Fair Work Ombudsman v More Than Skin Pty Ltd (No 2)
[2023] FedCFamC2G 1177
•12 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v More Than Skin Pty Ltd (No 2) [2023] FedCFamC2G 1177
File number(s): SYG 2344 of 2021 Judgment of: JUDGE GIVEN Date of judgment: 12 December 2023 Catchwords: PRACTICE & PROCEDURE – Online medical certificate for purchase without consultation – InstantScripts
INDUSTRIAL LAW – Imposition of penalties for contraventions of Fair Work Act 2009 (Cth) – failure to comply with compliance notices – failure to issue pay slips – lack of cooperation – no contrition – no corrective action
Legislation: Bankruptcy Act 1966 (Cth) s 82
Corporations Act 2001 (Cth)
Crimes Act 1914 (Cth) s 4AA
Crimes Amendment (Penalty Unit) Act 2022 (Cth) Schedule 1
Fair Work Act 2009 (Cth) ss 536, 539, 546, 550, 557, 716
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 175
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157
Australian Building and Construction Commissioner v Pattinson (2002) 274 CLR 450
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560
Australian Securities and Investments Commission v Loiterton (2004) 50 ACSR 693
Australian Securities Commission v Forem Freeway Enterprises Pty Ltd (1999) 30 ACSR 339
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate and Ors (2015) 258 CLR 482
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Telstra Corp Ltd [2007] FCA 1607
Cotis v Macpherson [2007] FMCA 2060
Fair Work Ombudsman v A to Z Catering Solution Pty Ltd (No 3) (2018) 342 FLR 46
Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128
Fair Work Ombudsman v Al Hilfi [2016] FCA 193
Fair Work Ombudsman v ASGBRIS Pty Ltd [2020] FCCA 553
Fair Work Ombudsman v Bundy Market Meats Pty Ltd (2009) 190 IR 180
Fair Work Ombudsman v Dingwall Hilder Nominees Pty Ltd [2022] FedCFamC2G 76
Fair Work Ombudsman v Extrados Solutions Pty Ltd [2014] FCCA 815
Fair Work Ombudsman v Finetune Holdings Pty Ltd (No 3) [2012] FMCA 883
Fair Work Ombudsman v Hiyi Pty Ltd [2016] FCCA 1634
Fair Work Ombudsman v Jaycee Trading Pty Ltd (No. 2) [2013] FCCA 2128
Fair Work Ombudsman v More Than Skin Pty Ltd [2022] FedCFamC2G 1006
Fair Work Ombudsman v Nobrace Centre Pty Ltd(No 2) [2019] FCCA 2144
Fair Work Ombudsman v NSH North Pty Ltd (t/as New Shanghai Charlestown) (2017) 275 IR 148
Fair Work Ombudsman v Rubee Enterprises Pty Ltd [2016] FCCA 3456
Fair Work Ombudsman v Rum Runner Trading Pty Ltd & Anor [2018] FCCA 1129
Fair Work Ombudsman v Shri Krishna Guru Pty Ltd [2021] FCCA 1808
Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd [2012] FMCA 258
Fair Work Ombudsman v Tester [2021] FCCA 771
Fair Work Ombudsman v Zillion Zenith International Pty Ltd & Anor [2014] FCCA 433
Kelly v Atanaskovic Hartnell Corporate Services Pty Ltd (No 3) [2023] FedCFamC2G 1
Kelly v Fitzpatrick (2007) 166 IR 14
Mathers v Commonwealth (2004) 134 FCR 135
Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70
NAKX v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1559
Parker v Australian Building and Construction Commissioner (2019) 270 FCR 39
Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153
State of Victoria v Mansfield (2003) 199 ALR 395
Trade Practices Commission v CSR Ltd (1991) ATPR 41-076
Victoria University of Technology v Australian Education Union (1999) 91 IR 96
Division: Division 2 General Federal Law Number of paragraphs: 142 Date of hearing: 22 February 2023 Place: Sydney Solicitor for the Applicant: Mr S Reeves, Australian Government Solicitor The Respondents: No appearance ORDERS
SYG 2344 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: MORE THAN SKIN PTY LTD (ACN 135 402 345)
First Respondent
LILA STOJCEVSKI
Second Respondent
LUPCO STOJCEVSKI
Third Respondent
ORDER MADE BY:
JUDGE GIVEN
DATE OF ORDER:
12 DECEMBER 2023
THE COURT ORDERS THAT:
1.Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) (Act), the first respondent must pay:
(a)a pecuniary penalty of $19,980 for its contravention of s 716(5) of the Act declared in Order 2(a)(i) made on 14 November 2022;
(b)a pecuniary penalty of $19,980 for its contravention of s 716(5) of the Act declared in Order 2(a)(ii) made on 14 November 2022;
(c)a pecuniary penalty of $19,980 for its contravention of s 716(5) of the Act declared in Order 2(a)(iii) made on 14 November 2022; and
(d)a pecuniary penalty of $39,960 for its contravention of s 536(1) of the Act declared in Order 2(b) made on 14 November 2022.
2.Pursuant to s 546(1) of the Act and the declaration made in Order 2(c) on 14 November 2022, the second respondent must pay a pecuniary penalty of $10,189.80 for her involvement, within the meaning of s 550(2) of the Act, in each of the first respondent’s contraventions of s 716(5) of the Act declared in Order 2(a)(i) and (iii) pursuant to the declarations made on 14 November 2022.
3.Pursuant to s 546(1) of the Act and the declaration made in Order 2(c) on 14 November 2022, the second respondent must pay a pecuniary penalty of $10,189.80 for her involvement, within the meaning of s 550(2) of the Act, in the first respondent’s contravention of s 536(1) of the Act declared in Order 2(b) pursuant to the declaration made on 14 November 2022.
4.Pursuant to section 546(1) of the Act and the declaration made in Order 2(d) on 14 November 2022, the third respondent must pay a pecuniary penalty of $3,996.00 for his involvement, within the meaning of s 550(2) of the Act, in the first respondent’s contravention of s 716(5) declared in Order 2(a)(iii) pursuant to the declaration made on 14 November 2022.
5.Pursuant to s 546(3)(a) of the Act, the pecuniary penalties ordered to be paid by the respondents by orders 1 to 4 above, are to be paid by each of them to the Consolidated Revenue Fund of the Commonwealth of Australia, within 35 days of the date of these orders.
6.The applicant has liberty to apply on 7 days’ notice in the event that any of the preceding orders are not complied with.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE GIVEN:
On 14 November 2022, at the conclusion of an application for default judgment, this Court delivered reasons for entry of that judgment: see Fair Work Ombudsman v More Than Skin Pty Ltd [2022] FedCFamC2G 1006 (default judgment) and made orders and declarations (November Orders). By order 5 of the November Orders, the proceedings were adjourned to 10:15am on Wednesday, 22 February 2023 before me for further hearing in respect of civil pecuniary penalties sought by the Fair Work Ombudsman (FWO) in relation to the contraventions declared as part of the default judgment (penalty hearing). At delivery of the default judgment the only respondent present, Ms Stojcevski, confirmed that she would attend the penalty hearing.
Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (Act), the FWO seeks imposition of pecuniary penalties on the respondents being More Than Skin Pty Ltd (Company), Ms Lila Stojcevski and Mr Lupco Stojcevski. Ms Stojcevski and Mr Stojcevski are sister and brother (respectively).
BACKGROUND
The background to the conduct the subject of these proceedings is predominantly derived from the written submissions of the FWO, and the Affidavit evidence. Despite occasional assertions from the Bar table made by Ms Stojcevski on 14 November 2022, and an Affidavit which was not read (see [41] below) there is no evidence before the Court which disputes the FWO’s version of events.
The Company (which is incorporated under the Corporations Act 2001 (Cth)) was first registered on 16 February 2009 and, at all times relevant to these proceedings, apparently owned and operated a café business in Glebe, New South Wales under the registered business name ‘The Noshery Glebe’ (Café).[1] Ms Stojcevski is currently an undischarged bankrupt[2] but at all relevant times, was a director and the secretary of the Company.[3] Mr Stojcevski was, at all relevant times, a director of the Company.[4]
[1] Amended Statement of Claim at [2], FWI Affidavit at [13] to [16] and Annexures “KO-7” and “KO-8” thereto
[2] Pursuant to a sequestration order made on 24 November 2023 and written submissions of the FWO filed on 1 February 2023 at [83]
[3] Amended Statement of Claim at [3], FWI Affidavit at [14] to [16] and Annexure “KO-8” thereto
[4] Amended Statement of Claim at [4], FWI Affidavit at [14] and Annexure “KO-8” thereto
Relevantly, the Company employed the following people in the Cafe:
(a)Ms Ligia Guelfi Letang Silva from 28 October 2020 to 8 November 2020;
(b)Ms Natalia Monika Tyburczy from 10 October 2020 to 31 October 2020; and
(c)Ms Maeva Effoudou from 27 September 2020 to 12 December 2020.
(collectively the employees).
Each of the employees was covered by, and subject to, the Restaurant Industry Award 2020 (Award), being a modern award under the Act.
In or about November 2020, Fair Work Inspector O’Connell (FWI O’Connell) commenced an investigation into the Company in respect of the employment of Ms Silva and Ms Tyburczy. On or about 1 April 2021, FWI O’Connell commenced an investigation into the employment of Ms Effoudou by the Company. It is important to observe that investigations of the FWI in respect of each of the employees arose from three separate complaints made by each of Ms Silva, Ms Tyburczy and Ms Effoudou in relation to their employment by the Company in the Café.
Failure to comply with compliance notices
Having formed a reasonable belief for the purposes of s 716(1) of the Act that the Company had contravened terms of the Award during the period in which the employees were employed, the FWI issued compliance notices pursuant to s 716(2) of the Act to the Company on the following dates:
(a)3 March 2021 in respect of Ms Silva, requiring specific action to be taken to rectify the contraventions by 25 March 2021 (Silva compliance notice);
(b)22 April 2021 in respect of Ms Effoudou, requiring specific action to be taken to rectify the contraventions by 17 May 2021 (Effoudou compliance notice); and
(c)20 May 2021, in respect of Ms Tyburczy, requiring specific action to be taken to rectify the contraventions by 3 June 2021 (Monika compliance notice).[5]
(collectively, the compliance notices).
[5] In materials filed by the FWO, Ms Tyburczy’s last name was erroneously referred to as “Monika”. To maintain consistency between the judgments and orders, the Court has continued to use this defined term in respect of the compliance notice, with no disrespect intended to Ms Tyburczy.
The Company did not take the aforementioned specified action required by any (and all) of the compliance notices by their respective required dates, or at all.[6]
[6] Amended Statement of Claim at [19]
The FWO asserts, and it is not the subject of formal dispute, that:
(a)Ms Stojcevski had knowledge of the Silva Compliance Notice and the Monika Compliance Notice, and was an intentional participant in the Company’s failure to take action;
(b)Mr Stojcevski had knowledge of the Monika Compliance Notice, and was an intentional participant in the Company’s failure to take action; and
(c)none of the respondents has subsequently taken the steps required by the November Orders to rectify the contraventions.
Failure to issue payslips
During the employment periods referred to at [5] above, the Company paid Ms Effoudou on five occasions and Ms Tyburczy on two occasions, on each of which the Company failed to issue a pay slip to the respective employees within one working day as required by s 536(1) of the Act, or at all.[7]
[7] Amended Statement of Claim at [22] to [26]
The FWO asserts, and it is not the subject of formal dispute, that Ms Stojcevski was:
(a)aware of the Company’s obligation to issue each of Ms Effoudou and Ms Tyburczy with pay slips, and of its failure to do so; and
(b)an intentional participant in the Company’s failure to issue pay slips to each of Ms Effoudou and Ms Tyburczy.
PROCEEDINGS IN THIS COURT
The FWO commenced these proceedings on 20 December 2021. The procedural history from that date is set out in the default judgment at [19] to [44]. From the time default judgment was entered, until the morning of the penalty hearing, the following procedural matters and events are relevant to note:
(a)the respondents did not comply with any of the November Orders including those requiring the appointment by the Company of a legal representative nor the filing of a Notice of Address for Service in respect of any of them;
(b)the respondents did not file any written submissions within the time ordered, or at all, nor any additional evidence or documents;[8]
[8] Albeit correspondence and an Affidavit was emailed to the Court
(c)the FWO filed Affidavits and written submissions in accordance with the November Orders;
(d)on 26 December 2022, the Company was deregistered by the Australian Investment and Securities Commission (ASIC). The FWO applied for the reinstatement of the First Respondent. Ms and Mr Stojcevski were advised of the FWO’s intent to make this application on 5 January 2023. The FWO says that on 5 January 2023, Ms Stojcevski wrote to the FWO and did not oppose that application. A representative of ASIC advised the FWO’s legal representatives by telephone on 27 January 2023 that the application had been received and was still being processed with a likely decision date of 8 February 2023.[9]
[9] First Bayliss Affidavit at [4] to [10]
(e)on Monday, 20 February 2023 (being 2 days before the penalty hearing), the solicitor for the FWO wrote to the Court to say that correspondence had been received from Ms Stojcevski to say that she may require the solicitor or FWI O’Connell for cross-examination. My Associate responded to the email at my direction to remind the parties that the issues for determination at the penalty hearing pertained to civil pecuniary penalties only and, as such, any proposed cross-examination would be limited to those issues. Confirmation of any witnesses required was also requested, given that those persons named were understood to be located in Queensland and that there was an extant time difference between Queensland and New South Wales, from whence the Court would be presiding.
(f)on Tuesday 21 February 2023 at about 12:30pm, Ms Stojcevski sent an email to the Court and the FWO’s solicitors stating that she also wished to cross-examine three named persons none of whom:
(i)was a party to the proceeding;
(ii)had deposed Affidavits filed in the proceedings; nor
(iii)been subpoenaed.
One of those named persons was a Mr Steven Murabito.
(g)on Tuesday 21 February 2023 at about 2:45pm, Ms Stojcevski wrote to the Court stating (errors in original):
We also require Monica (The protected employee) to be available for cross examination and the previous tenant Corey Sandringham who was the employer at the time of the employment of the protected employees.
(h)on Tuesday 21 February 2023 at about 3:20pm, my Associate responded to the various emails of that date in relation to the proposed cross-examination of persons who were neither parties nor witnesses, and to remind the parties that, aside from any evidence which might be required to be given from Queensland, the matter remained listed in-person the following day;
(i)on Wednesday 22 February 2023 at about 8:10am, Ms Stojcevski emailed the Court and the solicitors for the FWO in the following terms (errors in original):
Dear Associate
My autistic son has had a melt down due to a broken toe nail when he sighed blood.
Can I please request to arrange to appear by Microsoft teams.
My son is in a special ESS class for his autism and is in year 7 and he attends school in Parramatta and his father is trying to assist us this morning.
(j)on Wednesday 22 February 2023 at about 9:00am my Associate responded to the aforementioned email to inform the parties that the matter remained listed; and
(k)at or about 10:08am on 22 February 2023, Ms Stojcevski emailed the Court attaching an Affidavit which appeared to have been made the previous day by Mr Murabito.
When the hearing commenced later on the morning of 22 February 2023, the FWO was represented by a solicitor. There was no appearance for the first respondent or by the respondents. The aforementioned Mr Murabito (see [13(f)] above) was present in Court and said he was the partner of Ms Stojcevski and, from the context of his statements, that he is also the father of Ms Stojcevski’s son. Mr Murabito indicated that Ms Stojcevski was on her way to Court but that her estimated time of arrival was more than an hour hence. The solicitor for the FWO resisted an adjournment for such a period, noting that Ms Stojcevski had been on notice since her attendance at the default judgment hearing in November 2022, when the penalty hearing would take place.
Mr Murabito was informed that, aside from the effect of s 175 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) in respect of each of the respondents, r 9.04 of the Rules specifically required that the Company be represented by a lawyer. Following some oral submissions in which Mr Murabito described the Court as callous, the proceedings were adjourned to 10:40am to enable Ms Stojcevski to attend.
It will be recalled from the default judgment that in similar circumstances in November 2022, Ms Stojcevski also expressed an inability to attend, with short notice, citing another emergency related to her son. There is no material before the Court pertaining to Ms Stojcevski’s son. Even giving her the benefit of the doubt, there is no evidence to verify that Ms Stojcevski has, on any occasion, been prevented from attending Court by reason of an emergency (medical or otherwise) involving her son. Leaving aside this emerging pattern of last-minute adjournment requests, there was also no explanation as to why Mr Murabito could not have attended to taking their son to his school in Parramatta while Ms Stojcevski attended Court as required, instead of them reversing those tasks, particularly given Mr Murabito did not have standing before the Court, and Ms Stojcevski was a party to the proceedings.
When the matter resumed at 10:40am there was no appearance by, or for, any of the respondents. Mr Murabito was no longer in Court, and the matter proceeded in the absence of any appearance by, or for, the respondents.
During the course of the hearing, various email correspondence continued to be sent by email from Ms Stojcevski to the solicitor for the FWO and my Associate. Those emails appeared to be describing difficulties in filing documents on the Court’s electronic portal, being a claim made on 14 November 2022 by Ms Stojcevski at the default judgment hearing, though never substantiated.
“Online” medical certificate
At or about 10:50am, being during the hearing, an email was sent to my Associate from Ms Stojcevski which stated that she was unable to physically attend the hearing that morning (medical certificate email). The medical certificate email also stated:
My husband has been given authority to represent me and the company more than <Main PTY LTD and is at the court in person and is also there in person to inform the court about Little Town PTY LTD.
As noted at [17] above, despite the content of the medical certificate email, Mr Murabito was no longer at the Court.
The medical certificate email attached a document which was on letter head displaying the name “InstantScripts” (InstantScripts certificate). The InstantScripts certificate bears the electronic signature of a doctor, whose name and provider number are included. The InstantScripts certificate states (errors in original, date of birth anonymised):
This is to certify that Lila Stojcevski (DOB: [DATE])is not medically fit to attend work today or attend any court appearances. , Wednesday, February 22nd 2023.
The medical certificate email did not expressly seek an adjournment. To the extent an adjournment was being sought implicitly, it was refused on the following bases.
In NAKX v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1559 at [5] to [11], Lindgren J refused an adjournment grounded by medical certificates in the following circumstances:
The medical certificate dated 13 December 2003 in respect of the male applicant states as follows:
‘This is to certify that on 13/12/2003 I examined the above person. In my opinion he/she is suffering from Dermatitis atopic and will be unable to attend court from 13/12/2003 to 01/01/2004 inclusive.’
The certificate of the same date in respect of the female appellant states:
‘This is to certify that on 13/12/2003 I examined the above named person. In my opinion he/she is suffering from Anxiety disorder/Depression and will be unable to attend court from 13/12/2003 to 13/01/2004 inclusive.’
The medical certificates are quite unsatisfactory. They do not address the critical question whether, and if so why, the medical condition would prevent the appellant from travelling to the Court and participating effectively in a court hearing.
I do not accept that either of the medical conditions referred to would make the sufferer ‘unable to attend court’ – apparently each was able to attend upon the medical practitioner.
If the certificates were meant to say that the medical condition would prevent the sufferer from participating effectively in a court hearing, they do not in fact say that and do not explain why the medical condition would have that effect.
I take into account the fact that the two medical certificates are structured identically, use the expression ‘he/she’, and are dated the same day, which was only two days before the hearing. The certificates have the appearance of being pro forma certificates which are available for the asking.
In any event, even accepting the certificates on their face, I find them unpersuasive for the reasons given at [6]–[8] above.
I refuse the application for an adjournment.
The combination of an electronic signature and the name “InstantScripts” caused the Court to question whether Ms Stojcevski had in fact consulted a doctor prior to the script being issued. A review of the InstantScripts website reveals the following banner headline:[10]
Need a medical certificate in minutes?
With InstantScripts you can get a medical certificate from the comfort of your home
and includes 4 varieties of medical certificate on offer upon payment of $19 (or $49 for a multiple-day certificate):[11]
(a)Single-day certificate for work;
(b)Single-day certificate for school or university;
(c)Single-day certificate for carer’s leave; and
(d)Multiple-day certificate.
[10] (last accessed on 11 December 2023)
[11] (last accessed on 11 December 2023)
It will be observed that there is no option on the InstantScript website to obtain a medical certificate relation to court attendance.
Among the “Frequently Asked Questions” section of the InstantScripts website,[12] is the following information:
Can I get a medical certificate online using Instant Scripts?:
Yes, a doctor can issue you with a Medical Certificate if deemed suitable. The medical certificate will be emailed to you within minutes of the doctor reviewing your digital consultation.
For medical certificates required for more than 1 day, patients must consult with a doctor through a Telehealth Consultation.
[12] (last accessed on 11 December 2023)
The information on the InstantScripts website appears to indicate that it is only for certificates which extend beyond a day which require a “Telehealth” consultation with a doctor. All other certificates appear to be issued based entirely on content submitted by the purchaser of the certificate, and then “certified” by one of InstantScript’s doctors “if deemed suitable”. It is open to infer, and I do, that in order to obtain an InstantScript medical certificate for a single day, no medical consultation is undertaken with any doctor (be they the certifying doctor or otherwise). The reference above to a consultation constituted by a review by a doctor of the “digital consultation” does not suggest any interaction between doctor and patient. It is open to infer that certificates are issued as a matter of course, based on any condition/s self-reported by the patient/customer and upon payment of the requisite fee. Despite the explanation that the medical certificate will be issued “if deemed suitable” by a doctor, there is not information to indicate what, if any, verification process is undertaken in relation to deem a certificate suitable or otherwise.
Given the absence of there being an option to obtain a certificate in relation to unfitness to attend, or participate in, a court hearing I find that the statement in the InstantScript certificate sent to the Court by Ms Stojcevski that she was not medically fit to attend work “or attend any court appearances” is content which she herself provided for inclusion in the InstantScript certificate.
Leaving aside any general qualms which might be held about medical certificates issued without actual/interactive consultation, applying the principles in NAKX (supra), the InstantScript certificate is not sufficiently probative to ground an adjournment request (assuming it was provided for said purpose), for the following reasons:
(a)it does not specify any medical condition from which Ms Stojcevski was allegedly suffering;
(b)the InstantScript certificate is then also entirely silent as to why said medical condition would render her so medically unfit as to prevent her from attending, and participating effectively in, a court hearing; and
(c)as such it is also not possible for the Court to consider that information for itself to make an assessment of whether it would render Ms Stojcevski medically unfit to attend, and participate effectively in the court hearing as listed.
I also take into account that, until the provision of the InstantScript certificate, none of the reasons proffered for Ms Stojcevski’s alleged inability to attend the hearing turned upon her being unwell or suffering from any medical condition herself. Rather, her inability to attend Court was said to be based on logistical challenges surrounding the need to take her son to school. The InstantScripts certificate was not advanced on the basis of being a ‘carer’s certificate’, despite the fact that such a certificate is on offer from InstantScripts (see [24(c)] above). Even if a carer’s certificate had been proffered, it would not have been sufficient for the reasons which follow.
Similar to the findings in NAKX, the InstantScripts certificate is inadequate on its face. Even if that were not so (and, for example, a future litigant were to heed the above deficiencies and provide their own, more fulsome content while obtaining an online generated certificate to attempt to meet those matters), the Court would not be inclined to accept a medical certificate from any online provider utilising the model described at [26] above.
In NAKX, the Court made observations regarding the template nature of the certificates provided, including that they had options for completion, specifically as to the gender of the person the subject of the certificate, where the inapplicable option had not been struck out. The Court said at [10] that the certificates had the appearance of being pro forma certificates “which are available for the asking”. It is relevant to bear in mind that the time in which NAKX was delivered, was an era before e-commerce was prevalent. The description of medica certificates being available for the asking was made at a time when the consulting medical practitioner had, somewhat indiscriminately, provided the certificate on request, with little scrutiny or care. The InstantScript certificate is a fortiori insofar as it appears to have been prepared without any doctor examining or (it seems even) consulting with Ms Stojcevski. As noted, there is nothing available to the Court to indicate what, if any verification processes the doctor certifying a medical certificate which is produced by the InstantScripts service undertakes.
On the material which is available to the Court, the InstantScript certificate was generated entirely on the basis of text which Ms Stojcevski typed herself, with no evidence to demonstrate that the truth of those matters was verified by the doctor in whose name the certificate was issued. As such, it carries no greater weight than if Ms Stojcevski had written a statement to that effect herself. On that basis, it is entirely unpersuasive of the matters advanced by it.
There being no probative medical evidence before the Court to demonstrate that Ms Stojcevski was unable (for medical reasons or otherwise) to attend Court, the hearing continued.
From the conclusion of the hearing until delivery of these reasons for judgment, no further correspondence has been received from, or documents filed by, the respondents in respect of their respective non-attendances at hearing nor the substantive question of penalty.
Lastly, the conduct of the respondents in these proceedings is a relevant factor in determining penalty only in limited respects. The failure by them to engage with the Court and comply with orders is relevant to penalty only insofar as it intersects with the state of the evidential landscape at the time penalty is considered. The respondents assumed the risks involved with having failed to present evidence to the Court which might be material to the findings made. However, there is no punitive aspect to their relevant defaults and otherwise recalcitrant conduct when reaching a decision as to whether penalty should be awarded and, if so, in what amount/s. The defaults of the respondents sounded in the delivery of the default judgment and the making of the November Orders. The defaults do not go to the question of penalty.
Relief sought
As noted above, the FWO seeks the imposition of pecuniary penalties, pursuant to s 546(1) of the Act, on the respondents. The penalties are sought for the following contraventions which by reason of the entry of the default judgment are deemed to be admitted. Specifically, the FWO seeks penalty in respect of:
(a)the Company for having contravened s 716(5) of the Act by failing to comply with three compliance notices, and for contravening s 536(1) of the Act for failing to give pay slips to two employees a total of seven times;
(b)Ms Stojcevski, for being involved, within the meaning of s 550(2) of the Act, in two of the contraventions of s 716(5) and each of the contraventions of s 536(1) by the Company; and
(c)Mr Stojcevski, for being involved, within the meaning of s 550(2) of the Act, in one of the contraventions of s 716(5) by the Company.
Evidence
At the penalty hearing, the following Affidavits were read for the FWO:
(a)Affidavit of Kim O’Connell affirmed 31 January 2023 (FWI Affidavit);
(b)Affidavit of Myles Robert Bayliss affirmed 1 February 2023 (first Bayliss Affidavit); and
(c)Affidavit of Myles Robert Bayliss affirmed 20 February 2023 (second Bayliss Affidavit);
The respondents did not file any evidence as directed, or at all.
As noted above at [13(k)] an Affidavit was sent to the Court and the FWO minutes before the hearing commenced. That Affidavit appeared to go to various matters involving the Café including assertions of the involvement of other corporate entities, including those referred to in the medical certificate email (see [19] above). The Affidavit annexed no corroborating documentation, appears predominantly to be hearsay on Mr Murabito’s part and, in any event, was not read.
Legislation
Section 546(1) of the Act empowers the Court to impose a penalty in respect of a contravention of a civil remedy provision and provides as follows:
546 Pecuniary penalty orders
(1) The Federal Court, the Federal Circuit and Family Court of Australia (Division 2) or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.
Note: Pecuniary penalty orders cannot be made in relation to conduct that contravenes a term of a modern award, a national minimum wage order or an enterprise agreement only because of the retrospective effect of a determination (see subsections 167(3) and 298(2)).
In terms of the contraventions, s 716(5) of the Act relevantly provides:
716 Compliance notices
…
(5) A person must not fail to comply with a notice given under this section.
Note: This subsection is a civil remedy provision (see Part 4‑1).
Section 536(1) of the Act provides:
536 Employer obligations in relation to pay slips
(1) An employer must give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.
Note 1: This subsection is a civil remedy provision (see Part 4‑1).
Note 2: Section 80 of the Paid Parental Leave Act 2010 requires an employer to give information to an employee to whom the employer pays an instalment under that Act.
PRINCIPLES FOR DETERMINING PENALTY
Rationale
The principles for determining penalty are well settled. Their primary (or even sole) purpose is to promote the public interest in compliance with law and to attempt to put a price on a contravention that is sufficiently high to deter repetition by the contravenor and by others who are in a position to contravene legislation: see Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate and Ors (2015) 258 CLR 482 at [55] per French CJ, Kiefel (as her Honour then was), Bell, Nettle and Gordon JJ citing Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at [40] per French J (as his Honour then was) and Australian Building and Construction Commissioner v Pattinson (2002) 274 CLR 450 (Pattinson) at [15] to [17] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ.
In short, specific and general deterrence are the primary purposes of the civil penalties imposed under the Act and, to achieve this objective, the Court should fix penalties at an amount which it considers fairly and reasonably to be appropriate to protect the public interest from future contraventions: see Pattinson at [71] Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ. In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157 at [116], Keane, Nettle and Gaudron JJ found that for a penalty to protect the public interest, it must have sufficient “sting or burden” to prevent repeat or similar conduct.
The FWO submits that the appropriate deterrent value of a penalty may be assessed by reference to the non-exhaustive list of the factors identified by French J (as his Honour was then) in Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 (CSR) at [42] (see also Pattinson at [18] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ).
Approach
The FWO refers to the appropriate steps to be considered in fixing an appropriate penalty as being those summarised by Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd (t/as New Shanghai Charlestown) (2017) 275 IR 148 (New Shanghai) at [36] where his Honour set out the following five step process:[13]
(a)identifying the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention;
(b)considering whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person;
(c)considering whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did;
(d)considering the appropriate penalty in respect of each final individual group of contraventions, taken in isolation; and
(e)considering the overall penalties arrived at, including what is proposed by the respective parties, and apply the totality principle to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary: see Kelly v Fitzpatrick (2007) 166 IR 14 (Kelly v Fitzpatrick) at [30] per Tracey J and Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 (Australian Ophthalmic Supplies v McAlary-Smith) at [23] per Gray J, [71] per Graham J and [102] per Buchanan J.
[13] See Kelly v Atanaskovic Hartnell Corporate Services Pty Ltd (No 3) [2023] FedCFamC2G 1 at [70]
Range of penalty
In the instant case, the penalty amounts for contraventions of penalty provisions of the Act are set out in a table contained in s 539(2) of the Act. The table relevantly provides that the Court may impose the following maximum penalties:
(a)for a contravention of s 716(5) — 30 penalty units; and
(b)for a contravention of s 536(1) — 60 penalty units.
Section 546(2)(b) provides that for a body corporate, such as the first respondent Company, the maximum penalty imposed is five times the maximum units referred to in s 539(2). Section 546(2)(a) of the Act provides that for individuals, such as Ms and Mr Stojcevski, a pecuniary penalty must not be more than the amount referred to in s 539(2).
The
calculation of penalty units by reference to the above maximums are given a value by
s 4AA of the Crimes Act 1914 (Cth)(Crimes Act) and the relevant penalty unit value which applies will be that which was in force as at the time the offending took place.
In the present case, the value of a penalty unit was $222 at the time of offending. The Crimes Act was amended by Schedule 1 of the Crimes Amendment (Penalty Unit) Act 2022 (Cth) to increase the amount of the Commonwealth penalty unit from $222 to $275 from 1 January 2023. However, that increase is not retrospective. Accordingly, in the present case, by reference to the penalty unit value, the maximum penalty that can be assigned for the contraventions is as follows:
(a)$13,320 for an individual and $66,600 for a company in respect of the contravention of section 536(1); and
(b)$6,660 for an individual and $33,300 for a company in respect of the contravention of section 716(5).
Identification of the contraventions
As noted above at [37], the contraventions which fall for consideration for penalty are as follows:
(a)the Company:
(i)three contraventions of s 716(5) of the Act for failing to comply with three compliance notices;
(ii)seven contraventions of s 536(1) of the Act for failing to give pay slips to two employees a total of seven times.
(b)Ms Stojcevski for being involved in:
(i)two of the contraventions by the Company of sections 716(5); and
(ii)each of the seven contraventions of s 536(1) by the Company.
(c)Mr Stojcevski, for being involved in:
(i)one of the contraventions of s 716(5) by the Company.
Grouping
The FWO’s contentions as to grouping of contraventions is summarised in a tabular form and marked Annexure “B” to the written submissions filed with the Court on 1 February 2023 (FWO penalty table). By the FWO penalty table, the FWO contends as follows.
Company contraventions
The FWO contends that each of the breaches of s 716(5) of the Act by the Company ought not be grouped and that separate penalties should be imposed for each.
Section 557(2) of the Act prescribes the contraventions that can be grouped under s 557(1). Contraventions of s 716(5) are not included. In Fair Work Ombudsman v Tester [2021] FCCA 771,[14] Judge Jarrett (as his Honour then was) found the following at [14]:
Notwithstanding that, the Court has a discretion to group separate contraventions together where the contraventions may be said to overlap with each other or involve the potential double punishment of a respondent for the same or substantially similar conduct. The onus to demonstrate such overlap or commonality of factual substratum is on the respondent and there is no evidence before the Court that the respondent’s failure to comply with the two notices arose from the one transaction or decision such that they should be grouped together.
[14] See also Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 at [18] to [23] per North, Flick and Jagot JJ
In respect of the onus to demonstrate overlap or commonality, the respondents have furnished no evidence and made no submissions in this regard. The FWO submits that it would not be appropriate for the Court to exercise its discretion to group the contraventions of s 716(5). In the present case, I agree.
I have taken into account the following matters which weigh against the grouping of the section 716(5) contraventions by the Company:
(a)each of the contraventions arose out of the failure of the Company to comply with three separate and distinct compliance notices;
(b)each of those compliance notices was each issued in respect of a separate named employee who had each made a separate complaint to the FWO in respect of issues regarding their employment by the Company;
(c)each of the compliance notices alleged distinct contraventions in respect of the named employees;
(d)each compliance notice required the Company to take action specific to the named employee and contraventions identified in that notice: see FWO v Tester (supra) at [15] per Judge Jarrett, Fair Work Ombudsman v A to Z Catering Solution Pty Ltd (No 3) (2018) 342 FLR 46 at [49] per Judge Manousaridis;
(e)each of the compliance notices were issued, and fell due for compliance, on separate dates in different months, as did the specified actions required by each notice; and
(f)the complaints which underpinned the notices were received by the FWO on different dates, across a total period of six months. Specifically, the complaints by Ms Silva and Ms Tyburczy were received in November 2020, while the complaint by Ms Effoudou was received around 1 April 2021 (see [7] above).
In the present case, I accept the submissions of the FWO to the effect that the obligations imposed on the Company by each compliance notice was wholly separate and distinct from the other and I am satisfied that the respondent’s decision not to comply with each notice was an individual decision which did not constitute a single transaction: see FWO v Tester (supra) at [15] applied in Fair Work Ombudsman v Dingwall Hilder Nominees Pty Ltd [2022] FedCFamC2G 76 at [27] to [28] per Judge Kendall. That the employees were all subject to the Award does not alter my view in this regard.
As such, the contraventions by the Company of s 716(5) will be considered individually for the purpose of a single penalty in respect of each.
The failure by the Company to issue payslips (see [11] to [12] above) were contraventions of
s 536(1) of the Act which is a civil remedy provision pursuant to s 557(2) of the Act.
The position of the FWO was to (quite properly) accept that the seven contraventions of
s 536(1) by the Company should be taken to constitute a single contravention if they arose out of a course of conduct.
The position of the FWO was that the payslip contraventions arose from a single course of conduct and should be properly grouped under in accordance with section 557(1). I agree that the contraventions of 536(1) occurred within two confined and overlapping periods of time (28 October 2020 to 16 December 2020 in relation to Ms Effoudou, and 23 October 2020 to 8 November 2020 in relation to Ms Tyburczy and that in all the circumstances of this case. Having regard to s 557 of the Act, it is appropriate to consider the payslip contraventions as constituting a single course of conduct by the Company for the purposes of assessing penalty.
Contraventions by Ms Stojcevski
For the same reasons given at [56] to [58] above in declining to group the s 716(5) contraventions by the Company for the purpose of penalty, I am also of the view that Ms Stojcevski’s involvement in those contraventions should be considered for a single penalty in respect of each.
The FWO takes the same position in respect of Ms Stojcevski’s involvement in the payslip contraventions as for the Company, namely that the payslip contraventions arose from a single course of conduct and should be properly grouped under in accordance with s 557(1) for the purposes of assessing any penalty to be imposed on Ms Stojcevski. I agree that this is the appropriate approach in this case.
Contravention by Mr Stojcevski
Mr Stojcevski is deemed to have admitted to a single contravention and as such, the question of grouping does not arise in relation to him.
Double penalty
I am satisfied that no further adjustment is necessary to prevent overlap between groups of separate aggregated contraventions so as to avoid the imposition of double penalty. There is no contention advanced (let alone established) for the respondents as to any factor between them (other than that Ms Stojcevski and Mr Stojcevski are brother and sister and directors of the Company) which would relevantly inform any such question. There has been no contention advanced[15] that by reason of that relationship alone, or the manner in which the company was/is financed that a double penalty situation might arise. I have also considered the question of double penalty upon the revelation in submissions from the FWO that Ms Stojcevski is presently bankrupt (see [116] below).
[15] Cf Kelly v Atanaskovic Hartnell Corporate Services Pty Ltd (No 3) [2023] FedCFamC2G 1
CONSIDERATION OF MATTERS GOING TO PENALTY
The Court’s discretion as to penalty is unfettered and the Court is not required to impose a penalty simply because contraventions have been found: see Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Telstra Corp Ltd [2007] FCA 1607 (CEPU v Telstra ) at [13] per Gordon J citing Victoria University of Technology v Australian Education Union (1999) 91 IR 96 at [33] per Ryan, Branson and Finkelstein JJ.
As already observed at [46] above, there are no set matters which are prescribed for consideration in the assessment of penalty. The factors which do regularly arise for consideration include matters relevant to both the character of the contravening conduct and of the contravenor (see Pattinson at [19] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ) and while the list of factors is generally well-settled, it should not be treated as a “rigid catalogue of matters for attention”: see Australian Ophthalmic Supplies v McAlary-Smith (supra) at [91] per Buchanan J.
In the present case I am of the view that the matters which arise to inform the imposition, by reference to CSR (supra) and Kelly v Fitzpatrick at [14] per Tracey J:
(a)the nature, circumstances and deliberateness of conduct;
(b)the nature of the loss;
(c)the size and nature of the business enterprise involved;
(d)whether the party/ies who committed the contravention have exhibited contrition;
(e)whether the party/ies committing the contravention have taken corrective action; and
(f)the need for specific and general deterrence.
Nature, Circumstances and Deliberateness of Conduct
The FWO says that the respondents were on notice that the FWO had received allegations from the employees several months before the compliance notices were issued and that, after they were issued, the Company failed to comply with the Notices and that the individual respondents were involved in the requisite sense under s 550(2) of the Act. This failure occurred despite the fact that they were given ample time and multiple opportunities by the FWO in which to comply, and also therefore avoid litigation. Once issued with the compliance notices, which set out clearly the specified actions required to achieve compliance, the respondents thereafter failed to take those steps to rectify that failure, despite being clearly informed that this may lead to the FWO commencing legal proceedings.
The power of an FWI to issue a compliance notice was introduced into the Act to provide a mechanism for dealing with non-compliance with minimum entitlements in the Act, as an alternative to commencing litigation for each underlying contravention. When the respondents failed to comply with the various compliance notices, it is accurate to say that as a direct result, the FWO was required to bring proceedings seeking orders to remedy the contravention.
The FWO submits that by failing to comply with the compliance notices, the respondents have demonstrated a deliberate disregard for their obligations under the Act, and also for the authority of the FWO as a regulator of Commonwealth workplace laws. In view of those circumstances, the FWO submitted that the Company’s failure to comply with the compliance notices was deliberate and that a significant penalty should be imposed.
In respect of the failure to give pay slips, it was contended by the FWO that this Court recognises that failing to give pay slips is a significant contravention, citing Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd [2012] FMCA 258 where Riethmuller FM (as his Honour then was) said the following at [67]:
Pay slips provide the most practical check on false record keeping and underpayments, and allow for genuine mistakes or misunderstandings to quickly be identified. Without proper pay slips employees are significantly disempowered, creating a structure within which breaches of the industrial laws can be easily perpetrated.
see also Fair Work Ombudsman v Rum Runner Trading Pty Ltd & Anor [2018] FCCA 1129 at [111] per Judge Jones and Fair Work Ombudsman v Zillion Zenith International Pty Ltd & Anor [2014] FCCA 433 at [76] per Judge O’Sullivan.
The FWO submitted that the pay slip obligations which are imposed by the Act and Fair Work Regulations 2009 (Cth) are directed at ensuring the creation and retention of pay slips which are critical in assessing compliance with Commonwealth workplace laws.
In the present case, no evidence or explanations have been forthcoming from the Company (nor Ms Stojcevski) for the failure to give pay slips to the employees, beyond the bare and unsubstantiated allusions and contentions that the Company was not the relevant employer at all. As against the investigations by the FWI which are documented in the FWI Affidavit, if the respondents wished to make good what they appear to contend is a simple factual premise, they could have done so by engaging in these proceedings. They have, for whatever reason/s, chosen not to do so. On the evidence before the Court it is open to infer, and I do, that the pay slip contraventions were not the result of oversight or any other mistake by the Company or Ms Stojcevski. It is open to view the conduct as deliberate, and I do so. I accept the submission of the FWO that failing to keep records undermines both the capacity of employees to pursue their entitlements, and the ability of the FWO to enforce compliance with workplace laws: see FWO v Rum Runner Trading Pty Ltd (supra) at [111] per Judge Jones and FWO v Zillion Zenith International Pty Ltd (supra) at [76] per Judge O’Sullivan.
As noted above, the respondents have provided no material in mitigation, or to otherwise to contextualise the nature, circumstances or deliberateness of the contraventions. The lack of corrective action in this case, up to and including the date of the penalty hearing is such as to further reinforce the conclusion as to deliberateness. Even if it was open to accept that there had been some inadvertency to the conduct up to the commencement of these proceedings, the respondents did not thereafter take any steps to rectify the contraventions. If, as has been noted above, there was an arguable case as to the identity of the employer, this could have been ventilated in these proceedings by evidence. None was advanced.
From the materials available to the Court it is open to infer, and I do, that the failure to comply with the compliance notices and to issue payslips was done in conscious disregard for the Company’s obligations as an employer and that the involvement of the individual respondents was equally deliberate and indifferent despite those obligations, and the manner in which they could be met (and contraventions rectified) being set out for them in clear terms. These matters weigh in favour of a substantial penalty being imposed on the Company and each of the individual respondents.
Accordingly, the nature, circumstances and deliberateness of the conduct weighs in favour of a significant penalty being imposed.
Nature of the loss
The evidence before the Court is that there has been no corrective action taken. As such, the employees have been without amounts lawfully owing to them for more than 2 years after compliance was required by the respective compliance notices and even longer since the cessation of each employee’s employment.
In addition to the amounts which are yet to be paid to the employees, it is well established that there is a cost to the public in relation to non-compliance. That cost arises in the expenditure of public funds and also public resources needed for the FWO to pursue a matter through the Courts, in circumstances where civil remedy proceedings would otherwise not have been required had compliance occurred: Fair Work Ombudsman v Nobrace Centre Pty Ltd(No 2) [2019] FCCA 2144 at [19] per Judge Blake, Fair Work Ombudsman v ASGBRIS Pty Ltd [2020] FCCA 553 at [36] per Judge Tonkin; Fair Work Ombudsman v Jaycee Trading Pty Ltd (No. 2) [2013] FCCA 2128 at [9] per Judge Emmett.
In terms of the amounts owing to the employees, in the absence of payslips having been issued and the specified actions (including calculation of the underpayments) having been taken by the respondents, the Court is left without precise knowledge as to the amount of the losses which is, in and of itself, unsatisfactory.
Size and nature of the business
There is no material advanced before the Court to inform an analysis of the size and nature of of the business undertaken by the Company. The FWO concedes that the Company appears to be a small business by inferences drawn from its operation of a suburban Café, and that it no longer appears to be trading. The FWO further accepted that the inferable small size of the business is a factor relevant in setting an appropriate penalty on the basis that a smaller business may be effectively deterred by a smaller penalty than may be necessary to properly deter a large business.
Compliance with the Act is not referrable to the size of the business concerned. All employers, great and small, are required to adhere to the law: see Fair Work Ombudsman v Extrados Solutions Pty Ltd [2014] FCCA 815 at [10] per Judge Jarrett (as his Honour then was).
However, while the size and financial circumstances of a respondent will not excuse compliance (see Fair Work Ombudsman v Hiyi Pty Ltd [2016] FCCA 1634 at [47] per Judge Jones), those remain are factors relevant to the consideration of appropriate penalty, where appropriate evidence is put forward: see New Shanghai (supra) at [105] to [106] per Bromwich J. In this case there is no evidence before the Court of the financial position of the business or the individual respondents. Those parties had the opportunity to provide such material to inform the question of penalty by advancing material relevant to the question of size, financial resources and the objects of specific and general deterrence. There is no evidence as to what might be a penalty which, relevant to the responses, could be considered crushing or oppressive.
Contrition
In Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 at [76], Stone and Buchannan JJ found that:
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 said that an admission of liability: (a) has indicated an acceptance of wrongdoing and a suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate the course of justice.
However, in the present case there is there is no material before the Court, and certainly nothing which suggests, any acceptance of wrongdoing nor any credible expression of regret on the part of any of the respondents.
Corrective action
There is also no evidence of any corrective action taken by the respondents.
In circumstances where a respondent cooperates with the FWO and/or takes corrective action, this may be an appropriate factor in reducing penalty to relevantly account for it: see Mornington Inn (supra) at [76] per Stone and Buchannan JJ.
However, just as the respondents have evidenced no contrition, there has equally been nothing advanced before the Court to demonstrate any corrective action by any of them. To the contrary I accept the FWO’s submissions that there was no cooperation with the FWI at any point during the investigation,[16] there has been no compliance with the compliance notices nor any subsequent attempt to pay the employees nor issue them with their payslips,[17] and there has been significant obfuscation in these proceedings resulting in the default judgment as well as the unusual conduct by Ms Stojcevski surrounding the penalty hearing.
Deterrence
[16] O’Connell Affidavit at [11] to [12] and [26]
[17] O’Connell Affidavit at [30]
Specific deterrence
There is no evidence before the Court to indicate that any of the respondents has previously contravened the Act.
Specific deterrence is directed at ensuring that a contravener is not prepared to embark upon the risk of engaging in the same contravening conduct in the future: see Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128 at [50] per Gilmour J.
The FWO contends that there is a particular need in this case to specifically deter each of the respondents from engaging in the same contravening conduct in the future because:
(a)they have each have demonstrated a disregard for their obligations under the Act by failing to comply with any, and all, of the three compliance notices;
(b)they have each demonstrated a disregard for the Court by failing to comply with Court orders necessitating entry of the default judgment and the making of the November orders (see [1] above);
(c)each of the Ms and Mr Stojcevski have held, or currently hold, directorial positions in other corporate entities;[18]
(d)there is a particular need to ensure the respondents do not continue offending through the other entities; and
(e)that even after the Court ordered the respondents to rectify their non-compliance with the compliance notices, the respondents have still not rectified their non-compliance.[19]
[18] O’Connell Affidavit, Annexures “KO-17” and “KO-18”
[19] See O’Connell Affidavit at [30]
The above factors are each relevant to the question of specific deterrence.
While there is nothing to indicate previous contraventions, the absence of any corrective action, or contrition become significant factors in the context of the current contraventions. The Court is of the view that penalty in this matter must be fixed at a level which will specifically deter each of the respondents from engaging in further contravening conduct in future.
General deterrence
The FWO has provided to the Court an industry profile report for cafés and restaurants spanning the period July 2019 to June 2022 (Industry Profile). Reports in the nature of the Industry Profile are accepted by Courts (subject to relevance and weight) to inform questions of the need for general deterrence in certain employment sectors: see New Shanghai (supra) at [199] per Bromwich J and Fair Work Ombudsman v Shri Krishna Guru Pty Ltd [2021] FCCA 1808 at [62] per Judge Blake.
The Industry Profile in the instant case, which forms Annexure “KO-20” to the O’Connell Affidavit indicates that:
(a)the dispute rate for the café and restaurant industry is rated as “high”;
(b)the location where the contraventions in the instant case took place, namely New South Wales, accounts for 30% of total industry disputes making it the joint most frequent location for disputes;
(c)contraventions involving wages and conditions are three of the top five most frequent types of contravention for this industry;
(d)café and restaurant businesses are frequently the subject of enforcement action by the FWO;
(e)each successive year, the FWO has issued more compliance notices to businesses in the café and restaurant industry;
(f)43.2% of workers employed in the café and restaurant industry are young workers, being employees aged between 15 to 25 years of age; and
(g)the majority of workers in the café and restaurant industry are female.
Recommendation as to penalty
The FWO says that on the basis of the factors relating to the circumstances of the contraventions and the circumstances and conduct of the contravenors, the following penalties are necessary to deter repetition of the contravening conduct by the respective respondents:
First Respondent
Contravention Maximum penalty Proposed penalty range Proposed penalty range amount Section 716(5) – failure to comply with the Compliance Notice $33,300 70% - 80% $23,310 - $26,640 Section 716(5) – failure to comply with the Compliance Notice $33,300 70% - 80% $23,310 - $26,640 Section 716(5) – failure to comply with the Compliance Notice $33,300 70% - 80% $23,310 - $26,640 Grouped contraventions of section 536(1) $66,600 70% - 80% $46,620 – $53,280 Total $116,550 - $133,200 20% totality discount $93,240 - $106,560 Second Respondent
Contravention Maximum penalty Proposed penalty range Proposed penalty range amount Section 716(5) – failure to comply with the Compliance Notice $6,660 75% - 85% $4,995 - $5,661 Section 716(5) – failure to comply with the Compliance Notice $6,660 75% - 85% $4,995 - $5,661 Grouped contraventions of section 536(1) $13,320 70% - 80% $9,324 - $10,656 Total $19,314 - $21,978 20% totality discount $15,451 - $17,582 Third Respondent
Contravention Maximum penalty Proposed penalty range Proposed penalty range amount Section 716(5) – failure to comply with the Compliance Notice $6,660 75% - 85% $4,995 - $5,661 Total $4,995 - $5,661
The FWO says that the above penalty range reflects an appropriate and proportionate response to the contraventions and is relative to the conduct in this case, citing Fair Work Ombudsman v Rubee Enterprises Pty Ltd [2016] FCCA 3456 at [120] per Judge Altobelli, as his Honour then was, Parker v Australian Building and Construction Commissioner (2019) 270 FCR 39 at [289] to [307] per Besanko and Bromwich JJ, and Kelly v Fitzpatrick at [30] per Tracey J.
AWARD OF PENALTY
The Company
Failing to comply with compliance notices
Pursuant to the November Orders, the Company is taken to have made admissions of contraventions of s 716(5) of the Act by failing to comply with each of the three compliance notices. I am of the view that in the exercise of my discretion, the contraventions by the Company of s 716(5) do warrant imposition of a penalty.
The failures appear to have been deliberate and in disregard for the Company’s obligations as an employer. Despite faint attempts to resist responsibility for the obligations in question, no real attempts were every made by (or on behalf of) the Company to demonstrate any proper basis for the failure to comply. The Company has been uncooperative with the FWO and has failed to express or exhibit any contrition or undertake any corrective action, even after the commencement of the proceedings or even the entry of default judgment. As this Court has previously observed, where corrective action is taken (even when at the eleventh hour) it should sound in some discount because if corrective action were to have no impact on penalty there would be a correlative disincentive to ever rectify conduct. The obverse is true in cases in which no corrective action is attempted.
Employers ignore the FWO, and moreover the orders of the Court, at their peril. A significant penalty will serve as a general deterrent to such conduct by any employer.
While it can be accepted that the Café endeavour in which the Company was involved appears to have been a small business, and the nature of the losses to the employees are likely not objectively large (albeit may have been significant to them), these factors do not outweigh a significant penalty being imposed in all the circumstances of this case.
The question of deterrence weighs heavily towards the imposition of a significant penalty for the reasons already outlined. It can be inferred from the attempt (or accession) to deregister the Company (see [13(c)] above) that specific deterrence might not be as effective in the instant case. However, there is also the need for the penalty in this matter to act as a general deterrent to employers, in particular in the café and restaurant industry which, by reference to the matters addressed at [96] above, is an employment sector with a relatively high degree of disputes from employees and with a high proportion of youth workers. Employers in the café and restaurant industry should recognise the significant detriment which will result by failing to comply with their obligations.
In all the circumstances of this case, the appropriate penalty for each of the contraventions by the Company of s 716(5) is 75% of the maximum penalty applicable (which is $33,300), being $24,975 per contravention, being a total of $74,925.
Failing to issue payslips
In respect of the seven contraventions of s 536(1) of the Act, for failing to give pay slips to two employees a total of seven times, the same matters identified at [100] to [103] apply to these contraventions also. I am of the view that in the exercise of my discretion, the contraventions by the Company of s 736(1) warrant imposition of a penalty.
In terms of the nature of the conduct, this has been addressed above at [73] to [77].
For the reasons already outlined, the appropriate penalty for the seven grouped contraventions by the Company of s 536(1) is 75% of the maximum penalty applicable (which is $66,600), being $49,950.00.
Summary
Accordingly, the total penalty for all contraventions (prior to any adjustment for totality) of the Company is $124,875.00
Ms Stojcevski
Bankruptcy
The material before the Court reveals that Ms Stojcevski was made bankrupt on 24 November 2021 (with the date of the act of Bankruptcy being 10 August 2021) by a sequestration order made following the filing of a creditor’s petition.
Bankruptcy is not a barrier to the imposition of a pecuniary penalty: see Fair Work Ombudsman v Finetune Holdings Pty Ltd (No 3) [2012] FMCA 883 at [48] per Lucev FM (as his Honour then was). This Court has recognised that civil penalties under the Act (and its predecessor legislation) are not provable in bankruptcy: see s 82(3) Bankruptcy Act 1966 (Cth) and Mathers v Commonwealth (2004) 134 FCR 135 per Heerey J, Cotis v Macpherson [2007] FMCA 2060 at [7] to [12] per Driver FM (as his Honour then was), Fair Work Ombudsman v Bundy Market Meats Pty Ltd (2009) 190 IR 180 Jarrett FM (as his Honour then was), and State of Victoria v Mansfield (2003) 199 ALR 395 at [32] per Black CJ, Kenny and Downes JJ.
The FWO quite properly accepted that the bankruptcy of Ms Stojcevski is a factor to be considered in fixing a penalty but said that the Court must take into consideration the broader context of Ms Stojcevski’s bankruptcy, citing Australian Securities and Investments Commission v Loiterton (2004) 50 ACSR 693 at [47] and [52] to [54] per Bergin J and Fair Work Ombudsman v Al Hilfi [2016] FCA 193 at [58] per Besanko J.
In that respect the FWO submitted that at the time of the penalty hearing Ms Stojcevski had not provided any context relating to her bankruptcy or financial position, again despite multiple opportunities to engage with the instant proceedings and do so. As a result, the FWO submitted that Ms Stojcevski’s financial circumstances should be given little weight unless, or until, sworn evidence is filed.
Submissions were made by the FWO to the effect that Ms Stojcevski is the joint tenant of a property in Canada Bay, New South Wales, which is the subject of a mortgage and a number of caveats. Searches to that effect were not provided. However, the onus would again be on Ms Stojcevski to demonstrate that this (or other) property does not represent an asset which could be taken into account in considering her financial position.
Overall, and is the situation with much of the matters which the Court must consider in fixing penalty, there is a significant absence of material from the respondents which might otherwise have assisted them. I am satisfied that Ms Stojcevski has been given a proper opportunity to engage in these proceedings in a meaningful way and that she has elected, for whatever reason not to do so and to not make good the matters which she has sporadically asserted.
In the absence of any detailed evidence from Ms Stojcevski about the effect of the bankruptcy on her affairs, the current position is not that Ms Stojcevski:
(a)has a limited future earning capacity; or
(b)would be subject to an alternative form of penalty such as the revocation of a license that would hamper her future earning capability: Cf ASIC v Loiterton (supra) at [73] per Bergin J and Australian Securities Commission v Forem Freeway Enterprises Pty Ltd (1999) 30 ACSR 339 at [351] per Madgwick J; and/or
(c)became bankrupt as a result of the conduct that lead to the contravention of the Act by the Company (or her involvement in same): Cf Fair Work Ombudsman v Al Hilfi (supra) at [58] per Besanko J.
There is no evidence before me to suggest that, as a result of the fact of Ms Stojevski’s bankruptcy, that a penalty at the lower end of the range is warranted where it otherwise would not be. I am similarly not satisfied that Ms Stojcevski would be punished twice for the contraventions by reason of the fact of her bankruptcy, together with a penalty being imposed.
Accordingly, while acknowledging the fact of Ms Stojcevski’s bankruptcy, no specific aspect of it warrants imposition of a lesser penalty.
Involvement in Company’s failing to comply with compliance notices
Pursuant to the November Orders, Ms Stojcevski is taken to have made admissions to have been involved, within the meaning of s 550(2) of the Act, in the contraventions by the Company of s 716(5) of the Act (for failing to comply with 2 of 3 compliance notices (the Silva and Monika compliance notices)) and s 536(1) of the Act in respect of its failure to issue pay slips. I am of the view that in the exercise of my discretion, the involvement by Ms Stojcevski in the contraventions by the Company of ss 536(1) and 716(5) of the Act each warrant imposition of a penalty.
It will be observed that Ms Stojcevski was the intermediary between the FWI/FWO and the Company at all times. It was from Ms Stojcevski that claims of lost emails, confusion about the nature of the Café business and suggestions that she was the bookkeeper for the Café business but not the owner nor operator of it emanated. While there is not specific evidence to allow the Court to formulate a firm view that Ms Stojcevski is the controlling mind of the Company, she could certainly be described as its representative for the purposes of the interactions the subject of these proceedings. By reason of the declaration, she has already been found to be involved within the relevant statutory meaning, with the contraventions in question.
To the extent that it has been demonstrated that the Company knew about the allegations the subject of the compliance notices in advance of them being issued, it was to Ms Stojcevski that the relevant correspondence was sent and discussions with the FWI were had. To the extent that the compliance notices were then issued, it was Ms Stojcevski who corresponded with the FWI.
Again, it can be acknowledged that while Ms Stojcevski made varying, bare assertions as to why neither she nor the Company should be considered responsible for the employees (and thus for the contraventions) nothing was advanced beyond assertions to the FWO nor to the Court. The conduct of the Company described above at [100] to [103] and [73] to [77] (see [106] above) is, in essence, the conduct of Ms Stojcevski also. The conduct appears deliberate and recalcitrant, particularly from the time the proceedings were commenced.
The need for penalty to pose a significant, specific deterrent to similar contraventions in future looms large in the case of Ms Stojcevski. It can be accepted (and it seems attempts were made to enable (or at least allow)) the Company to be deregistered between the entry of the default judgment and the penalty hearing (see [13(d)] above). As such, there is a possibility that the Company might not operate much beyond these proceedings. However, it is open to infer from the records annexed to the O’Connell Affidavit, and I do, that there is a strong likelihood of Ms Stojcevski being involved in other businesses in the future.
Overall, Ms Stojcevski was deliberately uncooperative with the FWO, and has herself taken no responsibility nor exhibited any contrition for her involvement in the contraventions constituted by the failure to comply with the compliance notices. There has been not suggestion that Ms Ms Stojcevski is in any way remorseful for the losses caused to the employees, nor desirous of rectifying (or assisting in rectification of) them.
The need to create a specific deterrent for Ms Stojcevski is high. The penalty which should be imposed in relation to the contraventions of the Company constituted by its failure to comply with the compliance notices should be significant such that in future, Ms Stojcevski does not become involved in similar contraventions of the Act.
In all the circumstances of this case, the appropriate penalty for Ms Stojcevski’s involvement in each of the contraventions by the Company of s 716(5) is 85% of the maximum penalty applicable (which is $6,660), being $5,661 per contravention. For the two contraventions this results in a total penalty of $11,322.
Involvement in Company’s failure to issue payslips
The observations made at [118] to [124] above apply equally in respect of these contraventions by the Company. While it was open on the basis of Ms Stojcevski’s continued assertions to the FWI that she was simply the bookkeeper for the Café business, that it was in fact her responsibility to issue the payslips to the employees, in the absence of conclusive evidence in that regard I am not prepared to make a finding to that effect. However, it remains open, as with the s 716(5) contraventions to observe that Ms Stojcevski did seem to play a central role in the Company’s interactions with the employees.
In all the circumstances of this case, I am of the view that the appropriate penalty for Ms Stojcevski’s involvement in the grouped contraventions by the Company of s 536(1) of the Act is also 85% of the maximum penalty applicable (which is $13,320), despite the submissions of the FWO that the appropriate range was slightly less. For grouped contraventions this results in a total penalty of $11,322.00.
Summary
Accordingly the total penalty for all contraventions (prior to any adjustment for totality) of Ms Stojcevski is $22,644.
Mr Stojcevski for being involved in:
Involvement in Company’s failure to issue payslips
By reference to the November orders and declarations, Mr Stojcevski is deemed to have admitted to being involved, within the meaning of s 550(2) of the Act, in the contravention by the first respondent of s 716(5) of the Act in relation to the Monika Compliance Notice (only).
Unlike his sister, there is no more detailed material before the Court in respect of his involvement in dealings with the FWI or FWO. However, on the basis of the material pleaded at [31] to [33] of the Amended Statement of Claim in this matter, Mr Stojcevski had knowledge of the Monika Compliance Notice and was an intentional participant in the Company’s failure to take actions to comply with the.
I am of the view that in the exercise of my discretion, the involvement by Mr Stojcevski in the contraventions by the Company of s 536(1) of the Act does warrant imposition of a penalty.
Despite vague, and sometimes contradictory, suggestions in the proceedings about Mr Stojcevski’s health, there is no probative evidence before me as to how this is might be relevant to the question of penalty. Taking into account:
(a)the deliberateness of his involvement in the failure of the Company to comply with the Monika compliance notice;
(b)his lack of contrition;
(c)the lack of corrective action;
(d)the principles of general deterrence set out above at [95] to [96]; and
(e)that, Mr Stojcevski has or currently hold director positions in other companies and there is a specific need to ensure at in current, or any future roles, he holds that he is deterred from being involved in similar offending in future.
In all the circumstances of this case, the appropriate penalty for Mr Stojcevski’s involvement in the single contravention by the Company of s 716(5) by failing comply with the Monika compliance notice is 60% of the maximum penalty applicable (which is $6,660), being $3,996.00
Totality
Prior to fixing the final penalty based on assessment of the aforementioned factors, the Court will consider the totality principle. In a case such as the present in which there are multiple breaches of civil penalty provisions, the totality principle ensures that the imposition of a civil pecuniary penalty on the respondents would not be oppressive or crushing: see Kelly (supra) at [30] per Tracey J, cited with approval in Australian Ophthalmic Suppliesv McAlary-Smith (supra) at [71] per Graham J and [97] per Buchanan J.
The difficulty for the Court is that there is no evidence emanating from the respondents regarding their respective financial positions which might establish that the pecuniary penalties sought by the FWO would be oppressive or crushing. It is, however, open to infer from the fact of the bankruptcy of Ms Stojcevski that if she was unable to meet her debts in 2021, she is likely to be unable to meet any civil pecuniary penalty. However, for the reasons already given that is not a basis to refrain from imposing the penalty given the accepted principle that capacity to pay a penalty is of less relevance than the objective of deterrence and that in terms of general deterrence, a penalty set at the level deemed necessary to achieve the object generally deterring employers from similar conduct will not, on principle, be oppressive.
The penalty imposed must ultimately be relative to the seriousness of the conduct engaged in by the respondents. In the circumstances of the instant case, the FWO says that penalties in respect of the contraventions by the Company and Ms Stojcevski of s 716(5) should not be reduced on the basis of totality by any more than 20%, if any reduction is to be made at all.
The totals penalties as set out above are as follows:
(a)the Company: $74,925.00 + $49,950.00 = $124,875.00;
(b)Ms Stojcevski: $11,322.00 + $11,322.00 = $22,644.00; and
(c)Mr Stojcevski: $3,996.00.
Stepping back from the discrete penalties for each contravention, including the grouped contraventions considered as one whole, I am of the view that the penalties , when considered against the overall conduct of the respondents are disproportionate to the overall conduct.
In respect of each of the company, I am of the view that a 20% reduction is appropriate to the overall penalty amount arrived to properly reflect the conduct involved. In the cases of Ms Stojcevski, I am of the view that a 10% reduction in the overall penalty arrived at properly reflects in relationship between penalty and the contraventions in which she was involved. In respect of Mr Stojcevski, I am of the view that the final penalty arrived at is appropriate and I would not further reduce it.
CONCLUSION
The FWO seeks that any civil pecuniary penalty be paid to the Commonwealth pursuant to s 546(3)(a) of the Act. In the circumstances of this case, such an order is appropriate.
Accordingly, the overall penalties arrived at are:
(a)the Company: $59,940 + $39,960.00 = $99,900;
(b)Ms Stojcevski: $10,189.80 + $10,189.80 = $20,379.60; and
(c)Mr Stojcevski: $3,996.00.
I will so order and allow 35 days to pay.
I certify that the preceding one hundred and forty-two (142) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Given. Associate:
Dated: 12 December 2023
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