Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown

In the Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown, the Fair Work Ombudsman (FWO) brought proceedings against the employer, its director, and two employees for contraventions of the Fair Work Act 2009 (Cth) and Fair Work Regulations 2009 (Cth). The employer admitted to underpaying 85 employees over a period of 16 months, amounting to a total of $583,688.68 in unpaid entitlements. The employer also admitted to creating and producing false employment records to conceal the underpayments. The director and two employees admitted to involvement in the contraventions. The court had to decide on the appropriate penalties for each respondent. The court considered the principles governing the imposition of civil penalties, the objective seriousness of the aggregated contraventions, and the principles concerning civil penalty maximums and double counting. The court found the conduct to be deliberate, systematic, and premeditated. The employer was held to be the primary contravener, and the director and two employees were held to be accessorial contraveners. The court held that the employer should be penalised at the higher end of the FWO's proposed range, while the director and two employees should be penalised at the lower end of the FWO's proposed range. The director argued that he should not be penalised as he was the ultimate owner and thus the alter ego of the employer, and to penalise him as well would constitute double punishment. However, the court held that the director was not the alter ego of the employer, and thus he should be penalised. The court also held that the principles of double counting did not apply in this case, as the director and two employees were not owners of the employer. The court made declarations and orders for the employer, director, and two employees to pay penalties and the total outstanding underpayment owed to employees as at the date that orders are made. The total penalties to be paid by each of the respondents were set out in the orders. The court also made orders for the employer to pay the applicable amounts due to the relevant employees within 60 days of receipt. If the employer receives a partial payment of the outstanding underpayment amount, the employer must distribute the money to the employees in accordance with each employee's percentage share of the total underpayment amount. If the employer cannot locate any of the employees, the employer must pay the applicable amount due to each employee that cannot be located to the Commonwealth within a further 14 days.