Fair Work Ombudsman v Mai

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FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Mai [2025] FCA 421

File number: SAD 7 of 2024
Judgment of: MCDONALD J
Date of judgment: 1 May 2025
Catchwords: INDUSTRIAL LAW – determination of appropriate pecuniary penalties for contraventions and serious contraventions of multiple provisions of Fair Work Act 2009 (Cth) by couple running small business – where manager of business involved in contraventions – whether several obligations to pay overtime imposed by single term of award such that contraventions relating to failure to pay overtime should be treated as single contravention under s 557(1) of Fair Work Act – need for specific and general deterrence – application of totality principle  
Legislation:

Crimes Act 1901 (Cth) s 4AA

Fair Work Act 2009 (Cth) ss 45, 323, 324, 325, 535, 536, 539, 545, 546, 550, 557, 557A, 700, 706, 712, 718A

Fair Work Regulations 2009 (Cth) regs 3.32, 3.33, 3.34, 3.46

Fast Food Industry Award 2010 cll 13.1, 13.2, 17, 25.5, 26.1, 26.3, 30.3, 30.4

Restaurant Industry Award 2010 cll 13.1, 13.5, 20.1, 20.3, 32.5, 32.6, 33.2, 34.1

Restaurant Industry Award 2020 cll 11.1, 16.5, 16.6, 18.1, 18.2, 23.1, 23.4, 24.2

Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68; [2017] FCAFC 113

Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450; [2022] HCA 13

Australian Competition and Consumer Commission v Employsure Pty Ltd (2023) 407 ALR 302; [2023] FCAFC 5

Australian Competition and Consumer Commission v Murray Goulburn Co‑Operative Co Ltd [2018] FCA 1964

Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25; [2016] FCAFC 181

Basi v Namitha Nakul Pty Ltd (No2) [2023] FCA 671

Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 413

Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No 4) [2024] FCA 341

Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557

Fair Work Ombudsman v NSH North Pty Ltd (trading as New Shanghai Charlestown) (2017) 275 IR 148; [2017] FCA 1301

Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174; [2011] FCA 1176

Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (No 2) (2012) 64 AILR 101-608; [2012] FCA 408

Fair Work Ombudsman v Sushi Bay Pty Ltd (in liq) (No 3) [2024] FCA 869

Gibbs v City of Altona (1992) 37 FCR 216

Hansen v Mt Martha Community Learning Centre Inc (No 2) [2015] FCA 1283

Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70

Printing and Kindred Industries Union v Vista Paper Products Pty Ltd (1994) 127 ALR 673

Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153; [2014] FCAFC 62

Division: Fair Work Division
Registry: South Australia
National Practice Area: Employment and Industrial Relations
Number of paragraphs: 194
Date of last submission: 11 April 2025
Date of…
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Details
Case
[2025] FCA 421
Decision Date

CaseChat Overview and Summary

The Fair Work Ombudsman (FWO) brought this case against Mr and Ms Mai for contraventions of multiple provisions of the Fair Work Act 2009 (Cth) (FW Act) by the couple who ran a small business. The court had to determine the appropriate pecuniary penalties to be imposed on the respondents for their contraventions. The primary legal issue was whether several obligations to pay overtime imposed by a single term of the award should be treated as a single contravention under section 557(1) of the FW Act. Another issue was the need for specific and general deterrence, as well as the application of the totality principle.

The court considered the respondents' admissions and cooperation since the commencement of the proceedings, which justified a 25% reduction in penalties. The court also took into account the need for specific and general deterrence and applied the totality principle to ensure that the cumulative total of the penalties would not be too low or too high. The court ultimately decided on a penalty of $265,000 for Mr Mai and $130,000 for Ms Le, with a 25% reduction applied to these amounts.

The court issued orders for the rectification of underpayments and interest, superannuation payments, and the payment of pecuniary penalties to the Consolidated Revenue Fund of the Commonwealth. The respondents were also granted liberty to apply for enforcement if any of the preceding orders were not complied with.

Orders

Orders of the court

Rectification of underpayments and interest

1. Pursuant to ss 545(2)(b) and 559(1) of the FW Act, within 28 days of the making of these orders, the first respondent pay the applicant the amount of $407,546.45 (Underpayment Amount), being compensation for economic loss suffered by the Employees because of the contraventions referred to in the declarations above, or such other amounts as remain outstanding at that time.

2. Pursuant to ss 547(2) and 559(1) of the FW Act, within 28 days of the making of these orders, the first respondent pay the applicant interest on the Underpayment Amount at the applicable pre‑judgment interest rate, calculated by applying the rates identified in [2.2(a)-(b)] of the General Practice Note, Interest on judgments (GPN-INT).

3. Pursuant to s 545(1) of the FW Act and s 23 of the Federal Court of Australia Act 1976 (Cth) (FCA Act), within 90 days of receipt of the amount and interest pursuant to orders 1 and 2 above or any part of those amounts, the applicant seek to locate and pay:

(a) if the applicant receives those amounts in full—each amount set out in column B of the table below to the corresponding Employee named in column A, plus interest on those amounts at the applicable pre‑judgment interest rate, less any amount that Employee has already been paid by the first respondent; or

(b) if the applicant receives part of those amounts—the amount received multiplied by the percentage in column C of the table below to the corresponding Employee named in column A, less any amount that Employee has already been paid by the first respondent.

A

Employee

B

Underpayment

C

% of Total Underpayment Amount

Bui, Thi Ngoc Ha

$14,525.79

3.56%

Cao, Nguyen Dang Kho/Khoa

$4,326.31

1.06%

Cao, Thanh

$11,691.25

2.87%

Dang, Linh

$5,772.39

1.42%

Dang, Nhu

$5,486.51

1.35%

Dang, Thu Ha

$209.28

0.05%

Dat, H T

$170.38

0.04%

Do, Quynh Anh

$11,991.69

2.94%

Hoang, Ha Ngan

$13,580.77

3.33%

Hoang, Mei Jiao Lisa

$1,467.83

0.36%

Huy, Vo Hai

$5,133.28

1.26%

Lam, Hai

$30,032.85

7.37%

Le, Phuong Uyen Pham

$4,290.04

1.05%

Le, Thanh

$9,686.92

2.38%

Le, Trinh Thuy Ly

$9,546.44

2.34%

Luong, Quynh Anh

$7,811.78

1.92%

Ly, Thi Thu Mai

$58,592.41

14.38%

Nguyen, Hung

$5,476.48

1.34%

Nguyen, Nhi

$3,610.39

0.89%

Nguyen, Phong

$74.99

0.02%

Nguyen, Quynh Nhu

$17,296.43

4.24%

Nguyen, The Hoang An

$1,615.71

0.40%

Nguyen, The Hoang Anh

$1,084.90

0.27%

Nguyen, Thi Thanh Thuy

$12,860.81

3.16%

Nguyen, Thien

$13,064.09

3.21%

Pham, Thi Ngoc Linh

$8,731.96

2.14%

Phi, Thi Thu Hang

$12,286.11

3.01%

Quach, Quoc Huy

$24,803.61

6.09%

Tran, Duc Thinh

$9,380.28

2.30%

Tran, Thi Kim Dung

$29,086.55

7.14%

Trang, Thu Kim Dung

$1,030.07

0.25%

Tuyet, Van Truong

$32,036.73

7.86%

Ung, Thai Tac

$12,007.03

2.95%

Vo, Lam Thi

$5,821.24

1.43%

Vo, Lam Thi Ngoc

$19,335.39

4.74%

Vu, Nguyen Quynh Nhu

$3,627.76

0.89%

4. Pursuant to s 545(1) of the FW Act and s 23 of the FCA Act, if the applicant is unable to locate and pay any of the Employees specified in order 3 above within the time specified in that paragraph, the applicant pay to a person the amount specified in order 3 above for that Employee if:

(a) the person makes a claim for the amount in accordance with the form prescribed by the FW Regulations for the purpose of s 559(3) of the FW Act; and

(b) the applicant is satisfied that the person is entitled to the amount.

5. Pursuant to s 545(1) of the FW Act and s 23 of the FCA Act, if a person is paid an amount in accordance with order 4 above, the applicant also pay that person any interest on the amount that would be payable to the relevant Employee under s 559(3A) of the FW Act if the amount were paid to the Employee under s 559(3) of the FW Act.

Superannuation payments

6. Pursuant to s 545(2) of the FW Act, within 28 days of this order, the first respondent make superannuation contributions on behalf of each of the Employees to their nominated superannuation fund:

(a) in respect of the ordinary time earnings component of any payment made pursuant to the orders above at the superannuation guarantee charge rate prescribed by applicable superannuation legislation as at the date of these orders; and/or

(b) in the amount of any relevant superannuation guarantee charge under the Superannuation Guarantee (Administration) Act 1992 (Cth).

Pecuniary penalties

7. Pursuant to s 546(1) of the FW Act, the first respondent pay pecuniary penalties totalling $265,000 for the contraventions identified in declaration 1 above.

8. Pursuant to s 546(1) of the FW Act, the second respondent pay pecuniary penalties totalling $130,000 for the contraventions identified in declaration 2 above.

9. Pursuant to s 546(3) of the FW Act, the pecuniary penalties ordered to be paid by the first respondent and the second respondent be paid to the Consolidated Revenue Fund of the Commonwealth within 90 days of the making of these orders.

Ancillary

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

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

Background

Background to the litigation

The respondents also accept that it is appropriate that the Court impose civil penalties on both of them for their contraventions of the FW Act. The issue remaining between the parties concerns the quantum of the civil penalties that should be imposed. For the reasons that follow, I will order that penalties be imposed totalling the amounts set out in the orders at the beginning of these reasons.FACTUAL BACKGROUND The following facts, which I find proved, are agreed by the parties and are set out in the statement of agreed facts and admissions, as well as at [5]-[14] of the FWO’s written submissions. Those paragraphs are adopted by the respondents in their written submissions. During the period from 29 January 2018 to 5 September 2021 (assessment period), Mr Mai employed at least 31 persons as employees at the restaurant, under the Restaurant Industry Award 2010 (Restaurant Award 2010) until 29 May 2020 and the Restaurant Industry Award 2020 (Restaurant Award 2020) from 29 May 2020 onwards (restaurant employees). Ten persons (some of whom were also counted in the group of 31 restaurant employees) were employed under the Fast Food Industry Award 2010 (Fast Food Award) as employees at the stall (fast food employees). Five employees have been identified as being under 20 years of age during the period of their employment (junior employees). Mr Mai developed a system for paying each of the employees of the business (Payment System) which involved a combination of electronic funds transfer, paid at arbitrary hourly rates, in respect of some hours worked, and cash payments, paid at a different arbitrary rate, for all remaining hours. When remunerating employees via electronic funds transfer, Mr Mai paid a flat hourly rate, generally between $21.69 and $26.49, but sometimes as low as $16.00 or as high as $26.90, that he determined for each employee per fortnight. The payments were for an arbitrary number of hours that was also determined by him. In relation to the remaining hours worked by each employee, Mr Mai made cash payments at a flat hourly rate of $15.00. On 6 June 2015, Mr Mai created, and thereafter maintained and edited, a spreadsheet titled “timesheet.xls” in which he recorded the following data:(a)the number of hours worked by each employee per fortnight;(b)the number of hours for which he determined each employee would be paid via electronic funds transfer per fortnight;(c)the number of hours in excess of the hours for which electronic payment had been made for which Mr Mai determined each employee would be paid in cash per fortnight;(d)the amount to be paid to each employee via electronic funds transfer (calculated by multiplying the number of hours at (b) above by the hourly rate Mr Mai determined that that employee would be paid for hours remunerated via electronic funds transfer);(e)the amount to be paid to each employee in cash (calculated by multiplying the number of hours at (c) above by the hourly rate Mr Mai determined that that employee would be paid in cash); and(f)the total amount each employee would be paid each fortnight (being the sum of the amounts at (d) and (e) above).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In relation to the contravention involving the implementation of the strike board system it is apparent that Ms Le played a key role in the implementation of that system, enforced it and benefited from it. I consider it appropriate to impose the same penalty on Ms Le and Mr Mai in relation to that conduct.CONCLUSIONS AS TO PENALTIES THAT SHOULD BE IMPOSED, BEFORE FINAL ADJUSTMENT FOR TOTALITY Taking into account all the matters discussed above, I consider it appropriate – subject to the further steps of making reductions in recognition of co‑operation and totality – to identify nominal penalties to be imposed on Mr Mai as indicated in the following table: In relation to the contraventions in which Ms Le was involved, and again subject to reductions in recognition of co‑operation and totality, I consider that penalties in the following amounts are appropriate: The provisional penalties I have identified to this point add up to totals of $436,700 for Mr Mai and $219,400 for Ms Le. The parties are in agreement that it is appropriate to apply a discount of 25%, reflecting the extent of the respondents’ co‑operation since the commencement of the proceedings. I accept that the respondents have been co‑operative since the proceedings were commenced. The nature, and the limits, of that co‑operation have been described at [150]-[154] above. It is necessary to recall that the respondents’ admissions and co‑operation occurred only after legal proceedings were commenced. Before that, Mr Mai had initially responded to the FWO’s investigation not only unco‑operatively but obstructively, including by making, keeping and providing a Fair Work Inspector with false or misleading records, by instructing employees to lie to Fair Work Inspectors about their rates of pay and the method of payment, and even by prevailing upon one employee to repay, in cash, amounts that had ostensibly been paid to him to rectify underpayments. Those steps, which have been described in greater detail above, were designed to obscure the true position and mislead the investigation. Some of that unco‑operative conduct itself involved contraventions of the FW Act and so is reflected in the penalties imposed for those contraventions. I am satisfied that it is appropriate to apply a reduction of 25% to the provisional penalties identified above in recognition of the respondents’ co‑operation. Doing so produces a revised total of $327,525 in penalties for Mr Mai and $164,550 for Ms Le.TOTALITY The totality principle requires that the Court conduct a final check of the penalties to be imposed, considered as a whole. If the cumulative total of the penalties would be too low or too high, the final penalties can be altered to ensure that they are just and appropriate overall. In Australian Competition and Consumer Commission v Employsure Pty Ltd (2023) 407 ALR 302; [2023] FCAFC 5, Rares, Stewart and Abraham JJ explained (at 314 [52]):[The] course of conduct concept is separate from the principle of totality which requires the Court to make a “final check” of the penalties to be imposed on a wrongdoer, considered as a whole, to ensure that the total penalty does not exceed what is proper for the entire contravening conduct: Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 at 53, citing Mill v The Queen (1988) 166 CLR 59. …See also Mornington Inn at 397 [42]‑[43] (Stone and Buchanan JJ).

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.