector Zheng issued a Compliance Notice pursuant to s.716(2) of the FW Act in respect of the contraventions of terms of the Modern Award that applied to Ms Kaur’s employment. On the same day she gave the notice to Blu Hornsby by handing it to Mr Antonopoulos.
The Compliance Notice relevantly stated:
…
Required action under this Notice
1.In accordance with subsection 716(2) if (sic) the Act, the Employer is required to pay Ms Kaur:
a.$10,287.92 in respect of base rate of pay for ordinary hours worked;
b.$569.97 in respect of additional payment between 10pm and midnight Monday to Friday;
c.$2,634.22 in respect of Saturday penalty rate;
d.$2,588.48 in respect of Sunday penalty rate;
e.$1,806.64 in respect of public holiday penalty rate;
f.$2,028.80 in respect of Monday to Friday overtime rate;
g.$1,192.20 in respect of Saturday overtime rate; and
h.$1,221.67 in respect of Sunday overtime rate.
2.Payment of the total amount of $22,329.90 is to be made to Ms Kaur by 02 April 2015 (the Payment).
3.In accordance with subsection 716(2) of the Act, the Employer is required to produce reasonable evidence:
a.That the Employer has made the Payment (including the gross and net amounts); and
b.The date the Payment was made.
4.Evidence of the Payment must be provided to the Fair Work Ombudsman by 09 April 2015.
Employer rights and obligations under this Notice
5.Failure to comply with this Notice may contravene a civil remedy provision.
6.If the Employer does not comply with this Notice, the Fair Work Ombudsman may commence legal action against the Employer and/or individuals involved in the contraventions to recover any outstanding monies. Civil penalties may also be sought for non-compliance with this Notice.
7.Complying with the Notice is not an admission that the Employer contravened, or was found to have contravened, the FW Act or the Award.
8.The Employer may apply to the Federal Court, the Federal Circuit Court or eligible State or Territory Court for a review of this Notice on either or both of the following grounds:
a.That the Employer did not commit the contraventions set out in this Notice;
b.That the Notice does not comply with sections 716(2) or 716(3) of the Act.
(Emphasis in original)
When he was given the Compliance Notice, Mr Antonopoulos told Inspector Zheng that he would speak with his solicitor and accountant regarding arrangements for payment to Ms Kaur.
On the morning of 2 April 2015, Inspector Zheng contacted Mr Antonopoulos by telephone. Mr Antonopoulos indicated that the Compliance Notice would not be paid as there was no money made by Blu Hornsby and the business had not been trading. Mr Antonopoulos said words to the following effect:
… You can do whatever you need to do, take the company to court and the company will just be in bankruptcy.
On 13 April 2015 the Ombudsman wrote to Blu Hornsby and Mr Antonopoulos about the failure of Blu Hornsby to comply with the Compliance Notice and gave Blu Hornsby seven days to advise whether Blu Hornsby had a reasonable excuse for not complying with the Compliance Notice.
On 14 April 2015, Inspector Zheng had a further telephone conversation with Mr Antonopoulos regarding Blu Hornsby’s failure to comply with the Compliance Notice. Mr Antonopoulos indicated that Blu Hornsby would not be complying with the notice.
On 29 May 2015, the Ombudsman commenced proceedings in this Court against the respondents in respect of a failure to comply with the Compliance Notice.
In an agreed statement of facts filed on 21 January 2016, Blu Hornsby relevantly made the following admissions:
a)it owed Ms Kaur $22,329.90 for the underpayments set out above (at [6]);
b)it did not make any payment to Ms Kaur (and/or the Ombudsman) by 2 April 2015 as required by the Compliance Notice;
c)it did not produce any evidence to the Ombudsman of Blu Hornsby’s compliance with the Compliance Notice by 9 April 2015 or otherwise required by the Compliance Notice;
d)it failed to provide a reasonable excuse within seven days for its failure to comply with the Compliance Notice; and
e)it contravened s.716(5) of the FW Act by failing to comply with the Compliance Notice issued by Inspector Zheng pursuant to s.716(2) of the Act.
In the same document, Mr Antonopoulos made the following admissions:
a)that he had knowledge of the Compliance Notice as it was given to him in his capacity as a director of Blu Hornsby;
b)that he had actual knowledge of Blu Hornsby’s failure to comply with the Compliance Notice;
c)that he was an intentional participant in Blu Hornsby’s failure to comply with the Compliance Notice;
d)that because of the above admissions, he was involved (within the meaning of s.550(2) of the FW Act) in Blu Hornsby’s contraventions of s.716(5) of the FW Act and by virtue of s.550(1) of the FW Act, is taken to have committed the contravention.
On or about 24 November 2015, Blu Hornsby paid an amount of $11,964.65 (being $22,329.90 less the tax component) to Ms Kaur.
Relevant law
Section 716 of the FW Act relevantly provides:
Application of this section
(1)This section applies if an inspector reasonably believes that a person has contravened one or more of the following:
…
(b) a term of a modern award;
…
Giving a notice
(2)The inspector may, except as provided by subsection (4), give the person a notice requiring the person to do either or both of the following within such reasonable time as is specified in the notice:
(a)take specified action to remedy the direct effects of the contravention referred to in subsection (1);
(b)produce reasonable evidence of the person's compliance with the notice.
(3) The notice must also:
(a)set out the name of the person to whom the notice is given; and
(b)set out the name of the inspector who gave the notice; and
(c)set out brief details of the contravention; and
(d)explain that a failure to comply with the notice may contravene a civil remedy provision; and
(e)explain that the person may apply to the Federal Court, the Federal Circuit Court or an eligible State or Territory Court for a review of the notice on either or both of the following grounds:
(i) the person has not committed a contravention set out in the notice;
(ii) the notice does not comply with subsection (2) or this subsection; and
(f)set out any other matters prescribed by the regulations.
Relationship with enforceable undertakings
(4)An inspector must not give a person a notice in relation to a contravention if:
(a)the person has given an undertaking under section 715 in relation to the contravention; and
(b)the undertaking has not been withdrawn.
Relationship with civil remedy provisions
(4A)An inspector must not apply for an order under Division 2 of Part 4-1 in relation to a contravention of a civil remedy provision by a person if:
(a)the inspector has given the person a notice in relation to the contravention; and
(b)either of the following subparagraphs applies:
(i) the notice has not been withdrawn, and the person has complied with the notice;
(ii) the person has made an application under section 717 in relation to the notice that has not been completely dealt with.
Note: A person other than an inspector who is otherwise entitled to apply for an order in relation to the contravention may do so.
(4B)A person who complies with a notice in relation to a contravention of a civil remedy provision is not taken:
(a)to have admitted to contravening the provision; or
(b)to have been found to have contravened the provision.
Person must not fail to comply with notice
(5)A person must not fail to comply with a notice given under this section.
Note: This subsection is a civil remedy provision (see Part 4-1).
(6)Subsection (5) does not apply if the person has a reasonable excuse.
Section 539 of the FW Act provides that, in the event that a compliance notice is not complied with, an inspector of the Ombudsman may apply to the Federal Court, the Federal Circuit Court or an eligible State or Territory Court for orders in relation to the contravention, including an order for the maximum penalty referred to.
Section 546 of the FW Act provides that the Court may, on application, “order a person to pay a pecuniary penalty that the Court considers is appropriate if the Court is satisfied that the person has contravened a civil remedy provision”. In relation to these proceedings, when read with s.539, s.546(2) provides that the pecuniary penalty must not be more than 30 penalty units for an individual and 150 penalty units for a body corporate. At the time of the contravention, 2 April 2015, a “penalty unit” was the amount of $170: Crimes Act 1914 (Cth) s.4AA.
The Court may order that a pecuniary penalty, or a part of the penalty, be paid to the Commonwealth, a particular organisation or a particular person: s.546(3) of the FW Act.
Section 550 of the FW Act provides that involvement in a contravention is to be treated the same way as the actual contravention. It provides:
(1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.
(Emphasis in original)
Consideration
There is no issue that the Contravention Notice was properly issued under the FW Act and that both Blu Hornsby and Mr Antonopoulos have contravened the FW Act and that the Court has power to impose a penalty in respect of their contravention. The only issue in these proceedings is what penalty should be imposed on the respondents.
Under the FW Act, the maximum penalties that can be awarded against Blu Hornsby and Mr Antonopoulos for a breach of s.716(5) are $25,500 and $5,100 respectively. The Ombudsman sought a penalty in the range of $16,065 to $18,360 in respect of Blu Hornsby’s contravention and a penalty in the range of $3,213 to $3,672 in respect of Mr Antonopoulos’ contravention. The respondents submitted that the range of the appropriate penalty for each of them was from 30% to 40% of the maximum penalty. Translated to dollar amounts, that equates to a penalty in the range of $7,650 to $10,200 for Blu Hornsby and $1,530 to $2,040 for Mr Antonopoulos.
While the respondents have admitted that they contravened s.716(5) of the FW Act, they have not admitted any contraventions of the Modern Award in respect of Ms Kaur. They further submit that while Ms Kaur has been paid the outstanding amount, that did not amount to an admission of contravention of the Modern Award.
In Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 326 ALR 476; [2015] HCA 46 the High Court explained the purpose of the imposition of penalties for civil contraventions:
[55]… whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance[1]:
“Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act] ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.”
[1](1991) ATPR 41-076 at 52,152
Over the course of time the courts have developed a number of guidelines for the exercise of their power to impose pecuniary penalties. In Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 (“Kelly”) at 18-19 [14], Tracey J referred to the following:
· The nature and extent of the conduct which led to the breaches.
· The circumstances in which that conduct took place.
· The nature and extent of any loss or damage sustained as a result of the breaches.
· Whether there had been similar previous conduct by the respondent.
· Whether the breaches were properly distinct or arose out of the one course of conduct.
· The size of the business enterprise involved.
· Whether or not the breaches were deliberate.
· Whether senior management was involved in the breaches.
· Whether the party committing the breach had exhibited contrition.
· Whether the party committing the breach had taken corrective action.
· Whether the party committing the breach had cooperated with the enforcement authorities.
· The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
· The need for specific and general deterrence.
Those guidelines are meant to assist in the determination of what penalty is appropriate and do not constitute mandatory considerations.
Before turning to address the contentions of each of the parties it is necessary to note that there was initially a difference between the parties on a point of principle. On the one hand, the Ombudsman argued that, in determining the appropriate penalty, the Court should have regard to the alleged contraventions that formed the basis for the issue of the Contravention Notice. The respondents argued that that was impermissible. Ultimately, the Ombudsman only contended that regard could be had to the underlying allegations as part of the factual matrix leading to the issue of the Contravention Notice and the failure by Blu Hornsby to comply with it.
This question was addressed by Judge Manousaridis in Fair Work Ombudsman v Hair Industrie Mt Druitt Pty Ltd [2015] FCCA 3426 (“Hair Industrie”). His Honour said, at [12]:
I must bear in mind that it is no element of a contravention of s.716(5) of the FW Act that the person to whom a notice under s.716(2) of the FW Act has been issued has in fact contravened any of the provisions identified in the compliance notice. A penalty for a contravention of s.716(5) of the FW Act cannot, therefore, be assessed on the assumption that the person to whom a compliance notice has been issued has contravened those provisions. Nevertheless, account should be taken of the contraventions alleged in the notice, at least where the person against whom the notice is issued has not indicated he or she disputes the matters alleged in the notice. Hair Industrie has not indicated it disputes any of the matters alleged in the compliance notice that was served on it. It is, therefore, appropriate to take into account the nature of the contraventions alleged in the compliance notice.
The critical difference between this case and Hair Industrie is that there was an express statement here that no admission was made about the underlying conduct. In light of that, and the Ombudsman’s ultimate submissions mentioned above, it is unnecessary to consider the correctness of this passage or to analyse just how the conduct is to be taken into account. That said, I note that a difficulty that might arise if such a position were taken is that, contrary to its intended purpose, the contravention notice process might lead to complicated and contested hearings of fact. In any event, I will leave those considerations to one side and will proceed on the basis that there were allegations of other contraventions of the FW Act that led to the issue of the Contravention Notice.
Extent of conduct relating to failure to comply with Contravention Notice
The first matter to consider is the nature and extent of the conduct. The relevant conduct is the failure to comply with the Contravention Notice. In this respect it is important to bear in mind that the power to issue a compliance notice was included in the FW Act in order to provide a mechanism for dealing with non-compliance with minimum entitlements under the FW Act as an alternative to bringing Court proceedings for that non-compliance: Fair Work Ombudsman v Syndicate Group Pty Ltd [2015] FCCA 2847 at [27] (“Syndicate Group”). Thus, while a person who has been given such a notice may apply to the Court for review of it (s.717), an inspector cannot bring proceedings in respect of the underlying contraventions against a person who complies with the notice and compliance is not an admission of those contraventions. It is an important part of the armoury of Fair Work Inspectors in fulfilling their functions under sub-div. D of div.3 in pt.5-2 of ch.5 of the FW Act.
This matter is also relevant to the consideration often referred to as the need to ensure compliance with minimum standards.
The contravention in this case was the failure to pay $22,329.90 (gross) to Ms Kaur by 2 April 2015 and to produce reasonable evidence to the inspector of the fact and date of the payment. That amount was a considerable sum for Ms Kaur whose contract entitled her to a salary of $52,000 (gross) per annum. That said, objectively speaking, it is not a very large amount, being just less than the maximum penalty. For that reason, while the contravention is not trifling, it is not sufficiently serious to warrant a penalty in the higher range.
Circumstances surrounding the contravention
The circumstances in which the contravention took place are also relevant. The background to the contravention is that Blu Hornsby owned the business as trustee of a discretionary trust; the objects of which included Mr Antonopoulos’ family members. As part of the property settlement between Mr Antonopoulos and his former wife, Blu Hornsby sold the café business in May 2014. Ms Kaur continued to work at the café as an employee of the new owner. Since that time, Blu Hornsby has not owned or operated any business. Neither it nor the discretionary trust has any significant assets. It was in that context that Mr Antonopoulos told Inspector Zheng that Blu Hornsby would not pay the money because, he said, “you can’t get blood out of a stone.”
It might be inferred from Mr Antonopoulos’ conduct that he was not aware that he might also be liable for a penalty if Blu Hornsby failed to comply with the notice. In this case, I will not draw that inference. First, the Ombudsman has not asked that I draw the inference and, secondly, Mr Antonopoulos was not cross-examined on his evidence and so was given no chance to respond to the possibility of such an inference.
There are other matters relevant to this consideration, such as Mr Antonopoulos’ dealings with the applicant, including his production of documents and voluntary attendance at an interview. While they are relevant here, I will deal with those matters in more detail below.
The Ombudsman’s written submissions referred to the contraventions specified in the Contravention Notice as part of the relevant conduct. For the reasons I have given, I do not take that into account in assessing penalty.
Mr Antonopoulos’ evidence was that he did not seek legal advice about the notice until served with Court proceedings in June 2015 and now regrets that and wishes that he had done so. I accept that that is the case; however, he had spoken to a solicitor at the time Inspector Zheng was investigating the complaint made by Ms Kaur. That solicitor called Ms Kaur in September 2014 and told her that Mr Antonopoulos was going to pay her the money and that she should withdraw her complaint. Mr Antonopoulos also called Ms Kaur suggesting that she might not get residency if she did not withdraw her complaint. In a SMS message to Ms Kaur dated 24 September 2014, Mr Antonopoulos wrote (without correction):
All information going to fare work this afternoon as they still want it.. Now the can if worms will be opened in regard to your visa and I am sorry for what’s going to happen… Your a good girl and I didn’t want to go down this path..
There is no suggestion that anybody took any steps to try to prevent Ms Kaur from obtaining a residency visa; however, it is of significant concern that these threats were made. The Ombudsman suggested that the respondents had taken advantage of Ms Kaur’s vulnerability as an overseas student on a visa. In my view, in spite of the purport of the threats made to Ms Kaur, this submission does not go very far.
First, it appears to be relevant to the allegations of underpayment that were particularised in the Contravention Notice rather than to the failure to comply with the notice. That failure in fact had nothing to do with Ms Kaur: she was no longer employed by Blu Hornsby and had clearly not withdrawn any complaint. Secondly, it is not obvious that Ms Kaur was as vulnerable as the applicant suggests. If she had breached the conditions of her visa, that was a matter for her, not her employer. As Lucev FM (as his Honour then was) said in Fair Work Ombudsman v Ultra Tune Australia Pty Ltd (2012) 225 IR 326; [2012] FMCA 560 at 336 [14], one “cannot simply assume that because an employee is a foreign national, that the employee is unfamiliar with Australia’s labour practices, or more vulnerable to underpayment or exploitation than any other employee”.
The next consideration is the nature and extent of the loss. The loss here was the fact that Ms Kaur was not paid the amount in the notice until on or about 24 November 2015, that is, some 6 months after the time required by the notice. The amount was, as I have said, significant to Ms Kaur.
The applicant accepts that there have been no court proceedings against either respondent in respect of contraventions of workplace laws. The respondents argue that this is significant in circumstances where Mr Antonopoulos has run other restaurants for over 15 years and has had many employees. The other businesses of Mr Antonopoulos are relied on by the applicant as relevant to the next consideration, the size of the business enterprise.
I do not agree that all of the businesses of Mr Antonopoulos should have any impact on the penalty for the failure by the respondents to comply with the Contravention Notice. There may well have been some employees of other businesses who worked from time to time at Wild Sage Café, but Blu Hornsby is a discreet entity acting as trustee for a discretionary trust. In light of that, it cannot be said to be precisely in the same interest or as the same entity as Mr Antonopoulos. That is more than a matter of form. Trustees owe specific duties to the beneficiaries (or objects) of the trust regardless of whether their sole director and shareholder also runs other similar businesses.
That is not to say that Mr Antonopoulos’ experience and ongoing businesses are irrelevant to the question of penalty. They certainly affect the deliberateness of the conduct and the level of penalty required to act as a sufficient deterrent against further contraventions.
There is no question that the contravention was deliberate. The failure to pay was brought about by Mr Antonopoulos’ attitude that Blu Hornsby had no money rather than any oversight.
Similarly, there is no question that senior management was involved in the contravention: Mr Antonopoulos was the sole director and shareholder of Blu Hornsby and has admitted his involvement in the contravention.
The next considerations are the related issues of contrition and corrective action. The respondents say that they are genuinely contrite and point to the following facts:
a)Mr Antonopoulos has paid Ms Kaur the amount in the notice (less tax);
b)Mr Antonopoulos has personally apologised for both his conduct, and that of Blu Hornsby;
c)Mr Antonopoulos has accepted responsibility for the conduct personally and on behalf of Blu Hornsby; and
d)The respondents assisted and co-operated with the applicant during its investigations.
The Ombudsman does not suggest that Mr Antonopoulos’ expression of contrition is not genuine; it argues, however, that it was given at the last minute and should, for that reason, be given little weight.
I accept that the respondents are genuinely contrite. While I do take into account the fact that this was very late in coming, it was not challenged and is expressed not only in the ways relied on by the respondents above, but also by the conduct of these proceedings. First, the respondents have agreed to a statement of facts that has made them incur legal expenses and have shown a willingness to facilitate the course of justice; and secondly, Mr Antonopoulos attended the hearing of this matter and engaged both a solicitor and experienced counsel. These facts are significant in light of the level of maximum penalty that can be imposed: $25,500 and $5,100 respectively. From the few judgments given in respect of contraventions of this nature, it appears to be rare that any respondent appears at all at the final hearing: see for example the two referred to in this judgment, Syndicate Group and Hair Industrie. In light of those matters, I give the respondents’ contrition significant weight even though, as the Ombudsman says, it was late in coming.
The respondents did also co-operate with the applicant in its investigation of Ms Kaur’s complaint as well as the conduct of these proceedings. Importantly, it produced documents in answer to a notice to produce and Mr Antonopoulos voluntarily attended an interview. The Ombudsman argues that the agreed statement of facts was entered into long after the commencement of these proceedings; however, without more, that circumstance alone does not undermine the weight to be given to that fact.
Finally, there is the question of deterrence. The parties addressed this issue by reference to each of the respondents. In a sense that approach is artificial: Mr Antonopoulos, is and always has been, the controlling mind of Blu Hornsby. That said, given what I have said about the responsibilities of Blu Hornsby as trustee, I agree that the respondents ought to be considered separately.
The evidence is that Blu Hornsby presently does not, and does not propose to operate any business in the future. That evidence was not challenged. The respondents argue that, in those circumstances, there is no need for specific deterrence. The Ombudsman argues that there remains a need for specific deterrence and relies on the decision of Judge Hartnett in Syndicate Group in support of that proposition. In that case, after dealing with general deterrence, her Honour said:
[34]… There is also in the particular facts of this case a high need for specific deterrence. Although the First Respondent is no longer trading, it remains registered and Mr Locaso remains its director.
[35]The respondents need to be left in no doubt that their failure to comply with the compliance notices will not be tolerated, and that employees of the First Respondent and any other business operated by Mr Locaso must be provided with their minimum entitlements.
In that case the respondents did not appear and there seems to have been no evidence that the respondent company would not operate any business again. That distinguishes that case from the present circumstances. On the basis of the evidence, there is no likelihood that Blu Hornsby will ever employ anybody again and so there will be no opportunity for it to contravene any workplace law. For that reason, I do not think that there is any point in taking specific deterrence into account for the purposes of the appropriate penalty for Blu Hornsby.
Mr Antonopoulos is different. He still operates restaurant businesses and needs to be reminded that it is not acceptable to contravene the workplace laws. That said, I also bear in mind that he is genuinely contrite and that, in spite of his long experience, has no prior record of contravening workplace laws.
There is a need for general deterrence in respect of the breach by both the respondents. The Ombudsman relied on evidence to suggest that the restaurant industry has a high level of complaints and contraventions and notes what was said by her Honour Judge Whelan in Fair Work Ombudsman v Anahata Naturals Pty Ltd [2014] FCCA 2954 at [44] about the industry and the type of person often employed in it.
Taking all of those matters into account, I consider that the appropriate penalty for each of the respondents is 55% of the maximum, that is, $14,025 in respect of the Blu Hornsby and $2,805 in respect of Mr Antonopoulos.
While the considerations were, as I have explained above, different in respect of each respondent, there were additional factors relevant to each that ultimately balanced the circumstances relevant to penalty. For instance, specific deterrence was not relevant to Blu Hornsby, but it was to Mr Antonopoulos who eventually paid Ms Kaur.
Particularly important to my consideration is the need to ensure that other employers are aware that, if they do not propose to seek review of a Contravention Notice, they must comply with it or face a significant penalty. In this case, the penalty for Blu Hornsby will be just over half the amount that the Contravention Notice required it to pay to Ms Kaur. Together with the legal fees incurred by the respondents, that should be a strong encouragement to other employers to comply with Contravention Notices.
For those reasons, I will make the orders set out above.
I certify that the preceding fifty-seven (57) paragraphs are a true copy of the reasons for judgment of Judge Smith
Date: 27 May 2016
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