Fair Work Ombudsman v Domain Botanical Business Pty Ltd (No 2)

[2021] FCCA 1107

FEDERAL CIRCUIT COURT OF AUSTRALIA

Fair Work Ombudsman v Domain Botanical Business Pty Ltd (No 2) [2021] FCCA 1107

File number(s):	MLG 2234 of 2020
Judgment of:	JUDGE BURCHARDT
Date of judgment:	26 May 2021
Catchwords:	INDUSTRIAL LAW – ruling on quantum of civil penalties and declarations – totality principle applied.
Legislation:	Fair Work Act 2009 (Cth) ss 44, 45, 545, 546, 550, 90(2)
Number of paragraphs:	10
Date of hearing:	12 May 2021
Place:	Dandenong
Counsel for the Applicant:	Mr Tracey
Solicitor for the Applicant:	Fair Work Ombudsman
Counsel for the Respondents:	Mr Tindley
Solicitor for the Respondents:	FCB Lawyers and Consultants

ORDERS

MLG 2234 of 2020

BETWEEN:

FAIR WORK OMBUDSMAN

Applicant

AND:

DOMAIN BOTANICAL BUSINESS PTY LTD

First Respondent

JAMES MCBRIDE

Second Respondent

ORDER MADE BY:	JUDGE BURCHARDT
DATE OF ORDER:	26 MAY 2021

THE COURT DECLARES THAT:

(1)the First Respondent contravened the following civil remedy provisions:

(a)section 45 of the Fair Work Act 2009 (Cth) (“FW Act”), by failing to keep records of the start and finishing times of its full time salaried employees other than Amelia Devi and Heeyeun Park, in contravention of clause 28.2 of the Restaurant Industry Award 2010 (Award);

(b)section 45 of the FW Act, by failing to carry out reconciliations with respect to its full time salaried employees other than Daniel Farrelly and Ciaran Tedford, in contravention of clause 28.2 of the Award;

(c)section 45 of the FW Act, by failing to pay 18 employees the applicable minimum rates for each ordinary hour they worked, in contravention of clause 20.1 of the Award;

(d)section 45 of the FW Act, by failing to pay 34 employees casual loading for each ordinary hour they worked, in contravention of clause 13.1 of the Award;

(e)section 45 of the FW Act, by failing to pay 30 employees Saturday penalty rates for each ordinary hour they worked on a Saturday, in contravention of clause 34.1 of the Award;

(f)section 45 of the FW Act, by failing to pay 30 employees Sunday penalty rates for each ordinary hour they worked on a Sunday, in contravention of clause 34.1 of the Award;

(g)section 45 of the FW Act, by failing to pay 26 employees public holiday penalty rates for each ordinary hour they worked on a public holiday, in contravention of clause 34.1 of the Award;

(h)section 45 of the FW Act, by failing to pay 26 employees evening penalty for each applicable hour worked between 10.00pm and midnight on a weekday, in contravention of clause 34.2(a)(i) of the Award;

(i)section 45 of the FW Act, by failing to pay 11 employees morning penalty for each applicable hour worked between midnight and 6.00am on a weekday, in contravention of clause 34.2(a)(ii) of the Award;

(j)section 45 of the FW Act, by failing to pay Harrison Peasnell annual leave loading during a period of annual leave taken by him, in contravention of clause 35.2(b) of the Award;

(k)section 44(1) of the FW Act, by failing to pay Cicila Hidajat, Monish Kumar and Heeyeun Park their annual leave entitlements upon termination of their employment as required by clause 35.2 of the Award, in contravention of section 90(2) of the Fair Work Act 2009 (Cth) (FW Act);

(l)section 45 of the FW Act, by failing to pay overtime rates to 24 casual employees for each hour in excess of ordinary hours worked, in contravention of clause 33.1(c) of the Award;

(m)section 45 of the FW Act, by failing to pay overtime rates to full time employees Harrison Peasnell and Heeyeun Park for each hour in excess of ordinary hours worked, in contravention of clause 33.1(a) of the Award;

(n)section 45 of the FW Act, by failing to provide its employees with an unpaid meal break of no less than 30 minutes when they were required to work for five or more hours in a day, in contravention of clause 32.1 of the Award; and

(o)section 535(1) of the FW Act, by falling to make and keep records as required by regulations 3.33(1)(b), 3.33(2) and 3.34 of the Fair Work Regulations 2009 (Cth).

(2)the Second Respondent was involved, pursuant to section 550 of the FW Act, in each of the contraventions of the First Respondent as set out in paragraph 1 above.

THE COURT ORDERS THAT:

(3)The First Respondent pay penalties of $170,100 pursuant to section 546(1) of the FW Act for the contraventions of the FW Act as declared at paragraph 1 above;

(4)The Second Respondent pay penalties of $34,020 pursuant to section 546(1) of the FW Act for his involvement in the First Respondent’s contraventions of the FW Act as declared a paragraph 2 above;

(5)Pursuant to section 546(3)(a) of the FW Act that all penalties imposed on the First Respondent and Second Respondent be paid to the Commonwealth within 28 days of the date of the Court’s orders;

(6)Pursuant to section 545(1) of the FW Act that the First Respondent will, within 30 days of the date of this order, display a notice in the Business that can be easily viewed by all employees (Workplace Notice) in the following terms:

(a)the Workplace Notice must contain:

(i)information on the minimum rate of pay, penalty rates, meal breaks and overtime entitlements under the Award;

(ii)information on annualised salary arrangement obligations contained in the Award;

(iii)information about how employees can access the Fair Work Ombudsman’s “Record My Hours” smart phone application; and information on how to contact the Fair Work Ombudsman;

(b)the Workplace Notice must be in a form approved by the Applicant at least 7 days prior to the First Respondent displaying the Workplace Notice;

(c)the First Respondent will provide proof of the display of the Workplace Notice to the Applicant within 14 days of the Workplace Notice being approved by the Applicant; and

(d)the Workplace Notice must be displayed continuously for a period of one year;

the Applicant have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.

REASONS FOR JUDGMENT

JUDGE BURCHARDT:

1. On 12 May 2021, I handed down reasons for judgment in this matter.  I by and large disposed of the factual disputation between the parties and expressed conclusions about the matters in the issue.  For reasons then given, I did not, however, find it possible to understand the methodology propounded by the applicant as to how penalties should be assessed.  I further noted that the parties had agreed that there be declarations, but that I had not been addressed as to whether declarations were appropriate.  Accordingly, I heard further argument on the same day as to both these matters. 

2. Counsel for the applicant clarified the annexure B which was the working document provided to the Court.  He confirmed that the proposed range of penalties, after a 20 per cent discount, reflected what was submitted to be an appropriate discount to reflect the respondent’s cooperation and corrective action.  These were the figures that produced a combined total proposed penalty range of $226,800 to $297,360 in respect of the first respondent, and $45,360 to $59,472 for the second respondent.  It was explained that additionally it was sought that there be a 25 per cent additional reduction under the totality principle, producing a range of $170,100 to $223,000 for the first respondent, and $34,020 to $44,640 to the second respondent. 

3. As I indicated in my first judgment, the respondents submitted that the discount for cooperation, contrition and corrective action should be in the amount of 50 per cent. 

4. As I also indicated in my first judgment, the percentages of penalty set out in the applicant’s annexure B seemed to me to be appropriately assessed within the applicable scale.  Having turned my mind to the matter further, I have now confirmed that is correct.  Accordingly, the first issue that remains for determination is the extent of the discount which should be given under this heading to the respondents. 

5. It is not necessary to repeat the matters I set out in my first judgment.  I refer to them by way of reference but will not repeat them.  In my view, the discount contended for by the applicant is a generous one in all the relevant circumstances.  The cooperation by the respondents has been of assistance, but the applicant was put to the trouble of a number of notices to produce and the like in order to obtain the relevant information.  Contrition is a matter which I have, effectively, ruled against the primary submissions made by the respondents. Mr McBride’s endeavours to shift the blame for his conduct onto his agent was unsuccessful.  I will repeat, however, there is no question of increasing the penalty because of that.  The respondent has, indeed, taken corrective action, but took some time to do so, and has not, as I have found, taken any noticeable steps to take the further corrective action that is conceded ought be taken.  I think the 20 per cent discount contended for by the applicant is appropriate. 

6. The next issue is where to place the respondents in the range suggested by the applicant, given that I have accepted the applicant’s 20% discount and also the ranges suggested in each contravention. One has to look at the figures to be imposed, before applying the totality principle.  I have turned my mind to this question, and in my view, penalties should be set at the bottom range of that suggested by the applicant.  The net ultimate effect is to provide penalties before the totality principle of $226,800 for the first respondent, and $45,360 for the second respondent. 

7. As I have indicated, in my view a proper balancing of all the relevant considerations is to place all of these figures at the bottom end of the range contended for by the applicant.  It might be thought that some of these matters are more serious than others.  The timekeeping contraventions, after all, strike at a matter central to the system of industrial regulation.  Equally, however, the failure to pay employees their wages and to give them their benefits under the award is also, in my view, of commensurate seriousness in the particular circumstances of this case, bearing in mind the nature of the industry and the disadvantaged nature of the employees.  Against this, however, this is a first contravention on the part of the respondents, and balancing all these matters up together, in my view suggests that the lower end of the range will still provide a sufficient sting, to use a phrase adopted by the High Court, to ensure further compliance by the respondents and agents, this, of course, being the primary objective of the imposition of such penalties. 

8. That brings us to the question of the totality principle.  As already indicated in the earlier judgment, this is a matter of taking a step back to look at the penalties overall.  The applicant seeks a further discount of 25 per cent under this heading, and the respondents written submissions and oral submissions expressly agree with that assessment.  I will, therefore, apply 25 per cent discount.

9. Having said that, the application of the agreed 25 per cent reduction produces penalties for the first respondent of $170,100 and for the second respondent of $34,020.  In my view, these are an appropriately significant set of penalties and one that reflects the competing considerations that inform assessment of penalty. 

10. The final matter is the question of declarations.  Counsel for the applicant submitted that there was a proper purpose for declarations in this instance, most particularly because of the nature of the industry and the need to make clear the Court’s disapproval with the conduct found to have occurred.  I note that the declarations are, in any event, agreed between the parties.  In the circumstances, it seems to me that there is sufficient utility in the declarations sought for it to be appropriate for the Court to make them.  There will be orders accordingly. 

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Burchardt.

Associate:

Dated:       26 May 2021