Fair Work Ombudsman v Jackson (No.2)

[2016] FCCA 1181

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v JACKSON (No.2) [2016] FCCA 1181

Catchwords:
INDUSTRIAL LAW – Fair Work – agreed statement of facts – underpayment of employees – grouping of contraventions – principles and considerations relevant to penalty.

Legislation:

Fair Work Act 2009 (Cth)

Fair Work Regulations 2009 (Cth)

Workplace Relations Act 1996 (Cth)

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)
Workplace Relations Regulations 2006 (Cth)

Australian Ophthalmic Supplies Pty Ltd v Mc Alary-Smith [2008] FCAFC 8
Cotis v McPherson [2007] FMCA 2060
Fair Work Ombudsman v Maclean Bay Pty Ltd (No.2) [2012] FCA 557
FWO v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408

Fair Work Ombudsman v VS Investment Group Pty Ltd & Anor [2013] FCCA 208

Gibbs v City of Altona (1992) 37 FCR 216
Kelly v Fitzpatrick (2007) 166 IR 14
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Mornington Inn Pty Ltd v Jordan[2008] FCAFC 70
Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; (2008)177 IR 243; [2008] FCAFC 170
Rajagopalan v BM Sydney Building Materials Pty Ltd [2009] FMCA 1412 at [27]-[29].

Applicant: FAIR WORK OMBUDSMAN

Respondent: HAROLD WILLIAM JACKSON

File Number: LNG 27 of 2014

Judgment of: Judge McGuire

Hearing date: 11 March 2016

Date of Last Submission: 11 March 2016

Delivered at: Melbourne

Delivered on: 18 May 2016

REPRESENTATION

Counsel for the Applicant: Ms Knowles

Solicitors for the Applicant: Fair Work Ombudsman

Counsel for the Respondent: Self Represented - No appearance

ORDERS

1. That the Respondent pay penalties in the amount of $71,910.00 pursuant to subsection 546(1) of the Fair Work Act 2009 (Cth) (“FW Act”) in respect of the Respondent’s contraventions as declared in the Court orders dated 25 January 2016.

2. In accordance with subsection 546(3) of the FW Act that the penalties set out above be paid within twenty eight days of the date of this order to the Consolidated Revenue Fund of the Commonwealth.

3. In the alternative to paragraph 2, that, should the Respondent be unable to comply with the orders in paragraph 2 of the Orders of Judge McGuire dated 25 January 2016 by reason of personal insolvency, that the penalties be paid as follows:

   (a)Any penalty payable by the Respondent be paid to the Employees in the appropriate proportion up to the amount of $42,985.54; and

   (b)Any remaining monies to be paid to the Consolidated Revenue Fund of the Commonwealth.

4. That the Applicant has liberty to apply on 7 days’ notice.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

LNG 27 of 2014

FAIR WORK OMBUDSMAN

Applicant

And

HAROLD WILLIAM JACKSON

Respondent

REASONS FOR JUDGMENT

1. The Fair Work Ombudsman (the applicant) commenced proceedings against Harold William Jackson (the respondent) and by application and statement of claim filed on 25 September 2014. The applicant has standing pursuant to 539(2) of the Fair Work Act 2009 (“FW Act”) to apply for penalties in respect of contraventions of civil penalty provisions of that Act.

2. On 25 January 2016 this court, after making appropriate declarations as to the respondent’s contraventions, Orders were made whereby the respondent pay a sum of $42,985.54 owing to five employee complainants and particularised as follows:

   i)$9,693.18 to Graeme Alexander Fraser;

   ii)$3,814.19 to Vanessa Mancini;

   iii)$19,097.64 to Tomeyuki Watari;

   iv)$9,354.14 to Madoka Makino;

   v)$1,026.39 to Keelin Elmhirst.

3. The respondent at the relevant time operated a hardware store and café/ bakery businesses.

4. The respondent was initially represented and entered a defence. However, he terminated his legal representation and did not appear at the hearing. He had given notice accordingly, albeit only shortly before the hearing, and had signed a statement of agreed facts relied upon by the applicant at that hearing.

5. In summary, the aggrieved employees were “backpackers” on 417 visas enticed to work for the respondent at Queenstown in Tasmania’s West Coast and so as to complete a requisite 88 days of regional work in order to qualify for a second year stay in Australia. Three of the complainants were of non-English speaking background. The circumstances of the respondent’s offending behaviour are detailed below.

Penalty hearing

1. Pursuant to the above mentioned orders, the matter returned to Court on 11 March 2016 at 10.00am at the Federal Circuit Court at the Hobart Registry for a penalty hearing. The applicant was represented by Ms Knowles of Counsel. The respondent was put on notice as to the hearing but did not appear.

2. In respect of the penalties sought against Mr Jackson, the applicant relies upon the following documents:

   (a)Application filed 25 September 2014; 

   (b)Statement of Claim filed 25 September 2014;

   (c)Defence filed 19 November 2014;

   (d)Amended Defence filed 8 May 2015;

   (e)Affidavit of Keelin Elmhirst, affirmed 18 August 2015 (Elmhirst Affidavit);

   (f)Affidavit of Madoka Makino, affirmed 24 August 2015 (Makino Affidavit);

   (g)Affidavit of Kate Elizabeth McIver, affirmed 31 August 2015 (McIver Affidavit);

   (h)Affidavit of Graeme Alexander Fraser, affirmed 31 August 2015 (Fraser Affidavit);

   (i)Affidavit of Vanessa Mancini, sworn 14 September 2015 (Mancini Affidavit);

   (j)Statement of Agreed Facts between the Applicant and Respondent, filed 22 January 2016 (SOAF); and

   (k)Declaration and orders of this court made on 25 January 2016.

Approach to penalty proceedings

1. The applicant’s standing to commence these proceedings was not in dispute. The power for the Court to order the imposition of penalties arises under the Act for contraventions occurring on or after 1 July 2009.

2. Section 12 of the Act provided at the relevant time that the “penalty unit” had the same meaning as in the Crimes Act 1914 (Cth). At all relevant times, section 4AA of the Crimes Act defined “penalty unit” to be $170.

3. The appropriate penalties for the contravening conduct by the respondent are to be determined by firstly, the Court identifying the separate contraventions. Each contravention of each separate obligation found in the Workplace Relations Act 1996 (Cth) (WR Act), Workplace Relations Regulations 2006 (Cth) (WR Regulations), the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (“Transitional Act”), the Fair Work Act2009 (“FW Act”) and Fair Work Regulations 2009 (Cth) (“FW Regulations”) is a separate contravention of a civil remedy provision for the purposes of subsection 719(1) of the WR Act, Regulation 14.4 of the WR Regulations and section 539(2) of the FW Act. This involves consideration of whether the contraventions constitute a single course of conduct, such that multiple contraventions should be treated as a single contravention.

4. Secondly, the Court must consider the extent that two or more contraventions have common elements. This should be taken into account in considering an appropriate penalty. A respondent should not be penalised more than once for the same conduct. The penalties imposed by the Court should be an appropriate response to the respondent’s culpable behaviour. This task is distinct from and in addition to the final application of the “totality principle”.

5. Thirdly, the Court will consider an appropriate penalty to impose in respect of each contravention, whether a single contravention, a course of conduct, or group of contraventions, having regard to all the circumstances of the case.

6. Finally, having fixed an appropriate penalty for each contravention, the Court should stand back and consider the aggregate penalty and determine whether it is an appropriate response to the contravening conduct.[1] The Court should apply an “instinctive synthesis” in making this assessment.[2] This is known as the “totality principle”.

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

   [2] Merringtons, supra at [27] (Gray J) and [55] and [78] (Graham J) 

7. The factors which may be taken into account in the assessment of penalty are well established and are not controversial. The factors relevant to the imposition of a penalty were summarised by Federal Magistrate Mowbray in Mason v Harrington Corporation Pty Ltd[3] as follows:

   [3] [2007] FMCA 7[26]-[59].

   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; and

   m. the need for specific and general deterrence.

8. This summary was adopted by Tracey J in Kelly v Fitzpatrick[4] and in Australian Ophthalmic Supplies Pty Ltd v Mc Alary-Smith (supra) Buchanan J after referring to the decision in Kelly v Fitzpatrick (supra) observed at [9]:

   “9. 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…”

   [4] (2007) 166 IR 14

Contraventions

1. As identified in the Statement of Agreed Facts (SOAF) and orders made 25 January 2016 the first respondent contravened:

   a.Section 293 of the Act for failure to pay minimum wages to Graeme Fraser in the amount of $7,542.54 and Vanessa Mancini in the amount of $3,012.19 pursuant to clauses 4.1 and 8.2 of the National Minimum Wage Order 2012.

   b.Section 293 of the Act for failure to pay casual loading to Graeme Fraser in the amount of $2,150.64 and to Vanessa Mancini in the amount of $802 pursuant to clause 5.1 of the National Minimum Wage 2012;

   c.Section 45 of the Act for failure to pay minimum wages to Tomoyuki Watari in the amount of $6,878.48, Madoka Makino in the amount of $4,331.32 and Keelin Elmhirst in the amount of $400.22 pursuant to clause 17 of the General Retail Industry Award 2010;

   d.Section 45 of the Act for failure to pay casual loading to Tomoyuki Watari in the amount of $2,876.16, Madoka Makino in the amount of $1,542.94 and Keelin Elmhirst in the amount of $167.99 pursuant to clause 13.2 of the General Retail Industry Award 2010;

   e.Section 45 of the Act for failure to pay penalties for Saturday work to Tomoyuki Watari in the amount of $3,838.65, Madoka Makino in the amount of $1,825.13 and Keelin Elmhirst in the amount of $211.95 pursuant to clause 29.4(b) of the General Retail Industry Award 2010;

   f.Section 45 of the Act for failure to pay penalties for Sunday work to Tomoyuki Watari in the amount of $4,661.86, Madoka Makino in the amount of $1,313.20 and Keelin Elmhirst in the amount of $246.23 pursuant to clause 29.4(c) of the General Retail Industry Award 2010;

   g.Section 45 of the Act for failure to pay penalties for work on public holidays to Tomoyuki Watari in the amount of $842.49 and Madoka Makino in the amount of $341.55 pursuant to clause 29.4(d)(i) of the General Retail Industry Award 2010;

   h.Section 45 of the Act for failure to observe the minimum daily engagement for Keelin Elmhirst pursuant to clause 13.4 of the General Retail Industry Award 2010;

   i.Subsection 535(1) of the Act by failing to make or keep employment records as required by subregulation 3.33(2) of the FW Regulations in respect of the complainant Employees; and

   j.Subsection 536(1) of the Act by failing to provide payslips to the complainant Employees.

Grouping of Contraventions

1. Subsection 557(1) of the FW Act provides that where two or more contraventions of a civil remedy provision are committed by the same person, and arise out of a course of conduct by the person, the contraventions shall be taken to be a single contravention of the provision.

2. The applicant submitted that in accordance with the relevant authorities the contraventions should be grouped as follows:

   (i) That the respondent be entitled to the benefit conferred by s557 of the Act in that repeated contraventions of a provision of the Act in respect of each employee, be grouped and considered as a single breach.

   (ii) The Fair Work Ombudsman urges the Court to follow the approach of my colleague, Judge Jarrett, in Fair Work Ombudsman v VS Investment Group Pty Ltd & Anor[5] where his Honour opined:

   Moreover, in my view s557(1) does not require the Court to treat the alleged contraventions of s45 of the Fair Work Act (by failure to pay basic rates of pay for example) in respect of multiple employees, as one contravention. The failure to pay a basic rate of pay to one employee over time might properly be seen as a course of conduct.  However, the failure to pay a basic rate of pay to a number of employees should not, in my view, be seen as a “course of conduct” for the purposes of s557(1) unless it is the result of a single decision made by the employer. The failures to pay basic rates of pay to a number of different employees are several and separate courses of conduct in respect of each employee which is dependent upon the decision made in respect of that employee. So much seems to be accepted by the approach of Marshall J in McKiver v Healy.

   [5] [2013] FCCA 208 at [19]

3. I respectfully accept and adopt such an approach and am satisfied that the non-payment and underpayment of the different Employees was not one single decision made by Mr Jackson in relation to all of the Employees. Rather, I find these to be decisions unique to each Employee.

4. It was the applicant’s submission that such an approach to the grouping of contraventions, which I accept, would mean the respondent faced a maximum statutory penalty of $91,800, the result of twenty one separate counts of contraventions.

5. In consideration of the penalty it is further open to the Court to consider any common element and to further group together separate contraventions where there is a context of overlap between those separate breaches which might be seen as potential application of penalties for the same or substantially the same conduct.

6. In Gibbs v City of Altona,[6] Gray J, in respect of the legislative predecessor of the current provisions under consideration, said as follows in respect of how the Court was to approach repeated omissions of an award, which related to the same course of conduct. His Honour said as follows:

   “… The ascertainment of what is a term should depend not on matters of form, such as how the award maker has chosen to designate by numbers or letters the various provisions of an award, but on matters of substance, namely the different obligations which can be spelt out. For these reasons, I incline to the view that each separate obligation imposed by an award is to be regarded as a “term”, for the purposes of s 178 of the Act. If the different terms impose cumulative obligations or obligations that substantially overlap, it is possible to take into account the substance of the matter by imposing no penalty, or a nominal penalty, in respect of breaches of some terms, but a substantial penalty in respect of others.”

   [6] (1992) 37 FCR 216 at 223

7. The Court is required to give recognition to the distinct legal nature of each breach arising under the FW Act and associated regulations. Section 557 of the FW Act (and its predecessor) operates to allow groupings of contraventions of the same obligation or term of an industrial instrument, not the entire range of terms breached under that one instrument.

8. In FWO v Ramsey Food Processing Pty Ltd (No 2)[7] Buchanan J considered the application of section 719(2) of the WR Act, the legislative predecessor of section 557. His Honour said as follows:

   “On one view, the failure to make any of the required payments arose from a single course of conduct. They all arose from a determination by the respondents that no payment would be made upon the termination of employment of any of the employees, or the employees as a group. However, this approach gives insufficient attention to the separate legal character of the three forms of obligation earlier identified. I am satisfied that each of those forms of obligation requires separate recognition. I am not, however, satisfied that each individual example of defiance of an obligation is permitted separate recognition. In my view the individual examples, constituted by the failure to make payments to particular individual employees, arise out of a course of conduct in each of the three instances. Any penalty must be assessed taking that into account.”[8]

   [7] FWO v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408

   [8] FWO v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408 at [2] The passage was approved by the Full Court in Rocky Holdings Pty Limited v Fair Work Ombudsman [2014] FCAFC 62 at [18]

9. In the circumstances of this matter and given the separate legal character of the obligations that were the subject of the various contraventions, I am satisfied that they should be grouped as follows and in accordance with the submissions of Counsel for the applicant:

Provision Contravened	Description of Contravention	Number of contraventions in the group	Amount of underpayment for the group
1	s293 of the FW Act and clause 4.1 and 8.2 of the NMWO	Failure to pay minimum wages under NMWO	2	$10,554.73
2	s293 of the FW Act and clause 5.2 of the NMWO	Failure to pay casual loading under NMWO	2	$2,952.64
3	s45 of the FW Act and clause 17of the General Retail Award	Failure to pay minimum wages under General Retail Award	3	$11,610.02
4	s45 of the FW Act and clause 13.2 of the General Retail Award	Failure to pay casual loading under General Retail Award	3	$4,587.09
5	s45 of the FW Act and clause 29.4(b) of the General Retail Award	Failure to pay Saturday loading	3	$5,875.73
6	s45 of the FW Act and clause 29.4(c) of the General Retail Award	Failure to pay Sunday loading	3	$6,221.29
7	S 45 of the FW Act and clause 29.4(d)(i) of the General Retail Award	Failure to pay public holiday loading	2	$1,184.04
TOTAL UNDERPAYMENT	$42,985.54
8	s45 of the FW Act and clause 13.4 of the General Retail Award	Failure to observe minimum daily engagement	1
9	s535 of the FW Act and Reg. 3.33 FW Regulations	Failure to make and keep records	1
10.	s536 of the FW Act	Failure to provide payslips	1

1. I am satisfied therefore that the respondent’s counts of contraventions should be grouped, for the purposes of consideration of penalty, into ten (10) “contraventions”.

2. The statutory maximum penalties available to me are:

   i)60 penalty units x $170 = $10,200 in respect of breaches of sections 45 and 293 and;

   ii)30 penalty units x $170 =$5,100 for each breach of section 535 and 536. I calculate, therefore, that the maximum penalty available to me in respect of this respondent is $91.800.

3. Relevant considerations include, but not exhaustively:[9]

   [9] Kelly v Fitzpatrick (2007) FCA 1080 [14] per Tracey J

a)The nature and extent of the conduct which led to the breaches;

b)the circumstances in which the conduct took place;

c)the nature and extent of any loss or damage;

d)the nature and size of the respondent’s business;

e)the involvement of senior management;

f)whether the contraventions were deliberate;

g)the respondent’s remorse for his behaviour, corrective action and cooperation with the enforcement authorities;

h)ensuring compliance with minimum standards; and

1. an element of both specific and general deterrence.

Nature and extent of the conduct which led to the breaches

1. The respondent’s conduct proceeds over a period of some seven (7) months between July 2013 and February 2014. The five aggrieved employees were all young and recipients of 417 visas. Three of them were from non-English speaking backgrounds. They were enticed to the West Coast of Tasmania to complete the requisite eighty eight (88) days of regional work so as to qualify for a second year extension on their visas. Significantly, the evidence before me of advertisements placed by the respondent from 2012 is indicative of a course of conduct involving workers other than these complainants. I am satisfied that these were generally vulnerable employees enticed to a relatively remote regional area. The consequence of the respondent’s conduct resulted in a substantial total underpayment of near $43,000 to the Employees and consequent financial advantage to the respondent.

Circumstances in which the conduct took place

1. The respondent enticed the employees to a relatively isolated regional area some distance from exit air or sea terminals. The employees were young and in some cases English was not their first language. Their vulnerability as such is something that I consider to be an aggravating factor. Further, the evidence before me suggests that the accommodation and facilities provided for these young people was what could only be described as “basic”. It is often construed that  employers rue the reluctance of young Australians to take on seasonal or similar work. I comment only that such young locals might well be aware of their basic rights and the obligations of employers when considering employment and the respondent’s tendency to advertise in backpacker hostels was calculated accordingly. Notably in this context, the work required of these employees was often of a substantially different nature than that represented to them by the respondent and involved hard physical labour, rather than the suggested hospitality work.

2. The unchallenged evidence before me is that the respondent employer would berate and yell at these young employees. At least some of the employees were effectively stranded in Queenstown upon the termination of their employment, without payment of the wage entitlements and without the respondent even signing-off on their work records in respect of the eighty-eight day requirement.

3. In summary these young and vulnerable people were enticed to a regional area and not provided with appropriate accommodation and facilities. They were in some cases obliged to undertake work of a hard physical nature not advertised by the respondent. They were not paid or were underpaid. The respondent did not provide the statutorily required acknowledgment of work completed. The termination of their employment, in some cases apparently arbitrarily, left these young people actually and financially stranded.  

Deliberate nature of the breaches

1. The issue of whether a breach is deliberate was considered by (as His Honour then was) Federal Magistrate Driver in Cotis v McPherson,[10] where his Honour stated:

   “In issue in this matter is whether the identified breaches were deliberate. I do not think that they were deliberate in the sense of Mr Macpherson setting out with an intention to breach the Workplace Relations Act. However, the facts compel the conclusion that Mr Macpherson was at least reckless in relation to the responsibilities of his company and himself as an employer. Mr Macpherson was made aware of some of the breaches by employees whilst the business was still in operation. He also acknowledged the breaches to the inspector following the closure of the business. Mr Macpherson has no contest with the evidence provided by Ms Cotis.”

   [10] [2007] FMCA 2060 at para [17]

2. I am satisfied here that the respondent’s breaches were deliberate. He concedes target-advertising 417 visa recipients. That his behaviour was deliberate, rather than simply reckless or negligent, is evidenced by his efforts to conceal his behaviour by instructing employees to tell visiting investigating Fair Work inspectors that they were “volunteers”. This demonstrates an understanding by the respondent of his statutory obligations and a calculated attempt to avoid and conceal them. There is before me evidence that the respondent went even further in instructing the employees to complete and back-date documents suggesting that they were volunteer workers. This is all evidence of deliberate intent in the respondent.

Nature and extent of any loss or damage

1. The Employees were underpaid an aggregate total of $42,985.54. This is a significant amount considering the vulnerability of the Employees and the period of time they worked for the Respondent. The particulars in respect of each employee are enlightening as to their losses. For example, Mr Fraser’s underpayment of $9,693.18 occurred over just twelve (12) weeks and comprised 88% of his entitlement. Each of the employees were underpaid at least 79% of their entitlement. Mr Watari worked for the longer period of only about four months being underpaid $19,897.64 or 79% of his entitlement. The evidence is that the underpayments have not been rectified and hence the losses for these employees have been outstanding now for some two years or more.

The size of the respondent’s business

1. The respondent is a sole trader in a regional area. Such factors do not, however, excuse his contraventions.[11]  It is trite to observe that the Act does not distinguish between smaller and larger employers. I do, however, accept and adopt the submissions of Counsel for the applicant that the conduct of this respondent in luring and engaging free or underpaid labour in a small town such as Queenstown is likely to give him an unfair advantage over and disadvantageous impact on his business competitors.

   [11] Rajagopalan v BM Sydney Building Materials Pty Ltd [2009] FMCA 1412 at [27]-[29]

The respondent’s contrition, corrective action and co-operation with the enforcement authorities

1. The respondent did not attend the initial hearing but he did sign a statement of agreed facts. The complainant employees were therefore spared the ordeal of giving evidence and cross-examination. The hearing was also considerably shortened to one day from the anticipated five days with consequent substantial saving to the public purse. Whilst this might be seen as the respondent being given some credit for contrition for his behaviour, the respondent’s concessions were not made until only a day or so prior to the liability hearing and by which time the matter had obviously been prepared for hearing and witnesses proofed, including those who had been required to travel from overseas. Translators had been engaged for the duration of the hearing. All of this incurred substantial impost on the public purse in a jurisdiction where compensatory costs orders are not ordinarily available.

2. These proceedings have been on foot for a considerable period prior to the respondent’s late concessions. The respondent had, as long ago as May 2015, filed an Amended Defence specifically disputing numerous of the particulars later conceded.

3. I accept that the respondent obfuscated and was uncooperative in the investigative process. I accept that he provided information that was contradictory and inconsistent.

4. I am satisfied that the respondent’s conduct was so as to undermine the utility and object of the Fair Work Act being to provide a safety net of relevant and enforceable terms and conditions for all employees.

5. On this issue it is timely to recall what the Full Court said in Mornington Inn Pty Ltd v Jordan[12]:

   “…a discount should not be available simply because a respondent has spared the community the cost of a contested trial. Rather, the benefit of such a discount should be reserved for cases where it can be fairly should that an admission of liability:

   a)has indicated an acceptance of wrongdoing and suitable and credible expression of regret; and/or

   b)has indicated a willingness to facilitate the course of justice.”

   [12] [2008] FCAFC 70 at [74] –[76]

Ensuring compliance with minimum standards

1. Any object of the FW Act is clearly to provide a scheme of minimal terms and conditions for all employees and to prevent their exploitation. This object is particularly relevant in regional areas and in respect of employees carrying the vulnerabilities of the complainant employees here. As the Court observed in Fair Work Ombudsman v A Dalley Holdings Pty Ltd[13]:

   “In imposing a penalty, it is imperative for the Court to impose a penalty that reinforces the fundamental importance of compliance with the safety net of entitlements specified by the National Employment Standards and the general protection provisions of the FW Act.”

   [13] [2013] FCA 509

2. This respondent failed to meet the minimum requirements of any of the complainant employees. This is a factor which aggravates penalty here.

Specific Deterrence

1. There is no evidence before me of any prior relevant convictions for this respondent and there is insufficient evidence to permit me to make findings as to whether this respondent substantially engaged in such conduct prior to these complaints being lodged or as to whether he has continued the behaviour. I have found little evidence, however, of any genuine remorse in the respondent and his efforts to rectify the underpayments by payment of $250 per month are not indicative of contrition. I am of the view therefore that there is a requirement for a penalty which dissuades this particular respondent from engaging in similar behaviour in the future and particularly so given what I find to be a lack of any genuine objective contrition. Again, the respondent’s late signing of the statement of agreed facts can, in context, mitigate little in the need for a penalty to provide a necessary specific deterrence.

General Deterrence

1. Any penalty must also act as a sufficient deterrent to those contemplating like-behaviour. The penalty must therefore objectively address the seriousness of the behaviour in the eyes of the general public, not in the form of retribution, but to discourage similar breaches.

2. As Marshall J said in Fair Work Ombudsman v Maclean Bay Pty Ltd (No.2)[14]:

   “It is important to ensure that the protections provided by the Act to employees are real and effective and properly enforced. The need for general deterrence cannot be understated. Rights are a mere shell unless they are respected.”

   [14] [2012] FCA 557 at [29]

Respondent’s Circumstances

1. The respondent did not appear before me and thus my knowledge of his personal financial circumstances is limited. I understand that he may have moved to Queensland to pursue employment but that he retains business interests in Queenstown. As mentioned above, I am told that he has made what I consider to be a token offer at restitution of $250 per month which will do little to satisfy the losses of these young employees.

Consideration of appropriate penalty

1. There is no evidence of prior breaches of the relevant sections of the Act by this respondent. I also take into account that his concessions as to culpability, albeit late in the coming, saved expense in prosecution and the trauma to the complainant employees of having to give evidence. These are factors which should properly mitigate the penalty imposed.

2. There are, however, a number of aggravating factors which urge a penalty in the higher range. There is no evidence of contrition. The monies owing to the employees remain outstanding save a token effort at payment. I find the behaviour to have been calculated or deliberate. It continued over a period of time. Advantages and benefits were achieved by the respondent in his own enterprises and as against his business competitors. The employees were vulnerable and such vulnerability was compounded by their isolated circumstances and the deliberate and at times callous nature of the respondent’s behaviour. This is a matter were the penalty should reflect both specific and general deterrence. I am satisfied that the penalty imposed on this respondent should be in the higher range available to me.

3. It is appropriate to find these contraventions to be at the more serious end of the scale but to allow generally a discount of 10% for the mitigatory factors referred to above. Specifically, I also accept the submissions of counsel for the applicant that further discounts of penalty be attributed as follows:

   (i)the breach of s.536 of the Act in failing to provide payslips is considered less serious than the failures to pay minimum rates as casual loading. The penalty here will be at 60% of maximum.

   (ii)The breach of s.45 in failing to observe the minimum daily engagement related to only one employee and occurred on only three (3) occasions. The discount from the maximum here will be at 50%.

   (iii)The breach of s.45 in failing to pay for work on public holidays related to two employees only and involved only $1,184.04. The discount for the maximum here will be 30%.

   (iv)The two counts of failure to pay casual loading involved a quantum of $2,952.66 being significantly less than the quantum of underpayment of payment in minimum wages. The discount here will be 20%.

   (v)The count of failure to pay Saturday and Sunday loading affected three of the five complainants although the total underpayment was considerable. A discount on penalty of 15% is applicable here. 

   (vi)Consequently, penalties will be imposed as follows:

Description of Contravention	Proposed Grouping	Maximum Penalty	Proposed Penalty Range
			Percentage	Amount
1	Section 293 of the FW Act by failing to observe the minimum rate payable to Mr Fraser and Ms Mancini under the NMWO	Failure to pay minimum wages under NMWO	$10,200	90	$9,180
2	Section 293 of the FW Act by failing to pay casual loading to Mr Fraser and Ms Mancini under the NMWO	Failure to casual loading under Award	$10,200	80	$8,160
3	Section 45 for failure to pay minimum wages to Mr Watari, Ms Makino and Ms Elmhirst pursuant to the Modern Award	Failure to pay casual loading under NMWO	$10,200	90	$9,180
4	Section 45 for failure to pay casual loading to Mr Watari, Ms Makino and Ms Elmhirst pursuant to the Modern Award	Failure to pay casual loading under Award	$10,200	80	$8,160
5	Section 45 failure to pay for Saturday work to Mr Watari, Ms MAKINO AND Ms Elmhirst pursuant to the Modern Award	Failure to pay Saturday loading	$10,200	85	$8,670
6	Section 45 failure to pay for Sunday work to Mr Watari, Ms MAKINO AND Ms Elmhirst pursuant to the Modern Award	Failure to pay Sunday loading	$10,200	85	$8,670
7	Section 45 failure to pay for work on public holidays to Mr Watari, Ms MAKINO AND Ms Elmhirst pursuant to the Modern Award	Failure to pay public holiday loading	$10,200	70	$7,140
8	Section 45 failure to observe the minimum daily engagement for Ms Elmhirst pursuant to the Modern Award	Failure to observe minimum daily engagement	$10,200	50	$5,100
9	Section 535 of the FW Act by failing to make and keep employee records	Failure to make and keep records	$5,100	90	$4,590
10	Section 536 of the FW Act by failing to provide payslips	Failure to provide payslips	$5,100	60	$3,060
Totals	10 groups of contraventions	$91,800	$71,910

1. Having considered the fixed penalties for each grouping of breaches, I now consider the aggregate penalty as to whether it is appropriate and not oppressive or crushing. I do not consider the penalty to be either given the seriousness of the Respondent’s conduct, the aggravating factors, and the minimal material before me in respect of the respondent’s circumstances. In this regard, I am also mindful of the necessary obligation to pay the amount of $42,985.54 in respect of the underpayments.

2. There will be an order that the Respondent pay penalties in the amount of $71,910.

I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date: 18 May 2016