Fair Work Ombudsman v Phua & Foo Pty Ltd

The Fair Work Ombudsman (FWO) brought proceedings against Phua & Foo Pty Ltd in the Federal Circuit Court of Australia for contraventions of section 45 of the Fair Work Act 2009 (Cth), specifically the failure to pay minimum rates, casual loading, and weekend penalty rates in accordance with the Fair Work Act and the Restaurant Industry Award 2010. The FWO conducted an audit in 2015 which revealed that the respondent had been paying a flat rate to its employees, irrespective of the day of the week or the nature of the hours worked, which did not comply with the Award's requirements.

The court was required to decide the appropriate penalty for the admitted contraventions, taking into account various factors such as the respondent's contrition, corrective action, and cooperation, as well as the need for deterrence. The court found that the respondent, through its director, had deliberately ignored its legal obligations and had paid its employees at a flat rate, which did not meet the applicable rates under the Award. However, the court did note that the respondent had promptly reimbursed the underpaid employees, cooperated with the FWO, and taken steps to ensure compliance in the future, which were considered in mitigation of the penalty. The court also found that there were no previous contraventions of workplace laws by the respondent.

In determining the appropriate penalty, the court considered the importance of deterrence, particularly given the vulnerability of the employees and the widespread nature of non-compliance within the restaurant industry. The court concluded that the penalty should reflect an element of specific deterrence to remind the respondent of the need to comply with its statutory obligations and to deter others in the industry from flouting the law. The court ordered that the respondent pay a pecuniary penalty of $35,000, and that all persons engaged by the respondent with managerial responsibility for decisions regarding wages and conditions to engage a suitably qualified compliance professional or legal practitioner to conduct training in relation to compliance with the Award and the National Employment Standards.