Fair Work Ombudsman v Crystal Carwash Café Pty Ltd (No 2)

The Fair Work Ombudsman (FWO) brought proceedings against Crystal Carwash Café Pty Ltd and related entities (collectively, the respondents) for underpayments of wages to carwash employees. The dispute centered on the respondents' use of purported labour hire arrangements to evade their obligations under the Vehicle Modern Award. The agreed facts revealed that the respondents established labour hire companies to employ carwash staff, paying them rates below the minimum required by the Award. The respondents claimed that these companies were the true employers, but later admitted that they were the actual employers of the staff. The primary issue before the court was the determination of an appropriate penalty for the respondents' contraventions of the Fair Work Act 2009.

The court considered several factors in determining the penalty, including the respondents' conduct in setting up the labour hire companies, which was deemed to be without legitimate purpose and thus an aggravating factor. The respondents' cooperation in the proceedings, while helpful in avoiding a trial, was not considered a mitigating factor as it was self-serving and not driven by a genuine desire to assist the administration of justice. Additionally, the deliberate nature of the underpayments, which involved setting flat rate wages regardless of Award entitlements, further aggravated the seriousness of the contraventions. The involvement of senior management, with Mr Sahade and Mr Khouri both having responsibility for setting employment terms, also contributed to the gravity of the situation.

Ultimately, the court found that the respondents' actions warranted a substantial penalty. The respondents were ordered to pay a total penalty of $1,157,000, reflecting the seriousness of the contraventions and the need for deterrence and retribution. This decision underscores the importance of compliance with employment laws and the consequences of attempts to circumvent them through illegitimate business practices.