Fair Work Ombudsman v Ital One Holdings Pty Ltd
[2019] FCCA 187
•1 February 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
FAIR WORK OMBUDSMAN v ITAL ONE HOLDINGS PTY LTD & ANOR [2019] FCCA 187
Catchwords:
INDUSTRIAL LAW – Declarations as to various contraventions of the Fair Work Act 2009 and the Restaurant Industry Award 2010 – penalties – objections to evidence – impact of a media release issued by the applicant prior to the determination of liability – whether ancillary orders should be made for an audit of the respondents’ payment system – whether injunctions should be granted restraining the respondents from further breaches of the Act or Award.
Legislation:
Evidence Act 1995, s.69
Fair Work Act 2009, ss.45, 539, 545(1), 546(1), 546(2), 546(3)(a), 550, 557
Restaurant Industry Award 2010, cls.12.3, 13.1, 20.1, 34.1, 34.2(a)(i), 34.2(a)(ii), 33.2(a), 33.2(b), 33.2(c)
Crimes Act1914, s.4AA
Cases cited:
Australian Competition and Consumer Commission (ACCC) v Dataline.Net.Au Pty Ltd (2007) 161 FCR 513; (2007) 244 ALR 300; (2007) ATPR 42-181; [2007] FCAFC 146
Australian Competition and Consumer Commission v Advanced Medical Institute (No. 2) (2005) 147 FCR 235; (2006) ATPR 42-087; [2005] FCA 1357
Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (2006) 236 ALR 665; (2008) ASAL 55-176; (2007) ATPR 42-138; [2006] FCA 1427
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) 246 ALR 35; [2008] FCAFC 8
Browne v Dunn (1894) 6 R 67 (HL)
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; (2015) 326 ALR 476; (2015) 90 ALJR 113; (2015) 255 IR 87; [2015] HCA 46
Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228; [2001] FCA 1364
Cousins v Merringtons Pty Ltd (No 2) [2008] VSC 340
Director of the Fair Work Building Industry Inspectorate v Construction Forestry, Mining and Energy Union (Quest Apartments and Greek Community Centre) [2016] FCA 1262
Eva v Southern Motors Box Hill Pty Ltd (1977) 15 ALR 428; (1977) 30 FLR 213; (1977) 2 TPC 64; (1977) ATPR 40-026; [1977] FCA 2
Fair Work Ombudsman (FWO) v James Nelson Pty Ltd [2016] FCCA 531
Fair Work Ombudsman v Acute Health Pty Ltd [2018] FCCA 707
Fair Work Ombudsman v Bedington [2012] FMCA 1133
Fair Work Ombudsman v Grouped Property Services Pty Ltd (2016) 152 ALD 209; [2016] FCA 1034
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No.2) [2017] FCA 557
Fair Work Ombudsman v HTA Farmings Pty Ltd and Anor [2017] FCCA 1847
Fair Work Ombudsman v Mahomet(T/as Academy for Kids) [2017] FCCA 3000
Fair Work Ombudsman v Meatball and Wine Bar Pty Ltd [2018] FCCA 2288
Fair Work Ombudsman v VS Investment Group Pty Ltd & Anor [2013] FCCA 208
Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290
Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Miljevic v Ital One Holdings Pty Ltd [2015] FCCA 1317
Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; (2008) 247 ALR 714; (2008) 171 IR 455; [2008] FCAFC 70
Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; (2008) 177 IR 243; [2008] FCAFC 170
Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; (2007) 162 IR 444; [2007] FCAFC 65
Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412
Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (ACCC) (2012) 287 ALR 249; [2012] FCAFC 20
Applicant: FAIR WORK OMBUDSMAN
First respondent: ITAL ONE HOLDINGS PTY LTD T/A BACI CAFÉ
(ACN 105 964 921)
Second respondent: LEN DI PIETRO
File number: MLG 1122 of 2017
Judgment of: Judge Riley
Hearing date: 26 September 2018
Date of last submission: 24 October 2018
Delivered at: Melbourne
Delivered on: 1 February 2019 REPRESENTATION
Counsel for the applicant: Jim McKenna
Solicitors for the applicant: Fair Work Ombudsman
Counsel for the respondents: James Tierney
Solicitors for the respondents: Madgwicks Lawyers THE COURT DECLARES THAT, having regard to the admissions made by the first and second respondents in the statement of agreed facts filed in this proceeding:
(1)The first respondent contravened:
(a)section 45 of the Fair Work Act 2009 (“the Act”), by failing to pay the employees listed in Schedule 1 to these orders their minimum rates of pay pursuant to cl.20.1 of the Restaurant Industry Award 2010 (“the Award”);
(b)section 45 of the Act, by failing to pay the employees listed in Schedule 2 to these orders a casual loading of 25 per cent pursuant to cl.13.1 of the Award;
(c)section 45 of the Act, by failing to pay:
(i)the casual employees listed in Schedule 3 to these orders a penalty rate of 150 per cent; and
(ii)the full time and part time employees listed in Schedule 3 to these orders a penalty rate of 125 per cent,
for time worked on Saturdays pursuant to clause 34.1 of the Award;
(d)section 45 of the Act, by failing to pay the employees listed in Schedule 4 to these orders a penalty rate of 150 per cent for time worked on Sundays pursuant to cl.34.1 of the Award;
(e)section 45 of the Act, by failing to pay the employees listed in Schedule 5 to these orders a penalty rate of 250 per cent for time worked on public holidays pursuant to cl.34.1 of the Award;
(f)section 45 of the Act, by failing to pay the employees listed in Schedule 6 to these orders an additional amount of 10 per cent of the standard hourly rate for time worked between 10pm and midnight Monday to Friday pursuant to cl.34.2(a)(i) of the Award;
(g)section 45 of the Act, by failing to pay the employees listed in Schedule 7 to these orders an additional amount of 15 per cent of the standard hourly rate for time worked between midnight and 7am Monday to Friday pursuant to cl.34.2(a)(ii) of the Award;
(h)section 45 of the Act, by failing to pay weekday overtime to the employees listed in Schedule 8 pursuant to cl.33.2(a) of the Award;
(i)section 45 of the Act, by failing to pay Saturday overtime to the employees listed in Schedule 8 pursuant to cl.33.2(b) of the Award;
(j)section 45 of the Act, by failing to pay Sunday overtime to the employees listed in Schedule 8 pursuant to cl.33.2(c) of the Award; and
(k)section 45 of the Act, by failing to make a written agreement about a regular pattern of work with a part-time employee upon engagement pursuant to cl.12.3 of the Award.
(2)Pursuant to s.550 of the Act, the second respondent was involved in each of the first respondent’s contraventions identified in declaration 1.
ORDER BY CONSENT
(3)Paragraphs 68, 69, 71, 72, 73, 74, 75, 76 and 77 of the affidavit sworn by Sasha Renee Srkulj on 3 August 2018 and the annexures thereto marked SRS-22, SRS-23 and SRS-24 be struck out.
ORDERS BY THE COURT
(4)Paragraphs 66, 67, 70 and 78 of the affidavit sworn by Sasha Renee Srkulj on 3 August 2018 and the annexures thereto marked SRS-19, SRS-21 and SRS-25 be struck out.
(5)Pursuant to s.546(1) of the Act, within 28 days, the first respondent pay pecuniary penalties of $217,000 in respect of the contraventions set out in declaration 1 above.
(6)Pursuant to s.546(1) of the Act, within 28 days, the second respondent pay pecuniary penalties of $40,000 in respect of the contraventions set out in declaration 1 above.
ORDERS BY CONSENT
(7)Pursuant to subsection 546(3)(a) of the Act, the first and second respondents pay their respective pecuniary penalties to the Commonwealth within 28 days.
(8)Pursuant to s.545(1) of the Act, the first respondent, within three months, provide workplace relations compliance training on the following terms:
(a)the first respondent must engage, at its own expense, a person or organisation with expertise in workplace relations, and approved by the applicant, to conduct the training;
(b)the training relate to compliance with the Act and the Award, including the first respondent’s obligations in respect of minimum wages, overtime rates, casual loading, personal leave and annual leave entitlements;
(c)the training be undertaken by:
(i)all persons employed or engaged by the first respondent whose duties relate to the management of employees, the administration of payroll, and the administration and compliance with Australian workplace laws; and
(ii)the second respondent;
(d)within 30 days of completing the training, the first respondent provide to the applicant a written report specifying the date or dates on which the training was completed, the details of the delivery and content of the training and the names and positions of all persons who undertook in the training.
ORDERS BY THE COURT
(9)Pursuant to s.545(1) of the Act the first respondent, at its own expense, engage a third party, or third parties, with appropriate qualifications in accounting and workplace relations to undertake an audit of the first respondent’s compliance with the Act and the Award on the following terms:
(a)the audit period will be the first accounting quarter commencing after the making of the orders;
(b)the audit is to be completed within 30 days of the end of the audit period;
(c)the audit will apply to all employees employed by the first respondent at any time during the audit period;
(d)the audit will assess the first respondent’s compliance with wages and work-related entitlements under the Award according to each employee’s classification of work, category of employment and hours worked during the audit period;
(e)within 14 days of the audit being completed, the first respondent will rectify any contraventions identified in the audit;
(f)within 30 days of the audit being completed, the first respondent will provide to the applicant:
(i)a copy of the audit report, which will include a statement of the methodology used in the audit;
(ii)a copy of the source materials used to audit the times worked by employees (including but not limited to rosters, time cards and time sheets) and the amounts paid to the employees (including but not limited to pay slips and pay reports);
(iii)written details of any contraventions identified in the audit; and
(iv)evidence of rectification by the first respondent of any contravention identified in the audit.
(10)The applicant have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
SCHEDULE 1
Failure to pay the minimum hourly rates pursuant to cl.20.1 of the Restaurant Industry Award 2010
Abdelati, Jasmin Talla, Naveen Reddy Alam, Shamsul Velentino, Candela Aslam, Abrar Vepsa, Karoliina Cashmore, Natalie Ward, Bryson Cuminatto, Chiara Yoebaidi, Melissa Hidayati Degouve, Marion Diab, Lorenzo Derek Di Pietro, Matthew Donthiri, Vaibhav Reddy Franca, Camila Betto Hussain, Ismail Jackson, Tamika Kakkireni, Bharath Kumar Men, Sovanarith Morel, Felix Munoz, Juliana Tamayo Mylamala, Swetha Nardone, Davide Nelva, Serena Park, Hannah Sangireddy, Sravan Kumar Sultana, Sabiya SCHEDULE 2
Failure to pay casual loading pursuant to cl.13.1 of the Restaurant Industry Award 2010
Abdelati, Jasmin Munoz, Juliana Tamayo Alam, Shamsul Mylamala, Swetha Aslam, Abrar Nardone, Davide Bansal, Hunish Nelva, Serena Bansal, Smriti Park, Hannah Cashmore, Natalie Pasquali, Michael Cuminatto, Chiara Raby, Scott Degouve, Marion Raigir, Vishal Goud Di Pietro, Matthew Sangireddy, Sravan Kumar Donthiri, Vaibhav Reddy Sultana, Sabiya Fazzini, Francesco Talla, Naveen Reddy Franca, Camila Betto Velentino, Candela Hodgson, Nathan Vepsa, Karoliina Hussain, Ismail Ward, Ashton Invernici, Michele Ward, Bryson Jackson, Tamika Yoebaidi, Melissa Hidayati Kakkireni, Bharath Kumar Kasturiarachchi, Kaumika Visanda Li, Jiayang Men, Sovanarith Morel, Felix SCHEDULE 3
Failure to pay the Saturday penalty rate pursuant to cl.34.1 of the Restaurant Industry Award 2010
Casual employees Abdelati, Jasmin Morel, Felix Alam, Shamsul Mylamala, Swetha Aslam, Abrar Nardone, Davide Carelli, Claudio Nelva, Serena Cashmore, Natalie Park, Hannah Cuminatto, Chiara Pasquali, Michael Degouve, Marion Raby, Scott Di Pietro, Matthew Raigir, Vishal Goud Donthiri, Vaibhav Reddy Sangireddy, Sravan Kumar Fazzini, Francesco Sultana, Sabiya Fedele, Fabrizio Talla, Naveen Reddy Franca, Camila Betto Trantino, Silvana Hodgson, Nathan Velentino, Candela Hussain, Ismail Vepsa, Karoliina Invernici, Michele Ward, Ashton Jackson, Tamika Ward, Bryson Kakkireni, Bharath Kumar Yoebaidi, Melissa Hidayati Kasturiarachchi, Kaumika Visanda Li, Jiayang Men, Sovanarith
Part time employees Diab, Lorenzo Derek Mishra, Sandeep Full time employees Nguyen, Yen Thi Hai SCHEDULE 4
Failure to pay the Sunday penalty rate pursuant to cl.34.1 of the Restaurant Industry Award 2010
Abdelati, Jasmin Nardone, Davide Alam, Shamsul Nelva, Serena Aslam, Abrar Park, Hannah Cashmore, Natalie Pasquali, Michael Cuminatto, Chiara Raby, Scott Degouve, Marion Raigir, Vishal Goud Di Pietro, Matthew Sangireddy, Sravan Kumar Donthiri, Vaibhav Reddy Sultana, Sabiya Fazzini, Francesco Talla, Naveen Reddy Fedele, Fabrizio Trantino, Silvana Franca, Camila Betto Velentino, Candela Hodgson, Nathan Vepsa, Karoliina Hussain, Ismail Ward, Ashton Invernici, Michele Ward, Bryson Jackson, Tamika Yoebaidi, Melissa Hidayati Kakkireni, Bharath Kumar Diab, Lorenzo Derek Kasturiarachchi, Kaumika Visanda Mishra, Sandeep Li, Jiayang Cappellano, Francesco Malik, Ravinder Coffa, Adrian Men, Sovanarith Nguyen, Yen Thi Hai Morel, Felix Piller, Charles Mylamala, Swetha SCHEDULE 5
Failure to pay the public holiday rate pursuant to cl.34.1 of the Restaurant Industry Award 2010
Alam, Shamsul Bansal, Hunish Bansal, Smriti Hantelmann, Annika Marie Hussain, Ismail Invernici, Michele Inzerauto, Alessandro Jackson, Tamika Kandukuri, Bhasker Reddy Men, Sovanarith Mohammad, Abdul Majid Mohammed, Adnan Ali Morel, Felix Nelva, Serena Raby, Scott Sultana, Sabiya Vepsa, Karoliina Yoebaidi, Melissa Hidayati Diab, Lorenzo Derek Mishra, Sandeep Cappellano, Francesco Coffa, Adrian SCHEDULE 6
Failure to pay the 10pm to midnight penalty rate pursuant to c.34.2(a)(i) of the Restaurant Industry Award 2010
Abdelati, Jasmin Ward, Ashton Aslam, Abrar Ward, Bryson Carelli, Claudio Diab, Lorenzo Derek Cuminatto, Chiara Cappellano, Francesco Fazzini, Francesco Coffa, Adrian Fedele, Fabrizio Piller, Charles Franca, Camila Betto Hodgson, Nathan Hussain, Ismail Invernici, Michele Kakkireni, Bharath Kumar Kasturiarachchi, Kaumika Visanda Men, Sovanarith Morel, Felix Nardone, Davide Nelva, Serena Pasquali, Michael Raby, Scott Raigir, Vishal Goud Talla, Naveen Reddy Vepsa, Karoliina SCHEDULE 7
Failure to pay the midnight to 7am penalty rate pursuant to cl.34.2(a)(ii) of the Restaurant Industry Award 2010
Abdelati, Jasmin Sultana, Sabiya Alam, Shamsul Talla, Naveen Reddy Bansal, Hunish Talla, Naveen Reddy Bansal, Smriti Velentino, Candela Cashmore, Natalie Ward, Ashton Cuminatto, Chiara Ward, Bryson Degouve, Marion Yoebaidi, Melissa Hidayati Donthiri, Vaibhav Reddy Mishra, Sandeep Franca, Camila Betto Cappellano, Francesco Hodgson, Nathan Coffa, Adrian Hussain, Ismail Nguyen, Yen Thi Hai Invernici, Michele Jackson, Tamika Kakkireni, Bharath Kumar Kasturiarachchi, Kaumika Visanda Li, Jiayang Men, Sovanarith Morel, Felix Nardone, Davide Nelva, Serena Park, Hannah Pasquali, Michael SCHEDULE 8
Failure to pay weekday, Saturday and Sunday overtime pursuant to cl.33.2 of the Restaurant Industry Award 2010
Mishra, Sandeep Cappellano, Francesco Coffa, Adrian Nguyen, Yen Thi Hai
FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNEMLG 1122 of 2017
FAIR WORK OMBUDSMAN Applicant
And
ITAL ONE HOLDINGS PTY LTD T/A BACI CAFÉ
(ACN 105 964 921)First Respondent
LEN DI PIETRO Second Respondent
REASONS FOR JUDGMENT
Introduction
1.This is an application for declarations as to certain contraventions of the Fair Work Act 2009 (“the Act”) and the Restaurant Industry Award 2010 (“the Award”) and penalties for those contraventions. There was no dispute as to the declarations. However, the parties were in dispute about the amount of any penalties and some ancillary orders.
2.The applicant is the Fair Work Ombudsman. The first respondent is the operator of Café Baci which trades 24 hours a day in the Crown Casino complex in Southbank, Victoria. The second respondent is the sole director of the first respondent.
3.The parties filed a statement of agreed facts, which is attached to these reasons as Annexure A. The respondents admitted in the statement of agreed facts that they contravened the Act and the Award on numerous occasions.
4.Essentially, the first respondent underpaid 53 employees in the period from 1 June 2015 to 23 August 2015 and underpaid another employee, Ms Cashmore, in the period from 18 June 2016 to 25 September 2016. In addition, the first respondent failed to make a written agreement about a regular pattern of work with a part-time employee upon engagement. The underpayments consisted of:
a)failing to pay minimum hourly rates;
b)failing to pay casual loadings;
c)failing to pay Saturday penalty rates;
d)failing to pay Sunday penalty rates;
e)failing to pay public holiday penalty rates;
f)failing to pay the 10pm until midnight penalty rate;
g)failing to pay the midnight until 7am penalty rate;
h)failing to pay weekday overtime;
i)failing to pay Saturday overtime; and
j)failing to pay Sunday overtime.
5.The first respondent underpaid the employees a total of $73,347.42. The underpayments were rectified by 21 February 2018, following intervention by the applicant. The second respondent was involved, within the meaning of s.550 of the Act, in the first respondent’s contraventions.
6.The parties jointly asked the court to make declarations as follows:
1.The First Respondent contravened the following civil remedy provisions:
(a)section 45 of the Fair Work Act 2009 (Cth) (FW Act), by failing to pay the employees listed in Schedule 1 to these orders their minimum rates of pay pursuant to clause 20.1 of the Restaurant Industry Award 2010 (Restaurant Award);
(b)section 45 of the FW Act, by failing to pay the employees listed in Schedule 2 to these orders a casual loading of 25 per cent pursuant to clause 13.1 of the Restaurant Award;
(c)section 45 of the FW Act, by failing to pay:
(i) the casual employees listed in Schedule 3 to these orders a penalty rate of 150 per cent; and
(ii) the full time and part time employees listed in Schedule 3 to these orders a penalty rate of 125 per cent,
for time worked on Saturdays pursuant to clause 34.1 of the Restaurant Award;
(d)section 45 of the FW Act, by failing to pay the employees listed in Schedule 4 to these orders a penalty rate of 150 per cent for time worked on Sundays pursuant to clause 34.1 of the Restaurant Award;
(e)section 45 of the FW Act, by failing to pay the employees listed in Schedule 5 to these orders a penalty rate of 250 per cent for time worked on public holidays pursuant to clause 34.1 of the Restaurant Award;
(f)section 45 of the FW Act, by failing to pay the employees listed in Schedule 6 to these orders an additional amount of 10 per cent of the standard hourly rate for time worked between 10.00 pm and midnight Monday to Friday pursuant to clause 34.2(a)(i) of the Restaurant Award;
(g)section 45 of the FW Act, by failing to pay the employees listed in Schedule 7 to these orders an additional amount of 15 per cent of the standard hourly rate for time worked between midnight and 7.00 am Monday to Friday pursuant to clause 34.2(a)(ii) of the Restaurant Award;
(h)section 45 of the FW Act, by failing to pay weekday overtime to the Employees listed in Schedule 8 pursuant to clause 33.2(a) of the Restaurant Award;
(i)section 45 of the FW Act, by failing to pay Saturday overtime to the employees listed in Schedule 8 pursuant to clause 33.2(b) of the Restaurant Award;
(j)section 45 of the FW Act, by failing to pay Sunday overtime to the employees listed in Schedule 8 pursuant to clause 33.2(c) of the Restaurant Award; and
(k)section 45 of the FW Act, by failing to make a written agreement about a regular pattern of work with a part-time employee upon engagement pursuant to clause 12.3 of the Restaurant Award.
2.The Second Respondent, was involved, within the meaning of subsection 550(2) of the FW Act, in each of the contraventions committed by the First Respondent as set out in paragraph 1 above.
7.There has been authority in the past to the effect that it is not appropriate for a court to make declarations based on admissions. However, there is more recent authority that in certain cases it is appropriate for the court to make declarations in such circumstances.
8.In particular, in Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (2006) 236 ALR 665; (2008) ASAL 55-176; (2007) ATPR 42-138; [2006] FCA 1427, Kiefel J, as her Honour then was, considered at paragraphs 52 to 59 the rationale for the previous approach taken by the courts. Her Honour came to the view that the previous approach may no longer be warranted, particularly in public interest cases such as this, and particularly if the declarations are preceded by a statement that they are made upon admissions.
9.In all the circumstances of this case, including the matters discussed below, I am satisfied that it is appropriate to make the declarations sought by the parties on the basis of the admissions made by the respondents, provided that the declarations are preceded by an appropriate preamble. Those declarations will be made accordingly.
10.The parties also consented to the court making orders as follows:
3. Pursuant to section 546(1) of the FW Act that, within 28 days, the First Respondent pay pecuniary penalties in the amount of $_________be imposed on the First Respondent in respect of the contraventions set out in Declaration 1 above.
4. Pursuant to section 546(1) of the FW Act that, within 28 days, the Second Respondent pay pecuniary penalties in an amount of $_________be imposed on the First Respondent in respect of the contraventions set out in Declaration 1 above.
5. Pursuant to subsection 546(3)(a) of the FW Act, the First and Second Respondents pay their respective pecuniary penalty amounts to the Commonwealth within 28 days of the Court’s orders.
6. Pursuant to section 545(1) of the FW Act, that the First Respondent will, within three months of the date of this order, provide workplace relations compliance training (Training) on the following terms:
(a)the First Respondent must engage, at its own expense, a person or organisation with expertise in workplace relations, and approved by the Applicant, to conduct the Training;
(b)the Training must relate to compliance with the FW Act and the Restaurant Award, including the First Respondent’s obligations in respect of minimum wages, overtime rates, casual loading, personal leave and annual leave entitlements;
(c)the Training must be undertaken by:
(i) all persons employed or engaged by the First Respondent whose duties relate to the management of employees, the administration of payroll, and the administration and compliance with Australian workplace laws; and
(ii) the Second Respondent;
(d)within 30 days of completing the Training, the First Respondent must provide the Applicant, in writing, with a report specifying the date(s) on which the Training was completed, the details of the delivery and content of the Training and the names and positions of all persons who undertook in the Training.
11.Subject to the determination of penalty, I consider that it is appropriate to make those orders. The parties agreed that the range of penalties for the first respondent’s contravening conduct was $160,000 to $217,000, and for the second respondent’s contravening conduct was $30,000 to $40,000.
12.The parties differed on whether the penalties should be at the higher or the lower end of the range. In view of the High Court’s decision in the matter of Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; (2015) 326 ALR 476; (2015) 90 ALJR 113; (2015) 255 IR 87; [2015] HCA 46, it may be appropriate to accept the parties’ proposals as to the range of the penalties to be imposed in this case. French CJ and Kiefel, Bell, Nettle and Gordon JJ said in that case at [58] that:
… Subject to the court being sufficiently persuaded of the accuracy of the parties’ agreement as to facts and consequences, and that the penalty which the parties propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and, for the reasons identified in Allied Mills(110), highly desirable in practice for the court to accept the parties’ proposal and therefore impose the proposed penalty. To do so is no different in principle or practice from approving an infant’s compromise, a custody or property compromise, a group proceeding settlement or a scheme of arrangement.
(110) (1981) 60 FLR 38 at 41-42; 37 ALR 256 at 259 per Sheppard J; see also NW Frozen Foods (1996) 71 FCR 285 at 291; Mobile Oil [2004] ATPR 41-993 at 48,627 [53].
13.Similarly, in Director of the Fair Work Building Industry Inspectorate v Construction Forestry, Mining and Energy Union (Quest Apartments and Greek Community Centre) [2016] FCA 1262, Tracey J said at [23]:
The principles which emerge from the joint judgment of Burchett and Kiefel JJ (Carr J agreeing) in NW Frozen Foods were summarised by Branson, Sackville and Gyles JJ in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [51] as follows:
“(i)It is the responsibility of the Court to determine the appropriate penalty to be imposed … .
(ii)Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.
(iii)There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed.
(iv)The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise … will usually be given greater weight than its views on more “subjective” matters.
(v)In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so.
(vi)Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court’s view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.”
14.The appropriate amount of any penalties to be imposed is considered in detail below.
Material sought to be relied upon
15.The applicant sought to rely upon:
a)the application filed on 29 May 2017;
b)the statement of claim filed on 29 May 2017;
c)the statement of agreed facts filed on 15 May 2018;
d)the affidavit sworn by Sasha Renne Srkulj, Fair Work Inspector, on 3 August 2018;
e)the written submissions filed on 9 August 2018;
f)the written submissions in reply filed on 12 September 2018;
g)the applicant’s response to the respondents’ objections to the applicant’s affidavit evidence filed on 26 September 2018; and
h)the applicant’s further written submissions on the hearsay point filed on 10 October 2018.
16.The respondents relied on:
a)their responses filed on 15 June 2017;
b)the first respondent’s defence filed on 4 September 2017;
c)the affidavit sworn by the second respondent on 5 July 2018;
d)their written submissions filed on 29 August 2018;
e)their notice of objection to evidence of the applicant filed on 20 September 2018; and
f)their further written submissions on the hearsay point filed on 24 October 2018.
17.The parties agreed that their witnesses would not be cross-examined, that the parties would make submissions consistent with their evidence and that no one would take a Browne v Dunn[1] point.
[1] (1894) 6 R 67 (HL).
Objections to evidence
18.The respondents objected to paragraphs 66 to 78 of the affidavit sworn by Sasha Renee Srkulj on 3 August 2018 and the annexures marked SRS-20 to SRS-25 referred to therein. By the time the hearing commenced, the applicant had decided not to press paragraphs 69 and 73 to 77 of Ms Srkulj’s affidavit or the annexure marked SRS-24. Those paragraphs and that annexure were consequently struck out by consent.
19.At the commencement of the hearing, the parties remained in dispute about the admissibility of paragraphs 66, 67, 68, 70, 71, 72 and 78 of Ms Srkulj’s affidavit and the annexures marked SRS-20, 21, 22, 23, and 25. However, the applicant in oral argument elected not to press paragraph 68 of Ms Srkulj’s affidavit.
20.The respondents’ written objections were based on relevance and unfair prejudice. However, during the hearing, a question arose as to whether some of the challenged paragraphs might constitute hearsay. At the applicant’s request, orders were made for the parties to file written submissions after the hearing on the hearsay issue. Both parties did so.
21.In the applicant’s written submissions filed on 10 October 2018, the applicant stated that she no longer pressed paragraphs 71 and 72 of Ms Srkulj’s affidavit, or the annexures marked SRS-22 or SRS-23. As a result, the parties remained in dispute about paragraphs 66, 67, 70 and 78 of Ms Srkulj’s affidavit and the annexures marked SRS-19, 21 and 25 thereto.
22.For completeness, there will be an order that paragraphs 68, 69, 71, 72, 73, 74, 75, 76 and 77 of Ms Srkulj’s affidavit be struck out by consent, together with the annexures marked SRS-22, 23 and 24.
23.Paragraphs 66, 67, 70 and 78 of Ms Srkulj’s affidavit and the annexures marked SRS-19, 21 and 25 thereto are as follows:
66. Between July 2017 and August 2017, the FWO received enquiries from a number of former employees of the First Respondent, including: (Further Enquiries):
(a)Serena Nelva (Ms Nelva);
(b)Francesco Gemma (Mr Gemma);
(c) Igor Tinnirello (Mr Tinnirello);
(d) Vincenzo Adragna (Mr Adragna)
(e) Clarissa Schirosi;
(f) Khoa Duy An Le (Mr Le);
(g) Ms Seewald;
(h) Pablo Andres Gonzalez Jaramillo (Mr Jaramillo);
(i) Nagib Bousaad;
(j) Fabiola Saiu; and
(k) Teh Shu Ling (collectively, Further Enquiry Employees).
67.On 21 August 2017, Ms Nelva, Mr Gemma, Mr Tinnirello and Mr Adragna attended the FWO Melbourne office and spoke to FWI Samuel Kelly (FWI Kelly) regarding their former employment with the First Respondent. They claimed that they had recently contacted the First Respondent to request that they be provided with their timesheets or that alleged underpayments be rectified, but they had not received any response. FWI Kelly provided the former employees of the First Respondent with information regarding the small claims process. Annexed hereto and marked SRS-19 is a copy of the file note from that meeting.
Annexure SRS-19
Task
Activity Subtype Reference Number TSK-0112-6229
Subject Visit to FWO office − 21/8
Created On 24/08/2017
On 21/8 four former employees visited the FWO office. All have RFA’s. They were Serena Nelva, Vincenzo Adragda, Igor Tinnirello, Francesco Gemma. At the suggestion of FWO, all had contacted ER recently via email or text message to request ER either provide their timesheets or rectify underpayments, but had not heard back. I asked them to provide evidence of having attempted to resolve with ER, they said they would. I asked them individually if they would provide consent for me to provide their email address and telephone number to ER, they all agreed. I provided them information about the small claims process. After talking among themselves, all four agreed to wait until FWO had attempted to contact ER before commencing with a small claim together. I said I would advise them of any progress. …
…
70. On 24 August 2017, Mr Le and FWI Kelly spoke on the telephone. In that telephone conversation, Mr Le:
(a) alleged that when he had been employed by the First Respondent between August 2011 and December 2012 he had been underpaid; and
(b) stated that he had tried to contact the First Respondent but had no response.
Annexed hereto and marked SRS-21 is a copy of the file note from that telephone conversation.
Annexure SRS-21
Phone Call
…
Created On 24/08/2017
…
Subject Call from EE
…
Title: Note created on 24/08/2017 3:19 PM by Samuel Kelly
Note created on 24/08/2017 3:19 PM by Samuel Kelly
Edited 25/08/2017 9:00 AM by Samuel Kelly
EE Khoa called me. He confirmed he had already email[ed] ER a few weeks ago in relation to rectifying his underpayment when he worked there, he worked for 10 months from Aug 2011 to Dec 2012, and had not got a response from ER. I asked him to sent (sic) me the email he sent ER, he said he would. I asked him to provide consent to provide his contact details to ER, he agreed. He advised he had all his pay slips and 6 months of timesheets. He asked about other friends of his who used to work there. I said they should contact the Company to request audit/records/rectification, first giving ER 14 days, and then if ER didn’t respond, they could contact me. EE understood. EE asked about claims going back over 6 years. I advised him that ER may not be required to keep records beyond 6−7 years, and was possibly aware of this, so it may be less likely to have the records to assist to get a resolution, but we could attempt.
…
78. On 25 October 2017, I emailed the Second Respondent in relation to the Further Enquiries. In that email I provided the Second Respondent with the names and contact details of the Further Enquiry Employees, requested that the First Respondent contact them, and if appropriate, take action to resolve their concerns. I never received any response to my email. Annexed hereto and marked SRS-25 is a copy of my email.
Annexure SRS-25
From: SRKULJ, Sasha
Sent: Wednesday, 25 October 2017 16:47
Subject: Fair Work Ombudsman − Enquiries Received [DLM=For-Official-Use-Only]
For Official Use Only
Dear Mr Di Pietro,
I write to you in relation to enquiries received by the Fair Work Ombudsman (FWO) concerning employees of Ital One Holdings Pty Ltd (Company).
A number of former employees have contacted the FWO making allegations that they were underpaid during their employment with the Company. In the main, the allegations relate to underpayments of the casual loading and weekend, evening and public holiday penalty rates.
A number of the employees have informed the FWO that they have made attempts to contact representatives of the Company in order to resolve their claim but have received no response.
Please find below the names and contact details of these employees. We request that the Company contact the employees and if appropriate, take action to resolve their concerns. Please note that the FWO may take these matters further.
Name
Contact Details
Mary Seewald
…
Pablo Andres Gonzalez Jaramillo
…
Khoa Duy An Le (Eric)
…
Nagib Bousad
…
Clarissa Schirossi
…
Fabiola Saiu
…
Teh Shu Ling (also known as Joanne Stevenson)
…
Francesco Gemma
…
Vincenzo Adragna
…
Igor Tinnirello
…
Serena Nelva
…
I note that I have been in contact with Margaret Truong of Madgwicks who has confirmed that the firm do not hold instructions to act on the Company’s behalf in relation these enquiries and as such, I provide them to you directly.
The FWO will consider any cooperative action taken by the Company to rectify the issues raised when deciding whether further enforcement action will be taken where contraventions of Commonwealth workplace laws are identified.
I look forward to your response in relation to the above, including confirmation that representatives of the Company have made contact with the employees.
I can be contacted on the details below.
Kind regards,
Sasha Srkulj Team Leader (a/g)
Fair Work Inspector
…
24.The applicant noted that the disputed evidence related to enquiries received by the applicant from alleged former employees of the first respondent. The alleged former employees were not the subject of the present proceeding. The applicant received the enquiries from the alleged former employees after the contraventions the subject of this proceeding had occurred.
25.The applicant submitted that she did not wish to rely on the disputed evidence to support an assertion that the people who made the enquiries were underpaid by the first respondent. Rather, the applicant said that she wished to rely on the disputed evidence to show that:
a)various people had contacted the respondents about alleged underpayments; and
b)the respondents were unresponsive to those communications.
26.The applicant submitted that the disputed evidence was relevant to the need for specific deterrence, and, more specifically, whether the respondents had exhibited contrition or changed their behaviour since the admitted contraventions.
27.The essence of the disputed evidence is that some alleged former employees of the first respondent made some enquiries with the applicant. The applicant herself described the people making the enquiries as alleged former employees. That is, the applicant did not claim that the court could be satisfied that the people making enquiries were in fact actual former employees of the first respondent. That, in itself, is enough to exclude the disputed evidence. There is simply nothing before court to substantiate that the people making the enquiries were actual employees of the first respondent. Therefore, any enquiries that the applicant may have received would not have sufficient relevance or probative value to be admitted into evidence.
28.Moreover, while the applicant professes that she does not wish to rely on the disputed evidence to establish that the first respondent underpaid some employees after the contraventions the subject of this proceeding, the applicant does wish to rely on the disputed evidence to show that the respondents have not changed their behaviour since the events the subject of this proceeding. Realistically, that means that the applicant does wish to rely on the disputed evidence to support an allegation that the first respondent has continued to underpay staff.
29.The alternative is that the applicant wishes to rely on the disputed evidence to support an allegation that the respondents did not answer queries by or about people who have not been established to have been employees of the first respondent and who have not been established to have been underpaid. That allegation, even if accepted, would not support a conclusion that the respondents had not changed their behaviour in a way relevant to an assessment of the need for specific deterrence. The first respondent cannot be condemned for not responding to emails from people who were not employees and who it had not underpaid.
30.Similarly, the applicant conceded that she wished to rely upon the disputed evidence to support an argument that the respondents had not demonstrated contrition. The disputed evidence could only support that argument if it were accepted that the people who made the enquiries were actual employees of the first respondent who had actually been underpaid. If the people who made enquiries were not employees of the first respondent or were not underpaid, the respondents’ failure to respond to enquiries by or about them says nothing about the respondents’ contrition or lack thereof. The applicant did not advance any evidence that the people who made the enquiries were actual employees of the first respondent who had been underpaid. Therefore, the disputed evidence is not relevant to the consideration of the question of specific deterrence.
31.Of itself, paragraph 66 of Ms Srkulj’s affidavit does not advance matters. Without more, it is simply irrelevant that 11 former employees of the first respondent made enquiries with the applicant. Paragraph 66 should be excluded on that basis alone. It is noteworthy that Ms Srkulj asserted in her affidavit that the 11 people were actual employees of the first respondent, without providing any evidence to that effect. However, in her post-hearing written submissions, the applicant evidently resiled from that claim, and described the 11 people as alleged former employees.
32.The applicant submitted that paragraph 67 of Ms Srkulj’s affidavit was admissible by reason of the business records exception to the hearsay rule. However, I understand that submission to be confined to the aspect of paragraph 67 of Ms Srkulj’s affidavit that asserts that the four people had not received any response to their queries directed to the first respondent about underpayments.
33.The business records exception is contained in s.69 of the Evidence Act 1995 and is as follows:
(1) This section applies to a document that:
(a) either:
(i) is or forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business; or
(ii) at any time was or formed part of such a record; and
(b) contains a previous representation made or recorded in the document in the course of, or for the purposes of, the business.
(2) The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made:
(a) by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact; or
(b) on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.
(3) Subsection (2) does not apply if the representation:
(a) was prepared or obtained for the purpose of conducting, or for or in contemplation of or in connection with, an Australian or overseas proceeding; or
(b) was made in connection with an investigation relating or leading to a criminal proceeding.
…
34.The parties agreed that the question of whether the representation was prepared in contemplation of an Australian proceeding was governed by the decision of Lindgren J in Australian Competition and Consumer Commission v Advanced Medical Institute (No. 2) (2005) 147 FCR 235; (2006) ATPR 42-087; [2005] FCA 1357.
35.The applicant conceded that the relevant contemplation was the contemplation of the person who caused the representation to be made, that is, in the present case, the officer of the applicant who recorded the representation in a business record of the applicant.
36.However, the exception in s.69(3) of the Evidence Act does not only refer to representations made in contemplation of an Australian proceeding. It also refers to representations prepared or obtained in connection with an Australian proceeding.
37.The applicant did not provide any evidence about whether the disputed evidence was prepared or obtained in connection with an Australian proceeding. However, it is apparent from the evidence before the court that the present proceeding had already been commenced when the four people mentioned in paragraph 67 of Ms Srkulj’s affidavit attended the applicant’s office on 21 August 2017.
38.Given that the present proceeding was already on foot, I infer that the relevant representations in paragraph 67 of Ms Srkulj’s affidavit were prepared or obtained in connection with the present proceeding, which is an Australian proceeding as defined. Consequently, paragraph 67 of Ms Srkulj’s affidavit, and annexure SRS-19, are not admissible.
39.Paragraph 70 of Ms Srkulj’s affidavit, and annexure SRS-21, are not admissible for the same reasons.
40.Paragraph 78 of Ms Srkulj’s affidavit is not hearsay, because Ms Srkulj simply recounts her own experiences. However, the respondents object to it on the grounds that it is irrelevant and unfairly prejudicial to them. I accept that submission. That is, the fact that the respondents did not reply to an email from the applicant, in the absence of evidence that the email concerned actual employees of the first respondent who had actually been underpaid, is irrelevant and unfairly prejudicial. Paragraph 78 of Ms Srkulj’s affidavit and annexure SRS-25 are not admissible.
Approach to determining penalty
41.In general, the proper approach to determining penalty in cases such as this is as follows. The first step is to identify each separate contravention involved.
42.Where there are multiple contraventions, the second step is to consider whether any of the various contraventions constituted a single course of conduct, such that multiple breaches should be treated as a single breach.
43.The third step is for the court to consider the extent, if any, to which two or more contraventions have common elements, such that the contraventions may be grouped as a single breach.
44.The fourth step is for the court to consider the appropriate penalty for each breach.
45.
The fifth step is for the court to apply the totality principle.
This requires the court to consider the aggregate penalty overall, and determine whether it is an appropriate response to the conduct which resulted in the breaches.[2] The court in this step makes an “instinctive synthesis”.[3]
[2] See Kelly v Fitzpatrick (2007) 166 IR 14 at [30] (Tracey J) (Kelly); Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) 246 ALR 35; [2008] FCAFC 8 at [23] (Gray J), [71] (Graham J) and [102] (Buchanan J).
[3] Ophthalmic, supra at [27] (Gray J) and [55] and [78] (Graham J).
46.A convenient checklist of the factors that the court might consider in determining penalty include the matters that were identified by Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 at [26]-[59] and adopted by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [14]. That list is as follows, (with paragraph letters inserted):
(a)The nature and extent of the conduct which led to the breaches.
(b)The circumstances in which that conduct took place.
(c)The nature and extent of any loss or damage sustained as a result of the breaches.
(d)Whether there had been similar previous conduct by the respondent.
(e)Whether the breaches were properly distinct or arose out of the one course of conduct.
(f)The size of the business enterprise involved.
(g)Whether or not the breaches were deliberate.
(h)Whether senior management was involved in the breaches.
(i)Whether the party committing the breach had exhibited contrition.
(j)Whether the party committing the breach had taken corrective action.
(k)Whether the party committing the breach had cooperated with the enforcement authorities.
(l)The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements.
(m)The need for specific and general deterrence.
47.The court must, of course, be mindful of the caution expressed by Buchanan J in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) 246 ALR 35; [2008] FCAFC 8 at [91] as follows:
Checklists of this kind can be useful providing they do not become transformed into a rigid catalogue of matters for attention. At the end of the day the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations. There is no suggestion in the present case that the learned magistrate made any relevant error in her identification of the matters which she should consider in fixing penalties.
48.The court will consider the circumstances of the case under the various headings suggested by Mowbray FM, and then consider whether any other matters are relevant.
49.There was no cross examination of any witnesses, so I accept all of the affidavit evidence, except where otherwise stated.
Step 1: identifying the breaches
50.The breaches are set out in detail in the agreed statement of facts annexed to these reasons.
Step 2: single course of conduct
51.The parties agreed that, where the same provision of the Act or Award was breached in relation to multiple employees, the contraventions should be treated as a single course of conduct pursuant to s.557 of the Act provided that the contraventions arose from a single decision made by the first respondent: Fair Work Ombudsman v VS Investment Group Pty Ltd & Anor [2013] FCCA 208 at [19].
52.The parties agreed that the contraventions of s.45 of the Act relating to the failure to pay casual loading, Saturday penalty rates, Sunday penalty rates and public holiday penalty rates arose from two separate decisions, namely:
(a) the decision to pay employees flat rates of pay that did not satisfy their minimum hourly rates; and
(b) the decision to pay employees flat rates of pay that did satisfy their minimum hourly rate but not their relevant loading or penalty rate.
53.I accept the parties’ approach to these matters. The result is that, after applying the course of conduct provisions, there were 15 breaches, namely:
a)failure to pay minimum wages;
b)failure to pay, where the flat rates of pay did not satisfy the minimum rate of pay:
i)casual loading;
ii)Saturday penalty rates;
iii)Sunday penalty rates; and
iv)public holiday penalty rates;
c)failure to pay, where the flat rates of pay did satisfy the minimum rate of pay but not the relevant loading or penalty rate:
i)casual loading;
ii)Saturday penalty rates;
iii)Sunday penalty rates; and
iv)public holiday penalty rates;
d)failure to pay late night work penalties;
e)failure to pay early morning work penalties;
f)failure to pay weekday overtime;
g)failure to pay Saturday overtime;
h)failure to pay Sunday overtime; and
i)failure to provide a written agreement for part time working hours.
Step 3: grouped breaches
54.In addition, the parties agreed and I accept that the overtime breaches in paragraphs (f), (g) and (h) above should be treated as a single grouped breach, on the basis that they all arose from a single decision not to pay overtime but to instead pay flat rates of pay for all overtime hours worked.
55.The parties agreed and I accept that penalties should be imposed on the basis that there were 13 breaches, namely:
a)failure to pay minimum wages;
b)failure to pay, where the flat rates of pay did not satisfy the minimum rate of pay:
i)casual loading;
ii)Saturday penalty rates;
iii)Sunday penalty rates; and
iv)public holiday penalty rates;
c)failure to pay, where the flat rates of pay did satisfy the minimum rate of pay but not the relevant loading or penalty rate:
i)casual loading;
ii)Saturday penalty rates;
iii)Sunday penalty rates; and
iv)public holiday penalty rates;
d)failure to pay late night work penalties;
e)failure to pay early morning work penalties;
f)failure to pay weekday and weekend overtime; and
g)failure to provide a written agreement for part time working hours.
Step 4: the appropriate penalty for the breaches
a. the nature and extent of the conduct which led to the breach
56.The underpayments occurred over a period of 84 days for the 53 employees and 100 days for Ms Cashmore.
57.The first respondent underpaid a total $73,347. The underpayments extended to 10 separate contraventions of the Award. In addition, there was the breach relating to not providing a written agreement for a part-time worker, which concerned a separate provision of the Award.
58.The applicant submitted at paragraph 36 of their written submissions that:
…the Respondents’ … decision … not to pay [the employees] in accordance with the … Award, and [instead to] pay … flat rates of pay of between $16 and $48 per hour for all time worked, including late night and early morning work, weekends, public holidays and overtime [resulted in]:
a. 25 (of a total of 48) casual employees … [not being] paid flat rates of pay high enough to cover their minimum hourly rate or casual loading, … applicable penalties and/or overtime;
b. 19 casual employees … [being] paid $17.18 per hour, being a rate of pay that … was insufficient to cover the minimum rate of pay for a casual employee classified as a Level 2 under the Restaurant Award;
c. 11 casual employees … [being] paid flat rates of pay high enough to cover their minimum hourly rate but not their casual loading and any applicable penalties and/or overtime;
d. only 11 casual employees … [being] paid flat rates of pay high enough to cover their minimum hourly rate, casual loading and some penalties; and
e. one of the two part-time employees …[not being] paid a flat rate of pay high enough to cover his minimum hourly rate or any penalties.
(footnotes omitted)
59.The applicant also noted that a number of employees were vulnerable in that:
a)one was 18 years old;
b)one was 19 years old and was on a student visa;
c)14 others were on student visas;
d)eight were on working holiday visas; and
e)two were on bridging visas.
60.I accept the applicant’s submissions on these matters.
b. the circumstances in which that conduct took place
61.The first respondent operates Café Baci, in the Crown Casino complex in Melbourne. The cafe trades for 24 hours a day, seven days a week. The second respondent has been operating Café Baci since 2003.
c. the nature and extent of any loss or damage sustained
62.The respondents noted that the quantum of the underpayments to individual employees ranged from $8.80 to $5,433.98. The respondents also noted that 26 of the employees were underpaid less than $1,000 and nine were underpaid less than $100. The respondents submitted in paragraph 15 of their written submissions that:
Any contravention of the Act is inherently serious and it is not disputed that the amounts owed would be of significance to the Employees affected. Nonetheless, the Respondents submit that the extent of the loss and damage suffered by the individual Employees was moderate, having regard to the quantum of individual loss and the fact that the evidence of harm suffered by the Employees has not been disclosed as extensive. (footnote omitted)
63.The applicant submitted that to assess the impact of the underpayments to each employee is entirely artificial and should not be adopted by the court.
64.The applicant relied on Fair Work Ombudsman v HTA Farmings Pty Ltd and Anor [2017] FCCA 1847 at [32] to [34] where Judge Vasta held:
32. It may be said that for the person Lilian to be $146.97 short in the overall payment does not seem to be a great deal. Of course, all of these things are relative. The person Lilian would be a minimum wage worker, and $146.00 is, to a person on the minimum wage, is a not insubstantial sum. But if one then extrapolated that, that if a business had 200 employees and that business were chronically underpaying the employees $150.00, over this four and a half month period, a bottom line $30,000.00 can be saved by the business by not properly paying wages.
33. When one looks at the payment of wages as being the greatest expenditure for such a company such as the First Respondent, even small amounts not being properly paid to workers can make a very big difference to that company’s bottom line and put them in a position where they are unfairly advantaged against companies and farms and employers who are paying the proper payments to the workers.
34. So it cannot be said that a shortfall of $146.00 is trifling and not all that serious. Such a statement does not take into account the domino effect of such payments, and is minimising the mischief that the FW Act is trying to eliminate in cases such as this.
65.The applicant highlighted that if the underpayments to the employees, not including Ms Cashmore, continued over a year, the respondents would have derived a competitive advantage, as against other restaurant owners, of approximately $295,100 for the year.
66.The respondents argued that the applicant’s analysis was improper and should be rejected. The respondents said in their written submissions at paragraph 16:
… The Respondents are subject to the imposition of penalties for the admitted contraventions. It is not open to the Applicant to speculate as to what might have occurred outside of the Assessment Period.
67.The respondents argued that the remarks of Judge Vasta in HTA Farmings were mere obiter and should not form part of the sentencing decision.
68.I accept the respondents’ submissions in this regard. The court can only sentence based on the established facts. The evidence should not be sullied with speculative extrapolations. Having said that, I accept that the established underpayments, totalling $73,347.42, were very significant, and that at least some of the employees suffered very significant losses through being underpaid.
Attachment 5
Employee Part 1 – Weekday Overtime Hours (150%) Hours (200%) Total entitlement Total paid Underpayment Mishra, Sandeep 3.50 3.00 $214.88 $143.00 $71.88 Cappellano, Francesco 6.50 11.00 $584.76 $420.00 $164.76 Coffa, Adrian 21.75 30.10 $1,970.70 $1,477.09 $493.61 Nguyen, Yen Thi Hai 4.75 7.00 $380.68 $225.02 $155.66
Employee Part 2 – Saturday Overtime Hours (175%) Hours (200%) Total entitlement Total paid Underpayment Mishra, Sandeep 2.75 7.50 $378.43 $225.50 $152.93 Cappellano, Francesco 13.50 27.00 $1,413.45 $1,044.00 $369.45 Coffa, Adrian 26.50 45.75 $2,911.95 $1,979.84 $932.11 Nguyen, Yen Thi Hai 2.00 9.00 $387.44 $210.65 $176.79
Employee Part 3 – Sunday Overtime Hours
(200%)Total entitlement Total paid Underpayment Mishra, Sandeep 22.50 $859.50 $495.00 $364.50 Cappellano, Francesco 9.50 $345.98 $228.00 $117.98 Coffa, Adrian 71.50 $3,020.59 $1,954.16 $1,066.43 Nguyen, Yen Thi Hai 9.50 $342.38 $181.93 $160.45 Attachment 6
Name of Employee
Last date of payment
Total Underpayment
Abdelati, Jasmin
11-May-17
$3,297.73
Alam, Shamsul
11-May-17
$2,619.89
Aslam, Abrar
28-Oct-16
$189.42
Bansal, Hunish
28-Oct-16
$991.01
Bansal, Smritti
28-Oct-16
$610.07
Cappellano, Francesco
21-Feb-18
$1,120.21
Carelli, Claudio
21-Feb-18
$163.74
Coffa, Adrian
21-Feb-18
$3,207.48
Cuminatto, Chiara
11-May-17
$1,293.48
Degouve, Marion
11-May-17
$1,677.54
Di Pietro, Matthew
11-May-17
$1,308.57
Diab, Lorenzo Derek
28-Oct-16
$633.12
Donthiri, Vaibhav Reddy
11-May-17
$1,900.08
Fazzini, Francesco
28-Oct-16
$410.04
Fedele, Fabrizio
21-Feb-18
$245.83
Franca, Camila Betto
11-May-17
$1,437.22
Hantelmann, Annika Marie
28-Oct-16
$36.08
Hodgson, Nathan
11-May-17
$2,508.58
Hussain, Ismail
11-May-17
$2,367.80
Invernici, Michele
11-May-17
$1,177.88
Inzerauto, Alessandro
28-Oct-16
$8.80
Jackson, Tamika
11-May-17
$4,391.44
Kakkireni, Bharath Kumar
11-May-17
$2,384.87
Kandukuri, Bhaskar Reddy
28-Oct-16
$99.46
Kasturiarachchi, Kaumika Visanda
28-Oct-16
$822.28
Li, Jiayang
21-Feb-18
$693.97
Malik, Ravinder
28-Oct-16
$372.56
Men, Sovanarith
11-May-17
$4,807.91
Mishra, Sandeep
21-Feb-18
$1,432.69
Mohammad, Abdul Majid
28-Oct-16
$85.52
Mohammed, Adnan Ali
28-Oct-16
$85.52
Morel, Felix
11-May-17
$2,503.21
Munoz, Juliana Tamayo
28-Oct-16
$42.80
Mylamala, Swetha
11-May-17
$1,853.89
Nardone, Davide
11-May-17
$2,217.77
Nelva, Serena
28-Oct-16
$677.71
Nguyen, Thi Hai Yen
21-Feb-18
$625.32
Park, Hannah
11-May-17
$1,832.58
Pasquali, Michael
28-Oct-16
$144.26
Piller, Charles
21-Feb-18
$18.13
Raby, Scott
28-Oct-16
$664.62
Raigir, Vishal Goud
28-Oct-16
$282.48
Rodriguez , Pia
28-Oct-16
$54.30
Sangireddy, Sravan
28-Oct-16
$609.01
Sultana, Sabiya
11-May-17
$1,164.02
Talla, Naveen Reddy
11-May-17
$2,207.80
Tippana, Raghavendhra Reddy
28-Oct-16
$90.20
Trantino, Silvana
28-Oct-16
$402.94
Velentino, Candela
11-May-17
$1,427.85
Vepsa, Karoliina
11-May-17
$1,774.23
Ward, Ashton
11-May-17
$1,355.25
Ward, Bryson
11-May-17
$1,481.01
Yoebaidi, Melissa Hidayati
11-May-17
$4,103.27
Cashmore, Natalie
2-Feb-17
$5,433.98
TOTALS:
$73,347.42
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