Fair Work Ombudsman v Chatime Australia Pty Ltd (No 4)
[2024] FedCFamC2G 1266
•22 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Chatime Australia Pty Ltd (No 4) [2024] FedCFamC2G 1266
File number(s): SYG 3321 of 2019 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 22 November 2024 Catchwords: INDUSTRIAL LAW – Assessment of pecuniary penalties for contraventions of s 45 and s 44 of the Fair Work Act 2009 (Cth). Legislation: Crimes Act 1914 (Cth), s 4AA
Fair Work Act 2009 (Cth), ss 12, 44, 45, 90(1),(2), 116, 539(1),(2), 546(1),(2), 550(1),(2), 557(1)
Crimes Legislation Amendment (Penalty Unit) Act 2015 (Cth), Sch 1
Fast Food Industry Award 2010, cl 13.2, cl 13.4, cl 17, cl 18, cl 25.5(a)(i),(ii), cl 25.5(b),(c), cl 26, cl 28.3, cl 30.3
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97
Contin v The Queen [2012] VSCA 247
Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59
Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626
Fair Work Ombudsman v Chatime Australia Pty Ltd [2022] FedCFamC2G 934
Fair Work Ombudsman v Chatime Australia Pty Ltd (No 2) [2023] FedCFamC2G 712
Fair Work Ombudsman v Chatime Australia Pty Ltd (No 3) [2023] FedCFamC2G 1075
Fair Work Ombudsman v Ho [2024] FCAFC 111
Fair Work Ombudsman v Lohr [2018] FCA 5
Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Re Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd (1980) 44 FLR 149
Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62
Royer v The State of Western Australia [2009] WASCA 139
R v Holder (1983) 3 NSWLR 245
The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46
Thompson v Freshfood Management Services Pty Ltd (No 2) [2023] FedCFamC2G 1065
Trade Practices Commission v CSR Ltd [1991] ATPR 41-076
Division: Fair Work Number of paragraphs: 59 Date of hearing: 26 March 2024 Place: Sydney Counsel for the Applicant: Mr J Darams Counsel for the Applicant: Mr M Harker Solicitor for the Applicant: Office of the Fair Work Ombudsman Counsel for the Respondents: Mr D Mahendra Solicitor for the Respondents: Cowell Clarke Commercial Lawyers ORDERS
SYG 3321 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: CHATIME AUSTRALIA PTY LTD ACN 136 677 453
First Respondent
CHEN ZHAO
Second Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
22 NOVEMBER 2024
THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (FW Act), the first respondent pay:
(a)a pecuniary penalty of $21,600 for its contravention of s 45 of the FW Act referred to in declarations 1(a) and (b) of the declarations made on 17 March 2023 (Declarations);
(b)a pecuniary penalty of $8,640 for its contravention of s 45 of the FW Act referred to in declaration 1(c) of the Declarations;
(c)a pecuniary penalty of $17,280 for its contravention of s 45 of the FW Act referred to in declaration 1(d) of the Declarations;
(d)a pecuniary penalty of $21,600 for its contravention of s 45 of the FW Act referred to in declaration 1(e) of the Declarations;
(e)a pecuniary penalty of $12,960 for its contravention of s 45 of the FW Act referred to in declaration 1(f) of the Declarations;
(f)a pecuniary penalty of $8,640 for its contravention of s 45 of the FW Act referred to in declaration 1(g) of the Declarations;
(g)a pecuniary penalty of $8,640 for its contravention of s 45 of the FW Act referred to in declaration 1(i) of the Declarations;
(h)a pecuniary penalty of $8,640 for its contravention of s 45 of the FW Act referred to in declaration 1(j) of the Declarations;
(i)a pecuniary penalty of $2,160 for its contravention of s 45 of the FW Act referred to in declaration 1(k) of the Declarations;
(j)a pecuniary penalty of $4,320 for its contravention of s 44 of the FW Act referred to in declaration 1(l) of the Declarations;
(k)a pecuniary penalty of $4,320 for its contravention of s 44 of the FW Act referred to in declaration 1(m) of the Declarations; and
(l)a pecuniary penalty of $2,160 for its contravention of s 44 of the FW Act referred to in declaration 1(n) of the Declarations;
2.The first respondent pay each of the pecuniary penalties referred to in order 1 to the Commonwealth within 28 days after the date of these orders.
3.Pursuant to s 546(1) of the FW Act, the second respondent pay:
(a)a pecuniary penalty of $2,160 for his involvement in the first respondent’s contravention of s 45 of the FW Act identified in declaration 1(c) of the Declarations, as declared by declaration 1 of the declarations made on 31 August 2023 (Accessory Declarations);
(b)a pecuniary penalty of $4,320 for his involvement in the first respondent’s contravention of s 45 of the FW Act identified in declaration 1(d) of the Declarations, as declared by declaration 2 of the Accessory Declarations; and
(c)a pecuniary penalty of $5,400 for his involvement in the first respondent’s contravention of s 45 of the FW Act identified in declaration 1(e) of the Declarations, as declared by declaration 3 of the Accessory Declarations.
4.The second respondent pay each of the pecuniary penalties referred to in order 3 to the Commonwealth within 28 days after the date of these orders.
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
INTRODUCTION
On 11 November 2022 I published reasons for judgment (first reasons) in which I determined a number of discrete disputes between the applicant, the Fair Work Ombudsman (FWO), and the first respondent (Chatime) about the extent to which Chatime contravened provisions of the Fast Food Industry Award 2010 (Award), and therefore about the extent to which Chatime contravened s 45 of the Fair Work Act 2009 (Cth) (FW Act).[1]
[1] Fair Work Ombudsman v Chatime Australia Pty Ltd [2022] FedCFamC2G 934
On 17 March 2023 I made the following declarations (Declarations) which identified each of the terms of the Award and the National Employment Standards (NES) Chatime had contravened (Contraventions) (bold words added).
1.The First Respondent contravened the following civil remedy provisions:
a)section 45 of the FW Act by failing to pay the 104 adult employees listed in Schedule 1 of the Annexure to these Orders (Annexure) minimum hourly rates pursuant to clause 17 of the Fast Food Industry Award 2010 (Fast Food Award) [Contravention 1];
b)section 45 of the FW Act by failing to pay the 41 junior employees listed in Schedule 2 of the Annexure junior minimum hourly rates pursuant to clause 18 of the Fast Food Award [Contravention 2];
c)section 45 of the FW Act by failing to pay casual loadings to the 12 casual employees listed in Schedule 3 of the Annexure pursuant to clause 13.2 of the Fast Food Award [Contravention 3];
d)section 45 of the FW Act by failing to pay the Saturday loading to the 130 Employees listed in Schedule 4 pursuant to clause 25.5(b) of the Fast Food Award [Contravention 4];
e)section 45 of the FW Act by failing to pay the Sunday loading to the 122 Employees listed in Schedule 5 pursuant to clause 25.5(c) of the Fast Food Award [Contravention 5];
f)section 45 of the FW Act by failing to pay the public holiday penalty rates to the 51 Employees listed in Schedule 6 pursuant to clause 30.3 of the Fast Food Award [Contravention 6];
g)section 45 of the FW Act by failing to pay the 9.00pm – Midnight Loading to the 118 Employees listed in Schedule 7 pursuant to clause 25.5(a)(i) of the Fast Food Award [Contravention 7];
h)section 45 of the FW Act by failing to pay the After Midnight Loading to Heting Yang (Irelia), PoChuan Lu (Luke), Xin Shi (Aiko), Shang Shan Wu and Winne Chen, listed in Schedule 8 pursuant to clause 25.5(a)(ii) of the Fast Food Award [Contravention 8];
i)section 45 of the FW Act by failing to pay overtime rates to the 35 Employees listed in Schedule 9, pursuant to clause 26 of the Fast Food Award [Contravention 9];
j)section 45 of the FW Act by failing to pay annual leave loading to the 47 Employees listed in Schedule 10 pursuant to clause 28.3 of the Fast Food Award [Contravention 10];
k)section 45 of the FW Act by failing to roster the 10 Employees listed in Schedule 11 for the Minimum Engagement Hours pursuant to clause 13.4 of the Fast Food Award [Contravention 11];
l)section 44(1) of the FW Act by failing to pay annual leave entitlements to the 27 Employees listed in Schedule 12 pursuant to section 90(1) of the FW Act [Contravention 12];
m)section 44(1) of the FW Act by failing to pay annual leave on termination to the 19 Employees listed in Schedule 13 pursuant to section 90(2) of the FW Act [Contravention 13];
n)section 44(1) of the FW Act by failing to pay public holiday entitlements to the 4 Employees listed in Schedule 14 pursuant to section 116 of the FW Act [Contravention 14].
As is apparent from the Declarations, there are 14 schedules (Schedules) annexed to the orders I made on 17 March 2023 which, in relation to each contravention of the Award, and in relation to the contraventions of s 90(1), s 90(2), and s 116 of the FW Act, identify each of the employees who had been underpaid, and the amounts by which they had been underpaid. Schedule 15 to the orders sets out the total underpayments of each of the employees, and the total underpayments for all employees, being $162,533.13.
I also considered in the first reasons the claims (accessory claims) the FWO made against the second respondent, Mr Zhao, that he was a person involved, within the meaning of s 550(2) of the FW Act, in Chatime’s contraventions of s 45 and s 44; but I concluded I could not finally determine those claims without giving Mr Zhao an opportunity to decide whether he should go into evidence.
By 1 December 2022, Mr Zhao notified the FWO and the Court that he had decided to go into evidence. On that day, therefore, I made directions that Mr Zhao file his evidence in relation to the accessory claims; and I set down the accessory claims for further hearing on 24, 25, and 26 July 2023. In the event, the hearing of the accessory claims required less than one day, and, on 24 July 2023, I reserved my judgment on those claims.
On 11 August 2023 I published reasons for judgment (second reasons) in which I concluded that Mr Zhao had knowledge of the essential elements of each of the Contraventions, to the extent that the Contraventions consisted of Chatime not complying with the terms of the Award that “Costing Model A” identified were payable under the Award but which were omitted from “Costing Model B”.[2] Those terms related to casual rates, and the payment of “weekend penalty (Saturday & Sunday)” rates. I so held even though I found that Mr Zhao believed he did not commit Chatime to engage in any unlawful activity.[3] I listed the matter for a directions hearing on 31 August 2023 to make orders to give effect to the findings and conclusions contained in the second reasons, and to make directions for the hearing of the FWO’s application for orders that Chatime and Mr Zhao pay pecuniary penalties.
[2] Fair Work Ombudsman v Chatime Australia Pty Ltd (No 2) [2023] FedCFamC2G 712. I defined “Costing Model A” in Fair Work Ombudsman v Chatime Australia Pty Ltd [2022] FedCFamC2G 934 at [26(e)], and “Costing Model B” at [26(g)]
[3] Fair Work Ombudsman v Chatime Australia Pty Ltd (No 2) [2023] FedCFamC2G 712, [49]
On 31 August 2023 I made the following additional declarations to give effect to my findings and conclusions in the second reasons for judgment (Accessory Declarations):
1.The Second Respondent was involved, within the meaning of section 550(1) of the Fair Work Act 2009 (FW Act), in the First Respondent’s contravention of section 45 of FW Act when the First Respondent failed to pay casual loadings as required by clause 13.2 of the Fast Food Award to the 12 Casual Employees listed in Schedule 4 of the Court’s orders made on 17 March 2023 (17 March Orders).
2.The Second Respondent was involved, within the meaning of section 550(1) of the FW Act, in the of the First Respondent’s contravention of section 45 of FW Act when the First Respondent failed to pay the Saturday loading required by clause 25.5(b) of the Fast Food Award to the 130 Employees listed in Schedule 5 of the 17 March Orders.
3.The Second Respondent was involved, within the meaning of section 550(1) of the FW Act, in the of the First Respondent’s contravention of section 45 of FW Act when the First Respondent failed to pay the Sunday loading required by clause 25.5(c) of the Fast Food Award to the 122 Employees listed in Schedule 6 of the 17 March Orders.
These declarations refer to the incorrect Schedules: “Schedule 4” in the first Accessory Declaration should be a reference to Schedule 3; “Schedule 5” in the second Accessory Declaration should be a reference to Schedule 4; and “Schedule 6” in the third Accessory Declaration should be a reference to Schedule 5.
Also on 31 August 2023 I made directions for the filing of submissions on the question of whether, given the second reasons, additional declarations should be made. I heard oral argument on that question on 21 November 2023; and on 23 November 2023 I published reasons for judgment in which I concluded that no further declarations should be made.[4]
[4] Fair Work Ombudsman v Chatime Australia Pty Ltd (No 3) [2023] FedCFamC2G 1075
The FWO’s claim for the payment of pecuniary penalties was finally listed for hearing on 26 March 2024. On that day I heard the FWO’s application for penalties, after which I reserved my judgment.
In these reasons for judgment, therefore, which assume familiarity with the first and second reasons, I consider whether Chatime and Mr Zhao should be ordered to pay pecuniary penalties, and if so, the amounts they should be ordered to pay.
POWER AND PRINCIPLES[5]
[5] In this part of my reasons I substantially reproduce much of what I have said in Thompson v Freshfood Management Services Pty Ltd (No 2) [2023] FedCFamC2G 1065, at [6]-[31]
Power
Under s 546(1) of the FW Act this Court may, on application, order a person to pay a pecuniary penalty the Court considers is appropriate if the Court is satisfied the person has contravened a “civil remedy provision”. That expression is defined in s 539(1) of the FW Act to include the provisions identified in column 1 of the table to s 539(2) of the FW Act. Column 1 includes s 44 and s 45 of the FW Act.
Subsection s 546(2) of the FW Act provides that the pecuniary penalty the Court may impose must not, where the person is an individual, be more than “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)” and, if the person is a “body corporate”, must not be more than five times “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)”. The maximum penalty units specified in the table in s 539(2) of the FW Act for a (non-serious) contravention of s 45 of the FW Act during the period of Chatime’s and Mr Zhao’s contraventions are 60 penalty units.
Under s 12 of the FW Act, “penalty unit” has the meaning given by s 4AA of the Crimes Act 1914 (Cth). The penalty unit from 8 August 2016 to 25 December 2016, being the period over which Chatime committed the Contraventions, was $180.[6] The maximum penalty for each of Chatime’s contraventions of s 45 and s 44 of the FW Act, therefore, is $54,000, and the maximum penalty for each of Mr Zhao’s contraventions is $10,800.
Principles
[6] See item 5 of Schedule 1 to the Crimes Legislation Amendment (Penalty Unit) Act 2015 (Cth)
Object of making orders under s 546(1) of the FW Act
In Australian Building and Construction Commissioner v Pattinson the plurality observed that civil penalty provisions of the kind enacted in s 546(1) of the FW Act have a “statutory function of securing compliance with provisions of the [statutory] regime”;[7] that “[W]hereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty . . . is primarily if not wholly protective in promoting the public interest in compliance”;[8] that the “principal, and . . . probably the only, object of the penalties . . . 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”;[9] and that “deterrence is the “principal and indeed only object” of the imposition of a civil penalty: “[r]etribution, denunciation and rehabilitation have no part to play””.[10] In short, the task of assessing an appropriate penalty under s 546(1) of the FW Act is to assess a “penalty of appropriate deterrent value”.[11]
[7] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [14], quoting from the judgment of the plurality in The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, at [24].
[8] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [15], quoting from The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, at [55].
[9] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [15], quoting from Trade Practices Commission v CSR Ltd [1991] ATPR 41-076, at pages 52, 152.
[10] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [16], quoting from Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97, at [19].
[11] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
The objective of deterrence, however, must be considered having regard to “the need for deterrence in respect of the particular case”.[12] The purpose of s 546(1) of the FW Act is “the deterrence of future contraventions of a like kind by the contravenor and by others”;[13] and “an “appropriate” penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case”.[14]
[12] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [46]
[13] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [10] (my emphasis)
[14] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [46] (my emphasis)
Assessing penalty for single contravention – factors
The plurality in Pattinson recognised that, when assessing an appropriate penalty under s 546(1) of the FW Act, the Court may have regard to a number of factors that are relevant to assessing what is necessary for deterrence in respect of the particular contravention in question. That is apparent from the plurality referring,[15] with approval, to the following passage from the judgment of French J in Trade Practices Commission v CSR Ltd:[16]
[15] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
[16] Trade Practices Commission v CSR Ltd [1991] ATPR 41-076, at pages 52,152‑52,153
The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:
1.The nature and extent of the contravening conduct.
2.The amount of loss or damage caused.
3.The circumstances in which the conduct took place.
4.The size of the contravening company.
5.The degree of power it has, as evidenced by its market share and ease of entry into the market.
6.The deliberateness of the contravention and the period over which it extended.
7.Whether the contravention arose out of the conduct of senior management or at a lower level.
8.Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.
9.Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention.
The plurality in Pattinson characterised these as factors that “informed the assessment under the Trade Practices Act 1974 (Cth) of a penalty of appropriate deterrent value”,[17] further noting the following:[18]
It may readily be seen that this list of factors includes matters pertaining both to the character of the contravening conduct (such as factors 1 to 3) and to the character of the contravenor (such as factors 4, 5, 8 and 9). It is important, however, not to regard the list of possible relevant considerations as a “rigid catalogue of matters for attention” as if it were a legal checklist. The court’s task remains to determine what is an “appropriate” penalty in the circumstances of the particular case.
[17] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
[18] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [19] (footnotes omitted)
The approach of most judges when assessing penalties for a single contravention of a provision of the FW Act has been to take into account the non-exhaustive considerations Tracey J identified in Kelly v Fitzpatrick,[19] which his Honour adopted from the judgment of Mowbray FM in Mason v Harrington Corporation Pty Ltd.[20] Those considerations are:
[19] Kelly v Fitzpatrick [2007] FCA 1080, at [14]
[20] Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
(a)the nature and extent of the conduct which led to the breaches;
(b)the circumstances in which that conduct took place;
(c)the nature and extent of any loss or damage sustained as a result of the breaches;
(d)whether there had been similar previous conduct by the respondent;
(e)whether the breaches were properly distinct or arose out of the one course of conduct;
(f)the size of the business enterprise involved;
(g)whether or not the breaches were deliberate;
(h)whether senior management was involved in the breaches;
(i)whether the party committing the breach had exhibited contrition;
(j)whether the party committing the breach had taken corrective action;
(k)whether the party committing the breach had cooperated with the enforcement authorities;
(l)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
(m)the need for specific and general deterrence.
Although these factors have been identified and applied as relevant to the assessment of penalties, they do not constitute a “rigid catalogue of matters for attention”.[21]
[21] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, at [91] (Buchanan J)
Also relevant is the maximum penalty for the contravention provided for by the FW Act; and here I refer to the following passage from the judgment of Flick J in The BKH Contractors Case (No 2):[22]
In undertaking the task of assessing and quantifying the penalties to be imposed, the maximum penalty prescribed by the Commonwealth legislature for a specific contravention serves as a “yardstick” against which the assessment of penalties is generally to proceed . . . .
[22] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563, at [19]
Approach to assessing penalties for multiple contraventions
What I have said so far concerns the assessment of an appropriate penalty for a single contravention. In many cases, however, the Court is required to assess multiple contraventions of civil remedy provisions of the FW Act. The approach to assessing pecuniary penalties in those circumstances was outlined by Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown as follows:[23]
(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 . . . 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 . . .
[23] Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301, at [36]
The first step requires the Court to identify the contraventions in relation to which the appropriate penalties are to be assessed.
The second step requires the Court to consider whether any two or more of the contraventions in question are to be treated as a single contravention under s 557(1) of the FW Act, which provides:
For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a)the contraventions are committed by the same person; and
(b)the contraventions arose out of a course of conduct by the person.
In the case of contraventions of two or more terms of a modern award which, for that reason, constitute a contravention of s 45 of the FW Act, the “civil remedy provision” that is denoted by that expression in s 557(1) is not s 45, with the consequence that there would be a single contravention in relation to the contraventions of the two or more terms of the award; the “civil remedy provision” that is denoted by that expression in s 557(1) are the terms of the modern award that have been contravened. The Full Federal Court so held in Rocky Holdings Pty Ltd v Fair Work Ombudsman:[24]
The reference in s 557(1) to “a civil remedy provision referred to in subsection (2)” discloses that it is the provision which is relevant. Section 557(2) identifies each of ss 44(1) and 45 as a civil remedy provision. It is the substance of those provisions which create the proscriptions. Section 44(1) proscribes contraventions of a provision of the NES. Section 45 proscribes contravention of a term of a modern award. . . . Section 557(2) should be recognised to be a form of definitions provision. It defines civil remedy provisions for the purposes of s 557(1). The function of s 557(2) is to indicate that when a provision is identified, it is the substance of the provision found elsewhere in the Act (in this case, in ss 44(1) and 45) which is the civil penalty provision. As the FWO put it in written submissions:
However, section 557 also operates on contraventions which relevantly occur when a term of an award or a provision of an NES is contravened. This now occurs indirectly through the operation of sections 44 and 45. In the case of s. 45 (for example), the contravention occurs when a term of a modern award is contravened. Thus the effect of subsection 557(1) in relation to contraventions of s. 45 is that:
…2 or more contraventions of (a term of an award) are, subject to subsection 3, taken to constitute a single contravention…
[24] Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62, at [13]. The Full Federal Court recently confirmed this approach in Fair Work Ombudsman v Ho [2024] FCAFC 111, at [16]-[27]
I considered some of the principles relating to s 557(1) of the FW Act in Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor.[25] After reviewing a number of cases, I said:[26]
Two firm principles may be drawn from the cases to which I have referred, one negative, and one positive. The negative principle is that s.557(1) of the FW Act does not apply to contraventions of different terms of modern awards, even if such contraventions arise out of a course of conduct, and even if the contraventions affect only one person. The positive principle is that s.557(1) of the FW Act applies to the multiple contravention of the one term of a modern award, even where the contravention may affect two or more persons. These principles may be extrapolated to contraventions of civil penalty provisions that do not involve the contravention of a term of a modern award. Just as s.557(1) of the FW Act does not apply to the contravention of two or more separate terms of an award, so too does it not apply to contraventions of two or more separate civil remedy provisions that do not involve a breach of a term of an award. On the other hand, s.557(1) of the FW Act applies to multiple contraventions of a single civil penalty provision, even though the contraventions may affect two or more persons.
These principles, important as they are, are limited. The judgments to which I have referred do not explicitly consider the meaning of “course of conduct”. From the words themselves, it may be said that “course of conduct” denotes a series of acts that are connected in some way; and given that it is conduct – namely, acts or omissions of a person – that is required to be connected in some way, the required connection must be sought, at least in substantial part, in the state of mind that the person engaging in the conduct has in relation to the conduct. That a contravener’s state of mind is relevant to determining whether conduct he or she has engaged in is a “course of conduct” is supported by the judgment of Nettle J in Berlyn v Brouskos. In that case, his Honour considered the meaning of “course of conduct” as that expression appears in the definition of “stalking” given in s.21A(2) of the Crimes Act 1958 (Vic). His Honour concluded that “course of conduct” for the purposes of that subsection is a course of conduct as prescribed in the California Penal Code, namely, “a pattern of conduct composed of a series of acts over a period of time however short, evidencing a continuity of purpose”.
Although the question whether conduct amounts to a “course of conduct” is to be determined, at least substantially, by reference to the person’s state of mind, proof of that state of mind may, and usually will be inferred from objective matters existing outside that person’s mind. Of importance would usually be whether the relevant conduct consists of an omission, the number of acts or omissions that are claimed to constitute the course of conduct, the time that separates each act or omission from the other, and whether the acts or omissions are similar or dissimilar, and, if dissimilar, whether they are jointly necessary to the achievement of the conduct that constitutes the contravention.
[25] Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626
[26] Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626, at [32]-[34]
The third step contained in the passage from the judgment of Bromwich J in New Shanghai requires the Court to consider whether there is any overlap “between groups of separate aggregated contraventions” to ensure the same conduct is not penalised twice and, if there is an overlap, whether there should be “further adjustment”.[27] Bromwich J did not expressly describe the nature of the adjustment that may need to be made to avoid a double penalty; but the passage suggests that the adjustment is to be made by further aggregation. That is apparent from the fourth step the passage identifies, namely, the consideration of “the appropriate penalty in respect of each final individual group of contraventions, taken in isolation” (emphasis added).[28]
[27] Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301, [36]
[28] Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301, [36]
Given s 557(1) of the FW Act, however, there would appear to be no further room to treat two or more contraventions as one contravention by applying what is often referred to as the “one transaction principle” or the “course of conduct principle”. That is what Bromwich J concluded in Fair Work Ombudsman v Lohr, where his Honour accepted the FWO’s submission that s 557 of the FW Act “is the express statutory manifestation of the one transaction or course of conduct principle”; that by “enacting s.557 Parliament has determined how multiple contraventions arising from a course of conduct are to be treated”; and that, once s 557 has been applied it is not open to “further consolidate the … contraventions into one contravention by applying that principle, in effect, again”.[29] That is also what the Full Federal Court held in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union:[30]
The important point to emphasise is that the course of conduct principle, in the criminal context at least, does not operate to permit a sentencing judge to impose a single sentence in respect of multiple offences on the basis that the offences formed part of a course of conduct. Absent a statutory provision that provides otherwise, a sentencing judge is to impose a separate sentence, albeit with the option of concurrency, for each offence.
. . . .
The important point to emphasise is that, contrary to the Commissioner’s submissions, neither the course of conduct principle nor the totality principle, properly considered and applied, permit, let alone require, the Court to impose a single penalty in respect of multiple contraventions of a pecuniary penalty provision. . . . That is not to say that the Court can impose a single penalty in respect of each course of conduct. Likewise, there is no doubt that in an appropriate case involving multiple contraventions, the Court should, after fixing separate penalties for the contraventions, consider whether the aggregate penalty is excessive. If the aggregate is found to be excessive, the penalties should be adjusted so as to avoid that outcome. That is not to say that the Court can fix a single penalty for the multiple contraventions.
[29] Fair Work Ombudsman v Lohr [2018] FCA 5, at [33]
[30] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, at [114], [148] (Dowsett, Greenwood, and Wigney JJ)
More recently, the Full Federal Court, in Fair Work Ombudsman v Ho, described, with apparent approval, the effect of what Bromwich J held in Lohr as follows:[31]
. . . Bromwich J made clear that the course of conduct principle had no work to do where there was one decision to pay one flat rate, and that decision led to breaches of different terms of the award.
[31] Fair Work Ombudsman v Ho [2024] FCAFC 111, at [30]
In their counsel’s written submissions, the respondents submit that it is clear that all Contraventions stem from a single mistake concerning the implementation of Costing Model B. I do not read this as a submission that the fact that the Contraventions resulted from a single mistake (assuming that to be a correct characterisation of the Contraventions) should result in the application of the one transaction principle to all of the Contraventions. If that is what the respondents intend to submit, I would not accept it because it would be contrary to what Bromwich J held in Lohr.
Thus, the third step when assessing multiple contraventions of provisions of the FW Act is to provisionally assess the appropriate penalty for each contravention, including each set of contraventions which, because of s 557(1) of the FW Act, are to be treated as single contraventions.
The fourth step is to consider whether any adjustment should be made to the penalties that have been (provisionally) considered to be appropriate for the contraventions in question. That involves applying what is often referred to as the “one transaction principle”, which has been described as follows:[32]
At its heart, the one transaction principle recognises that, where there is an interrelationship between the legal and factual elements of two or more offences with which an offender has been charged, care needs to be taken so that the offender is not punished twice (or more often) for what is essentially the same criminality. The interrelationship may be legal, in the sense that it arises from the elements of the crimes. It may also be factual, because of a temporal or geographical link or the presence of other circumstances compelling the conclusion that the crimes arise out of substantially the same act, omission or occurrences.
[32] Royer v The State of Western Australia [2009] WASCA 139, at [22]
Lockhart J stated the principle in the context of the imposition of penalties for contraventions of provisions of the Trade Practices Act 1974 (Cth) in Re Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd:[33]
Guidance is given in the field of sentencing for criminal offences by the well-known principle that where several offences are heard together and arise out of the same transaction it is a sound working rule that the sentences imposed for those offences should be made concurrent; it is inappropriate to sentence consecutively when the offences were all really involved in the same episode . . .
[33] Re Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd (1980) 44 FLR 149 ,176
The Full Federal Court has confirmed the relevance of the “one transaction principle” in the assessment of multiple contraventions of a single civil remedy provision in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union:[34]
There is no doubt that, in an appropriate case involving multiple contraventions, the Court should consider whether the multiple contraventions arose from a course or separate courses of conduct. If the contraventions arose out of a course of conduct, the penalties imposed in relation to the contraventions should generally reflect that fact, otherwise there is a risk that the respondent will be doubly punished in respect of the relevant acts or omissions that make up the multiple contraventions.
[34] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, at [148] (Dowsett, Greenwood, and Wigney JJ)
There are two matters to note about the application of the “one transaction principle”. First, the principle does not relieve the Court from assessing a penalty for each contravention, even if the contravention arose out of a course of conduct.[35] Second, “even if the contraventions are properly characterised as arising from a single course of conduct, a judge is not obliged to apply the principle if the resulting penalty fails to reflect the seriousness of the contraventions”.[36]
[35] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, at [114], [148] (Dowsett, Greenwood, and Wigney JJ)
[36] Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73, at [235] (Allsop CJ, Middleton and Robertson JJ)
The fifth step consists of the application of the “totality principle”. Under that principle, a sentencing judge is required “to impose a sentence or sentences which reflect the overall criminality of the offending for which the offender has been convicted”.[37] In R v Holder Street CJ described the principle as follows:[38]
The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently a straight-forward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences.
[37] Contin v The Queen [2012] VSCA 247, at [38]
[38] R v Holder (1983) 3 NSWLR 245, at page 260
The totality principle has been held to apply to the assessment of pecuniary penalties.[39]
PECUNIARY PENALTIES IN RELATION TO CHATIME
[39] Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59, at [41]
What are the contraventions to be assessed?
There is no dispute that each of the 14 Contraventions constitutes multiple contraventions of each of the provisions of the Award and of each of the NES to which they relate; and that s 557(1) of the FW Act applies to each of the multiple contraventions with the effect that each set of multiple contraventions is to be treated as a single contravention. The FWO accepts, however, that Contraventions 1 and 2 (which relate to the contraventions of cl 17 and cl 18 of the Award) should in substance be treated as one contravention, although only after a penalty has been assessed for each Contravention.[40]
[40] Applicant’s Outline of Submissions on Penalty, [29]
Approach
Under Bromwich J’s approach in New Shanghai Charlestown, I am required to assess a penalty for each Contravention, and then consider whether any adjustments should be made to each of the penalties I assess.
Most of the factors that are relevant to assessing a penalty for each of the Contraventions apply to all Contraventions; therefore I will consider those factors in relation to all of the Contraventions. I will, however, identify the factors that are unique to each Contravention, these being the number of employees affected by the Contravention, and the amount of the underpayments.
Assessment before adjustment
Nature and extent of the contravening conduct
The nature and extent of each contravention is best illustrated by the information contained in the following table, which I have extracted from the Schedules and Annexure A of the FWO’s written submissions:[41]
[41] Applicant’s Outline of Submissions on Penalty, Annexure A - ‘Proposed penalty amounts’
# Contravention Number of employees Range of underpayments Total underpayments 1 s.45 of the FW Act - failure to pay minimum adult rate of pay pursuant to cl. 17 of the Award 104 $10.57 - $2,339.25 $38,622.55 2 s.45 of the FW Act - failure to pay junior employees minimum rate pursuant to cl. 18 of the Award 41 $23.45 - $1,495.21 $13,827.17 3 s.45 of the FW Act - failure to pay casual loading pursuant to cl. 13.2 of the Award 12 $29.16 - $584.54 $2,321.92 4 s.45 of the FW Act - failure to pay Saturday penalty rates pursuant to cl. 25.5(b) of the Award 130 $8.45 - $812.45 $26,514.94 5 s.45 of the FW Act - failure to pay Sunday penalty rates pursuant to cl. 25.5(c) of the Award 122 $31.12 - $1,407.35 $44,272.87 6 s.45 of the FW Act – failure to pay public holiday penalties pursuant to cl 30.3 of the Award 51 $118.45 - $370.12 $11,463.90 7 s.45 of the FW Act – failure to pay 9.00pm – Midnight Loading penalties pursuant to cl. 25.5(a)(i) of the Award 118 $0.19 - $173.04 $4,018.49 8 s.45 of the FW Act - failure to pay After Midnight Loading pursuant to cl. 25.5(a)(ii) of the Award 5 $1.46 - $1.54 $7.54 9 s.45 of the FW Act – failure to pay Monday to Saturday overtime rates, Sunday overtime rates, and public holidays overtime rates, pursuant to cl.26 of the Award 35 $5.08 - $1,520.28 $8,275.91 10 s.45 of the FW Act – failure to pay annual leave loading pursuant to cl. 28.3 of the Award 47 $27.41 - $422.54 $6,973.86 11 s.45 of the FW Act – failure to failing to [sic] roster employees for Minimum Engagement Hours pursuant to cl. 13.4 of the Award 10 $6.81 - $105.90 $466.19 12 s.44 of the FW Act – failure to pay annual leave entitlements pursuant to s 90(1) of the FW Act 27 $0.01 - $95.13 $650.52 13 s.44 of the FW Act – failure to pay annual leave on termination pursuant to s 90(2) of the FW Act 19 $1.21 - $95.87 $520.02 14 s.44 of the FW Act – failure to [pay] public holiday entitlements pursuant to s 116 of the FW Act 4 $48.60 - $154.58 $485.03
In their counsel’s written submissions, Chatime submits the evidence “clearly indicates that Chatime and Mr Zhao were misled as to the effect of implementing Costing Model B by Chatime’s then Chief Finance Officer, Mr Lawrence Chen”, and, for that reason, it would be “unfair to characterise the contraventions as “serious” or “substantial””.[42] I do not accept that submission. Even if the premise of the submissions is correct, that would have no bearing on whether the contravening conduct was serious or substantial. Whether contravening conduct is serious or substantial is to be assessed objectively, without reference to the reasons for which Chatime decided to embark on the contravening conduct.
[42] Outline of Submissions for the Respondents on Penalty, [10]-[11]
In any event, I do not accept the premise of the submission. First, Chatime has not called as witnesses the other persons who, on 12 September 2013, accepted Mr Chen’s recommendation to adopt Costing Model B.[43] Thus, there is no evidence on the basis of which it could be submitted that those officers of Chatime who, on 12 September 2013, joined with Mr Zhao in authorising Mr Chen to implement Costing Model B, were misled by Mr Chen into doing so. Second, the respondents have not identified any evidence that could support a finding that Mr Chen intended to mislead Mr Zhao or any other person who on behalf of Chatime had authorised Mr Chen to implement Costing Model B. At most, the evidence shows that either Mr Chen did not turn his mind to whether implementing Costing Model B would be lawful, or, to the extent he did, Mr Chen, like Mr Zhao, assumed that it would be lawful.
[43] Fair Work Ombudsman v Chatime Australia Pty Ltd (No 3) [2023] FedCFamC2G 1075, at [7(e)]
The respondents also submit that although the aggregate underpayment of $162,533.13 is significant, this “actually represents an amount of little over $1,000 per employee” and, in “this sense, the Court should not find that the contraventions fall into the category of being either “serious” or “substantial””.[44] This submission does not engage with the nature, extent, and effect of the contravening conduct. It ignores that a number of the Contraventions involved a large number of employees – 104 employees in the case of Contravention 1; 130 in the case of Contravention 4; 122 in the case of Contravention 5; and 118 in the case of Contravention 7. The respondents’ submission also ignores the range of the underpayments, and in particular the largest of the underpayments. The largest underpayments were $2,339.25 for Contravention 1, $1,495.21 for Contravention 2, $1,407.35 for Contravention 5, and $1,520.28 for Contravention 9.
[44] Outline of Submissions for the Respondents on Penalty, [11]
The Contraventions range from the trivial (Contravention 8) to varying degrees of substantiality and seriousness, both in terms of the number of employees who had been underpaid, the aggregate of amounts by which employees had been underpaid, and the individual amounts by which each employee had been underpaid. These considerations point to the assessment of a penalty on the higher end of the scale in relation to those Contraventions that involve the most number of employees, the largest aggregate of the underpayments, and the largest single underpayment; and that the penalty for each Contravention is to be assessed by reference to these matters.
Nature and extent of loss occasioned by the contravening conduct
The table in paragraph 41 of these reasons shows the aggregate amount of the underpayments, the single greatest underpayment for each Contravention, and that the amounts of loss range from the substantial to the trivial (in the case of Contravention 8) to the very substantial and significant. Relevant to assessing the extent of the loss, however, is the accepted fact that, between October 2018 and 15 March 2019, Chatime remedied the underpayments.[45] The FWO submits I ought to not give too much weight to Chatime’s having remedied the underpayments. That is so because Chatime has had the benefit of the money it had not paid its employees for some time; and Chatime commenced rectification of the underpayments only as a result of the FWO’s investigation.[46]
[45] Exhibit MC-1 (CB 1669-1706)
[46] Applicant’s Outline of Submissions on Penalty, [47]
Chatime’s having rectified the underpayments is obviously a matter that weighs in favour of assessing penalties at the lower end of the scale than would otherwise be the case had Chatime not rectified the underpayments.
Deterrence
I do not accept the FWO’s submission that the assessment of penalties should incorporate an element for specific deterrence. As the FWO acknowledges, Chatime has taken steps to reduce the risk of future contraventions. Mr Antonius, Chatime’s Chief Executive Officer, has deposed to the steps Chatime has taken to reduce the risk of future contraventions,[47] and I am satisfied that these steps are sufficient to reduce the risk of future contraventions.
[47] Affidavit of C Antonius, 8.01.2024, [29]-[35]
General deterrence, however, is another matter. On the findings I have made in the first and second reasons, the Contraventions came about through ignorance and inattention by those who managed Chatime’s business. Penalties should be set to signal to employers that they will be met with substantial penalties even if it is through ignorance and inattention that they fail to ensure that employees are paid their entitlements under a modern award or under the NES.
Contrition and co-operation
Chatime admitted substantially all of its contraventions, and the FWO accepts Chatime did so at the earliest opportunity. The FWO accepts that this is a consideration that should attract a discount of 15% to 20% on what would otherwise be an appropriate penalty. I find that a 20% discount would appropriately reflect Chatime’s timely acknowledgement of (most of) its contraventions.
Assessment
I consider that the following amounts are appropriate penalties for the Contraventions.
# Contravention Percentage of maximum Amount After 20% discount 1 s 45 of the FW Act - failure to pay minimum adult rate of pay pursuant to cl 17 of the Award 50% $27,000 $21,600 2 s 45 of the FW Act - failure to pay junior employees minimum rate pursuant to c l 18 of the Award 35% $18,900 $15,120 3 s 45 of the FW Act - failure to pay casual loading pursuant to cl 13.2 of the Award 20% $10,800 $8,640 4 s 45 of the FW Act - failure to pay Saturday penalty rates pursuant to cl 25.5(b) of the Award 40% $21,600 $17,280 5 s 45 of the FW Act - failure to pay Sunday penalty rates pursuant to cl 25.5(c) of the Award 50% $27,000 $21,600 6 s 45 of the FW Act – failure to pay public holiday penalties pursuant to cl 30.3 of the Award 30% $16,200 $12,960 7 s 45 of the FW Act – failure to pay 9.00pm – Midnight Loading penalties pursuant to cl 25.5(a)(i) of the Award 20% $10,800 $8,640 8 s 45 of the FW Act - failure to pay After Midnight Loading pursuant to cl 25.5(a)(ii) of the Award 0% $0.00 $0.00 9 s 45 of the FW Act – failure to pay overtime rates pursuant to cl 26 of the Award 20% $10,800 $8,640 10 s 45 of the FW Act – failure to pay annual leave loading pursuant to cl 28.3 of the Award 20% $10,800 $8,640 11 s 45 of the FW Act – failure to failing to [sic] roster employees for Minimum Engagement Hours pursuant to cl 13.4 of the Award 5% $2,700 $2,160 12 s 44 of the FW Act – failure to pay annual leave entitlements pursuant to s 90(1) of the FW Act 10% $5,400 $4,320 13 s 44 of the FW Act – failure to pay annual leave on termination pursuant to s 90(2) of the FW Act 10% $5,400 $4,320 14 s 44 of the FW Act – failure to pay public holiday entitlements pursuant to s 116 of the FW Act 5% $2,700 $2,160 TOTAL $170,100 $136,080 Assessment after adjustments
An adjustment should be made to reflect the FWO’s acceptance that Contraventions 1 and 2 should be treated as one contravention. Such adjustment may be made by ordering that the penalty I have assessed for Contravention 1, namely $21,600, be the penalty for Contraventions 1 and 2.
I am satisfied that it is not appropriate to make any other adjustment, either on the basis of the one transaction principle, or on the basis of the totality principle.
PECUNIARY PENALTIES IN RELATION TO MR ZHAO
The declarations I made on 31 August 2023 in relation to Mr Zhao on the basis of the second reasons provide that Mr Zhao was involved in Contraventions 3, 4, and 5. These are as follows:
# Contravention Number of employees Range of underpayments Total underpayments 3 s 45 of the FW Act - failure to pay casual loading pursuant to cl 13.2 of the Award 12 $29.16 - $584.54 $2,321.92 4 s 45 of the FW Act - failure to pay Saturday penalty rates pursuant to cl 25.5(b) of the Award 130 $8.45 - $812.45 $26,514.94 5 s 45 of the FW Act - failure to pay Sunday penalty rates pursuant to cl 25.5(c) of the Award 122 $31.12 - $1,407.35 $44,272.87
Most of the matters I have considered to be relevant to assessing the appropriate pecuniary penalties Chatime should be ordered to pay for Contraventions 3, 4, and 5 are relevant to assessing the pecuniary penalties it would be appropriate to order Mr Zhao to pay for his involvement in those Contraventions.
I am not satisfied that penalties should reflect an element of specific deterrence, given the steps Chatime, a company of which Mr Zhao is a director, has implemented to reduce the risk of future contraventions. Considerations of general deterrence, however, apply equally to Mr Zhao as a director of Chatime. Mr Zhao’s involvement in Contraventions 3, 4, and 5 came about through ignorance and inattention; and penalties should be set to signal to persons who manage companies that they will be met with substantial penalties if, through their neglect, they permit companies they manage to contravene terms of an award or any other industrial laws or instruments that might apply to employees of the companies they manage.
Unlike Chatime, Mr Zhao did not admit his involvement in any of the Contraventions; and for that reason, it would not be open to extend to him any discount for having admitted his involvement in any of the Contraventions.
I am satisfied that the amounts of the pecuniary penalties Mr Zhao should be ordered to pay for his involvement in Contraventions 3, 4, 5 are as follows:
# Contravention Percentage of maximum Amount 3 s 45 of the FW Act - failure to pay casual loading pursuant to cl. 13.2 of the Award 20% $2,160 4 s 45 of the FW Act - failure to pay Saturday penalty rates pursuant to cl 25.5(b) of the Award 40% $4,320 5 s 45 of the FW Act - failure to pay Sunday penalty rates pursuant to cl 25.5(c) of the Award 50% $5,400 TOTAL $11,880 DISPOSITION
I propose to order that Chatime and Mr Zhao pay the pecuniary penalties I have assessed for their contraventions of s 45 and s 44 of the FW Act; and I will order that they pay the pecuniary penalties to the Commonwealth within 28 days after the day on which I pronounce orders.
I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Associate:
Dated: 22 November 2024
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