Fair Work Ombudsman v Hu (No 3)

[2020] FCA 936

FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Hu (No 3) [2020] FCA 936

File number:

QUD 708 of 2016

Judge:

RANGIAH J

Date of judgment:

29 June 2020

Catchwords:

INDUSTRIAL LAW - pecuniary penalties – admitted contraventions of ss 45 and 546 of the Fair Work Act 2009 (Cth) – where parties agreed penalties – penalties imposed

Legislation:

Fair Work Act2009 (Cth) ss 45, 536 and 546

Fair Work Regulations 2009 (Cth) reg 3.46

Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 249 FCR 458

Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482

Construction, Forestry, Mining and Energy Union v Coal & Allied Operations (No 2) (1999) 94 IR 231

Fair Work Ombudsman v Hu [2019] FCAFC 133

Fair Work Ombudsman v Hu [2020] HCATrans 011

Fair Work Ombudsman v Hu (No. 2) [2018] FCA 1034
Kelly v Fitzpatrick (2007) 166 IR 14
Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383
Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61

Date of hearing:

29 June 2020

Registry:

Queensland

Division:

Fair Work Division

National Practice Area:

Employment & Industrial Relations

Category:

Catchwords

Number of paragraphs:

18

Counsel for the Applicant:

Mr J Bourke QC

Solicitor for the Applicant:

Fair Work Ombudsman

Counsel for the Respondent:

Mr D Grippi

Solicitor for the Respondent:

Johnsons Law Group

ORDERS

QUD 708 of 2016

BETWEEN:

FAIR WORK OMBUDSMAN

Applicant

AND:

TAO HU

Respondent

JUDGE:	RANGIAH J
DATE OF ORDER:	29 JUNE 2020

THE COURT DECLARES THAT:

1.The first respondent was involved in, within the meaning of s 550(2) of the Fair Work Act 2009 (Cth) (FW Act), the contravention by HRS Country Pty Ltd (HRS Country) of each of the following civil penalty provisions:

(a)s 45 of the FW Act by HRS Country failing to pay each of its employees who were 20 years of age or older and have an applicable entry in Column A of Schedule A to these orders (save for the employee at line 80 of Schedule A), the minimum hourly rate for ordinary hours worked pursuant to cl 14.1 of the Horticulture Award 2010 (the Horticulture Award);

(b)s 45 of the FW Act by HRS Country failing to pay the employee who was under 20 years of age and has an applicable entry in Column A of Schedule A to these orders, namely, the employee at line 80, the minimum hourly rate for hours worked pursuant to cl 16.1 of the Horticulture Award and cll A.2 and A.3 of Schedule A of the Horticulture Award;

(c)s 45 of the FW Act by HRS Country failing to pay each of its employees who have an applicable entry in Column B of Schedule A to these orders, a casual loading pursuant to cl 10.4(b) of the Horticulture Award and cl A.5 of Schedule A of the Horticulture Award;

(d)s 45 of the FW Act by HRS Country failing to pay its employees who have an applicable entry in Column C of Schedule A to these orders, public holiday rates pursuant to cl 28.3 of the Horticulture Award and cl A.7 of Schedule A of the Horticulture Award;

(e)s 45 of the FW Act by HRS Country failing to pay its employees who have an applicable entry in Column D of Schedule A to these orders, for a ten minute rest break pursuant to cl 23.2 of the Horticulture Award; and

(f)s 536(2)(b) of the FW Act by HRS Country failing to include superannuation contribution information in the payslips of its employees entitled to superannuation listed in Schedule B to these orders, as required by reg 3.46(5) of the Fair Work Regulations 2009 (Cth).

THE COURT ORDERS THAT:

2.The first respondent pay the following penalties, pursuant to s 546(2) of the FW Act, in respect of her involvement in each of the contraventions declared in Declaration 1 above, to the applicant within 28 days of this order:

Declaration	Summary of Contravention	Penalty
1(a)	Failure to pay adult minimum hourly rate	$6,528.00
1(c)	Failure to pay casual loading	$6,528.00
1(d)	Failure to pay public holiday rates	$4,080.00
1(e)	Failure to provide paid rest breaks	$4,080.00
1(f)	Failure to include prescribed information in payslips	$1,224.00
Total:		$22,440.00

3.The penalties paid in accordance with Order 2 above, be thereafter distributed by the applicant to the HRS Country employees listed in Schedule A to this order, within 180 days of this order, in amounts proportionate to their outstanding underpayments as set in Column F of Schedule A to these orders.

4.In the event that any of the HRS Country employees listed in Schedule A to these orders cannot be located within 180 days of this order, the balance of the amounts received in accordance with Order 2 be paid into the Consolidated Revenue Fund of the Commonwealth.

5.The applicant have liberty to apply on 7 days’ notice in the event that any of the preceding orders are not complied with.

6.There be no order as to costs.

SCHEDULE A

A	B	C	D	E	F
Line	Employee	Hourly Rate	Casual Loading	Public Holiday Rate	Paid Rest Break	Total Underpayment Amounts	Proportion of Underpayment
Adult Employees
1.	Amanda SMITH	N/A	-$18.07	N/A	-$10.41	-$28.48	0.04%
2.	Amelie CLARIGO	N/A	-$112.70	N/A	-$17.35	-$130.05	0.17%
3.	Anthony LOYSON	-$0.66	-$949.84	-$226.60	-$87.74	-$1,264.84	1.61%
4.	ARMITAGE Sue	-$2.07	-$788.43	-$282.42	-$89.97	-$1,162.89	1.48%
5.	Benjamin GONTRAN- MASSEY	-$4.61	-$2,743.00	-$457.36	-$248.35	-$3,453.32	4.39%
6.	Beverley MARAE	N/A	-$51.18	N/A	-$6.94	-$58.12	0.07%
7.	Binqi HUANG	N/A	-$41.59	N/A	N/A	-$41.59	0.05%
8.	CHAN Wing Yan (Kacie)	-$756.80	-$371.82	-$267.28	-$83.03	-$1,478.93	1.88%
9.	CHANG Lei	N/A	-$70.04	N/A	N/A	-$70.04	0.09%
10.	CHEN Jia Sing	-$0.34	-$1,134.17	-$215.01	-$108.56	-$1,458.08	1.85%
11.	CHEN Kun-Yu (David)	-$0.35	-$1,592.96	-$288.46	-$146.73	-$2,028.50	2.58%
12.	Che-Yu HE (Aaron)	-$583.62	-$4,209.78	-$476.67	-$362.86	-$5,632.93	7.16%
13.	Chi Sang CHUI	N/A	-$516.16	N/A	-$48.58	-$564.74	0.72%
14.	Chia Li CHEN	N/A	-$93.25	N/A	N/A	-$93.25	0.12%
15.	Chia-Jung HSIEH (Jay)	-$9.84	-$209.74	N/A	-$34.70	-$254.28	0.32%
16.	CHING Lai	-$0.01	-$109.57	N/A	-$10.41	-$119.99	0.15%
17.	Ching-Chuan KUO (Peggy)	-$702.43	-$2,252.83	-$297.34	-$209.19	-$3,461.79	4.40%
18.	CHOU Hsin Fu (Frank)	-$78.91	-$38.85	N/A	-$3.47	-$121.23	0.15%
19.	Chu-Kang WU (Justin)	N/A	-$72.31	-$92.83	-$9.17	-$174.31	0.22%
20.	CLARK Kelly	N/A	-$3.92	N/A	-$12.20	-$16.12	0.02%
21.	CROSS Daniel	-$0.66	-$1,246.71	-$488.99	-$119.96	-$1,856.32	2.36%
22.	DAHMANI Sabrina	-$3.36	-$1,111.82	-$190.13	-$118.97	-$1,424.28	1.81%
23.	Devon Hetzger	-$48.47	-$835.63	N/A	-$69.40	-$953.50	1.21%
24.	Elham Ghanei	-$49.25	-$2,135.95	-$540.12	-$203.24	-$2,928.56	3.72%
A	B	C	D	E	F
Line	Employee	Hourly Rate	Casual Loading	Public Holiday Rate	Paid Rest Break	Total Underpayment Amounts	Proportion of Underpayment
25.	ESLAMI Reza	-$208.11	-$1,973.87	-$484.08	-$185.89	-$2,851.95	3.63%
26.	Foloi Siu	-$6.39	-$422.89	-$228.94	-$46.10	-$704.32	0.90%
27.	FONG Tung Ham (Ham)	N/A	-$108.73	N/A	-$10.41	-$119.14	0.15%
28.	HASHIMOTO Risa	N/A	-$75.80	N/A	-$10.41	-$86.21	0.11%
29.	HOBBS Trent	-$1.50	-$15.50	NTA	-$5.04	-$22.04	0.03%
30.	Hon Shing YIP	N/A	-$565.04	N/A	-$55.52	-$620.56	0.79%
31.	HSU Feng-Chih (Vincent)	-$0.16	-$927.56	-$51.68	-$78.57	-$1,057.97	1.34%
32.	HUANG Chia-Chi (Jessie)	-$328.06	-$2,466.36	-$447.17	-$206.71	-$3,448.30	4.38%
33.	HUANG Sai Ping	N/A	-$105.38	N/A	-$10.41	-$115.79	0.15%
34.	HUNG Ya Chuan (Sophia)	N/A	-$34.69	N/A	-$6.94	-$41.63	0.05%
35.	I Chu LIU	N/A	-$94.10	N/A	N/A	-$94.10	0.12%
36.	Jamie COOK	N/A	-$5.11	N/A	N/A	-$5.11	0.01%
37.	John LEADBETTER	N/A	-$4.08	N/A	-$3.47	-$7.55	0.01%
38.	Ka Kit TSOI	N/A	-$568.31	N/A	-$55.52	-$623.83	0.79%
39.	Kellie MCRAE	N/A	-$51.22	N/A	-$6.94	-$58.16	0.07%
40.	Keng Han Chieh	-$0.86	-$1,319.17	-$104.36	-$106.33	-$1,530.72	1.95%
41.	KWAN Man Chun	-$0.19	-$2,794.29	-$303.12	-$266.94	-$3,364.54	4.28%
42.	Kylie Johnston (JOHNSTONE)	N/A	-$61.69	N/A	-$10.41	-$72.10	0.09%
43.	LAI Ya Juan (Becky)	-$111.84	-$1,438.48	-$348.69	-$148.65	-$2,047.66	2.60%
44.	LEE Tak Wai (David)	N/A	-$23.17	N/A	N/A	-$23.17	0.03%
45.	LI Fang Zhan	N/A	-$107.56	N/A	-$10.41	-$117.97	0.15%
46.	LIU Pei Fang	-$0.82	-$2,092.64	-$316.76	-$204.48	-$2,614.70	3.32%
47.	Mei-Chen LU (Cindy)	-$35.04	-$749.69	-$158.90	-$71.63	-$1,015.26	1.29%
48.	MIRETTI Maeva	N/A	-$69.12	N/A	-$6.94	-$76.06	0.10%
49.	MONDEN Miho	N/A	-$515.28	-$161.50	-$105.09	-$781.87	0.99%
50.	MORRIS Gregory	-$0.17	-$203.93	N/A	-$20.82	-$224.92	0.29%
51.	Ng Tung Cheong (Charles)	-$19.64	-$1,647.46	-$74.57	-$175.73	-$1,917.40	2.44%
A	B	C	D	E	F
Line	Employee	Hourly Rate	Casual Loading	Public Holiday Rate	Paid Rest Break	Total Underpayment Amounts	Proportion of Underpayment
52.	Pei-Chan CHEN (Iris)	-$59.35	-$1,283.03	-$162.75	-$120.21	-$1,625.34	2.07%
53.	PERGEGAJ Anila	N/A	-$12.85	N/A	-$6.94	-$19.79	0.03%
54.	Ping-Wei YANG (Jeff)	-$0.16	-$713.03	-$167.30	-$75.10	-$955.59	1.21%
55.	POGAI Lian	-$2.81	-$19.64	N/A	-$6.94	-$29.39	0.04%
56.	Quentin ROUSSEL	N/A	-$134.90	N/A	-$13.88	-$148.78	0.19%
57.	SHACKELL Lynette	N/A	-$116.32	N/A	-$13.88	-$130.20	0.17%
58.	Shuk Yu WONG	N/A	-$108.31	N/A	-$17.35	-$125.66	0.16%
59.	Sidney GEERCKE	N/A	-$143.06	N/A	-$17.35	-$160.41	0.20%
60.	TAI SHING Fan	N/A	-$86.53	N/A	-$6.94	-$93.47	0.12%
61.	TANG Shu Mui	-$0.99	-$105.26	N/A	-$10.41	-$116.66	0.15%
62.	TEPA Ann	N/A	-$9.79	N/A	-$6.94	-$16.73	0.02%
63.	THAN Thanda	N/A	-$127.18	N/A	-$13.88	-$141.06	0.18%
64.	Trenton James OEHM	-$38.75	-$1,257.51	-$295.20	-$158.58	-$1,750.04	2.22%
65.	Troy APPS	N/A	-$1.55	N/A	-$4.37	-$5.92	0.01%
66.	TSAI Meng Ting	-$466.63	-$2,950.87	-$377.22	-$266.94	-$4,061.66	5.16%
67.	Wai Hang TING	N/A	-$898.01	N/A	-$83.28	-$981.29	1.25%
68.	WAI NING Ma	-$0.01	-$89.35	N/A	-$6.94	-$96.30	0.12%
69.	Wei-Tien CHANG (Jill)	-$94.18	-$2,830.85	-$416.33	-$266.94	-$3,608.30	4.59%
70.	WENG Yao- Ching (Fiona)	-$103.08	-$2,105.25	-$454.71	-$214.89	-$2,877.93	3.66%
71.	WILLIAMS John	-$0.16	-$1,170.97	-$120.87	-$113.27	-$1,405.27	1.79%
72.	WIN Naing	N/A	-$372.96	N/A	-$20.82	-$393.78	0.50%
73.	WONG Ching Yi (Ginne)	-$810.80	-$2,355.65	-$581.69	-$205.47	-$3,953.61	5.03%
74.	WU Yue Ping	N/A	-$70.49	N/A	-$6.94	-$77.43	0.10%
75.	Xung Skene Lam	N/A	-$124.51	N/A	-$20.82	-$145.33	0.18%
76.	Yen Jung CHEN	N/A	-$14.43	N/A	N/A	-$14.43	0.02%
77.	Yi-Hung LIAO (Get)	-$17.69	-$1,260.55	N/A	-$124.92	-$1,403.16	1.78%
78.	YU Ka Ho (Ivan)	-$20.14	-$1,522.87	N/A	-$159.62	-$1,702.63	2.16%
A	B	C	D	E	F
Line	Employee	Hourly Rate	Casual Loading	Public Holiday Rate	Paid Rest Break	Total Underpayment Amounts	Proportion of Underpayment
79.	Yu Mei Lin (May)	N/A	-$34.96	N/A	-$6.94	-$41.90	0.05%
Junior Employees
80.	DONALDSON Jarae	-$53.50	-$93.17	N/A	-$17.01	-$163.68	0.21%
Totals:		-$4,622.41	-$57,700.89	-$9,090.96	-$5,801.58	-$78,664.91	100.00%

SCHEDULE B

(List of employees paid an hourly rate who did not receive superannuation contribution information in their payslips)

Line	Employee Name	Line	Employee Name
1.	Amanda SMITH	39.	LEE Tak Wai (David)
2.	Amelie CLARIGO	40.	LI Fang Zhan
3.	Anthony LOYSON	41.	LIU Pei Fang
4.	ARMITAGE Sue	42.	Mei-Chen LU (Cindy)
5.	Benjamin GONTRAN- MASSEY	43.	MIRETTI Maeva
6.	Beverley MARAE	44.	MONDEN Miho
7.	CHAN Wing Yan (Kacie)	45.	MORRIS Gregory
8.	CHANG Lei	46.	Ng Tung Cheong (Charles)
9.	CHEN Jia Sing	47.	Pei-Chan CHEN (Iris)
10.	CHEN Kun-Yu (David)	48.	Ping-Wei YANG (Jeff)
11.	Che-Yu HE (Aaron)	49.	POGAI Lian
12.	Chi Sang CHUI	50.	Quentin ROUSSEL
13.	Chia Li CHEN	51.	SHACKELL Lynette
14.	Chia-Jung HSIEH (Jay)	52.	Shuk Yu WONG
15.	CHING Lai	53.	Sidney GEERCKE
16.	Ching-Chuan KUO (Peggy)	54.	TAI SHING Fan
17.	Chu-Kang WU (Justin)	55.	TANG Shu Mui
18.	CLARK Kelly	56.	THAN Thanda
19.	CROSS Daniel	57.	Trenton James OEHM
20.	DAHMANI Sabrina	58.	TSAI Meng Ting
21.	Devon Hetzger	59.	TSAI Pei-Ju
22.	Elham Ghanei	60.	Wai Hang TING
23.	ESLAMI Reza	61.	WAI NING Ma
24.	Foloi Siu	62.	Wei-Tien CHANG (Jill)
25.	FONG Tung Ham (Ham)	63.	WENG Yao-Ching (Fiona)
26.	HASHIMOTO Risa	64.	WILLIAMS John
27.	Hon Shing YIP	65.	WIN Naing
28.	HSU Feng-Chih (Vincent)	66.	WONG Ching Yi (Ginne)
29.	HUANG Chia-Chi (Jessie)	67.	WU Yue Ping
30.	HUANG Sai Ping	68.	Xung Skene Lam
31.	HUNG Ya Chuan (Sophia)	69.	Yen Jung CHEN
32.	I Chu LIU	70.	Yi-Hung LIAO (Get)
33.	Ka Kit TSOI	71.	YU Ka Ho (Ivan)
34.	Kellie MCRAE	72.	Yu Mei Lin (May)
35.	Keng Han Chieh
36.	KWAN Man Chun
37.	Kylie Johnston (JOHNSTONE)
38.	LAI Ya Juan (Becky)

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(DELIVERED EX TEMPORE AND REVISED)

RANGIAH J:

1. The applicant, the Fair Work Ombudsman, brought proceedings for contraventions of ss 45 and 36 of the Fair Work Act2009 (Cth) (the FWAct) against the first respondent, Tao Hu, the second respondent, Marland Mushrooms Qld Pty Ltd (Marland Mushrooms), and the third respondent, Troy Marland.  The second and third respondents defended the proceedings and were ultimately successful: see Fair Work Ombudsman v Hu (No. 2) [2018] FCA 1034; Fair Work Ombudsman v Hu [2019] FCAFC 133; Fair Work Ombudsman v Hu [2020] HCATrans 011. However, Ms Hu admitted the allegations at an early stage.

2. Ms Hu has agreed a statement of facts with the applicant.  Ms Hu was the sole director and shareholder of HRS Country Pty Ltd (HRS Country).  HRS Country operated a labour hire business.  It employed a number of persons whom it supplied to Marland Mushrooms to pick mushrooms and perform other farm duties.  The employees were predominantly transient workers from other countries.  On 1 August 2016, a liquidator was appointed to HRS Country.

3. Ms Hu has admitted liability as an accessory to the following contraventions of the FW Act by HRS Country, involving noncompliance with the Horticulture Award 2010 (the Horticulture Award):

   ·Failure to pay the minimum rate of pay to adult employees: s 45 of the FW Act, cl 14.1 of the Horticulture Award.

   ·Failure to pay the minimum rate of pay to junior employees: s 45 of the FW Act, cl 16.1 of the Horticulture Award and cll A.2 and A.3 of Sch A of the Horticulture Award.

   ·Failure to pay casual loading: s 45 of the FW Act, cl 10.4(b) of the Horticulture Award and cl A.5 of Sch A of the Horticulture Award.

   ·Failure to pay public holiday rates: s 45 of the FW Act, cl 28.3 of the Horticulture Award and cl A.7 of Sch A of the Horticulture Award.

   ·Failure to provide paid rest breaks: s 45 of the FW Act, cl 23.2 of the Horticulture Award.

   ·Failure to include superannuation contribution details on payslips as required: s 536(2)(b) of the FW Act, reg 3.46(5) of the Fair Work Regulations 2009 (Cth).

4. Sections 45 and 536(2)(b) of the FW Act are civil remedy provisions. The applicant seeks an order pursuant to s 546(1) of the FW Act that Ms Hu pay pecuniary penalties in respect of her admitted contraventions of the civil remedy provisions. Ms Hu accepts that pecuniary penalties ought to be imposed and has agreed with the applicant as to the appropriate amounts of those penalties.

5. The agreed penalties are as follows:

Contravention	Number of Employees Affected	Maximum Penalty	Proposed Penalty Agreed by Parties
Failure to pay adult minimum hourly rate	41	$10,200.00	$6,528.00
Failure to pay junior minimum hourly rate	1	$10,200.00	No penalty is sought
Failure to pay casual loading	80	$10,200.00	$6,528.00
Failure to pay public holiday rates	31	$10,200.00	$4,080.00
Failure to provide paid rest breaks	73	$10,200.00	$4,080.00
Failure to include prescribed information in pay slips	72	$5,100.00	$1,224.00
Total:	$56,100.00	$22,440.00

1. In Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at [58] (Agreed Penalties Case), the High Court confirmed that parties to civil penalty proceedings may make submissions in respect of the quantum of pecuniary penalties, including in respect of proposed agreed penalties. 

2. However, it is necessary for the Court to satisfy itself that the agreed penalties are appropriate: Agreed Penalties Case at [48]. Despite this, the Court ought not to depart from the proposed amounts, merely because it might have been disposed to select some other amounts: Agreed Penalties Case at [47]-[48].

3. Subject to the Court being persuaded of the accuracy of the parties’ agreement as to facts and that, the penalties proposed are an appropriate remedy, the High Court has recognised that it is consistent with principle and highly desirable in practice for the Court to accept the parties’ proposed agreement as to penalties: Agreed Penalties Case at [58]

4. In a number of cases, various factors have been listed that may be relevant to the fixing of civil penalties: see, for example, Construction, Forestry, Mining and Energy Union v Coal & Allied Operations (No 2) (1999) 94 IR 231 at [8]; Kelly v Fitzpatrick (2007) 166 IR 14 at [14]; Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61 at [40]. In this case, the relevant factors include the following.

5. The High Court has confirmed that deterrence is the sole, or at least, the primary objective of pecuniary penalties: Agreed Penalties Case at [55]; Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 249 FCR 458 at [90]. General deterrence is very important in this case. Given the nature of fruit and vegetable picking and that its workforce is often comprised of transient non-English speaking workers from overseas, contraventions of the Horticulture Award are likely to be common but difficult to detect.

1. Specific deterrence is somewhat less significant in this matter given that Ms Hu is no longer involved in the labour hire industry and the contraventions are very unlikely to be repeated.

2. The contraventions are objectively serious.  They involved approximately 80 employees and occurred over a significant period of time from 1 January to 31 August 2014.  

3. The employees impacted by the contraventions suffered the loss of award entitlements, translating into a financial loss of over $78,000.  These employees are a very vulnerable group in the community, being predominantly made up of workers from overseas.  It may be noted that the applicant has not sought an order for compensation, for reasons that have not been explained. 

4. There is no allegation that Ms Hu has contravened any industrial legislation in the past. 

5. The underpayments that occurred have not been repaid, whether by HRS Country or Ms Hu. 

6. I take into account that Ms Hu has made admissions at an early stage and agreed as to appropriate penalties: Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383 at [76]. I am satisfied that she is remorseful about her contraventions, and that is reflected in her willingness to facilitate the course of justice.

7. I am satisfied that the agreed penalties are appropriate. 

8. I will make the declarations and other orders in the form proposed by the parties.

I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah.

Associate:       

Dated:       13 July 2020