Fair Work Ombudsman v EA Fuller & Sons Pty Ltd & Anor

[2013] FCCA 5

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v EA FULLER & SONS PTY LTD & ANOR [2013] FCCA 5

Catchwords:
INDUSTRIAL LAW – Imposition of penalties for breaches of the Fair Work Act 2009 (Cth) and the Workplace Relations Act 1996 (Cth) – sham contracting – failure to pay award entitlements.

Legislation:
Annual Holidays Act 1944 (Cth)
Disability Discrimination Act 1992 (Cth)
Fair Work Act 2009 (Cth), ss.12, 45, 323,535, 539, 545, 546, 550, 557
Fair Work Regulations 2009 (Cth)
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)
Industrial Relations Act 1996 (NSW)
Sex Discrimination Act 1984 (Cth)
Workplace Relations Act 1996 (Cth), ss.4, 182, 185, 718, 719, 728, 841, 846, 900,
Workplace Relations Regulations 2006 (Cth)

Cases cited:
 Australian Building and Construction Commissioner v Inner Strength Steel Fixing Pty Ltd [2012] FCA 499
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Blandy v Coverdale NT Pty Ltd ACN 102 611 423 [2008] FCA 1533
Clothing and Allied Trades Union v Snugglerite Industries Pty Ltd (1990) 34 IR 124
Darlaston v Risetop Construction Pty Ltd [2011] FMCA 220
David Armstrong v VK Holdings Pty Limited (unreported, Chief Industrial Magistrates Court, Sydney, 28 November 1997)
Fair Work Ombudsman v Contracting Plus Pty Ltd [2011] FMCA 191
Fair Work Ombudsman v MMP Management Services Pty Ltd [2012] FMCA 207
Fair Work Ombudsman v Ramsay Food Processing Pty Ltd (No. 2) [2012] FCA 408
Fair Work Ombudsman v Top Value International Pty Ltd [2013] FMCA 41
Gibbs v Mayor, Councillors and Citizens of City of Altona (1992) 37 FCR 216
Kelly v Fitzpatrick (2007) 166 IR 14
McIver v Healey [2008] FCA 425; at [56]
Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7
Mayberry v Kijani Investments Pty Ltd as trustee for The Dawe Investments Trust Subway Wallsend trading as Subway [2011] FCA 1238

Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70
Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357
Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543

Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241
Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550
Workplace Ombudsman v Saya Cleaning Pty Ltd [2009] FMCA 38

Workplace Ombudsman v Securit-E Holdings Pty Ltd (In Liquidation) & Ors [2009] FMCA 700

First Applicant: FAIR WORK OMBUDSMAN

First Respondent:

EA FULLER & SONS PTY LTD

ACN 003 551 237

Second Respondent: ERIC ANDREW FULLER

File Number: SYG 1228 of 2012

Judgment of: Judge Driver

Hearing date: 25 February 2013

Delivered at: Sydney

Delivered on: 19 April 2013

REPRESENTATION

Solicitors for the Fair Work Ombudsman: Ms J Dennis
Fair Work Ombudsman

Counsel for the Respondents: Mr M Easton

Solicitors for the Respondents: Fishburn Watson O’Brien

ORDERS

THE COURT DECLARES THAT

(1)During the period 1 March 2007 to 30 June 2009, the First Respondent, E.A. Fuller & Sons Pty Ltd (ACN 003 551 237), contravened s.900(1) of the Workplace Relations Act 1996 (Cth) (Workplace Relations Act) by misrepresenting to Jane Sandra Higham-Ross (Ms Higham-Ross) that the contract of employment under which Ms Higham-Ross performed work for the company was a contract for services, where Ms Higham-Ross performed work as an independent contractor.

(2)During the period 1 July 2009 to 11 August 2010, the First Respondent contravened s.357(1) of the Fair Work Act 2009 (Cth) (Fair Work Act) by misrepresenting to Ms Higham-Ross that the contract of employment under which Ms Higham-Ross performed work for the First Respondent was a contract for services, where Ms Higham-Ross performed work as an independent contractor.

(3)During the period 5 October 2008 to 30 June 2009, the First Respondent contravened s.900(1) of the Workplace Relations Act by misrepresenting to Julian Solomon (Mr Solomon) that the contract of employment under which Mr Solomon performed work for the First Respondent was a contract for services, where Mr Solomon performed work as an independent contractor.

(4)During the period 11 July 2009 to 7 February 2010, the First Respondent contravened s.357(1) of the Fair Work Act misrepresenting to Mr Solomon that the contract of employment under which Mr Solomon performed work for the First Respondent was a contract for services, where Mr Solomon performed work as an independent contractor.

(5)The First Respondent contravened s.182(1) of the Workplace Relations Act (as it continued to apply pursuant to item 5 of Schedule 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act)) by failing to pay Mr Solomon and Mohee Park (Ms Park) their basic periodic rate of pay under the Australian Pay and Classification Scale derived from the New South Wales Shop Employees (State) Award (Shop Employees Pay Scale), during the following periods:

(a)5 October 2008 to 30 June 2009, in respect of Mr Solomon; and

(b)26 October 2009 to 31 December 2009, in respect of Ms Park;

(6)During the period 1 January 2010 to 16 April 2010, the First Respondent contravened s.45 of the Fair Work Act by failing to pay Ms Park the appropriate transitional minimum wage under clause A.2.3 of Schedule A of the General Retail Industry Award 2010 (Modern Award).

(7)The First Respondent contravened s.185(2) of the Workplace Relations Act (as it continued to apply pursuant to item 5 of Schedule 16 of the Transitional Act) by failing to pay Ms Higham-Ross, Mr Solomon, Megan Ellanda Larson (Ms Larson) and Ms Park their guaranteed casual loadings under the Shop Employees Pay Scale, during the following periods:

(a)31 December 2006 to 31 December 2009, in respect of Ms Higham-Ross;

(b)5 October 2008 to 30 June 2009 and 11 July 2009 to 31 December 2009, in respect of Mr Solomon;

(c)8 May 2009 to 4 June 2009, in respect of Ms Larson; and

(d)26 October 2009 to 31 December 2009, in respect of Ms Park.

(8)The First Respondent contravened s.45 of the Fair Work Act by failing to pay Ms Higham-Ross, Mr Solomon, Ms Park and Rosanna Tess Dutson (Ms Dutson) the appropriate transitional casual loading under clauses A.5.2 and A.5.4 of Schedule A of the Modern Award, during the following periods:

(a)1 January 2010 to 11 August 2010, in respect of Ms Higham-Ross;

(b)1 January 2010 to 7 February 2010, in respect of Mr Solomon;

(c)1 January 2010 to 16 April 2010, in respect of Ms Park; and

(d)12 January 2010 to 27 May 2010, in respect of Ms Dutson.

(9)The First Respondent contravened s.718 of the Workplace Relations Act, as affected by sub-item 43(1) of Schedule 8 of the Workplace Relations Act (as it continued to apply pursuant to sub-item 2(1) of Schedule 16 of the Transitional Act) by failing to pay Ms Higham-Ross, Ms Larson and Ms Park their minimum fixed Saturday loadings under subclause 14(a)(iii) and item 5 of Table 2 of the Notional Agreement Preserving State Awards derived from the Shop Employees (State) Award (Shop Employees NAPSA), during the following periods:

(a)31 December 2006 to 31 December 2009, in respect of Ms Higham-Ross;

(b)8 May 2009 to 4 June 2009, in respect of Ms Larson; and

(c)26 October 2009 to 31 December 2009, in respect of Ms Park.

(10)The First Respondent contravened s.45 of the Fair Work Act by failing to pay Ms Park and Ms Dutson the appropriate transitional fixed Saturday loadings under clause A.5.2 of Schedule A of the Modern Award, during the following periods:

(a)1 January 2010 to 16 April 2010, in respect of Ms Park; and

(b)12 January 2010 to 27 May 2010, in respect of Ms Dutson.

(11)The First Respondent contravened s.718 of the Workplace Relations Act, as affected by sub-item 43(1) of Schedule 8 of the Workplace Relations Act (as it continued to apply pursuant to sub-item 2(1) of Schedule 16 of the Transitional Act) by failing to pay Ms Higham-Ross and Ms Park their Sunday penalty rates under subclause 14(b)(i) of the Shop Employees NAPSA, during the following periods:

(a)31 December 2006 to 31 December 2009, in respect of Ms Higham-Ross; and

(b)26 October 2009 to 31 December 2009, in respect of Ms Park.

(12)The First Respondent contravened s.45 of the Fair Work Act by failing to pay Ms Higham-Ross, Ms Park and Ms Dutson the appropriate transitional Sunday penalty rates under clauses A.5.2 and A.5.4 of Schedule A of the Modern Award, during the following periods:

(a)1 January 2010 to 11 August 2010, in respect of Ms Higham-Ross;

(b)1 January 2010 to 16 April 2010, in respect of Ms Park; and

(c)12 January 2010 to 27 May 2010, in respect of Ms Dutson.

(13)The First Respondent contravened s.718 of the Workplace Relations Act, as affected by sub-item 43(1) of Schedule 8 of the Workplace Relations Act (as it continued to apply pursuant to sub-item 2(1) of Schedule 16 of the Transitional Act) by failing to pay Ms Higham-Ross and Ms Park their overtime rates under clause 15 of the Shop Employees NAPSA, during the following periods:

(a)31 December 2006 to 31 December 2009, in respect of Ms Higham-Ross; and

(b)26 October 2009 to 31 December 2009, in respect of Ms Park.

(14)The First Respondent contravened s.718 of the Workplace Relations Act, as affected by sub-item 43(1) of Schedule 8 of the Workplace Relations Act (as it continued to apply pursuant to sub-item 2(1) of Schedule 16 of the Transitional Act) by failing to pay Ms Higham-Ross and Ms Park their public holiday penalty rates under clause 17 of the Shop Employees NAPSA, during the following periods:

(a)31 December 2006 to 31 December 2009, in respect of Ms Higham-Ross; and

(b)26 October 2009 to 31 December 2009, in respect of Ms Park.

(15)The First Respondent contravened s.45 of the Fair Work Act by failing to pay Ms Park and Ms Dutson the appropriate transitional public holiday penalty rates under clause A.5.2 of Schedule A of the Modern Award, during the following periods:

(a)1 January 2010 to 16 April 2010, in respect of Ms Park; and

(b)12 January 2010 to 27 May 2010, in respect of Ms Dutson.

(16)The First Respondent contravened s.718 of the Workplace Relations Act, as affected by sub-item 43(1) of Schedule 8 of the Workplace Relations Act (as it continued to apply pursuant to sub-item 2(1) of Schedule 16 of the Transitional Act) by failing to pay Ms Higham-Ross, Mr Solomon, Ms Larson and Ms Park their annual holiday loadings under subclause 4(3)(b)(ii) of the Notional Agreement Preserving State Awards derived from the Annual Holidays Act 1944 (NSW), during the following periods:

(a)31 December 2006 to 31 December 2009, in respect of Ms Higham-Ross;

(b)5 October 2008 to 30 June 2009 and 11 July 2009 to 31 December 2009, in respect of Mr Solomon;

(c)8 May 2009 to 4 June 2009, in respect of Ms Larson; and

(d)26 October 2009 to 31 December 2009, in respect of Ms Park.

(17)The First Respondent contravened s.45 of the Fair Work Act by failing to pay Ms Higham-Ross, Mr Solomon, Ms Park and Ms Dutson the appropriate transitional annual holiday loadings under clauses A.6.2 and A.6.4 of Schedule A of the Modern Award, in the following periods:

(a)1 January 2010 to 11 August 2010, in respect of Ms Higham-Ross;

(b)1 January 2010 to 7 February 2010, in respect of Mr Solomon;

(c)1 January 2010 to 16 April 2010, in respect of Ms Park; and

(d)12 January 2010 to 27 May 2010, in respect of Ms Dutson.

(18)In the period 31 December 2006 to 30 June 2009, the First Respondent contravened sub-regulation 19.9(1) of the Workplace Relations Regulations 2006 (Cth) (Workplace Regulations) by failing to keep employee records stating the number of overtime hours worked by Ms Higham-Ross each day, or alternatively, when Ms Higham-Ross started and ceased working overtime hours.

(19)In the period 1 July 2009 to 31 December 2009, the First Respondent contravened s.535(1) of the Fair Work Act by failing to keep employee records stating the number of overtime hours worked by Ms Higham-Ross each day, or alternatively, when Ms Higham-Ross started and ceased working overtime hours, as required by regulation 3.34 of the Fair Work Regulations 2009 (Cth) (Fair Work Regulations).

(20)In the period 31 December 2006 to 30 June 2009, the First Respondent contravened sub-regulation 19.11 of the Workplace Relations Regulations by failing to keep employee records setting out details of any incentive-based payment, bonus, loading, penalty rate or other monetary allowance or separately identifiable entitlement that Ms Higham-Ross, Mr Solomon, Ms Park and Ms Larson were entitled to.

(21)In the period 1 July 2009 to 11 August 2010, the First Respondent contravened s.535(1) of the Fair Work Act by failing to keep employee records setting out details of any incentive-based payment, bonus, loading, penalty rate or other monetary allowance or separately identifiable entitlement that Ms Higham-Ross, Mr Solomon, Ms Park and Ms Dutson were entitled to, as required by sub-regulation 3.33(3) of the Fair Work Regulations.

(22)The Second Respondent, Eric Andrew Fuller, was involved in each of the contraventions committed by the First Respondent (within the meaning of s.728(1) of the Workplace Relations Act and s.550(1) of the Fair Work Act) as set out in orders (1) to (21) above.

THE COURT ORDERS THAT:

(1)The First Respondent is to pay penalties pursuant to s.719(1) of the Workplace Relations Act, regulation 14.4 of the Workplace Relations Regulations and s.546(1) of the Fair Work Act to a total amount of $139,040, in respect of the First Respondent’s contraventions listed in declarations (1) to (8) above and declarations (11) to (21) above, which is made up of:

(a)a penalty of $18,480 in respect of the contraventions listed in declarations (1) and (2) above;

(b)a penalty of $18,480 in respect of the contraventions listed in declarations (3) and (4) above;

(c)a penalty of $9,240 in respect of the contraventions listed in declarations (5) and (6) above;

(d)a penalty of $17,160 in respect of the contraventions listed in declarations (7) and (8) above;

(e)a penalty of $17,160 in respect of the contraventions listed in declarations (11) and (12) above;

(f)a penalty of $17,160 in respect of the contraventions listed in declarations (13) above;

(g)a penalty of $17,160 in respect of the contraventions listed in declarations (14) and (15) above;

(h)a penalty of $17,160 in respect of the contraventions listed in declarations (16) and (17) above; and

(i)a penalty of $7,040 in respect of the contraventions listed in declarations (18), (19), (20), and (21) above.

(2)The Second Respondent is to pay penalties pursuant to s.719(1) of the Workplace Relations Act, regulation 14.4 of the Workplace Relations Regulations and s.546(1) of the Fair Work Act to a total amount of $27,808, in respect of the Second Respondent’s involvement in the contraventions listed in declarations (1) to (8) above and declarations (11) to (21) above, which is made up of:

(a)a penalty of $3,696 in respect of the Second Respondent’s involvement in the contraventions listed in declarations (1) and (2) above;

(b)a penalty of $3,696 in respect of the Second Respondent’s involvement in the contraventions listed in declarations (3) and (4) above;

(c)a penalty of $1,848 in respect of the Second Respondent’s involvement in the contraventions listed in declarations (5) and (6) above;

(d)a penalty of $3,432 in respect of the Second Respondent’s involvement in the contraventions listed in declarations (7) and (8) above;

(e)a penalty of $3,432 in respect of the Second Respondent’s involvement in the contraventions listed in declarations (11) and (12) above;

(f)a penalty of $3,432 in respect of the Second Respondent’s involvement in the contraventions listed in declarations (13) above;

(g)a penalty of $3,432 in respect of the Second Respondent’s involvement in the contraventions listed in declarations (14) and (15) above;

(h)a penalty of $3,432 in respect of the Second Respondent’s involvement in the contraventions listed in declarations (16) and (17) above; and

(i)a penalty of $1,408 in respect of the Second Respondent’s involvement in the contraventions listed in declarations (18), (19), (20), and (21) above.

(3)The First and Second Respondents are to pay the penalty amounts set out in orders 1 and 2 respectively to the Consolidated Revenue Fund of the Commonwealth, pursuant to s.841 of the Workplace Relations Act and s.546(3)(a) of the Fair Work Act.

(4)The payments ordered in orders 1 and 2 are to be paid within 28 days of these orders coming into effect.

(5)Under s.719(6) of the Workplace Relations Act and s.545(2)(b) of the Fair Work Act, the First Respondent is to pay to Mr Solomon the amount of $47.16 which is outstanding to him as a result of the First Respondent’s contraventions of the Workplace Relations Act and Fair Work Act within 14 days of these orders coming into effect.

(i)In the event that the First Respondent is unable to comply with order 5 due to being unable to locate Mr Soloman, the First Respondent is to pay the amount to the Consolidated Revenue Fund of the Commonwealth pursuant to s.841 of the Workplace Relations Act and s.546(3)(a) of the Fair Work Act within 28 days of these orders coming into effect.

FEDERAL CIRCUIT
COURT OF AUSTRALIA
AT SYDNEY

SYG 1228 of 2012

FAIR WORK OMBUDSMAN

Applicant

And

EA FULLER & SONS PTY LTD ACN 003 551 237

First Respondent

ERIC ANDREW FULLER

Second Respondent

REASONS FOR JUDGMENT

Introduction and background

1.The Fair Work Ombudsman seeks the imposition of pecuniary penalties against Mr Fuller and his company for sham contracting and underpayment of his employees in breach of the Fair Work Act 2009 (Cth) (Fair Work Act) and the Workplace Relations Act 1996 (Cth) (Workplace Relations Act).

2.There is no dispute as to liability.  The parties are in dispute over what is an appropriate penalty.

3.The parties have agreed upon the statement of facts (ASOF) which is annexed to this judgment.[1]

[1] Annexure A.

4.By way of a Defence filed 10 August 2012 (Defence) and the ASOF filed 21 December 2012,[2] the Respondents have admitted liability for contraventions of the Workplace Relations Act, the Workplace Relations Regulations 2006 (Cth) (Workplace Relations Regulations), the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act) and the Fair Work Act. The Respondents are:

a)E.A. Fuller & Sons Pty Ltd, the First Respondent (company) – which carried on a business selling fruit and vegetables, as well as petrol from two bowsers, in Bellingen, New South Wales; and

b)Eric Andrew Fuller, the Second Respondent (Mr Fuller) – a director, shareholder and company secretary of the company, who was principally responsible for the overall direction of the company’s operations and the terms and conditions of the company’s employees.

[2] ASOF, [104]-[105].

5.These proceedings relate to five employees of the company (Shop Workers) who were employed for varying periods between December 2006 and January 2011 as shop assistants in the company’s store.  Their employment was governed by:

a)the Australian Pay and Classification Scale derived from the Shop Employees (State) Award [AN120499] (Shop Employees Pay Scale) (in the period from 31 December 2006 to 31 December 2009);

b)the Notional Agreement Preserving State Awards derived from the Shop Employees (State) Award [AN120499] (Shop Employees NAPSA) (in the period from 31 December 2006 to 31 December 2009);

c)the Notional Agreement Preserving State Awards derived from the Annual Holidays Act 1944 (NSW) (Annual Holidays NAPSA) (in the period from 31 December 2006 to 31 December 2009); and

d)the General Retail Industry Award 2010 [MA000004] (Modern Award) (in the period from 1 January 2010 to 11 August 2010).

6.The company, through Mr Fuller, engaged in sham contracting in relation to two of the employees, Jane Higham-Ross (Ms Higham-Ross) and Julian Solomon (Mr Solomon). The company disguised the true nature of the employment relationship between the company and Ms Higham-Ross and Mr Solomon respectively, by misrepresenting to them that they were independent contractors.

7.In addition to the sham contracting, the company chose to pay all five Shop Workers (that is, Ms Higham-Ross and Mr Solomon, and three additional junior employees, Megan Larson (Ms Larson), Mohee Park (Ms Park) (who was an overseas worker) and Rosanna Dutson (Ms Dutson) flat rates of pay for all periods of work which were decided upon by Mr Fuller. In the case of the first of Mr Solomon’s two periods of employment, and in the case of Ms Park’s entire period of employment, the rates of pay were below the minimum wages required by the Shop Employees NAPSA and Modern Award (up to $8 below the minimum wage in the case of Ms Park). In the case of all Shop Workers, the flat rates of pay had the effect that the Shop Workers were denied their entitlements to a number of loadings and penalty rates which deprived them of a significant amount of income.

8.The company also failed to keep appropriate pay records in respect of overtime worked by Ms Higham-Ross and entitlements to penalties and loadings in respect of all Shop Workers. In the case of Mr Solomon, this failure meant that the Fair Work Ombudsman was not able to determine the full extent of any underpayment as it was not able to determine the exact hours and days on which Mr Solomon worked.

9.On 6 May 2010, the Fair Work Ombudsman commenced an investigation into the Respondents after receiving complaints from the Shop Workers regarding underpayment of wages and entitlements. The investigation focused on the period 31 December 2006 to 11 August 2010 (Audit Period).

10.The investigation revealed various contraventions of Australian workplace laws by the company.

11.The Fair Work Ombudsman claims that at all times, Mr Fuller had the requisite knowledge that Ms Higham-Ross and Mr Solomon were in fact employees, that the Shop Workers were paid flat rates of pay that were not in accordance with Australian workplace laws, and that the company did not keep appropriate records.

12.The company has admitted to contraventions of the Workplace Relations Act, Transitional Act, Workplace Relations Regulations and Fair Work Act. Mr Fuller has admitted to knowing involvement in the above contraventions and, pursuant to s.728 of the Workplace Relations Act and s.550 of the Fair Work Act, Mr Fuller is treated as having also contravened those provisions.

13.The Fair Work Ombudsman is seeking significant penalties against the Respondents. The Fair Work Ombudsman submits that these penalties are appropriate because of the following factors:

a)the high amount of the underpayment, especially in relation to Ms Higham-Ross;

b)the serious nature of sham contracting contraventions;

c)the need for specific deterrence in this matter;

d)the need for general deterrence in this matter, given the nature of the retail industry and the desire to send a message to the industry that contraventions of the kind admitted by the Respondents are not acceptable; and

e)in relation to record-keeping contraventions, the fact that the company had received a prior letter of caution from the New South Wales Office of Industrial Relations.

14.The Respondents point to what they say are extenuating circumstances relating to Mr Fuller, the business, local employment conditions and the circumstances of several of the Shop Workers.

The present application

Applicant’s documents

15.The Fair Work Ombudsman relies upon:

a)its application dated 5 June 2012;

b)its Statement of Claim dated 5 June 2012;

c)the ASOF;

d)the affidavit of Stephen Anthony Wade affirmed 8 February 2013 (Wade Affidavit);

e)the affidavit of Jason James Rhodes sworn 12 February 2013 (Rhodes Affidavit); and

f)the affidavit of Jane Sandra Higham-Ross sworn 14 February 2013 (Higham-Ross Affidavit).

Respondents’ documents

16.The Respondents rely upon:

a)their Defence;

b)the affidavit of Eric Andrew Fuller (with parts deleted) affirmed 1 February 2013 (the Fuller Affidavit); and

c)the ASOF.

17.The parties have dealt with issues raised in the Fuller Affidavit in their submissions relating to penalty.

Contraventions

18.The relevant contraventions as admitted by the Respondents in these proceedings, and the Court’s power to impose a penalty in respect of those contraventions, are set out at Annexure B.

19.In light of the admissions made by the Respondents as well as the facts and circumstances outlined in the ASOF, the Fair Work Ombudsman seeks particular penalties to be imposed on the Respondents.

Maximum Penalties

20.The maximum penalties that may be imposed by this Court under the Workplace Relations Act, Workplace Relations Regulations and Fair Work Act are as follows:

Legislation	Maximum penalty per contravention for an individual[3]	Maximum penalty per contravention for a body corporate[4]
Workplace Relations Act[5]	60 penalty units ($6,600)	300 penalty units ($33,000)
Workplace Relations Regulations[6]	10 penalty units ($1,100)	50 penalty units ($5,500)
Fair Work Act (ss.45 and 357(1)) [7]	60 penalty units ($6,600)	300 penalty units ($33,000)
Fair Work Act (s.535(1)) [8]	30 penalty units ($3,300)	150 penalty units ($16,500)

[3] Section 4 of the Workplace Relations Act and s.12 of the Fair Work Act provide that “penalty unit” has the same meaning as in the Crimes Act 1914 (Cth). At the time the admitted contraventions took place, s.4AA of that Act defined “penalty unit” to be $110.

[4] See footnote 3 above.

[5] Section 719(4)(a) of the Workplace Relations Act.

[6] Regulation 14.4 of the Workplace Relations Regulations. This is the maximum penalty that can be imposed by a Court under s.846(2)(g) of the Workplace Relations Act.

[7] Items 2 and 11 of s.539(2) of the Fair Work Act; s.546(2) of the Fair Work Act.

[8] Item 29 of s.539(2) of the Fair Work Act; s.546(2) of the Fair Work Act.

21.Both parties made written and oral submissions going to fixing the appropriate penalty.

Consideration

Principles relevant to determining penalty

22.The Court finds that liability is proven (as agreed by the parties in the ASOF and admitted by both Respondents in the Defence).  The Fair Work Ombudsman submits and I accept that the following principles should be taken into account in determining the question of appropriate penalty.

23.The first step for the Court is to identify the separate contraventions involved. Each breach of each separate obligation found in the Workplace Relations Act, Workplace Relations Regulations and Fair Work Act in relation to each employee is a separate contravention.[9]

[9] Gibbs v Mayor, Councillors and Citizens of City of Altona (1992) 37 FCR 216 at 223; McIver v Healey [2008] FCA 425 at [16]; Blandy v Coverdale NT Pty Ltd ACN 102 611 423 [2008] FCA 1533 at [56].

24.Secondly, the Court should consider whether the breaches arising in the first step constitute a single course of conduct.[10]

[10] Section 719(2) of the Workplace Relations Act, regulation 14.5 of the Workplace Relations Regulations and s.557(1) of the Fair Work Act.

25.Thirdly, to the extent that two or more contraventions have common elements, this should be taken into account in considering what is an appropriate penalty in all the circumstances for each contravention. The Respondents should not be penalised more than once for the same conduct. The penalties imposed by the Court should be an appropriate response to what the Respondents did.[11] This task is distinct from and in addition to the final application of the “totality principle”[12].

[11] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 (Merringtons) at [46] (Graham J).

[12] Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 (Mornington Inn) at [41]-[46] (Stone and Buchanan JJ).

26.Fourthly, consider the appropriate penalty for the single breaches and, if relevant, each group of contraventions, taking into account all of the relevant circumstances.

27.Finally, consider whether it is an appropriate response to the conduct which led to the breaches.[13]  The Court should apply an “instinctive synthesis” in making this assessment.[14]  This is known as an application of the “totality principle”.

[13] See Kelly v Fitzpatrick (2007) 166 IR 14 at [30] (Tracey J) (Kelly); Merringtons at [23] (Gray J), [71] (Graham J) and [102] (Buchanan J).

[14] Merringtons at [27] (Gray J) and [55] and [78] (Graham J).

28.Set out below is the application of each of the above principles to the current proceedings.

Identified contraventions

29.The Fair Work Ombudsman has identified the contraventions as set out in the table at Annexure B.

30.Due to the low amount of resulting underpayment, the Fair Work Ombudsman does not seek a penalty against the company for its failure to pay the Shop Workers the correct fixed Saturday loadings under the Shop Employees NAPSA and the Modern Award. The Fair Work Ombudsman continues to seek a declaration that the company contravened subclause 14(a)(iii) and item 5 of Table 2 of the Shop Employees NAPSA (as continued by item 2(1) of Schedule 16 of the Transitional Act) in the period from 31 December 2006 to 31 December 2009; and section 45 of the Fair Work Act, in the period from 1 January 2010 to 22 August 2010.

Grouping of Contraventions – Course of conduct and common element

Relevant factors

31.I accept the Fair Work Ombudsman’s submissions about the relevant principles. The Workplace Relations Act, Workplace Relations Regulations and the Fair Work Act all set out that multiple breaches of particular provisions may, depending upon the particular circumstances, attract the operation of the course of conduct provisions. The course of conduct provisions are contained in s.719(2)[15] of the Workplace Relations Act, regulation 14.5 of the Workplace Relations Regulations and s.557 of the Fair Work Act. Course of conduct provisions are not applicable to contraventions of s.900(1) of the Workplace Relations Act and s.357(1) of the Fair Work Act.[16] Particularly relevant is whether the breaches arose out of separate acts or decisions of the employer, or out of a single act or decision. The latter case will constitute a course of conduct but the former will not.[17] The onus of establishing the benefit of s.719(2) of the Workplace Relations Act, regulation 14.5 of the Workplace Relations Regulations and s.557 of the Fair Work Act is on the Respondents.[18]

[15] See eg Clothing and Allied Trades Union v Snugglerite Industries Pty Ltd (1990) 34 IR 124 at 126.

[16] Section 719(2) of the Workplace Relations Act refers to breaches of an “applicable provision”, which does not include s.900(1) of the Workplace Relations Act. Section 357(1) of the Fair Work Act is not included in the specific list of penalty provisions in s.57(2) of the Fair Work Act.

[17] Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241 at 266-267 per Gray J (with whom Northrop J agreed at 245).

[18] Workplace Ombudsman v Securit-E Holdings Pty Ltd (In Liquidation) & Ors [2009] FMCA 700 at [5].

32.In addition to the course of conduct provisions set out above, the Fair Work Ombudsman concedes that some of the contraventions have common elements and this should be taken into account when considering an appropriate penalty to ensure that the Respondents are not punished more than once for the same or substantially similar conduct.

Groupings of contraventions

33.The Respondents submit that there are eight classes of contraventions which constitute a single course of conduct, namely:

a)the basic rate of pay;

b)casual loadings;

c)Saturday loadings;

d)Sunday penalty rates;

e)overtime rates;

f)public holiday loadings;

g)annual holiday loadings; and

h)record keeping requirements.

34.The Fair Work Ombudsman concedes that, based on the facts in this case, the Respondents have the benefit of s.719(2) of the Workplace Relations Act, Regulation 14.5 of the Workplace Relations Regulations and s.557 of the Fair Work Act in relation to repeated breaches of each term regarding each of the employees, with the exception of the four contraventions of s.357(1) of the Fair Work Act and s.900(1) of the Workplace Relations Act. Accordingly, in circumstances where the identified remaining 41 contraventions relate to multiple employees, the course of conduct provisions in s.719(2) of the Workplace Relations Act, regulation 14.5 of the Workplace Relations Regulations and s.557 of the Fair Work Act should be applied, thereby reducing the total number of potential contraventions from 45 to 19.

35.The Fair Work Ombudsman also concedes that the company's failure to keep records containing details of overtime hours worked by Ms Higham-Ross (numbers 9 and 18 of the table at Annexure B), and the company's failure to keep records containing details of any incentive-based payment, bonus, loading, penalty rate or other monetary allowance have common elements and appear to have arisen out of the one decision by the company not to keep appropriate employee records overall.  Accordingly, the potential four record-keeping contraventions should be reduced to two.

36.In addition to reducing the number of contraventions as set out above, the Fair Work Ombudsman submits and I accept that where a legislative change, or a change in industrial instrument coverage, has meant that separate contraventions have been alleged under different legislation or different instruments (that is, the Workplace Relations Act, Transitional Act and Fair Work Act, or arising from contraventions of the Shop Employees Pay Scale, Shop Employees NAPSA, Annual Holiday NAPSA, and the Modern Award), it is necessary for the Court to consider whether there was in fact a single course of conduct or a common element straddling the contravention periods for the purpose of determining penalty. The Fair Work Ombudsman concedes that the Respondents should not be penalised more than once for the same conduct arising out of these legislative changes. I agree that this should apply to:

a)the company’s misrepresentations to Ms Higham-Ross that her employment relationship was an independent contracting arrangement, which took place under both the Workplace Relations Act and the Fair Work Act and arose out of the one decision by the company to mislead Ms Higham-Ross;

b)the company’s misrepresentations to Mr Solomon that his employment relationship was an independent contracting arrangement, which took place under both the Workplace Relations Act and the Fair Work Act and arose out of the one decision by the company to mislead Mr Solomon;

c)the company’s failure to pay the guaranteed basic periodic rates of pay / minimum wages to Mr Solomon and Ms Park under the Shop Employees Pay Scale and then the Modern Award, which arose out of the one decision by the company to underpay Mr Solomon and Ms Park;

d)the company’s failure to pay the correct casual loading under the Shop Employees Pay Scale and then under the Modern Award, which arose out of the one decision by the company to not pay any casual loading to the Shop Workers;

e)the company’s failure to pay the correct fixed Saturday loadings under the Shop Employees NAPSA and then under the Modern Award, which arose out of the one decision by the company to not pay any fixed Saturday loadings to the Shop Workers;

f)the company’s failure to pay the correct Sunday penalty rates under the Shop Employees NAPSA and then under the Modern Award, which arose out of the one decision by the company to not pay any Sunday penalty rates to the Shop Workers;

g)the company’s failure to pay the correct public holiday penalty rates under the Shop Employees NAPSA and then under the Modern Award, which arose out of the one decision by the company to not pay any public holiday penalty rates to the Shop Workers; and

h)the company’s failure to pay the correct annual holiday loadings under the Annual Holidays NAPSA and then under the Modern Award, which arose out of the one decision by the company to not pay any annual holiday loadings to the Shop Workers.

37.I accept that the company’s failure to pay the correct overtime rates under the Shop Employees NAPSA is not affected by legislative changes as the overtime provisions in the Shop Employees NAPSA were not continued or phased into the Modern Award.

38.Although the Respondents do not have the benefit of s.719(2) of the Workplace Relations Act and s.557 of the Fair Work Act in relation to multiple contraventions of s.900(1) of the Workplace Relations Act and s.357(1) of the Fair Work Act, based on the facts of this case, however, the Fair Work Ombudsman concedes that the multiple misrepresentations to Ms Higham-Ross and Mr Solomon have common elements and appear to have arisen from two separate decisions by the company to mislead both Ms Higham-Ross and Mr Solomon. The Fair Work Ombudsman submits and I accept that the Court should exercise its discretion to consider the multiple representations as two separate contraventions in relation to Ms Higham Ross and Mr Solomon.[19]

[19] See, for example, Fair Work Ombudsman v Contracting Plus Pty Ltd [2011] FMCA 191 at [79].

39.Other than as outlined at [33] to [38] above, the Fair Work Ombudsman submits that the course of conduct or common element provisions do not otherwise reduce the number of contraventions.  I agree.

40.The Fair Work Ombudsman recognises that the company's record-keeping contraventions were identical contraventions under both the Workplace Relations Regulations and the Fair Work Act. Previous decisions of this Court have treated contraventions that took place under both the Workplace Relations Regulations and Fair Work Act as separate contraventions, given the express repeal of the Workplace Relations Regulations (with a lower penalty) on 30 June 2009 and the introduction of the Fair Work Act and Fair Work Regulations, with a new penalty, on 1 July 2009.[20] The Fair Work Ombudsman submits that the Court should adopt this approach; but it has raised the common elements of these contraventions in respect to the principle of totality, so as to avoid an inappropriate penalty for the record-keeping contraventions.  I accept that that is the correct approach.

[20] Fair Work Ombudsman v MMP Management Services Pty Ltd [2012] FMCA 207 (MMP Management) at [18]-[35] (following Fair Work Ombudsman v S H Millicent Pty Ltd [2012] FMCA 178 and Fair Work Ombudsman v Promoting U Pty Ltd [2012] FMCA 58).

41.The Court finds that the Respondents engaged in a total of ten contraventions for which penalties should be imposed. These contraventions are:

a)misrepresenting to Ms Higham-Ross that her employment relationship was an independent contracting arrangement (arising from s.900(1) of the Workplace Relations Act and s.357(1) of the Fair Work Act);

b)misrepresenting to Mr Solomon that his employment relationship was an independent contracting arrangement (arising from s.900(1) of the Workplace Relations Act and s.357(1) of the Fair Work Act);

c)failure to pay minimum rates of pay to the Shop Workers (arising from the Shop Employees Pay Scale and clause A.2.3 of Schedule A of the Modern Award);

d)failure to pay the required casual loadings to the Shop Workers (arising from the Shop Employees Pay Scale and clauses A.5.2 and A.5.4 of Schedule A of the Modern Award);

e)failure to pay the required Sunday penalty rates to the Shop Workers (arising from subclause 14(b)(i) of the Shop Employees NAPSA and clause A.5.2 of Schedule A of the Modern Award);

f)failure to pay the required overtime rates to the Shop Workers (arising from clause 15 of the Shop Employees NAPSA);

g)failure to pay the required public holiday penalty rates to the Shop Workers (arising from clause 17 of the Shop Employees NAPSA and clause A.5.2 of Schedule A of the Modern Award);

h)failure to pay the required annual holiday loadings to the Shop Workers (arising from subclause 4(3)(b)(ii) of the Annual Holiday NAPSA and clauses A.6.2 and A.6.4 of Schedule A of the Modern Award);

i)failure to keep appropriate employee records stating the number of overtime hours worked for Ms Higham-Ross and stating details of any incentive-based payment, bonus, loading, penalty rate or other monetary allowance or separately identifiable entitlement for the Shop Workers (arising from sub-regulations 19.9(1) and 19.11(3) of the Workplace Relations Regulations); and

j)failure to keep appropriate employee records stating the number of overtime hours worked for Ms Higham-Ross and stating details of any incentive-based payment, bonus, loading, penalty rate or other monetary allowance or separately identifiable entitlement for the Shop Workers (arising from subsection 535(1) of the Fair Work Act (by failing to keep records complying with regulations 3.33(3) and 3.34 of the Fair Work Regulations);

42.Therefore, the Court finds that the maximum penalty it could impose on the Respondents in this matter is:

a)$286,000 for the company; and

b)$57,200 for Mr Fuller.

Factors relevant to determining penalties

43.I accept the Fair Work Ombudsman’s submissions concerning the relevant principles. I also accept from the Respondents’ submissions that the principles are well settled but it is necessary to focus on the particular circumstances of each case. The factors relevant to the imposition of a penalty under the Workplace Relations Act have been summarised by Mowbray FM in Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar[21] (Pangaea), [26]-[59], as follows:

[21] [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 defendant;

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.

44.This summary was adopted by Tracey J in Kelly at [14]. While the summary is a convenient checklist, it does not prescribe or restrict the matters which may be taken into account in the exercise of the Court’s discretion.[22]

[22] Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550 at [11]; Merringtons at [91] per Buchanan J.

45.I now turn to consider each of the factors relevant to determine penalty in relation to this matter.

Nature and extent of the conduct

46.The contraventions consist of three types: the misrepresentation contraventions to Ms Higham-Ross and Mr Solomon; the underpayment contraventions; and the record-keeping contraventions.

47.The underpayment contraventions represent a failure by the company to provide the Shop Workers with their statutory minimum entitlements, including the payment of minimum wages, casual loading, overtime, Saturday, Sunday, and public holiday loadings and penalty rates, and annual holiday loadings under various industrial instruments. This resulted in a total underpayment of $82,475.12 to the Shop Workers during the Audit Period.

48.The company has operated its business since 1987 and, over time, has employed a relatively large number of employees.  The widespread nature of these contraventions and their long duration is a relevant consideration.[23] The underpayment contraventions arose as a result of the company, over a period of three and a half years, paying the Shop Workers flat hourly rates of pay. In the case of Mr Solomon and Ms Park, those rates were below legal minimum hourly rates (up to 57.9 per cent below the minimum rate in the case of Ms Park). Further, in the case of all Shop Workers, the flat rates meant that the Shop Workers failed to receive the benefit of a number of loadings and penalty rates to which the Shop Workers were entitled.

[23] McIver v Healey [2008] FCA 425 at [34].

49.The misrepresentation contraventions meant that Ms Higham-Ross and Mr Solomon were deprived of all minimum entitlements under the Workplace Relations Act and Fair Work Act as a result of the company’s misrepresentations that their employment relationship was one under which they performed work as independent contractors.

50.The record-keeping contraventions represent a failure by the company to keep records for Ms Higham-Ross with respect to overtime, and for the Shop Workers with respect to Saturday loadings, Sunday and public holiday penalty rates, casual loading and annual holiday loading. Like the underpayment contraventions, the record-keeping contraventions were widespread and took place, during the Audit Period, over a period of three and a half years.

51.The company’s record-keeping contraventions had the effect of preventing the Fair Work Ombudsman from determining the full extent of Saturday loadings, Sunday and public holiday penalty rates to which Mr Solomon was entitled. Given that the total underpayments of loadings and penalty rates to the remaining Shop Workers were substantial, the Fair Work Ombudsman submits that the company’s failure to keep appropriate records in respect of Mr Solomon has prevented Mr Solomon from receiving his full entitlements.

Circumstances in which the conduct took place

52.At all times during the period from 31 December 2006 to 11 August 2010, the company was the employer of the Shop Workers (during the periods in which each of the Shop Workers was employed).

53.At the time of their employment, Ms Larson was 19 years of age, Ms Park was 20 years of age, and Ms Dutson was between 19 and 20 years of age.

54.Further, Ms Park was a Korean national from a non-English speaking background and was resident in Australia on a working holiday visa.

55.The Fair Work Ombudsman submits that three of the five Shop Workers (Ms Park, Ms Dutson and Ms Larson) were vulnerable by reason of their age and/or background and that this should be a significant factor in determining penalty.  This is disputed by the Respondents who submit that there is no evidence of actual vulnerability.  I draw an inference that young employees and those from a non English speaking background are likely to be more vulnerable than mature employees whose first language is English and who have significant work experience.  In Workplace Ombudsman v Saya Cleaning Pty Ltd[24] the Court found:

… The vulnerability of these employees and the way they were exploited by the respondents is a significant factor when assessing the quantum of penalty.

[24] [2009] FMCA 38 at [20]

56.The contraventions took place in the Bellingen Local Government, which in the years 2006-10 had a much higher unemployment rate and lower average annual earnings than Australia as a whole.[25]  The respondents submit that that factor should be disregarded but Mr Fuller himself seeks to rely upon it at [66] of his affidavit.

[25] Rhodes Affidavit, [13] and annexure “JJR-7”.

57.Mr Fuller was responsible for day to day management, direction and control of the company’s operations; responsible for determining the terms and conditions upon which workers were engaged by the company; and responsible for implementing a system of work whereby Ms Higham-Ross and Mr Solomon were engaged by the company as independent contractors. Mr Fuller deposes that this arrangement was intended to suit their personal circumstances. Mr Fuller's conduct was intrinsically linked to the company’s contraventions of the Fair Work Act.

Nature and extent of the loss

58.This matter involves a significant underpayment to low paid employees (i.e. employees who are paid minimum wages), three of whom were junior employees and one of whom was a foreign worker.

59.The total known underpayment to the five Shop Workers during the Audit Period as a result of the Respondent’s contravention was $82,475.12. The majority of this underpayment was incurred by paying the Shop Workers flat rates of pay for working at unsocial hours and times for which Australian workplace laws and industrial instruments have determined that penalty rates and loadings should apply. In the case of Mr Solomon’s second period of employment and the entirety of Ms Park’s employment, the flat rates of pay did not even meet the minimum wages required under the Shop Employee Pay Scale and Modern Award.

60.The majority of the underpayment was owed to Ms Higham-Ross. As a shop assistant entitled to a minimum wage of $15.84 per hour, the underpayment to Ms Higham-Ross over the Audit Period ($60,827.20 prior to offsetting) was the equivalent of almost two years’ salary ($31,299.84 per annum based on a 38-hour week) for a full-time worker.

61.The Fair Work Ombudsman acknowledges that $13,245.08 in over-award payments on base rate of pay were offset against the total underpayment, and the Fair Work Ombudsman also acknowledges the company made back-payments in April and August 2012 for all but $47.16 of the underpayments. Despite this, the Fair Work Ombudsman submits, and I accept, that the Shop Workers were deprived of wages for a significant period of time, up to five years in the case of Ms Higham-Ross, and the company had the benefit of all of these monies during this period.

62.I also accept that there is no evidence to suggest that the company’s failure to comply with its workplace obligations would not have continued, had the Shop Workers not brought their concerns to the attention of the Fair Work Ombudsman.

63.The Fair Work Ombudsman submits that, when considering penalty, the Court should give significant weight to the extent of the underpayment.  I agree.

64.In addition to the monetary loss resulting from the underpayment contraventions, as a result of the company’s sham contracting and both Ms Higham-Ross and Mr Solomon being misclassified as independent contractors, Ms Higham-Ross and Mr Solomon were deprived of many other basic protections and conveniences that Australian employees would ordinarily be entitled to, such as the payment of superannuation and deduction of taxation payments. In Darlaston v Risetop Construction Pty Ltd[26] (Darlaston) at [48], Barnes FM held:

The indirect avoidance of entitlements by sham contracting cannot be measured in monetary terms. As pointed out, a contractor does not have recourse to paid sick leave. It can be inferred that such a person may be more likely to work when not well than an employee who has the protection of regulated standards of paid sick leave. Matters such as maximum weekly hours, requests for flexible working arrangements, parental leave and related entitlements, annual leave, personal carers’ leave and compassionate leave, community service leave, long service leave, public holidays and notice of termination and redundancy pay may be similarly “devalued” and even effectively negated by such sham contractual arrangements. The Award which would have applied to the workers as employees is in evidence before the court. It contains such protections. It may be that other rights that employees have or may have recourse to (such as protections for unfair dismissal) are negated and avoided by such arrangements...

[26] [2011] FMCA 220

65.The Shop Employees NAPSA and Modern Award contain or refer to some protections of the kind envisaged by Barnes FM in Darlaston. I accept that the Court should take into account these potential additional losses when considering the penalty to be imposed in respect of the sham contracting contraventions.

66.Finally, the record-keeping contraventions prevented the Fair Work Ombudsman from determining the true extent of any underpayment by the company in respect of Mr Solomon for fixed Saturday loadings, Sunday penalty rates, overtime and public holiday penalty rates.[27] This has effectively denied Mr Solomon the right to receive his full underpayment.

[27] ASOF, [102].

Similar previous conduct

67.The Fair Work Ombudsman is not aware of any previous findings by a Court that either of the Respondents has contravened Commonwealth workplace laws.  The Respondents point to the lack of any allegation of previous contraventions and seek a penalty discount of 20 per cent-30 per cent.

68.However, by letter dated 6 February 2004, the company was formally cautioned by Inspector Stephen Wade of the New South Wales Office of Industrial Relations for breaches of record-keeping requirements under the Industrial Relations Act 1996 (NSW). The caution was issued to Mr Fuller in his capacity as director of the company. Paragraph (2) of the letter cautioned the Respondents for failing to specify the number of hours worked by employees during each day and the times of starting and ceasing work.[28]

[28] Wade Affidavit, [4].

69.Although the contraventions for which the company was cautioned and the contraventions in this case are different, the Fair Work Ombudsman submits that the Court should still give some weight to the previous caution when setting a penalty for the record-keeping contraventions that the Respondents have admitted to, because the conduct is of a similar nature. In particular, the breaches of the Workplace Relations Regulations and the Fair Work Act (by failing to keep records complying with the Fair Work Regulations), where the Respondents have admitted to not keeping records specifying overtime hours worked by Ms Higham-Ross during each day is similar to the caution in paragraph (2) of the 2004 letter of caution.

70.In my view, the lack of evidence of previous contraventions does not of itself support a penalty discount.  The failure by the company to keep proper records may well have protected it from earlier adverse action and that failure is, in my view, a practice of long standing.

Whether the breaches arose out of the one course of conduct

71.I have found that there should be ten contraventions in this matter for which penalties are sought.

Size and financial circumstances of the business

72.The company operates a business that employed up to 14 employees during the relevant time and engaged a further unknown number of contractors.[29]

[29] Fuller Affidavit, [3]-[5].

73.Mr Fuller has referred to various extenuating circumstances in the period 2009 to 2012.  Financial instability arising from a flood, wet weather, cyclones, the global financial crisis and a local economic downturn causing significant difficulties to the company’s business, all are advanced as reasons which caused the Respondents to fail to monitor employment issues to a level that they would otherwise have done.[30]  These are, however, more assertions not supported by objective evidence.

[30] Fuller Affidavit, [7], [69].

74.To the extent that the Respondents could seek to rely on their financial circumstances to excuse the contraventions of the Workplace Relations Act, Fair Work Transitional Act and the Fair Work Act, the Fair Work Ombudsman submits that such a submission should be rejected. The Fair Work Ombudsman relies upon Workplace Ombudsman v Saya Cleaning Pty Ltd at [27] to [28] and the authorities referred to in those paragraphs:

27. In Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412 at paras. 27 to 29 it was said:

Employers must not be left under the impression that because of their size or financial difficulty that they are able to breach an award. Obligations by employers for adherence to industrial instruments arise regardless of their size. Such a factor should be of limited relevance to a Court’s consideration of penalty.

28.Notwithstanding financial hardship that an employer may be experiencing in Lynch v Buckley Sawmills Pty Ltd [1984] FCA 306; (1984) 3 FCR 503, 508 Keely J said:

In this connection it is important that the respondent – and other employers bound by the award or by other awards under the Act – understand the importance of complying with an award and it follows that any decision taken by them which is regarded as affecting their obligation to comply with particular provisions of the award or the award generally should only be taken after careful consideration. They must not be left under the impression that in times of financial difficulty they can breach an award made under the Act either with impunity or in the belief that no substantial penalty will be imposed in respect of a breach found by a court to have been committed.

75.I accept that, notwithstanding the Respondents’ financial circumstances and the company’s size, the Court should mark its disapproval of the conduct in question, and set a penalty at a meaningful level.

Deliberateness of the breaches

Sham contracting contraventions

76.In relation to the misrepresentation contraventions, Mr Fuller has submitted that the company did not set out to mislead or deceive Mr Solomon and Ms Higham-Ross regarding the status of their employment relationship.[31]  Mr Fuller has suggested that Mr Solomon was engaged on the basis that:

a)the company was not aware that there would be any concerns with respect to him being engaged as a contractor until the Fair Work Ombudsman determined otherwise;[32]

b)Mr Solomon had an “unusual” relationship which “didn’t fit the normal employee mould” due to Mr Solomon’s family responsibilities,[33] and

c)Mr Solomon had never indicated to Mr Fuller that he considered himself as an employee of the company.[34]

[31] Fuller Affidavit, [68].

[32] Fuller Affidavit, [22].

[33] Fuller Affidavit, [11], [16].

[34] Fuller Affidavit, [22].

77.In relation to the misrepresentation contraventions regarding Ms Higham-Ross, Mr Fuller has suggested that Ms Higham-Ross was engaged on the basis that:

a)the company was not aware that there would be any concerns with respect to her being engaged as a contractor until the Fair Work Ombudsman determined otherwise;[35]

b)Mr Fuller perceived that Ms Higham-Ross was unable to obtain employment due to perceived disabilities and a perceived inability to obtain sufficient hours in another job;[36] and

c)Ms Higham-Ross never indicated to Mr Fuller that she considered herself to be an employee of the company and appeared to be happy with the arrangement.[37]

[35] Fuller Affidavit, [32].

[36] Fuller Affidavit, [26].

[37] Fuller Affidavit, [30].

78.The Fair Work Ombudsman submits that the Court should not accept the reasons put forward by the Respondents and should find that the company made a conscious decision to mislead Ms Higham-Ross and Mr Solomon that they were independent contractors, but did so with reckless disregard to its obligations under the Workplace Relations Act and Fair Work Act. This factor is said to be of significance in relation to penalty.

79.To the extent that the Respondents have relied upon their ignorance of the true status of Mr Solomon and Ms Higham-Ross’s relationship with the company and the alleged failure by the Shop Workers to raise any concerns about the status of their employment, these submissions should be rejected.  Mr Fuller gave evidence that the company employed up to 14 casual employees in the period 1987 to 2009, and also hired itinerant contract workers for fruit picking and packing on adjacent farm land.[38]  I do not accept that the company could have engaged workers since 1987 on both an employment and independent contracting basis without developing knowledge of what each relationship entails and the obligations for an employer/principal arising from each. The company had an obligation to inform Ms Higham-Ross and Mr Solomon about the true status of their relationship with the company and failed to do so.

[38] Fuller Affidavit, [3]-[4].

80.The fact that the Respondents have sought to rely on family responsibilities (for Mr Solomon) and perceived disabilities (for Ms Higham-Ross) as reasons why they could not be engaged as employees does not assist them.[39] The evidence from Ms Higham-Ross suggests that the reasons put forward by Mr Fuller are not accurate in any case.[40] The Fair Work Act has also prohibited discrimination on the basis of family responsibilities and physical and mental disability since 1 July 2009,[41] and prior to this time discrimination on those grounds was also prohibited by the Sex Discrimination Act 1984 (Cth) and the Disability Discrimination Act 1992 (Cth) respectively. A proposition that Mr Solomon and Ms Higham-Ross could only be engaged as independent contractors for these reasons (if made) should be rejected. Further, such an ex post facto justification for why the company engaged Ms Higham-Ross and Mr Solomon does nothing to remove an available inference that the Respondents knew that Ms Higham-Ross and Mr Solomon should have been engaged as employees, but nonetheless chose not to do so.

[39] Compare Fair Work Ombudsman v Top Value International Pty Ltd [2013] FMCA 41 at [29].

[40] Higham-Ross Affidavit, [14].

[41] Section 351 of the Fair Work Act.

81.The Fair Work Ombudsman submits that the Court should find that the company misled Ms Higham-Ross and Mr Solomon about their workplace relationship, and acted with reckless disregard as to its obligations under the Workplace Relations Act and Fair Work Act when it did so.

82.The Respondents dispute that there was any intention to mislead the Shop Workers or that the Respondents disguised the true employment relationship.  I find that Ms Higham-Ross and Mr Solomon were misled about their workplace relationship because of the company’s careless disregard as to its obligations.

Underpayment contraventions

83.In relation to the underpayment contraventions, the Respondents have relied upon the following factors:

a)the Shop Workers were offered training, no reduced training wage or waiting period, an immediate start and good work experience;[42]

b)the Shop Workers received free lunch, shop produce and stock and free access to coffee, milkshakes and fruit juice and unsold stock at the end of the day (and in the case of Ms Park, accommodation, food and access to a bicycle).[43]  Ms Higham-Ross disputes the claim that the Shop Workers received the complimentary food items;[44]

c)the Shop Workers would not have been able to obtain positions elsewhere in Bellingen had the company not offered them work, and “would have incurred a geographical cost far in excess of their perceived disadvantages”;[45]

d)none of the Shop Workers ever queried their terms and conditions to Mr Fuller or any other representative of the company and the Respondents subsequently never conducted any further investigations;[46] and

e)the company engaged a book-keeper who was responsible for monitoring workers’ hours and paying wages whom Mr Fuller relied upon to keep up to date with employee entitlements.

[42] Fuller Affidavit, [59], [61]-[62], [66].

[43] Fuller Affidavit, [61], [36]-[50].

[44] Higham-Ross Affidavit, [14].

[45] Fuller Affidavit, [62].

[46] Fuller Affidavit, [67].

84.In relation to Ms Park specifically, the Respondents have claimed that Ms Park was hired after being referred from the Willing Workers on Organic Farms (WWOOF) project.

85.The Fair Work Ombudsman contends in response that none of the above factors should detract from the conduct engaged in by the company and submits that the Court should find, on the evidence, that Mr Fuller, through the company, consciously determined to pay each of the Shop Workers a flat rate of pay and thus deprived them of appropriate penalty rates and loadings. In particular:

a)while the provision of training, experience, food and accommodation to one or more of the Shop Workers (if Mr Fuller’s evidence is to be accepted) may be commendable, it does not excuse the company from paying the correct rates of pay. The Fair Work Act makes it very clear that wages are to be paid in full and in money;[47]

b)the fact that other employers in Bellingen may not have been able to offer the Shop Workers work also does not excuse the company from underpaying award wages. Conversely, the low wage and high unemployment rate in the Bellingen area compared to the rest of Australia made all the more important that employers like the company not be permitted to undercut basic terms and conditions;[48]

c)evidence obtained by the Fair Work Ombudsman suggests that the Shop Workers and their fellow employees were actively discouraged by the company from discussing their entitlements.[49] In any case, Mr Fuller has already admitted that he was “principally responsible for the overall direction, management and supervision” of the Shop Workers’ terms and conditions, including in relation to industrial instruments and arrangements, setting and adjusting pay rates and determining wages and conditions of employment.[50] Therefore, the fact that none of the Shop Workers may have raised concerns with him, or the fact that the company’s bookkeeper may have failed to keep up to date with the correct terms and conditions, are not acceptable excuses for the conduct.

[47] Section 323(1) requires that wages be paid in full and in money.

[48] Rhodes Affidavit, [13].

[49] Rhodes Affidavit, [16].

[50] ASOF, [3], [103].

86.In relation to Ms Park, evidence obtained by the Fair Work Ombudsman shows that the company was not registered as a WWOOF host until May 2012. Ms Park could not have been engaged by the company as a WWOOF worker and I accept that this should be rejected as an excuse.[51]

[51] Rhodes Affidavit, [15].

87.The evidence shows that the company chose to pay the Shop Workers flat rates of pay that excluded any required loadings or penalty rates. Those rates were decided on for each employee by Mr Fuller.[52] In the case of Ms Park, the flat rate of pay appears to have been decided on the basis of the speed on which she worked and the rate at which Mr Fuller believed she should be paid based on that speed.[53] While that may have been an appropriate basis on which to decide a rate of over award pay, it does not justify a failure to make award payments.

[52] ASOF, [103].

[53] ASOF, [39].

88.In 2004, the company had received a formal caution from the New South Wales Office of Industrial Relations in relation to record-keeping for overtime hours under the Shop Employees (State) Award (now the Shop Employees NAPSA).[54]  I accept that a warning for not keeping records of overtime hours should have alerted the company to the need to pay overtime under the NAPSA.

[54] Wade Affidavit, [6].

89.Secondly, I find that at least from March 2010, Mr Fuller was aware of the availability of advice from the Fair Work Infoline as he sought to call that line to ask about his workplace obligations in relation to another employee. That call revealed Mr Fuller’s knowledge of award and entitlement coverage, as well as the availability of information on the Fair Work Ombudsman’s website and through the Fair Work Infoline.  The Fair Work Ombudsman has not found any other calls made to the Fair Work Infoline during the Audit Period or any other evidence suggesting that neither of the Respondents made any effort to ascertain the correct terms and conditions for the Shop Workers.[55] Consistently with this, Mr Fuller has indicated that he would not have actively sought out what the correct terms and conditions were unless one or more of the Shop Workers complained.[56]

[55] Rhodes Affidavit, [7]-[12].

[56] Fuller Affidavit, [67].

90.Consistently with the Fair Work Ombudsman’s submissions I find that the Respondents failed to take any steps to understand what the correct terms and conditions for the Shop Workers were.  This behaviour was careless, particularly for the three vulnerable workers.  As Chief Industrial Magistrate Hart held in David Armstrong v VK Holdings Pty Limited[57] at 19:

Negligence in this area is far from excusable. An employer has an obligation to find out and provide the minimum lawful entitlements prescribed for its employees. When the employee is a young, vulnerable employee, such as a trainee, the obligation upon the employer is even greater.

[57] (unreported, Chief Industrial Magistrates Court, Sydney, 28 November 1997)

Record-keeping contraventions

91.The Respondents have not put forward any motivation as to why they engaged in record-keeping contraventions.  The Fair Work Ombudsman submits that the Court should find that the Respondents acted with reckless disregard in relation to these contraventions.  I have already found that the Respondents were careless and disregarded their obligations.

92.As set out above, the company had previously been inspected in relation to its obligation to provide employees with correct terms and conditions, and keep appropriate employee records.[58] Despite receiving a formal caution in relation to record-keeping, it still failed to keep any records at all in relation to Ms Higham-Ross prior to 1 January 2009,[59] and failed to keep appropriate records at all times during the Audit Period.[60]

[58] Wade Affidavit, [3]-[7].

[59] ASOF, [91].

[60] ASOF, [92], [99].

Involvement of senior management

93.A corporate entity can only act through its authorised officers and agents.  Mr Fuller was and is a director of the company, its company secretary, and a shareholder, and its “directing mind and will”.[61]  Mr Fuller was involved in each of the contraventions of the company.[62]

[61] ASOF, [66].

[62] ASOF, [105].

Contrition, corrective action, co-operation with authorities

Contrition

94.Mr Fuller has claimed to have expressed contrition.  However, most paragraphs of his affidavit referred to are an attempt to explain or justify the breaches.  I accept that at [73] of his affidavit Mr Fuller expresses regret.

Corrective action

95.In August 2010, when the company was informed that Ms Higham-Ross was an employee, it immediately began paying her wages in accordance with the Modern Award (but was not able to do so to Mr Solomon as he had already resigned from his employment by this time).[63]

[63] ASOF, [13].

96.In April 2012 (prior to the commencement of proceedings) and August 2012, the company took corrective action by making back-payments to the Shop Workers. As a result, all but $47.16 of the original underpayment of $82,475.12 has been repaid to the Shop Workers. The remaining amount is still owed to Mr Solomon.[64]

[64] ASOF, [16],[18],[83]-[84].

97.The Fair Work Ombudsman acknowledges that, in the Fuller Affidavit, he stated that:

a)the company has not retained contract workers since the Audit Period ended and has resolved not to engage contractors in the future;

b)the company downloaded fact sheets from the Fair Work Ombudsman’s website and has implemented them in the workplace; and

c)the company has placed all workers on wages covered by the Retail Industry Award 2010.[65]

[65] Fuller Affidavit, [77]-[78].

98.I accept that evidence.

Co-operation with authorities

99.The Fair Work Ombudsman acknowledges, and I accept, that the Respondents have generally demonstrated a co-operative attitude throughout the Fair Work Ombudsman’s investigation. In particular:

a)the company produced all records and documents to the Fair Work Ombudsman during its investigation when requested;

b)Mr Fuller voluntarily participated in a recorded interview with the Fair Work Ombudsman on 8 December 2010;[66] and

c)the matter has also ultimately proceeded by way of the ASOF, with the Respondents admitting to all of the alleged contraventions at the earliest opportunity after these proceedings were commenced. This has saved a considerable cost to the public purse by avoiding the need for a fully contested hearing and providing a more efficient use of Court resources.

[66] ASOF, [19].

100.The Fair Work Ombudsman submits that both Respondents should be afforded a 20 per cent discount on penalty for their early admission and co-operation with the Fair Work Ombudsman.  I agree.

Ensuring compliance with minimum standards

101.One of the principal objects of the Workplace Relations Act and the Fair Work Act has been the maintenance of an effective safety net, and effective enforcement mechanisms.

102.The substantial penalties set by Parliament for breaches of such minimum entitlements reinforce the importance placed on compliance with minimum standards.

103.I find that the company misrepresented to Ms Higham-Ross and Mr Solomon that their contract of employment with the company was a contract for services where both Ms Higham-Ross and Mr Solomon performed work as an independent contractor. The effect of these misrepresentations was to deny Ms Higham-Ross and Mr Solomon their right to receive minimum terms and conditions afforded to employees under the Workplace Relations Act and Fair Work Act. In the case of all the Shop Workers, the company paid no loadings, penalty rates or overtime, and in some case, minimum wages up to 57 per cent less than what was required by the relevant industrial instruments.

104.I accept that penalties should be imposed at a meaningful level to ensure compliance with minimum standards.

Specific deterrence

105.It is well-established that “the need for specific and general deterrence” is a factor that is relevant to the imposition of a penalty under the Workplace Relations Act and the Fair Work Act.[67]

[67] See for example, Mowbray FM in Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 (Pangaea), [26]-[59].

106.Gray J in Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union[68] at [37] observed:

Specific deterrence focuses on the party on whom the penalty is to be imposed and the likelihood of that party being involved in a similar breach in the future. Much will depend on the attitude expressed by that party as to things like remorse and steps taken to ensure that no future breach will occur.

[68] (2008) 171 FCR 357

107.The Respondents submit that there is little need for specific deterrence in this case.  The Fair Work Ombudsman acknowledges that the company has paid back the underpayment amounts (apart from $47.16 owed to Mr Solomon) and that the company began paying Ms Higham-Ross the correct amount under the Modern Award immediately after they were informed that she was an employee, and has taken some steps to avoid future contraventions.  The Fair Work Ombudsman also notes Mr Fullers’ claim that he has “all but retired from work and the business”.[69]

[69] Fuller Affidavit, [81].

108.Despite the above, the Fair Work Ombudsman submits, and I accept, that there is still a need for specific deterrence given the following factors:

a)the company is continuing to trade and Mr Fuller continues to be the company’s director. Notwithstanding that all of the Shop Workers have now resigned from their employment with the company, it still employs employees and those employees need to be correctly classified, paid the correct rates of pay and provided with their correct entitlements, and appropriate records still need to be kept for those employees;

b)despite Mr Fuller’s claim that he has effectively retired, he continues to be the sole director for the company and is either a director or secretary for five other organisations;[70]

c)the hourly rates of pay paid by the company to the Shop Workers were, in some cases, significantly lower than the required minimum rates under the various industrial instruments (when penalty rates and loadings are taken into account);

d)the total underpayment of $82,475.12 is a significant underpayment;

e)three of the Shop Workers (Ms Park, Ms Dutson and Ms Larson) affected by the underpayments were junior employees and one of the Shop Workers (Ms Park) was an overseas worker;

f)in the case of the company’s record-keeping obligations, it had already received a formal caution in 2004 for a similar failure to record hours worked in respect of overtime; and

g)while Mr Fuller has expressed regret for his lack of understanding of the Company’s obligations, there is a need to make clear that ignorance (and carelessness) is not an excuse.

[70] Rhodes Affidavit, annexure “JJR-3”.

General deterrence

109.The role of general deterrence in determining the appropriate penalty is illustrated by the comments of Lander J in Ponzio v B & P Caelli Constructions Pty Ltd[71]:

In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217.

[71] (2007) 158 FCR 543 at [93]

110.The Fair Work Ombudsman submits, and I accept, that general deterrence is an important factor in these proceedings. There is a need to send a message to the community, and particularly employers, that employers must provide their employees with the correct entitlements and steps should be taken to understand and comply with those entitlements.

111.The Court regards the sham contracting contraventions as particularly serious and recognises the damage that sham contracting can have to the Australian economy and other employers generally. In Australian Building and Construction Commissioner v Inner Strength Steel Fixing Pty Ltd[72], Gilmour J held (at [30]):

The establishment of unlawful sham contracting arrangements is objectively serious. Sham contracting, by its nature, provides a company with an unfair advantage over its competitors in that the company’s operating expenses are unlawfully reduced, making it more competitive against its rivals and providing increased company revenue. Accordingly, penalties must reflect the objective seriousness of this type of conduct to act as a deterrent to others who might be likely to engage in contraventions: Ponzio v B&P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543 at [93].

[72] [2012] FCA 499

112.Sham contracting arrangements can allow employers to avoid tax obligations, such as income and payroll tax at the expense of Commonwealth and State revenues. Sham contracting can also allow unscrupulous employers to undercut other employers in relation to their wage costs who are paying their employees in accordance with the correct terms and conditions. This practice may force some employers to become unprofitable as they are not able to compete with the undercutting and result in job losses. These considerations underline the need to deter other employers from contravening provisions such as s.900(1) of the Workplace Relations Act and s.357(1) of the Fair Work Act.

113.I also accept that the Court should send a message to the retail industry in which the company operates.  The retail industry often attracts unskilled labour and is more likely to attract young, low-paid and vulnerable workers like Ms Dutson, Ms Larson and Ms Park. The need for general deterrence is particularly high in industries which attract these types of workers and where the scope for exploitation is high.[73]

[73] Workplace Ombudsman v Saya Cleaning Pty Ltd [2009] FMCA 38 at [48]; Mayberry v Kijani Investments Pty Ltd as trustee for The Dawe Investments Trust Subway Wallsend trading as Subway [2011] FCA 1238 at [22].

114.As I have already stated, penalties in this case should be imposed at a meaningful level so as to deter other employers from committing similar contraventions, and to send a message to the community that employers should ascertain and comply with minimum terms and conditions.

Totality

115.Having fixed an appropriate penalty for each course of conduct, the Court should take a final look at the aggregate penalty, to determine whether it is an appropriate response to the conduct which led to the breaches, and is not oppressive or crushing.[74]

[74] See Kelly v Fitzpatrick [2007] FCA 1080, [30]; Merringtons at [23] per Gray J, [71] per Graham J, [102] per Buchanan J.

116.The previous approach of the Court has been to treat record-keeping contraventions which have taken place under both the Workplace Relations Regulations and the Fair Work Act as separate contraventions, and the Fair Work Ombudsman has followed this approach. However, I accept that these contraventions were otherwise identical and it would be inappropriate to impose two penalties for the Respondents’ conduct.[75] The Fair Work Ombudsman has proposed a penalty derived from an average of the maximum penalties applicable under the Workplace Relations Regulations and Fair Work Act. I accept that submission.

[75] See MMP Management at [32] and Poznio v B&P Caelli Construcitons Pty Ltd (2007) 158 FCR 543 at [93]-[94].

Accessorial liability

117.I accept that the same considerations should apply in determining penalty in respect of the conduct of both the company and Mr Fuller.

118.The Fair Work Ombudsman submits that the connection between the company and Mr Fuller should not reduce the amount of penalty.  The Fair Work Ombudsman relies upon the decision of Buchanan J in Fair Work Ombudsman v Ramsay Food Processing Pty Ltd (No. 2)[76]:

A submission was made by the respondents that some consideration should be given to reducing the amount of the penalty imposed on one or other of the respondents to account for the intimate connection between the actions of the first respondent and the conduct of the second respondent. As I understood the submission, it was that there was a risk of punishing twice for the same conduct – i.e. punishing both the first and second respondents for the conduct of the second respondent. The submission appeared to rely on the judgment of Mansfield J in Australian Prudential Regulation Authority v Holloway (2000) 45 ATR 278; [2000] FCA 1245, although I do not understand how it could do so … in the legislative scheme which his Honour was applying, no distinction was made between the maximum penalty that could be applied to corporations and the maximum penalty that could be applied to individuals. That is not the case here. The present legislative scheme fixes quite different (and much lower) penalties for individuals than for corporations. The culpability of each respondent must be assessed individually and in the context set by the maximum penalty prescribed in each case. I reject the suggestion, if that was what was intended, that either or both respondents might have the benefit of any reduction in penalty because they were jointly, as well as individually, culpable.

[76] [2012] FCA 408 at [8]

119.I accept that submission.

Conclusion

120.I have accepted the critical submissions of the Fair Work Ombudsman hearing upon the assessment of penalties in this matter.  The Respondents seek the imposition of a total penalty in the low to mid range.  The total penalty sought by the Fair Work Ombudsman is $139,040 in respect of the company and $27,808 in respect of Mr Fuller.  Those penalties are in the mid range which I accept is appropriate in the circumstances in this case.  Further, I see no reason to depart from the calculation of the penalties for the individual breaches proposed by the Fair Work Ombudsman.  I will make the orders sought by the Fair Work Ombudsman.

I certify that the preceding one hundred and twenty (120) paragraphs are a true copy of the reasons for judgment of Judge Driver

Date:  19 April 2013

ANNEXURE A

AGREED STATEMENT OF FACTS

1.          The parties agree as set out below.

The Fair Work Ombudsman

2.The Fair Work Ombudsman has standing and authority to bring these proceedings.

The company

3.The company, E.A. Fuller and Sons Pty Ltd (ACN 003 551 237), was at all relevant times:

a)a company incorporated under the provisions of the Corporations Act 2001 (Cth);

b)able to be sued in and by its corporate name and style;

c)a constitutional corporation within the meaning of section 4 of the Workplace Relations Act 1996 (Cth) (Workplace Relations Act) and, from 1 July 2009, a constitutional corporation within the meaning of s.12 of the Fair Work Act 2009 (Cth) (Fair Work Act);

d)an “employer” within the meaning of s.6 of the Workplace Relations Act and, from 1 July 2009, a “national system employer” within the meaning of s.14 of the Fair Work Act; and

e)an entity operating as a shop selling fruit and vegetables, as well as petrol from two bowsers, at 995 Waterfall Way, Bellingen, in the State of New South Wales (Shop).

Mr Fuller

4.Eric Andrew Fuller (Mr Fuller) is and was at all material times:

a)a company director of the company, and since 30 June 2010, the sole company director of the company;

b)the Company Secretary of the company;

c)a shareholder of the company;

d)principally responsible for the overall direction, management and supervision of the company’s operations; and

e)principally responsible for the overall direction, management and supervision of the terms and conditions of employees of the company, including in relation to industrial instruments and arrangements, setting and adjusting pay rates, and determining wages and conditions of employment.

Shop Workers

5.These proceedings relate to five employees (Shop Workers), who worked for the company, as set out in the table below (Shop Workers).

Surname	First & middle names	Date of birth	Date employment commenced	Date employment ceased
Higham-Ross	Jane Sandra	27/01/1970	31/12/2006	01/01/2011
Solomon	Julian	25/01/1975	05/10/2008	30/06/2009
			11/07/2009	07/02/2010
Larson	Megan Ellanda	23/02/1990	08/05/2009	04/06/2009
Park	Mohee	11/09/1989	26/10/2009	16/04/2010
Dutson	Rosanna Tess	01/05/1991	12/01/2010	27/05/2010

6.At all times during her employment with the company, Mohee Park (Ms Park):

a)was a South Korean national;

b)did not speak English as her first language; and

c)was domiciled in Australia on a working holiday visa.

7.During her employment with the company, Ms Park was offered free food and accommodation, firstly in a container attached to Mr Fuller’s residence, and later in a house on an adjoining property owned by Mr Fuller's son.

8.At all times during their employment with the company, Megan Ellanda Larson (Ms Larson), Rosanna Tess Dutson (Ms Dutson) and Ms Park were under 21 years of age.

9.Throughout the entirety of their employment with the company, each of Jane Sandra Higham-Ross (Ms Higham-Ross), Ms Larson, Ms Park, and Ms Dutson were employed as a shop assistant whose primary duties involved the receiving, preparation for sale, and sale of fruit and vegetable produce (Shop Assistant Duties). In addition to the Shop Assistant Duties, throughout the entirety of her employment with the company, Ms Higham-Ross also performed ancillary duties in relation to the sale of petroleum fuel.

10.In the period from 5 October 2008 to 30 June 2009, Mr Solomon was employed by the company as a shop assistant in charge, whose duties included the training and supervision of up to four other employees at the Shop (Shop Assistant in Charge Duties) in addition to the Shop Assistant Duties.

11.Mr Solomon then left his employment with the company. When he returned, he was employed by the company to perform Shop Assistant duties from 11 July 2009 to 7 February 2010.

12.Each of the Shop Workers was employed by the company on a casual basis.

Investigation and institution of proceedings

13.On 6 May 2010, the Fair Work Ombudsman commenced an investigation into complaints lodged with the Fair Work Ombudsman by the Shop Workers concerning underpayment of pay and entitlements (Investigation).

14.In August 2010, after being informed by the Fair Work Ombudsman that the Fair Work Ombudsman considered Ms Higham-Ross to be an employee, the Respondents immediately began paying Ms Higham-Ross wages in accordance with the Award. Mr Solomon had by that stage ceased working for the company.

15.In or about December 2010, the Fair Work Ombudsman asked Mr Fuller to participate in a formal Record of Interview in relation to the Investigation. The opportunity was accepted by Mr Fuller.

16.The Investigation revealed that the company had:

a)misrepresented to Ms Higham-Ross and Mr Solomon that the contracts of employment under which they performed work for the company were contracts for services, whereby each of Ms Higham-Ross and Mr Solomon performed work as an independent contractor (as detailed at [22] to [34 below);

b)failed to pay Ms Park her basic periodic rate of pay and minimum wage (as detailed at [35] to [47 below);

c)failed to pay Mr Solomon his basic periodic rate of pay and minimum wage for in the period from 11 July 2009 to 7 February 2010 (as detailed at [35] to [47 below);

d)failed to pay the Shop Workers their casual loading (as detailed [48] to [53 below);

e)failed to pay the Shop Workers their fixed Saturday loadings (as detailed at [54] to [59 below);

f)failed to pay the Shop Workers Sunday penalty rates (as detailed at [60] to [66 below);

g)failed to pay the Shop Workers overtime rates (as detailed at [67] to [71 below);

h)failed to pay public holiday rates (as detailed at [72] to [77 below);

i)failed to pay annual holiday loadings (as detailed at [78] to [83 below); and

j)failed to keep appropriate records (as detailed at [86] to [103 below).

17.On 11 April 2012, the company:

a)made a partial back-payment to Mr Solomon leaving $47.16 unpaid;

b)paid all outstanding amounts to Ms Dutson; and

c)paid all outstanding amounts to Ms Larson.

18.On 5 June 2012, these proceedings were commenced.

19.On 14 August 2012, the company:

a)paid all outstanding amounts to Ms Higham-Ross; and

b)provided a cheque to pay Ms Park for all outstanding amounts (which was subsequently redrawn on 31 August 2012 when the Respondents were advised by the Ombudsman that Ms Park could not bank the cheque originally provided).

20.The Company and Mr Fuller:

a)produced all records and documents to the Fair Work Ombudsman during the Investigation as and when requested;

b)willingly participated in a record of interview with the Fair Work Ombudsman; and

c)since the commencement of proceedings, have co-operated with the Fair Work Ombudsman.

Relevant legislation

21.The company was bound in respect of the Shop Workers by the following legislation:

a)prior to 1 July 2009 – the Workplace Relations Act;

b)in the period from 1 July 2009 to 31 December 2009 – the Workplace Relations Act as it continued to apply by reason of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act); and

c)on and from 1 July 2009 – the Fair Work Act.

Relevant industrial instruments

22.The industrial instrument coverage and classification of the company, with respect to the Shop Workers during the periods of their employment by the company, is set out in the table below:

Employee(s)	Time period	Industrial instrument	Industrial instrument classification
Ms Higham-Ross Ms Larson Ms Park Ms Dutson	Employment periods up to and including 31 December 2009	Notional Agreement Preserving State Award (NAPSA) derived from the Shop Employees (State) Award [AN120499] (Shop Employees Award)	Group 1 – Shop Assistant
	Employment periods from 1 January 2010 onwards	General Retail Industry Award 2010 [MA000004] (Modern Award)	Retail Employee Level 1
Mr Solomon	5 October 2008 to 30 June 2009	NAPSA derived from the Shop Employees Award	Group 4 – Shop Assistant in charge of a shop without duty of buying.
	11 July 2009 to 31 December 2009		Group 1 – Shop Assistant
	1 January 2010 to 7 February 2010	Modern Award	Retail Employee Level 1

23.In addition to the industrial instrument coverage set out in paragraph 22 above, in the period from 27 March 2006 to 31 December 2009, the company was covered by the NAPSA derived from the Annual Holidays Act 1944 (NSW), which is preserved as a NAPSA under Part 3 of Schedule 8 of the Workplace Relations Act (Annual Holiday NAPSA).

Sham arrangement contraventions

Misrepresenting contracts of employment as contracts for services

Ms Higham-Ross

24.At all times in the period from 1 March 2007 to 11 August 2010, the company was party to a contract with Ms Higham-Ross.

25.At the commencement of Ms Higham-Ross’s employment, on or about 31 December 2006, the company required Ms Higham-Ross to obtain an Australian Business Number (ABN), and took steps to obtain an ABN on behalf of Ms Higham-Ross.

26.During the period from 1 March 2007 to 11 August 2010, the company continued to represent that the contract of employment under which she performed work for the company was a contract for services whereby Ms Higham-Ross would perform work as an independent contract, in that Ms Higham-Ross was required to:

a)provide invoices made out to the company in order to receive pay; and

b)arrange for payment of her own income taxation and superannuation.

(Higham-Ross Representations).

27.The contract in force at the time of the Higham-Ross Representations was a contract of employment and not a contract to provide services as an independent contractor.

28.Between 1 March 2007 and 31 December 2009, the company contravened section 900 of the Workplace Relations Act, by misrepresenting to Ms Higham-Ross that the contract of employment under which she performed work for the company was a contract for services whereby Ms Higham-Ross would perform work as an independent contractor.

29.Between 1 January 2010 and 11 August 2010, the company contravened section 357 of the Fair Work Act, by misrepresenting to Ms Higham-Ross that the contract of employment under which she performed work for the company was a contract for services whereby Ms Higham-Ross would perform work as an independent contractor.

Mr Solomon

30.At all times in the period from 5 October 2008 to 30 June 2009, and at all times in the period from 11 July 2009 to 7 February 2010, the company was party to a contract with Mr Solomon.

31.In the periods from 5 October 2008 to 30 June 2009 and from 11 July 2009 to 7 February 2010, the company represented to Mr Solomon that the contract of employment under which he performed work for the company was a contract for services whereby Mr Solomon performed work as an independent contractor, in that the company required Mr Solomon to:

a)provide invoices made out to the company in order to receive pay; and

b)arrange for payment of his own income taxation and superannuation.

(Solomon Representations).

32.The contract in force at the time of the Solomon Representations was a contract of employment and not a contract to provide services as an independent contractor.

33.In the periods from 5 October 2008 to 30 June 2009, and 11 July 2009 to 31 December 2009, the company contravened section 900 of the Workplace Relations Act, by misrepresenting to Mr Solomon that the contract of employment under which he performed work for the company was a contract for services, whereby Mr Solomon performed work as an independent contractor.

34.In the period from 1 January 2010 to 7 February 2010, the company contravened s.357 of the Fair Work Act, by misrepresenting to Mr Solomon that the contract of employment under which he performed work for the company was a contract for services, whereby Mr Solomon performed work as an independent contractor.

Underpayment contraventions

Failure to pay basic periodic rate of pay

Failure to pay relevant minimum wage

35.In the period up to and including 31 December 2009, pursuant to s.182(1) of the Workplace Relations Act, which continued to apply pursuant to item 5 of Schedule 16 of the Transitional Act), the company was required to pay Ms Park and Mr Solomon no less than the basic periodic rate of pay contained in the Australian Pay and Classification Scale (APCS) derived from the Shop Employees Award for each Shop Worker’s relevant age and classification.

36.In the period from 1 January 2010 to 30 June 2010, pursuant to clause A.2.3 of Schedule A of the Modern Award, the company was required to pay each Shop Worker, while employed, no less than the minimum wage in the APCS derived from the Shop Employees Award for the Shop Worker’s relevant age and classification.

Ms Park

37.During the period from 26 October 2009 to 16 April 2010, Ms Park:

a)performed work for the company within the APCS classification of “Shop Assistant”; and

b)was 20 years of age.

38.During the period from 26 October 2009 to 16 April 2010, the applicable basic periodic rate of pay or minimum wage for an employee in the classification of “Shop Assistant” who was 20 years of age was $14.26 per hour.

39.During the period from 26 October 2009 to 16 April 2010, the company paid Ms Park a flat rate of between $6.00 and $8.00 per hour (that is, a pay rate ranging from $8.26 to $6.26 below the basic periodic rate of pay or minimum wage owed to Ms Park).

40.In or about early November 2009, Mr Fuller had a conversation with Ms Park where he said that “if you want more money, you’ll have to get faster and faster.  When you get better I’ll pay you maybe eight, nine, ten dollars an hour.”

Mr Solomon

41.During the period from 5 October 2008 to 30 June 2009, Mr Solomon performed work for the company within the APCS classification of “Shop Assistant in charge”.

42.During the period from 5 October 2008 to 30 June 2009, the applicable basic periodic rate of pay for an employee in the classification of “Shop Assistant in Charge (in charge of four or less employees without responsibility for buying)” was $16.13 per hour. Mr Solomon was paid a flat rate of $20.00 per hour.  The Fair Work Ombudsman does not allege that Mr Solomon was underpaid in respect of his basic periodic rate of pay during this period.

43.During the period from 11 July 2009 to 7 February 2010, Mr Solomon performed work for the company within the APCS classification of “Shop Assistant”.

44.During the period from 11 July 2009 to 7 February 2010, the applicable basic periodic rate of pay or minimum wage for an adult employee in the classification of “Shop Assistant” was $15.84 per hour.

45.During the period from 11 July 2009 to 7 February 2010, the company paid Mr Solomon a flat rate of $15.00 per hour (that is, a pay rate $0.84 below the basic periodic rate of pay or minimum wage owed to Mr Solomon).

Contraventions and total underpayment

46.By failing to pay Ms Park and Mr Solomon the correct rate of pay under the APCS derived from the Shop Employees Award, the company contravened:

a)section 182(1) of the Workplace Relations Act, as it continued to apply pursuant to item 5 of Schedule 16 of the Transitional Act, in the period from 26 October 2009 to 31 December 2009 (in respect of Ms Park) and in the period from 11 July 2009 to 31 July 2009 (in respect of Mr Solomon); and

b)clause A.2.3 of Schedule A to the Modern Award, and therefore s. of the Fair Work Act, in the period from 1 January 2010 to 16 April 2010 (in respect of Ms Park), and in the period from 1 January 2010 to 7 February 2010 (in respect of Mr Solomon).

47.The total underpayment of basic periodic rate of pay and minimum wage for Mr Solomon and Ms Park was $3844.04, comprised of $3269.67 for Ms Park and $574.37 for Mr Solomon.

Failure to pay casual loadings

48.In the period from 27 March 2006 to 31 December 2009, pursuant to s.185(2) of the Workplace Relations Act, as it continued to apply pursuant to item 5 of Schedule 16 of the Transitional Act, the company was required to pay the Shop Workers a guaranteed casual loading percentage of 15 per cent.

49.In the period from 1 January 2010 to 30 June 2010, pursuant to clause A.5.2 of Schedule A of the Modern Award, the company was required to pay each Shop Worker engaged as a casual a loading percentage of 15 per cent, being no less than the casual loading in the NAPSA derived from the Shop Employees Award.

50.In the period from 1 July 2010 to 11 August 2010, pursuant to clause A.5.4 of Schedule A of the Modern Award, the company was required to pay each Shop Worker engaged as a casual a loading percentage of 17 per cent, being no less than the casual loading in clause 13.2 of the Modern Award less 80 per cent of the transitional percentage as set out in clause A.5.3 of Schedule A of the Modern Award.

51.In the period from 31 December 2006 to 11 August 2010, during the periods in which they were employed by the company, the company did not pay any casual loadings to the Shop Workers.

52.By failing to pay the required casual loadings to the Shop Workers, the company contravened:

a)section 185(2) of the Workplace Relations Act, as it continued to apply pursuant to item 5 of Schedule 16 of the Transitional Act, in the period from 31 December 2006 to 31 December 2009 (during the periods in which each of Ms Higham-Ross, Ms Park, Ms Larson and Mr Solomon were employed by the company);

b)clause A.5.2 of Schedule A of the Modern Award, and therefore section 45 of the Fair Work Act, in the period from 1 January 2010 to 30 June 2010 (during the periods in which each of Ms Higham-Ross, Ms Park, Mr Dutson and Mr Solomon were employed by the company); and

c)clause A.5.4 of Schedule A of the Modern Award, and therefore s.45 of the Fair Work Act, in the period from 1 July 2010 to 11 August 2010 (during the periods in which each of Ms Higham-Ross, Ms Park, Mr Dutson and Mr Solomon were employed by the company).

53.The total underpayment of casual loadings in the period from 31 December 2006 to 11 August 2010 was $21,670.90, comprised of:

a)$15,275.07 for Ms Higham-Ross;

b)$2768.07 for Mr Solomon;

c)$112.10 for Ms Larson;

d)$2463.67 for Ms Park; and

e)$1051.99 for Ms Dutson.

Failure to pay fixed Saturday loadings

54.In the period from 27 March 2006 to 31 December 2009, pursuant to subclause 14(a)(iii) and item 5 of Table 2 of the NAPSA derived from the Shop Employees Award, the company was required to pay the Shop Workers fixed loadings for each engagement of work performed on Saturdays, as set out in the table below:

Loading	Applicable rate
Engagements up to and including four hours
Adult employees	$5.90
Employees under 21 years of age	$3.90
Engagements exceeding four hours
Adult employees	$12.00
Employees under 21 years of age	$6.60

55.In the period from 1 January 2010 to 30 June 2010, pursuant to clause A.5.2 of Schedule A of the Modern Award, the company was required to pay each of the Shop Workers, for each engagement of work performed on Saturdays, at no less than the fixed loadings in the NAPSA which are set out in the table at [54 above.

56.In the period from 31 December 2006 to 30 June 2010, the Shop Workers were engaged to perform work on Saturdays on occasions as set out in Annexure A to this Statement of Agreed Facts.

57.Throughout the Shop Workers’ periods of employment in the period from 31 December 2006 to 30 June 2010, the company did not pay any fixed loadings to the Shop Workers on the occasions when they were engaged to perform work on Saturdays.

58.By failing to pay fixed loadings to the Shop Workers on occasions when they were engaged to perform work on Saturdays, the company contravened:

a)subclause 14(a)(iii) of the NAPSA derived from the Shop Employees Award, as it continued to apply pursuant to sub-item 2(1) of Schedule 16 of the Transitional Act, in the period from 31 December 2006 to 31 December 2009; and

b)clause A.5.2 of Schedule A of the Modern Award, and therefore section 45 of the Fair Work Act, in the period from 1 January 2010 to 30 June 2010.

59.The total underpayment of fixed Saturday loadings under the NAPSA derived from the Shop Award, and under the Modern Award, was $195.60, as set out in Annexure A.

Failure to pay Sunday penalty rates

60.In the period from 27 March 2006 to 31 December 2009, pursuant to subclause 14(b)(i) of the NAPSA derived from the Shop Employees Award, the company was required to pay the Shop Workers at the rate of time and one half for all ordinary hours of work performed on Sundays.

61.In the period from 1 January 2010 to 30 June 2010, pursuant to clause A.5.2 of Schedule A of the Modern Award, the company was required to pay the Shop Workers at no less than the rate set out in the NAPSA (as set out at [60] above) for all ordinary hours of work performed on Sundays.

62.In the period from 1 July 2010 to 11 August 2010, pursuant to clause A.5.4 of Schedule A of the Modern Award, the company was required to pay the Shop Workers at no less than the Sunday penalty rate in subclause 29.4(c) of the Modern Award less 80 per cent of the transitional percentage as set out in clause A.5.3 of Schedule A of the Modern Award, for all ordinary hours of work performed on Sundays.

63.In the period from 31 December 2006 to 11 August 2010, one or more of the Shop Workers were engaged to perform work on Sundays on occasions as set out in Annexure B to this Agreed Statement of Facts.

64.Throughout the Shop Workers’ periods of employment in the period from 31 December 2006 to 11 August 2010, the company did not pay any penalty rates to the Shop Workers on the occasions when they were engaged to perform work on Sundays.

65.By failing to pay the appropriate penalty rates to the Shop Workers on occasions when they were engaged to perform work on Sundays, the company contravened:

a)subclause 14(b)(i) of the NAPSA derived from the Shop Employees Award, as it continued to apply pursuant to sub-item 2(1) of Schedule 16 of the Transitional Act, in the period from 31 December 2006 to 31 December 2009;

b)clause A.5.2 of Schedule A of the Modern Award, and therefore s.45 of the Fair Work Act, in the period from 1 January 2010 to 30 June 2010; and

c)clause A.5.4 of Schedule A of the Modern Award, and therefore s.45 of the Fair Work Act, in the period from 1 January 2010 to 11 August 2010.

66.The total underpayment of Sunday penalty rates in the period from 31 December 2006 to 11 August 2010 was $32,834.34, as set out in Annexure B.

Failure to pay overtime rates

67.In the period from 27 March 2006 to 31 December 2009, pursuant to clause 15 of the NAPSA derived from the Shop Employees Award, the company was required to pay the Shop Workers at the rate of time and one half for the first two hours on any one day, and double time thereafter (except on Sundays, where the requirement is double time for all hours), for overtime work performed in any one of, but not limited to, the following circumstances:

a)hours in excess of 38 per week;

b)hours performed on any day in excess of five per week;

c)hours performed in excess of nine on any one day;

d)before a Shop Worker’s regular commencing time on any one day;

e)after the prescribed ceasing time on any one day; or

f)outside ordinary hours of work.

68.In the period from 31 December 2006 to 31 December 2009, during the periods in which they worked for the company, one or more of the Shop Workers performed overtime hours on occasions as set out in Annexure C to this Agreed Statement of Facts.

69.Throughout the Shop Workers’ periods of employment from 31 December 2006 to 31 December 2009, the company did not pay any overtime rates to the Shop Workers on the occasions when they were engaged to perform overtime work.

70.By failing to pay the Shop Workers the appropriate overtime rates on the occasions when they were engaged to perform overtime work, the company contravened clause 15 of the NAPSA derived from the Shop Employees Award, as it continued to apply pursuant to sub-item 2(1) of Schedule 16 of the Transitional Act, in the period from 31 December 2006 to 31 December 2009.

71.The total underpayment of overtime rates in the period from 31 December 2006 to 31 December 2009 was $5719.89, as set out in Annexure C.

Failure to pay public holiday penalty rates

72.In the period from 27 March 2006 to 31 December 2009, pursuant to clause 17 of the NAPSA derived from the Shop Employees Award, the company was required to pay the Shop Workers at the rate of double time and one half for all ordinary hours of work performed on certain public holidays, with a minimum payment of three hours.

73.In the period from 1 January 2010 to 30 June 2010, pursuant to clause A.5.2 of Schedule A of the Modern Award, the company was required to pay the Shop Workers at no less than the rate in the NAPSA (as set out at [72] above) for all ordinary hours of work performed on certain public holidays.

74.In the period from 31 December 2006 to 31 December 2009, one or more of the Shop Workers were engaged to perform work on public holidays on occasions as set out in Annexure D to this Agreed Statement of Facts.

75.Throughout the Shop Workers’ periods of employment from 31 December 2006 to 31 December 2009, the company did not pay any penalty rates to the Shop Workers on the occasions when they were engaged to perform work on public holidays.

76.By failing to pay the Shop Workers the required public holiday penalty rates on the occasions when they were engaged to perform work on public holidays, the company contravened:

a)clause 17 of the NAPSA derived from the Shop Employees Award, as it continued to apply pursuant to sub-item 2(1) of Schedule 16 of the Transitional Act), in the period from 31 December 2006 to 31 December 2009; and

b)clause A.5.2 of Schedule A of the Modern Award, and therefore section 45 of the Fair Work Act, in the period from 1 January 2010 to 30 June 2010.

77.The total underpayment of public holiday penalty rates in the period from 31 December 2006 to 30 June 2010 was $5657.18, as set out in Annexure D.

Failure to pay annual holiday loadings

78.In the period from 31 December 2006 to 31 December 2009, pursuant to clause 4(3)(b)(ii) of the Annual Holiday NAPSA, the company was required to pay the Shop Workers a loading of 1/12^th of their ordinary pay, in accordance with the Annual Holidays Act 1944 (NSW) (Annual Holiday Loading).

79.In the period from 1 January 2010 to 30 June 2010, pursuant to clause A.6.2 of Schedule A of the Modern Award, the company was required to pay the Shop Workers no less than the Annual Holiday Loading in the Annual Holiday NAPSA as set out at [78 above.

80.In the period from 1 July 2010 to 11 August 2010, pursuant to clause A.6.4 of Schedule A of the Modern Award, the company was required to pay the Shop Workers no less than 80 per cent of the Annual Holiday Loading as set out in clause A.6.3 of Schedule A of the Modern Award.

81.Throughout the Shop Workers’ periods of employment from 31 December 2006 to 11 August 2010, the company did not pay any Annual Holiday Loadings to the Shop Workers.

82.By failing to pay the required annual holiday loadings to the Shop Workers, the company contravened:

a)clause 4(3)(b)(ii) of the Annual Holiday NAPSA, as it continued to apply pursuant to item 2(1) of Schedule 16 of the Transitional Act, in the period from 31 December 2006 to 31 December 2009;

b)clause A.6.2 of Schedule A of the Modern Award, and therefore s.45 of the Fair Work Act, in the period from 1 January 2010 to 30 June 2010; and

c)clause A.6.4 of Schedule A of the Modern Award, and therefore s.45 of the Fair Work Act, in the period from 1 July 2010 to 11 August 2010.

83.The total underpayment of Annual Holiday Loading in the period from 31 December 2006 to 11 August 2010 was:

a)$8610.40 for Ms Higham-Ross;

b)$1774.32 for Mr Solomon;

c)$71.39 for Ms Larson;

d)$1364.64 for Ms Park; and

e)$732.41 for Ms Dutson.

Total underpayment

84.Set out in the table below are details of:

a)the total underpayment of the Shop Workers of $82,475.12 (as detailed in Annexure E to this Agreed Statement of Facts);

b)over-award payments of $13,245.08 for base rate of pay made to Ms Higham-Ross, Mr Solomon, Ms Larson and Ms Dutson, which the Fair Work Ombudsman has offset against the total amount outstanding; and

c)back payments rectifying the underpayments identified in Annexure E in part which the company made on:

i)11 April 2012; and

ii)14 August 2012:

Ms Higham-Ross	Mr Solomon	Ms Larson	Ms Park	Ms Dutson	TOTAL
Total underpayment	$60,827.20	$5,116.76	$187.39	$13,928.18	$2,145.59	$82,475.12
Over-award payments offset	$10,880.13	$1,832.80	$98.76	-	$433.39	$13,245.08
Back payments on 11/4/2012	-	$3,236.80	$88.63	-	$1,982.20	$5,307.63
Back payments on 14/8/2012	$49,947.08	$13,928.18	$63,875.26
TOTAL OUTSTANDING	$0.00	$47.16	$0.00	$0.00	$0.00	$47.16

85.As at the date of the signing of this Agreed Statement of Facts, it is agreed that the company owes a total amount of $47.16, all of which is owed to Mr Solomon.

Record keeping contraventions

Failure to keep appropriate records of overtime hours worked

86.In the period from 31 December 2006 to 30 June 2009, pursuant to Regulation 19.4 of the Workplace Relations Regulations 2006 (Cth) (Workplace Relations Regulations), the company was required to make, or cause to be made, records relating to the Shop Workers in accordance with Divisions 3 and 4 of Chapter 2, Part 19 of the Workplace Relations Regulations.

87.Pursuant to sub-regulation 19.09(1) of the Workplace Relations Regulations, the records referred to at [86] above were required to state the number of overtime hours worked by any Shop Worker during each day or alternatively when any Shop Worker started and ceased working overtime hours, if a penalty rate or loading was required to be paid for overtime hours actually worked by the Shop Worker.

88.In the period from 1 July 2009 onwards, pursuant to s.535 of the Fair Work Act, the company was required to make, or cause to be made, records relating to the Shop Workers in accordance with the Fair Work Regulations 2009 (Cth) (Fair Work Regulations).

89.The records referred to at [88] above were required, pursuant to Regulation 3.34 of the Fair Work Regulations, to state the number of overtime hours worked by the employee during each day or alternatively when the employee started and ceased working overtime hours, if a penalty rate or loading was required to be paid for overtime hours actually worked by the employee.

90.In the period from 31 December 2006 to 31 December 2009, pursuant to clause 15 of the NAPSA derived from the Shop Employees Award, Ms Higham-Ross was entitled to be paid a penalty rate for overtime hours in circumstances including, but not limited to:

a)before her regular commencing time on any one day;

b)after the prescribed ceasing time on any one day; and

c)outside her ordinary hours of work.

91.During the period from 31 December 2006 and 31 December 2009, Ms Higham-Ross worked overtime hours in one or more of the circumstances set out in paragraph 90 above, as set out in Annexure C.

92.During the period from 31 December 2006 to 1 January 2009, the company failed to keep any time records relating to Ms Higham-Ross.

93.During the period from 1 January 2009 to 31 December 2009, the company failed to keep records stating the number of overtime hours worked by Ms Higham-Ross during each day or alternatively when Ms Higham-Ross started and ceased working overtime hours. The records were not kept in a form that enabled any overtime hours worked each day to be identified, or alternatively showed the times in which Ms Higham-Ross started and ceased working overtime hours.

94.In the period from 31 December 2006 to 30 June 2009, the company contravened Regulation 19.09(1) of the Workplace Relations Regulations (which is a civil remedy provision according to Regulation 19.09(3) of the Workplace Relations Regulations the company), by failing to keep appropriate records in relation to Ms Higham-Ross.

95.In the period from 1 July 2009 to 31 December 2009, the company contravened s.535(1) of the Fair Work Act (which is a civil remedy provision under s.539(2) of the Fair Work Act), by failing to keep appropriate records in relation to Ms Higham-Ross.

Failure to keep appropriate records detailing payment, bonus, loading, penalty rate or entitlement

96.Pursuant to sub-regulation 19.11(3) of the Workplace Relations Regulations, in the period from 31 December 2006 to 30 June 2009, the records referred to at [86] above were required to contain details of any payment, bonus, loading, penalty rate or other monetary allowance or separately identifiable entitlement that any Shop Worker was entitled to receive.

97.Pursuant to sub-regulation 3.33(3) of the Fair Work Regulations, in the period from 1 July 2009 onwards, the records referred to at [88] above were required to set out details of any incentive-based payment, bonus, loading, penalty rate or other monetary allowance or separately identifiable entitlement if any Shop Worker was entitled to be paid it.

98.In the period from 31 December 2006 to 11 August 2010, pursuant to clause 15 of the NAPSA derived from the Shop Employees Award, the Shop Workers, during the periods in which they were employed, were entitled to be paid one or more incentive-based payments, bonuses, loadings, penalty rates, other monetary allowances or separately identifiable entitlements (being casual loading, fixed Saturday loading, Sunday penalty rates, public holiday penalty rates, and annual holiday loading as set out above).

99.During the period from 31 December 2006 to 11 August 2010, the Shop Workers performed work in such times or circumstances that entitled them to one or more of the loadings set out at [98] above.

100.During the period from 31 December 2006 to 11 August 2010, the company failed to keep time records that set out details of all payments, bonuses, loadings, penalty rates, allowances or entitlements set out at [98 above.

101.In the period from 31 December 2006 to 30 June 2009, the company contravened Regulation 19.11 of the Workplace Relations Regulations (which is a civil remedy provision according to sub-regulation 19.11(6) of the Workplace Relations Regulations), by failing to keep appropriate records.

102.In the period from 1 July 2009 to 11 August 2010, the company contravened s.535(1) of the Fair Work Act by failing to keep records in accordance with sub-regulation 3.33(3) of the Fair Work Regulations. Subsection 535(1) of the Fair Work Act is a civil remedy provision under s.539(2) of the Fair Work Act.

103.The company’s failure to keep appropriate records for Mr Solomon in accordance with sub-regulation 3.33(3) of the Fair Work Regulations prevented the Fair Work Ombudsman from determining the extent of any underpayment by the company in respect of Mr Solomon in relation to fixed Saturday loadings, Sunday penalty rates, overtime and public holiday penalty rates.

Accessorial liability of second respondent

104.At all relevant times, Mr Fuller was:

a)the operative and controlling mind of the company;

b)the person who made decisions on behalf of the company, or who was ultimately responsible for the company’s decisions, in relation to:

i)the basis upon which persons engaged to perform work for the company (including the Shop Workers) would be engaged;

ii)the terms and conditions upon which persons would be engaged;

iii)what payments would be made to persons engaged to perform work;

iv)the work to be performed by any person within the Shop;

v)the time, method and manner of payment; and

vi)what deductions, if any, would be made from payments; and

c)the person with whom the Fair Work Ombudsman primarily dealt with during the course of the investigation into the Shop Workers’ complaints.

Admissions

105.The company admits that it contravened the following civil penalty provisions:

a)section 900 of the Workplace Relations Act and s.357 of the Fair Work Act, by misrepresenting to Ms Higham-Ross in the period from 1 March 2007 to 11 August 2010 that the contract of employment under which she was engaged to perform work for the company was a contract for services, whereby she performed services as an independent contractor;

b)section 900 of the Workplace Relations Act and s.357 of the Fair Work Act, by misrepresenting to Mr Solomon in the period from 5 October 2008 to 30 June 2009, and in the period from 11 July 2009 to 7 February 2010, that the contract of employment under which he was engaged to perform work for the company was a contract for services, whereby he performed services as an independent contractor;

c)section 182(1) of the Workplace Relations Act (as it continued to apply pursuant to item 5 of Schedule 16 of the Transitional Act) and s.45 of the Fair Work Act (by contravening clause A.2.3 of Schedule A of the Modern Award), by failing to provide Mr Solomon and Ms Park with their basic periodic rate of pay and/or the relevant minimum wage;

d)section 185(2) of the Workplace Relations Act (as it continued to apply pursuant to item 5 of Schedule 16 of the Transitional Act) and s.45 of the Fair Work Act (by contravening clause A.5.2 of Schedule A of the Modern Award), by failing to pay the Shop Workers the relevant casual loading;

e)sub-item 2(1) of Schedule 16 of the Transitional Act (by contravening subclause 14(a)(iii) of the Shop Employees Award NAPSA), and s.45 of the Fair Work Act (by contravening clause A.5.2 of Schedule A of the Modern Award), by failing to pay the Shop Workers the applicable fixed Saturday loadings;

f)sub-item 2(1) of Schedule 16 of the Transitional Act (by contravening subclause 14(b)(i) of the Shop Employees Award NAPSA) and s.45 of the Fair Work Act (by contravening clauses A.5.2 and A.5.4 of Schedule A of the Modern Award), by failing to pay the Shop Workers the applicable Sunday penalty rates;

g)sub-item 2(1) of Schedule 16 of the Transitional Act (by contravening clause 15 of the Shop Employees Award NAPSA), by failing to pay the Shop Workers the applicable overtime rates;

h)sub-item 2(1) of Schedule 16 of the Transitional Act (by contravening clause 17 of the Shop Employees Award NAPSA), and section 45 of the Fair Work Act (by contravening clause A.5.2 of Schedule A of the Modern Award), by failing to pay the Shop Workers the applicable public holiday loadings;

i)sub-item 2(1) of Schedule 16 of the Transitional Act (by contravening subclause 4(3)(b)(ii) of the Annual Holiday NAPSA), and s.45 of the Fair Work Act (by contravening clauses A.5.2 and A.5.4 of Schedule A of the Modern Award), by failing to pay the Shop Workers the applicable annual holiday loadings; and

j)sub-regulation 19.09(1) and regulation 19.11 of the Workplace Relations Regulations, and s.535(1) of the Fair Work Act, by:

i)failing to keep appropriate records of overtime hours worked by Ms Higham-Ross, and

ii)failing to keep appropriate records detailing payments, bonuses, loadings, penalty rates or other entitlements owed to the Shop Workers.

106.Mr Fuller admits that he was involved in (within the meaning of s.728 of the Workplace Relations Act and s.550 of the Fair Work Act) the company’s contraventions of the Workplace Relations Act, the Fair Work Act, the Transitional Act, and the Workplace Relations Regulations as set out at [105] above.

TABLE 1 – FIXED SATURDAY LOADINGS

27 March 2006 to 31 December 2009

Employee	Saturdays worked	Applicable rate per shift	Total Saturday loadings payable	Total Saturday loadings paid	Total underpayment
Jane Sandra Higham-Ross	12	$5.90	$70.80	$0.00	$70.80
Julian Solomon	N/A*	N/A*	N/A*	N/A*	N/A*
Megan Ellanda Larson	1	$3.90	$3.90	$0.00	$3.90
Mohee Park	9	$3.90	$35.10	$0.00	$35.10
Rosanna Tess Dutson	-	-	$0.00	$0.00	$0.00
TOTALS			$109.80	$0.00	$109.80

* The parties have not been able to calculate the quantum of underpayments to Mr Solomon caused by the company’s failure to pay Saturday loadings, because the company failed to make and keep suitable employee records.

1 January 2010 to 30 June 2010

Employee	Saturdays worked	Applicable rate per shift	Total Saturday loadings payable	Total Saturday loadings paid	Total underpayment
Jane Sandra Higham-Ross	-	-	$0.00	$0.00	$0.00
Julian Solomon	N/A**	N/A**	N/A**	N/A**	N/A**
Megan Ellanda Larson	-	-	$0.00	$0.00	$0.00
Mohee Park	15	$3.90	$58.50	$0.00	$58.50
Rosanna Tess Dutson	7	$3.90	$27.30	$0.00	$27.30
TOTALS			$85.80	$0.00	$85.80

** The parties have not been able to calculate the quantum of underpayments to Mr Solomon caused by the company’s failure to pay Saturday loadings, because the company failed to make and keep suitable employee records.

TABLE 2 – SUNDAY PENALTY RATES

31 December 2006 to 31 December 2009

Employee	Sunday hours worked	Base rate payable	Sunday penalties payable (at 150 per cent of base rate)	Sunday penalties paid	Total underpayment
Jane Sandra Higham-Ross (31.12.2006-05.10.2007)	296	$15.00	$6660.00	$0.00	$6660.00
(06.10.2007-02.10.2008)	344	$15.27	$7879.32	$0.00	$7879.32
(03.10.2008-02.01.2010)	451	$15.84	$10,715.76	$0.00	$10,715.76
Julian Solomon	N/A*	N/A*	N/A*	N/A*	N/A*
Mohee Park	52	$14.26	$1112.28	$0.00	$1112.28
Rosanna Tess Dutson	-	-	$0.00	$0.00	$0.00
TOTALS			$26,367.36	$0.00	$26,367.36

* The parties have not been able to calculate the quantum of underpayments to Mr Solomon caused by the company’s failure to pay Sunday penalty rates, because the company failed to make and keep suitable employee records.

1 January 2010 to 11 August 2010

Employee	Sunday hours worked	Base rate payable	Sunday penalties payable (at 150 per cent of base rate)	Sunday penalties paid	Total underpayment
Jane Sandra Higham-Ross (03.01.2010-03.07.2010)	133.35	$15.84	$3168.40	$0.00	$3168.40
(04.07.2010-11.08.2010)	28	$16.47	$760.16	$0.00	$760.16
Julian Solomon	N/A**	N/A**	N/A**	N/A**	N/A**
Mohee Park	112.75	$14.26	$2411.72	$0.00	$2411.72
Rosanna Tess Dutson	4	$12.67	$126.70	$0.00	$126.70
TOTALS			$6466.98	$0.00	$6466.98

** The parties have not been able to calculate the quantum of underpayments to Mr Solomon caused by the company’s failure to pay Sunday penalty rates, because the company failed to make and keep suitable employee records.

TABLE 3 – OVERTIME

31 December 2006 to 31 December 2009

Employee	Hours worked for 150 per cent overtime	Hours worked for 200 per cent overtime	Base rate payable	150 per cent overtime payable	200 per cent overtime payable	Casual loading on overtime payable	Overtime paid	Total underpayment
Jane Sandra Higham-Ross (31.12.2006-05.10.2007)	28	50.75	$15.00	$630.00	$1,522.50	$322.88	$0.00	$2475.38
(06.10.2007-02.10.2008)	13	13	$15.27	$297.77	$397.02	$104.22	$0.00	$799.01
(03.10.2008-02.01.2010)	24	4	$15.84	$570.24	$126.72	$104.54	$0.00	$801.50
Julian Solomon	N/A*	N/A*	N/A*	N/A*	N/A*	N/A*	N/A*	N/A*
Mohee Park	13.5	40	$14.26	$288.77	$1140.80	$214.43	$0.00	$1644.00
TOTALS				$1,786.78	$3,187.04	$746.07	$0.00	$5719.89

* The parties have not been able to calculate the quantum of underpayments to Mr Solomon caused by the company’s failure to pay overtime rates, because the company failed to make and keep suitable employee records.

TABLE 4 – PUBLIC HOLIDAY PENALTY RATES

31 December 2006 to 31 December 2009

Employee	Public holiday hours worked	Base rate payable	P/H penalties payable (at 250 per cent of base rate)	Public holiday penalties paid	Total underpayment
Jane Sandra Higham-Ross (31.12.2006-05.10.2007)	46	$15.00	$1725.00	$0.00	$1725.00
(06.10.2007-02.10.2008)	24	$15.27	$916.20	$0.00	$916.20
(03.10.2008-02.01.2010)	24.5	$15.84	$970.20	$0.00	$970.20
Julian Solomon	N/A*	N/A*	N/A*	N/A*	N/A*
Mohee Park	8	$14.26	$285.20	$0.00	$285.20
Rosanna Tess Dutson	-	-	$0.00	$0.00	$0.00
TOTALS			$3896.60	$0.00	$3896.60

* The parties have not been able to calculate the quantum of underpayments to Mr Solomon caused by the company’s failure to pay public holiday penalty rates, because the company failed to make and keep suitable employee records.

1 January 2010 to 30 June 2010

Employee	Public holiday hours worked	Base rate payable	P/H penalties payable (at 250 per cent of base rate)	Public holiday penalties paid	Total underpayment
Jane Sandra Higham-Ross (03.01.2010-03.07.2010)	-	-	$0.00	$0.00	$0.00
(04.07.2010-11.08.2010)	-	-	$0.00	$0.00	$0.00
Julian Solomon	N/A**	N/A**	N/A**	N/A**	N/A**
Mohee Park	36	$14.26	$1283.40	$0.00	$1283.40
Rosanna Tess Dutson	16	$11.09	$477.18	$0.00	$477.18
TOTALS			$1760.58	$0.00	$1760.58

** The parties have not been able to calculate the quantum of underpayments to Mr Solomon caused by the company’s failure to pay public holiday penalty rates, because the company failed to make and keep suitable employee records.

TABLE 5 – TOTAL UNDERPAYMENTS

Jane Sandra Higham-Ross	Julian Solomon	Megan Ellanda Larson	Mohee Park	Rosanna Tess Dutson
Underpayment category
Base rate of pay	-	$574.37	-	$3269.67
Casual loading	$15275.07	$2768.07	$112.10	$2463.67	$1051.99
Annual holiday loading	$8610.40	$1774.32	$71.39	$1364.64	$732.41
Saturday loading	$70.80	-	$3.90	$93.60	$27.30
Sunday penalty rates	$29183.64	-	-	$3524.00	$126.70
Public holiday penalty rates	$3611.40	-	-	$1568.60	$477.18
Overtime	$4075.89	-	-	$1644.00	-
Total underpayment	$60827.20	$5116.76	$187.39	$13928.18	$2415.59
Less over-award payments for base rate of pay	$10880.13	$1832.80	$98.76	-	$433.39
Total outstanding	$49947.07	$3283.96	$88.63	$13928.18	$1982.20
Less back-payments known at date of this Agreed Statement of Facts	$49947.07**	$3236.80*	$88.63*	$13928.18**	$1982.20*
Total remaining to be paid as at the date of this Agreed Statement of Facts	$0.00	$47.16	$0.00	$0.00	$0.00

* paid by the company on 11 April 2012
**paid by the company on 14 August 2012

Annexure B
CONTRAVENTIONS AND POWER TO IMPOSE PENALTIES

CONTRAVENTIONS OF THE WORKPLACE RELATIONS ACT[77] AND TRANSITIONAL ACT[78]
No.	Provisions contravened	Description of contravention	Maximum penalty (1st R)	Maximum penalty (2nd R)	Reference for maximum penalty	Contraventions / employees	Power to impose penalty
1	Workplace Relations Act: Subsection 900(1)	Misrepresenting an employment relationship as an independent contracting arrangement	$33,000 per breach	$6,600 per breach	Workplace Relations Act: Subsection 904(2)	Repeated contraventions, 2 employees (Jane Sandra Higham-Ross, Julian Solomon)	Up to 30 June 2009: Subsection 904(1) Workplace Relations Act
2	Workplace Relations Act: Subsection 182(1) Transitional Act: Item 5, Schedule 16	Failure to pay guaranteed Shop Employees Pay Scale basic periodic rates of pay	$33,000 per breach	$6,600 per breach	Workplace Relations Act: Subsection 719(4) Transitional Act: Sub-item 16(1)(a) of Schedule 16	Repeated contraventions, 2 employees (Julian Solomon, Mohee Park)	Up to 30 June 2009: Subsection 719(1) Workplace Relations Act (subsection 717(a)(ii) defines “applicable provision” to include a term of the AFPCS, which includes s 182. 1 July 2009 to 31 Dec 2009 Item 5 of Sch 16 Transitional Act
3	Workplace Relations Act: Subsection 185(2) Transitional Act: Item 5, Schedule 16	Failure to pay guaranteed casual loadings in the Shop Employees Pay Scale	$33,000 per breach	$6,600 per breach	Workplace Relations Act: Subsection 719(4) Transitional Act: Sub-item 16(1)(a) of Schedule 16	Repeated contraventions, 4 employees (Jane Sandra Higham-Ross, Julian Solomon, Megan Ellanda Larson, Mohee Park)	Up to 30 June 2009: Subsection 719(1) Workplace Relations Act (subsection 717(a)(ii) defines “applicable provision” to include a term of the AFPCS, which includes s 185. 1 July 2009 to 31 Dec 2009 Item 5 of Sch 16 Transitional Act
4	Workplace Relations Act: Subsection 718(1) (as affected by item 43(1) of Schedule 8) Transitional Act: Item 2(1) of Schedule 16	Failure to pay minimum fixed Saturday loadings specified in subclause 14(a)(iii) and item 5 of Table 2 of the Shop Employees NAPSA	$33,000 per breach	$6,600 per breach	Workplace Relations Act: Subsection 719(4) Transitional Act: Sub-item 16(1)(a) of Schedule 16	Repeated contraventions, 3 employees (Jane Sandra Higham-Ross, Megan Ellanda Larson, Mohee Park)	Up to 30 June 2009: Subsection 719(1) Workplace Relations Act (subsection 717(a)(ii) defines “applicable provision” to include a term of a collective agreement. Item 43(1) Sch 8 Workplace Relations Act enforces a NAPSA as if a collective agreement. 1 July 2009 to 31 Dec 2009 Sub-item 2(1), Sch 16 Transitional Act
5	Workplace Relations Act: Subsection 718(1) (as affected by item 43(1) of Schedule 8) Transitional Act: Item 2(1) of Schedule 16	Failure to pay minimum Sunday penalty rates specified in subclause 14(b)(i) of the Shop Employees NAPSA	$33,000 per breach	$6,600 per breach	Workplace Relations Act: Subsection 719(4) Transitional Act: Sub-item 16(1)(a) of Schedule 16	Repeated contraventions, 2 employees (Jane Sandra Higham-Ross, Mohee Park)	Up to 30 June 2009: Subsection 719(1) Workplace Relations Act (subsection 717(a)(ii) defines “applicable provision” to include a term of a collective agreement. Item 43(1) Sch 8 Workplace Relations Act enforces a NAPSA as if a collective agreement. 1 July 2009 to 31 Dec 2009 Sub-item 2(1), Sch 16 Transitional Act
6	Workplace Relations Act: Subsection 718(1) (as affected by item 43(1) of Schedule 8) Transitional Act: Item 2(1) of Schedule 16	Failure to pay minimum overtime rates specified in clause 15 of the Shop Employees NAPSA	$33,000 per breach	$6,600 per breach	Workplace Relations Act: Subsection 719(4) Transitional Act: Sub-item 16(1)(a) of Schedule 16	Repeated contraventions, 2 employees (Jane Sandra Higham-Ross, Mohee Park)	Up to 30 June 2009: Subsection 719(1) Workplace Relations Act (subsection 717(a)(ii) defines “applicable provision” to include a term of a collective agreement. Item 43(1) Sch 8 Workplace Relations Act enforces a NAPSA as if a collective agreement. 1 July 2009 to 31 Dec 2009 Sub-item 2(1), Sch 16 Transitional Act
7	Workplace Relations Act: Subsection 718(1) (as affected by item 43(1) of Schedule 8) Transitional Act: Item 2(1) of Schedule 16	Failure to pay minimum public holiday penalty rates specified in clause 17 of the Shop Employees NAPSA	$33,000 per breach	$6,600 per breach	Workplace Relations Act: Subsection 719(4) Transitional Act: Sub-item 16(1)(a) of Schedule 16	Repeated contraventions, 2 employees (Jane Sandra Higham-Ross, Mohee Park)	Up to 30 June 2009: Subsection 719(1) Workplace Relations Act (subsection 717(a)(ii) defines “applicable provision” to include a term of a collective agreement. Item 43(1) Sch 8 Workplace Relations Act enforces a NAPSA as if a collective agreement. 1 July 2009 to 31 Dec 2009 Sub-item 2(1), Sch 16 Transitional Act
8	Workplace Relations Act: Subsection 718(1) (as affected by item 43(1) of Schedule 8) Transitional Act: Item 2(1) of Schedule 16	Failure to pay minimum annual holiday loadings specified in subclause 4(3)(b)(ii) of the Annual Holiday NAPSA	$33,000 per breach	$6,600 per breach	Workplace Relations Act: Subsection 719(4) Transitional Act: Sub-item 16(1)(a) of Schedule 16	Repeated contraventions, 4 employees (Jane Sandra Higham-Ross, Julian Solomon, Megan Ellanda Larson, Mohee Park)	Up to 30 June 2009: Subsection 719(1) Workplace Relations Act (subsection 717(a)(ii) defines “applicable provision” to include a term of a collective agreement. Item 43(1) Sch 8 Workplace Relations Act enforces a NAPSA as if a collective agreement. 1 July 2009 to 31 Dec 2009 Sub-item 2(1), Sch 16 Transitional Act

[77] Applicable in this case in the period from 31 December 2006 to 30 June 2009. Workplace Relations Act contraventions pleaded in these proceedings continue to operate after the repeal date pursuant to sub-item 14 of Part 3 of Schedule 18 of the Transitional Act and sub-item 13(1) of Part 3 of Schedule 18 of the Transitional Act.

[78] Applicable in this case in the period from 1 July 2009 to 30 June 2010 (apart from contravention 1)

CONTRAVENTIONS OF THE WORKPLACE RELATIONS REGULATIONS[79]
No.	Provisions contravened	Description of contravention	Maximum penalty (1st R)	Maximum penalty (2nd R)	Reference for maximum penalty	Contraventions / employees	Power to impose penalty
9	Sub-regulation 19.9(1)	Failing to keep employee records containing details of overtime hours worked	$5,500 per beach	$1,100 per breach	Regulation 14.4 and subsection 846(2)(g) of the Workplace Relations Act	Repeated contraventions, 1 employee (Jane Sandra Higham-Ross)	Sub-reg 14.3(2), Part 14 Ch 2 Workplace Relations Regulations allows workplace inspector to apply to s717 court. s717 Court defined to include Federal Circuit Court. Reg 14.4 provides that Court can order a person to pay a penalty up to maximum permissible under sub-para 846(2)(g) Workplace Relations Act.
10	Sub-regulation 19.11(3)	Failing to keep employee records containing details of any payment, bonus, loading, penalty rate or another monetary allowance or separately identifiable entitlement	$5,500 per beach	$1,100 per breach	Regulation 14.4 and subsection 846(2)(g) of the Workplace Relations Act	Repeated contraventions, 4 employees (Jane Sandra Higham-Ross, Julian Solomon, Megan Ellanda Larson, Mohee Park)

[79] Applicable in this case in the period from 31 December 2006 to 30 June 2009. The relevant WR Regulations contraventions pleaded in these proceedings continue to operate after the repeal date pursuant to sub-item 14 of Part 3 of Schedule 18 of the Transitional Act and sub-item 13(1) of Part 3 of Schedule 18 of the Transitional Act. Those sub-items refer to the “WR Act”, which is defined in sub-item 3(2) of Part 1 of Schedule 2 to the Transitional Act to include “regulations made for the purposes of the WR Act, or for the purposes of the provision or provisions of the WR Act”.

CONTRAVENTIONS OF THE FAIR WORK ACT[80]
No.	Provisions contravened	Description of contravention	Maximum penalty (1st R)	Maximum penalty (2nd R)	Reference for maximum penalty	Contraventions / employees	Power to impose penalty
11	Subsection 357(1), Fair Work Act	Misrepresenting employment as an independent contracting arrangement	$33,000 per breach	$6,600 per breach	Section 539 of the Fair Work Act	Repeated contraventions, 2 employees (Jane Sandra Higham-Ross, Julian Solomon)	Section 546 Fair Work Act – eligible court can impose a penalty if Court is satisfied that person has contravened civil remedy provision (incl s.357(1) Fair Work Act).
12	Section 45, Fair Work Act	Contravening a term of a modern award (item A.2.3 of Schedule A of the Modern Award – transitional minimum wages derived from the Shop Employees Pay Scale)	$33,000 per breach	$6,600 per breach	Section 539 of the Fair Work Act	Repeated contraventions, 2 employees (Julian Solomon, Mohee Park)	Section 546 Fair Work Act – eligible court can impose a penalty if Court is satisfied that person has contravened civil remedy provision (incl s.45 Fair Work Act).
13	Section 45, Fair Work Act	Contravening a term of a modern award (items A.5.2 and A.5.4 of Schedule A of the Modern Award – transitional casual loading under the Shop Employees Pay Scale)	$33,000 per breach	$6,600 per breach	Section 539 of the Fair Work Act	Repeated contraventions, 4 employees (Jane Sandra Higham-Ross, Julian Solomon, Mohee Park, Rosanna Tess Dutson)	Section 546 Fair Work Act – eligible court can impose a penalty if Court is satisfied that person has contravened civil remedy provision (incl s.45 Fair Work Act).
14	Section 45, Fair Work Act	Contravening a term of a modern award (item A.5.2 of Schedule A of the Modern Award – transitional Saturday loadings under the Shop Employees Pay Scale)	$33,000 per breach	$6,600 per breach	Section 539 of the Fair Work Act	Repeated contraventions, 2 employees (Mohee Park, Rosanna Tess Dutson)	Section 546 Fair Work Act – eligible court can impose a penalty if Court is satisfied that person has contravened civil remedy provision (incl s.45 FW Act).
15	Section 45, Fair Work Act	Contravening a term of a modern award (items A.5.2 and A.5.4 of Schedule A of the Modern Award – transitional Sunday penalty rates under the Shop Employees Pay Scale)	$33,000 per breach	$6,600 per breach	Section 539 of the Fair Work Act	Repeated contraventions, 3 employees (Jane Sandra Higham-Ross, Mohee Park, Rosanna Tess Dutson)	Section 546 Fair Work Act – eligible court can impose a penalty if Court is satisfied that person has contravened civil remedy provision (incl s.45 Fair Work Act).
16	Section 45, Fair Work Act	Contravening a term of a modern award (item A.5.2 of Schedule A of the Modern Award – transitional public holiday penalty rates under the Shop Employees Pay Scale)	$33,000 per breach	$6,600 per breach	Section 539 of the Fair Work Act	Repeated contraventions, 2 employees (Mohee Park, Rosanna Tess Dutson)	Section 546 Fair Work Act – eligible court can impose a penalty if Court is satisfied that person has contravened civil remedy provision (incl s.45 FW Act).
17	Section 45, Fair Work Act	Contravening a term of a modern award (items A.6.2 and A.6.4 of Schedule A of the Modern Award – transitional annual holiday loadings under the Annual Holiday NAPSA)	$33,000 per breach	$6,600 per breach	Section 539 of the FW Act	Repeated contraventions, 4 employees (Jane Sandra Higham-Ross, Julian Solomon, Mohee Park, Rosanna Tess Dutson)	Section 546 Fair Work Act – eligible court can impose a penalty if Court is satisfied that person has contravened civil remedy provision (incl s.45 Fair Work Act).
18	Subsection 535(1), Fair Work Act	Failure to keep employee records in accordance with Regulation 3.34 of the Fair Work Regulations 2009 (Fair Work Regulations) – failure to state number of overtime hours worked	$16,500 per breach	$3,300 per breach	Section 539 of the Fair Work Act	Repeated contraventions, 1 employee (Jane Sandra Higham-Ross)	Section 546 Fair Work Act – eligible court can impose a penalty if Court is satisfied that person has contravened civil remedy provision (incl s.535(1) Fair Work Act).
19	Subsection 535(1), Fair Work Act	Failure to keep employee records in accordance with sub-regulation 3.33(3) of the FW Regulations – failure to state details of any incentive-based payment, bonus, loading, penalty rate or other monetary allowance or separately identifiable entitlement	$16,500 per breach	$3,300 per breach	Section 539 of the Fair Work Act	Repeated contraventions, 4 employee (Jane Sandra Higham-Ross, Julian Solomon, Mohee Park, Rosanna Tess Dutson)	Section 546 Fair Work Act – eligible court can impose a penalty if Court is satisfied that person has contravened civil remedy provision (incl s.535(1) Fair Work Act).

[80] Applicable in this case in the period from 1 January 2010 to 11 August 2010 (apart from contravention 11, which is applicable in the period from 1 July 2009 to 11 August 2010)