Fair Work Ombudsman v Mashnicisa Pty Ltd

[2020] FCCA 1934

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v MASHNICISA PTY LTD & ANOR [2020] FCCA 1934

Catchwords:
INDUSTRIAL LAW – Commonwealth – Compliance and enforcement – Civil remedies – Pecuniary penalty orders – Amount of penalty – Course of conduct

Legislation:
Fair Work Act 2009 (Cth), ss.44(1), 45, 125(1), 535(1), 545(1), 545(2), 546(1), 546(3)(a), 547(2), 550(1), 559, 712(3), 718A
Fair Work Regulations2009 (Cth) reg. 3.33(3).

Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157

Applicant: FAIR WORK OMBUDSMAN

First Respondent: MASHNICISA PTY LTD (ACN 614 243 855)

Second Respondent: MAURICE ARIAS

File Number: BRG 836 of 2019

Judgment of: Judge Jarrett

Hearing date: By written submission

Date of Last Submission: 18 May 2020

Delivered at: Brisbane

Delivered on: 16 July 2020

REPRESENTATION

Solicitors for the Applicant: Office of the Fair Work Ombudsman

The Second Respondent in person

ORDERS

BY CONSENT THE COURT DECLARES THAT:

1. the first respondent contravened the following civil remedy provisions:

   (a)s.45 of the Fair Work Act2009 (Cth) by virtue of a contravention of clause 17 of the Fast Food Industry Award 2010 by failing to pay employees minimum wages for time worked;

   (b)s.45 of the Fair Work Act2009 (Cth) by virtue of a contravention of clause 18 of the Fast Food Industry Award 2010 by failing to pay employees junior minimum wages for time worked;

   (c)s.45 of the Fair Work Act2009 (Cth) by virtue of a contravention of clause 13.2 of the Fast Food Industry Award 2010 by failing to pay employees casual loading for time worked;

   (d)s.45 of the Fair Work Act2009 (Cth) by virtue of a contravention of clause 25.5(b)(ii) of the Fast Food Industry Award 2010 by failing to pay employees loading for time worked on Saturdays;

   (e)s.45 of the Fair Work Act2009 (Cth) by virtue of a contravention of clauses 25.5(c)(i) and 25.5(d) of the Fast Food Industry Award 2010 by failing to pay employees loading for time worked on Sundays;

   (f)s.45 of the Fair Work Act2009 (Cth) by virtue of a contravention of clause 30.3 of the Fast Food Industry Award 2010 by failing to pay employees penalty rates for time worked on public holidays;

   (g)s.45 of the Fair Work Act2009 (Cth) by virtue of a contravention of clause 25.5(a)(ii) of the Fast Food Industry Award 2010 by failing to pay employees in loading for work performed between midnight and 6:00am on weekdays;

   (h)s.45 of the Fair Work Act2009 (Cth) by virtue of a contravention of clauses 26.1, 26.2(a) and 26.3 of the Fast Food Industry Award 2010 by failing to pay overtime rates for work performed in excess of 38 hours per week or in excess of 11 hours per day;

   (i)s.718A of the Fair Work Act2009 (Cth) by providing false or misleading payroll documents to a Fair Work Inspector;

   (j)s.712(3) of the Fair Work Act2009 (Cth) by failing to comply with a notice to produce records or documents;

   (k)s.535(1) of the Fair Work Act2009 (Cth) by failing to make and keep a record of the penalty rates and loadings applicable to employees as required by reg.3.33(3) of the Fair Work Regulations2009 (Cth); and

   (l)s.44(1) of the Fair Work Act2009 (Cth), by failing to give the Fair Work Information Statement to employees on commencement of their employment or as soon as reasonably practicable thereafter in contravention of s.125(1) of the Fair Work Act 2009 (Cth).

2. The second respondent was involved in each of the contraventions committed by the first respondent referred to in declaration 1 above, with the exception of the contravention at declaration 1(b).

BY CONSENT THE COURT ORDERS THAT:

1. Pursuant to s.545(2) of the Fair Work Act 2009 (Cth):

   (a)the first respondent pay $13,913.63; and

   (b)the second respondent is jointly and severally liable to pay $13,340.81 of the above amount,

   to the applicant within 28 days of the Court’s orders.

2. Pursuant to s.547(2) of the Fair Work Act 2009 (Cth) first respondent and the second respondent, jointly and severally, pay interest to the applicant at the applicable pre-judgment rate on the amounts in paragraph 3 above within 28 days of the Court’s orders.

3. The applicant:

   (a)distribute the amounts referred to in paragraphs 3 and 4 above to the employees who are the subject of these proceedings, in proportion to their respective underpayments, within 28 days of receipt; and

   (b)in the event that any of the employees cannot be located by the applicant, that, pursuant to s.559 of the Fair Work Act2009 (Cth), the applicant pay the amounts in respect of any employees that cannot be located to the Commonwealth within a further 28 days.

4. Pursuant to s.545(1) of the Fair Work Act2009 (Cth), the first respondent will, at its own expense, engage a third party with appropriate qualifications in accounting and workplace relations to undertake an audit of the first respondent’s compliance with the Fair Work Act2009 (Cth) and the Fast Food Industry Award 2010 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 the following obligations according to each employee’s classification of work, category of employment and hours worked during the audit period;

   (e)wages and work−related entitlements under the Fast Food Industry Award 2010;

   (f)accrual and payment of entitlements under the National Employment Standards in Part 2−2 of the Fair Work Act2009 (Cth);

   (g)within 14 days of the audit being completed, the first respondent will rectify any contraventions identified in the audit;

   (h)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 contravention(s) identified in the audit; and

   (iv)evidence of rectification by the first respondent of any contravention(s) identified in the audit.

5. Pursuant to s.545(1) of the Fair Work Act2009 (Cth) the first respondent will, within 30 days of the date of this order, display a notice at each of the locations where employees and other workers employed by the first respondent take their break, in each site operated by the first respondent, containing:

   (a)information on the minimum rates of pay and penalty rates under the Fast Food Industry Award 2010;

   (b)information on how to download the Fair Work Ombudsman’s Record My Hours app; and

   (c)information on how to contact the Fair Work Ombudsman.

6. For the purposes of order 7 hereof:

   (a)the notice must be in a form approved by the applicant at least seven days prior to the first respondent displaying the notice;

   (b)the first respondent shall provide proof of display of the notice to the applicant within 14 days of the notice being approved by the applicant;

   (c)the notice must be displayed for a period of one year.

7. Pursuant to s.545(1) of the Fair Work Act 2009 (Cth) the first respondent shall:

   (a)within 30 days of the date of this order:

   (i)register with the Fair Work Ombudsman’s “My Account” portal at and complete the profile including the Fast Food Industry Award 2010 options;

   (ii)provide to the applicant the “My Account” registration number;

   (b)within 60 days of the date of this order:

   (i)register with the Fair Work Ombudsman’s Online Learning Centre at each of the employer courses; and

   (iii)provide to the applicant evidence of completion of each course.

AND THE COURT FURTHER ORDERS THAT:

1. Pursuant to s.546(1) of the Fair Work Act 2009 (Cth) the first respondent pay penalties of $70,000 for the contraventions as set out in declaration 1 above.

2. Pursuant to s.546(1) of the Fair Work Act2009 (Cth) the second respondent pay penalties of $16,000 for his involvement in the contraventions as set out in declaration 1 above.

3. Pursuant to s.546(3)(a) of the Fair Work Act 2009 (Cth) the pecuniary penalties be paid to the Commonwealth within 28 days of these orders.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 836 of 2019

FAIR WORK OMBUDSMAN

Applicant

And

MASHNICISA PTY LTD (ACN 614 243 855)

First Respondent

MAURICE ARIAS

Second Respondent

REASONS FOR JUDGMENT

1. Between about February, 2018 and the end of April, 2018 the first respondent employed 18 employees to perform duties associated with preparing and selling donuts and other food and drink at its two stores, known as Donut Joint and Buenavista Kuranda.  The second respondent was the sole director and shareholder of the first respondent.

2. Of the 18 employees, all but one worked at Donut Joint, and the other worked at Buenavista Kuranda.  They were all engaged on a casual basis, save for one who was a full-time employee.  They all performed work as Level 1 employees under the Fast Food Industry Award 2010, with the exception of two employees who performed work as Level 2 for the purposes of the award.

3. The first respondent underpaid all 18 employees a total of $13,913.63 over the period between the beginning of February, 2018 and the end of April, 2018.  The underpayments predominately arose from the failure to pay Saturday, Sunday and public holiday penalty rates, the loading for work performed between midnight and 6:00am and overtime rates prescribed by the award.  Additionally, one employee was not paid at all and some employees were not paid for certain hours of work.

4. The applicant commenced these proceedings seeking various relief against the first and second respondent pursuant to the Fair Work Act 2009 (Cth). The first and second respondents have admitted the contraventions alleged against the first respondent. The second respondent admits his involvement in those contraventions for the purposes of s.550(1) of the Act.

5. The parties propose some agreed orders that should be made to reflect those matters.  However, they have reached no agreement as to the penalties to be imposed upon the first and second respondents as a consequence of the contraventions.  It falls to the Court to consider the appropriate penalties to be imposed for the contraventions.

6. The applicant has filed comprehensive written submissions which have been of considerable assistance in preparing these reasons for judgment.  The first and second respondents have also made written submissions although they are of limited scope.

Consideration

1. The contraventions admitted by the first respondent and second respondent are set out in the table below:

No.	Provision contravened	No. of contraventions
1	s.718A(1) of the Fair Work Act Providing false and misleading information to a FWI	A single contravention on 28 May 2018
2	s.712(3) of the Fair Work Act Failure to comply with a notice to produce records or documents	A single contravention on 18 May 2018
3	s.535(1) of the Fair Work Act Failure to make and keep a record as required by Fair Work regulation 3.33(3)	Multiple contraventions between 18 January 2018 and 30 April 2018
4	s.45 of the Fair Work Act Failure to pay adult minimum rate	Multiple contraventions between 18 January 2018 and 30 April 2018
5	s.45 of the Fair Work Act Failure to pay junior minimum rate	Multiple contraventions between 1 February 2018 and 30 April 2018
6	s.45 of the Fair Work Act Failure to pay casual loading	Multiple contraventions between 18 January 2018 and 30 April 2018
7	s.45 of the Fair Work Act Failure to pay Saturday penalty rates	Multiple contraventions between 18 January 2018 and 30 April 2018
8	s.45 of the Fair Work Act Failure to pay Sunday penalty rates	Multiple contraventions between 18 January 2018 and 30 April 2018
9	s.45 of the Fair Work Act Failure to pay public holiday penalty rates	Multiple contraventions between 30 March 2018 and 25 April 2018
10	s.45 of the Fair Work Act Failure to pay loading for work performed between midnight and 6:00 am	Multiple contraventions between 18 January 2018 and 30 April 2018
11	s.45 of the Fair Work Act Failure to pay overtime for work performed in excess of 38 hours per week or in excess of 11 hours a day	Multiple contraventions between 1 February 2018 and 30 April 2018
12	s.44 of the Fair Work Act Failure to provide the Fair Work Information Statement pursuant to s.125 of the Fair Work Act	17 contraventions

1. Section 557(1) of the Fair Work Act provides that two or more contraventions of specified civil remedy provisions will be treated as a single contravention where those contraventions were committed by the same person and arose from the same course of conduct. In the present case the applicant accepts that the respondents are entitled to that benefit in relation to repeated contraventions of each separate obligation under the award resulting in separate breaches of s.45 of the Fair Work Act, and for the repeated contraventions of each separate obligation under ss.44(1) and 535(1) of the Fair Work Act.

2. The applicant submits that following the application of s.557(1), the contraventions of the following sections of the Fair Work Act should be treated as 12 single contraventions as set out below:

   a)eight contraventions of s.45 of the Fair Work Act;

   b)one contravention of s.44 of the Fair Work Act;

   c)one contravention of s.718A(1) of the Fair Work Act;

   d)one contravention of s.712(3) of the Fair Work Act; and

   e)one contravention of s.535(1) of the Fair Work Act.

3. I accept that submission.

4. Further, the applicant accepts that the failure to pay adult and junior minimum rates share common elements and as such it is appropriate to group those contraventions as one. 

5. I accept the first respondent’s submission that it would not be appropriate to further group the remaining contraventions on the basis of common elements, as each contravention arises from separate and distinct obligations and to do so would give insufficient weight to the separate legal character of the obligations.

6. Consequently, with respect to the accessorial liability of the second respondent, there are seven contraventions of s.45 of the Fair Work Act and a total of 11 single contraventions.

7. The contraventions took place between early February, 2018 and 30 April, 2018.  During that approximate three month period, the employees were underpaid $13,913.63, with individual underpayments ranging from between $37.09 to $6,034.26.  The underpayments resulted from the failure to comply with eight distinct obligations under the award.  The employees were collectively only paid 53% of their total entitlements during that period.

8. The underpayments have not been rectified.  In the submissions made on behalf of the first and second respondent, the second respondent professes that it was never his intention to “rip off any of my staff”.  He professes to having an exemplary record of running a successful café business and to making “the reimbursements as soon as to practicable”.  However, he has not rectified any of the underpayments and has not as yet paid the staff member who was not paid for any of his work.  The contraventions took place more than two years ago.  I do not accept the sincerity of his submissions about those matters.

9. The failure to rectify any of the underpayments resulting from the contravening conduct is a significant matter in the fixing a penalty in this case.

10. Eleven of the employees were aged between 15 and 18 years old at the time of contraventions.  Some of the junior employees were earning $10.04 per hour for all hours of work.  Given their age, I accept that the junior employees were likely not as experienced in workplace matters and were reliant on the respondents to ensure that they were paid the minimum entitlements under the award.

11. The employees were not paid amounts sufficient to meet their entitlements to penalty rates or overtime under the award.  The evidence from one of the employees, Ms Melissa Onus, is that she worked long and unsocial hours and received no additional payment for that work.  She commenced working in Donut Joint assisting in food preparation, but was soon offered a managerial type role.  From February, 2018 she often started work at 4:00am and worked until between 2:00pm and 6:00pm some days, up to five days per week.  She worked public holidays and weekends without any additional payment.

12. The first respondent did not pay another of the employees, Mr Brook Mills, at all.  He remains owed $2,929.70 for his work between 18 January, 2018 and 12 February, 2018.   The evidence shows that he first enquired about his pay on 29 January, 2018 and was told by the second respondent that “pay day is Friday”.  The second respondent repeated on seven different occasions between 8 February and 14 March, 2018 that he had transferred money into Mr Mill’s account.  The statements were untrue.  Mr Mills swears that he “felt like [he] could trust [the second respondent]” and that he “therefore continued to work at Donut Joint for a further two weeks after [he] was not paid for [his] first week of work”.

13. Mr Mills was also issued with payslips during his employment, two on 5 February, 2018 and two on 21 February, 2018, which recorded a “payment date” and the net amount paid.  However, Mr Mills did not receive any of the payments referred to by the second respondent, or identified on the payslips, and has been without the benefit of those wages for over two years.

14. On 28 May, 2018 the respondents produced a number of documents in response to a notice to produce records or documents issued on 3 May, 2018 by the applicant.  The second respondent, on behalf of the first respondent, produced the following documents to a Fair Work Inspector:

    a)payroll summaries which showed gross payments to:

    i)Mr Mills totalling $1,664.13;

    ii)Ms Hu totalling $1,599.60;

    b)four payroll advices which showed four payments made to Mr Mills totalling $2,532.81; and

    c)three payroll advices which showed three payments made to Ms Hu totalling $1,599.60.37.

15. The payroll summaries and payroll advices so produced were false and misleading as Mr Mills was not paid at all during his employment and Ms Hu only received two payments totalling $1,067.64. I accept that the provision of false records has the potential to undermine the ability to properly assess employee entitlements under the Fair Work Act. The production of false records, which must plainly have been known to be false by the second respondent, falsifies the statements made in his submissions that he has an exemplary record and that he intends to rectify the underpayments to the employees. It demonstrates a dishonest intention on his part.

16. The respondents did not keep a record of the penalty rates and loadings applicable to Mr Mills and Ms Hu as required by the Fair Work Act and reg.3.33(3) of the Fair Work Regulations 2009 (Cth). Mr Mills and Ms Hu’s hours of work were also not recorded on the ‘TimeStation’ payroll and time recording system used by the respondents. Mr Mills and Ms Hu kept their own records.

1. The TimeStation records which recorded the start and finish times worked by the other employees were not produced in response to the notice to produce.  The second respondent offers no justification for that.  The documents were provided by Ms Onus to a Fair Work Inspector on 6 July, 2018.  Had those documents not been identified and provided by Ms Onus, the ability of the applicant to identify the contraventions with respect to Saturday, Sunday and Public Holiday penalty rates and those contraventions relating to overtime hours and the loading for work performed from midnight to 6:00am for those employees might not have been revealed.  It was the work of one of the first respondent’s employees that assisted the applicant in this case rather than any actions by the second respondent on his own account or on behalf of the first respondent.

2. The applicant submits that the total underpayment to the employees of $13,913.63 is not insignificant when taking into account that those underpayments occurred over approximately three months.  I accept that submission.

3. Five employees were not paid for some hours of work.  As I have said above, Mr Mills, was not paid at all.  However, generally the employees were paid their minimum rate of pay and casual loading, but were not paid amounts sufficient to meet their entitlements to overtime rates, loading for work between midnight and 6:00am and Saturday, Sunday or Public Holidays penalty rates.

4. Mr Mills gave evidence in these proceedings by way of affidavit relied upon by the applicant.  His evidence is that the failure to pay him meant that he was unable to apply for his full driver’s licence, purchase textbooks for university or a laptop for studying.  Mr Mills intended to work for the first respondent before starting university in March, 2018. His evidence is that he had not been underpaid before and that “he found the whole situation stressful”.

5. Ms Onus similarly described her employment with the first respondent as stressful and that she “felt upset when employees asked [her] about not being paid”.  Ms Onus describes falling behind on her bills, including her credit card payments, rent, household bills and payments under a personal loan, during the time she worked for the first respondent.

6. The respondents admit that at all relevant times, they were aware that the award applied to the employees and provided for penalty rates to be paid for certain hours of work.  Further, the evidence demonstrates that:

   a)in early January, 2018 following inquiries from some of the first respondent’s employees, Ms Onus spoke to the second respondent and asked about her pay.  He told her that he would, “have a look”;

   b)on 15 January, 2018 the second respondent contacted the applicant’s Small Business Helpline regarding an employee and was told that the award would apply to the first respondent.  The second respondent and the customer service representative had a conversation about calculating entitlements under the award, during which the second respondent stated he was paying the employee “way above the award”;

   c)Ms Onus’ pay was subsequently increased to $25.10 per hour, being the minimum rate for a Level 1 casual employee under the award;

   d)in January, 2018 Ms Onus also had a conversation with the second respondent about the public holiday rates of pay for Australia Day during which the second respondent stated, “I’m a small business I don’t have to pay penalty rates”; and

   e)in late February or early March, 2018 the second respondent asked Ms Onus to get the staff to sign contracts, but when Ms Onus went to retrieve the contracts they were no longer there and so she assumed it had been dealt with.

7. In addition, on 3 May, 2018 at a site visit by a Fair Work Inspector, the second respondent answered an employer questionnaire.  A Fair Work Inspector took notes from that conversation which recorded the following questions and responses (in summary):

   Which award do you operate under? ---  “Fast Food”

   Are employees paid penalties on weekends or public holidays? ---    “Cannot afford have contract”

   Were you aware you had to pay penalty rates? --- “No I thought if I had a contract with them I was covered [if] I paid a little above the Award I didn’t have to pay that”

   “I get my rates from Fair Work website… called FW a number of times”

8. On 18 May 2018, following the site visit, the respondents’ bookkeeper sent a copy of two template contracts to Ms Onus, in her capacity as the Manager of Donut Joint.  The contracts recorded the relevant industrial instrument as the Fast Food Industry Award 2010.

9. On 28 May, 2018 the second respondent produced documents to the applicant, which included payroll advice records for between 1 February and 30 April, 2018 which recorded the award as the relevant instrument. 

10. I am satisfied by the evidence to which I have just referred that the first and second respondents’ contraventions of the Fair Work Act the subject of these proceedings were deliberate. I so find. The evidence clearly demonstrates that at all times the second respondent knew that the employment obligations of the first respondent towards its employees were governed by an award, he knew the identity of the award, and he knew the amounts that were being paid to the employees. He knew that there was a requirement to pay overtime and penalty rates. But he deliberately chose not to abide by those requirements.

11. Deterrence is a significant matter in the fixing of penalties.  Indeed, the primary purpose of civil penalties is to promote the public interest in compliance and to attempt to put a price on a contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the relevant legislation.  In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157 at [116], the following statement was made by Keane, Nettle and Gordon JJ:

    As has been observed, the principle object of an order that a person pay a pecuniary penalty under s 546 is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners. According to orthodox sentencing conceptions as they apply to the imposition of civil pecuniary penalties, specific deterrence inheres in the sting or burden which the penalty imposes on the contravener. Other things being equal, it is assumed that the greater the sting or burden of the penalty, the more likely it will be that the contravener will seek to avoid the risk of subjection to future penalties and thus the more likely it will be that the contravener is deterred from future contraventions; likewise, the more potent will be the example that the penalty sets for other would-be contraveners and therefore the greater the penalty’s deterrent effect. Conversely, the less the sting or burden that a penalty imposes on a contravener, the less likely it will be that the contravener is deterred from future contraventions and the less the general deterrent effect of the penalty…”

12. No evidence has been filed by the respondents to suggest that the first respondent has ceased trading.  In his written submissions, however, the second respondent says that he had to close the Donut Joint business last year.  He further asserts that due to the pandemic and lack of tourists this year he is “currently stood down from my Café which is solely reliant on tourism”.  He professes, however, to having some “innovative ways to get my business up and running again” and I infer from that that he intends to operate in the fast food industry as he has done in the past.

13. Thus, the penalties in this matter need to be imposed at a level that makes the contravening conduct clearly unprofitable and the prospect of future contraventions unlikely given that the second respondent and perhaps the first respondent as a vehicle utilised by the second respondent, intends to continue as an employer in the fast food industry.

14. General deterrence is necessary because the industry in which the respondents operate has previously been described by the Court as “notorious” for non-compliance with standards required by the Fair Work Act. This is supported by the evidence in this case, which demonstrates that there is a higher than normal number of disputes raised with the applicant in the industry and that young workers, in particular, are overrepresented in those disputes. Thus, it is important to send a message to other employers working within the fast food industry that non-compliance with the minimum standards, including the payment of overtime and penalty rates to junior staff, will not be tolerated.

15. The second respondent was at all material times the sole director and shareholder of the first respondent and responsible for ensuring that it complied with its legal obligations under the Act and regulations.  The second respondent was responsible for the overall operation, management and control of the first respondent.  His written submissions made on both his behalf and that of the first respondent, confirms that assessment.

16. In his written submissions, the second respondent points out that the first respondent’s business (which he refers to as his own business) is an “SME”. That seems consistent with the statements made by the second respondent to Ms Onus, reported in her affidavit relied upon in these proceedings by the applicant, to the effect that the first respondent did not have to pay penalty rates because it was a small business. However, the employees of small businesses are entitled to just as much protection under the Fair Work Act as are the employees of large businesses. Put another way, the obligation to comply with the provisions of the Fair Work Act fall just as heavily upon those who operate small businesses as they do upon those that operate large enterprises.

17. The financial circumstances of a respondent may be a relevant consideration in determining an appropriate penalty, and whether the size of that penalty is “meaningful”, in particular, when applying the totality principle and to ensure the penalty is not crushing or oppressive.  There is no financial information before the Court regarding the respondents’ capacity to pay the penalties, but I have taken into account the matters set out in the second respondent’s written submissions.

18. There is no evidence before the Court of any corrective action or contrition by the respondents.  The underpayments remain outstanding.  The respondents offered qualified assistance to the applicant in the course of the applicant’s investigations.  As I have set out above, false information was given to the applicant during the course of that investigation in response to a notice to produce records.  While the respondents now admit to the contraventions by way of the statement of agreed facts, having regard to the written submissions made by the second respondent,  I am not satisfied that the respondents have indicated an acceptance of wrongdoing or made a suitable credible expression of regret.  I do not consider their agreement to the statement of agreed facts as facilitating the course of justice rather than an acceptance by them of what was likely to be an inevitable result in these proceedings.

19. The applicant submits that considering the whole of the circumstances, a discount of 20% should be afforded to the respondents for their cooperation in these proceedings.  However, in my view that allowance is too generous and an allowance of 5% is more appropriate.

20. Having regard to the above matters, in my view the penalties that ought to be imposed in this matter taking into account the seriousness of the allegations but at the same time recognising that the amount of the underpayment is relatively modest and that the respondents have no previous history of non-compliance with the Fair Work Act for which they have been dealt with by a Court, should be as set out in annexure A to these reasons.

21. The aggregate penalty for the first respondent is $80,798.  Having regard to the totality of that penalty and the matters I have referred to above, a single penalty for all contraventions fixed at $70,000 is an appropriate response to the conduct which led to the breaches.  There is no evidence before me to suggest that a penalty in that sum will be crushing or oppressive.  I consider it to be commensurate with the seriousness of the conduct engaged in by the first respondent.

22. The aggregate penalty for the second respondent is $16,160.  Having regard to the totality of that penalty and the matters I have referred to above, a single penalty for all contraventions fixed at $16,000 is an appropriate response to the second respondent’s conduct which led to the breaches.  I consider it to be commensurate with the seriousness of the second respondent’s conduct.

23. I make orders accordingly.

I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 16 July, 2020.

Associate: 

Date: 15 July 2020

Annexure A

Contravention	Description of contravention	Max	Penalty	Discount	Total Penalty	Max	Penalty	Discount		Total Penalty
First Respondent					Second Respondent
section 718A of the FW Act	Providing false or misleading payroll documents to a Fair Work Inspector	$63,000	50%	$31,500	5%	$29,925	$12,600	50%	$6,300		5%	$5,985
section 712(3) of the FW Act	Failure to comply with a notice to produce records or documents	$63,000	20%	$12,600	5%	$11,970	$12,600	20%	$2,520		5%	$2,394
section 535(1) of the FW Act – by virtue of a contravention of FW regulation 3.33(3)	Failing to make and keep a record of the penalty rates and loading applicable to employees	$63,000	5%	$3,150	5%	$2,993	$12,600	5%	$630		5%	$599
section 45 of the FW Act by virtue of a contravention of clause 17 and 18 of the award	Failure to pay minimum rates - including both adult minimum rates (cl. 17) and junior minimum rates (cl. 18)	$63,000	20%	$12,600	5%	$11,970	$12,600	20%	$2,520		5%	$2,394
section 45 of the FW Act by virtue of a contravention of clause 13.2 of the award	Failure to pay casual loading	$63,000	5%	$3,150	5%	$2,993	$12,600	5%	$630		5%	$599
section 45 of the FW Act by virtue of a contravention of clause 25.5(b)(ii) of the award	Failure to pay Saturday penalty rates	$63,000	5%	$3,150	5%	$2,993	$12,600	5%	$630		5%	$599
section 45 of the FW Act by virtue of a contravention of clause 25.5(c)(i) and 25.5(d) of the award	Failure to pay Sunday penalty rates	$63,000	5%	$3,150	5%	$2,993	$12,600	5%	$630		5%	$599
section 45 of the FW Act by virtue of a contravention of clause 30.3 of the award	Failure to pay public holiday penalty rates	$63,000	5%	$3,150	5%	$2,993	$12,600	5%	$630		5%	$599
section 45 of the FW Act by virtue of a contravention of clause 25.5(a)(ii) of the Fast Food Award	Failure to pay loading of 15% for work performed between midnight and 6am	$63,000	5%	$3,150	5%	$2,993	$12,600	5%	$630		5%	$599
section 45 of the FW Act by virtue of a contravention on clause 26.2 and 26.3 of the award	Failure to pay overtime for work performed in excess of 38 hours per week or in excess of 11 hours a day	$63,000	10%	$6,300	5%	$5,985	$12,600	10%	$1,260		5%	$1,197
section 44(1) by virtue of a contravention of the National Employment Standards, namely, section 125(1) of the FW Act	Failure to give the Fair Work Information to employees	$63,000	5%	$3,150	5%	$2,993	$12,600	5%	$630		5%	$599
Totals	$693,000	$85,050	$80,798	$138,600	$17,010		$16,160