Fair Work Ombudsman v Poisson Pty Ltd
[2018] FCCA 2766
•5 October 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v POISSON PTY LTD & ANOR | [2018] FCCA 2766 |
| Catchwords: INDUSTRIAL LAW – Application for imposition of pecuniary penalties – contravention of Fair Work Act – contravention of Award entitlements to basic rate of pay, penalty rates and loadings – failing to keep records – penalties imposed. |
| Legislation: Fair Work Act 2009 (Cth), ss.3(b), 12, 45, 44(1), 535(1), 536(2), 539(2), 546(1) & (2), 546(1), 550(2), 557, 557(1) |
| Cases cited: Fair Work Ombudsman v Jet Star Airways Ltd [2014] FCA 33 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | POISSON PTY LTD |
| Second Respondent: | MIYUKI YOGO |
| File Number: | BRG 10 of 2016 |
| Judgment of: | Judge Middleton |
| Hearing date: | 15 June 2018 |
| Date of Last Submission: | 15 June 2018 |
| Delivered at: | Townsville |
| Delivered on: | 5 October 2018 |
REPRESENTATION
| Solicitors for the Applicant: | Office of the Fair Work Ombudsman |
| Counsel for the Respondents: | Mr Turnbull |
| Solicitors for the Respondents: | Myles Thompson Solicitor |
DECLARATIONS
The First Respondent, Poisson Pty Ltd, contravened each of the following civil remedy provisions:
(a)section 45 of the FW Act by contravening the following provisions of the Restaurant Industry Award 2010 (Award):
(i)clause 20.1 of the Award and clause A.2.5 of Schedule A to the Award, by failing to pay Ms Tai the applicable minimum rate of pay for ordinary time hours worked on Monday to Friday;
(ii)clause 13.1 of the Award and clause A.6.4 of Schedule A to the Award, by failing to pay Ms Tai the applicable casual loading for all ordinary time hours worked on Monday to Friday;
(iii)clause 34.1 of the Award and clause A.5.4 of Schedule A to the Award, by failing to pay Ms Tai a penalty rate for ordinary time hours worked on Saturdays;
(iv)clause 34.1 of the Award and clause A.5.4 of Schedule A to the Award, by failing to pay Ms Tai a penalty rate for ordinary time hours worked on Sundays;
(v)clause 34.1 of the Award and clause A.5.4 of Schedule A to the Award, by failing to pay Ms Tai a penalty rate for ordinary time hours worked on public holidays;
(vi)clause 24.2 of the Award, by failing to pay Ms Tai a split shift allowance;
(vii)subclause 34.2(a)(i) of the Award and clause A.5.4 of Schedule A to the Award, by failing to pay Ms Tai a penalty rate for evening work performed on Monday to Friday;
(viii)clause 33.1 of the Award, by failing to pay Ms Tai overtime for work performed outside of ordinary hours on Monday to Friday;
(ix)subclause 35.2(b) of the Award, by failing to pay Ms Tai her annual leave loading on annual leave taken;
(b)subsection 44(1) of the FW Act by contravening subsection 90(2) of the FW Act by failing to pay Ms Tai on termination of her employment, accrued annual leave in the amount to which she would have been entitled had she taken her annual leave;
(c)subsection 535(1) of the FW Act by failing to make and keep records in respect of Ms Tai as prescribed by the FW Regulations, being the kind of records referred to in paragraph 68 of the Statement of Claim; and
(d)subsection 536(2) of the FW Act by failing to give Ms Tai pay slips which included information prescribed by the FW Regulations, being the information referred to in paragraph 72 of the Statement of Claim.
That the Second Respondent was involved, within the meaning of subsection 550(2)(c) of the FW Act, in Poisson’s contraventions in paragraph 1 above, and is therefore taken to have committed those contraventions herself pursuant to subsection 550(1) of the FW Act.
ORDERS
The First Respondent pay a total penalty of $142,144 pursuant to section 546(1) of the FW Act, for committing the contraventions set out in order 1 above.
The Second Respondent pay a total penalty of $26,780 pursuant to section 546(1) of the FW Act, for her involvement in the contraventions set out in order 1 above.
An order pursuant to subsection 546(3)(a) of the FW Act that any pecuniary penalties ordered to be paid by:
(a)Poisson; and/or
(b)MsYogo
be paid to the Consolidated Revenue Fund of the Commonwealth within 28 days of the Court’s order;
An order pursuant to subsection 545(1) of the FW Act that the Second Respondent :
(a)Within a period of two months, register with the Applicant’s “My Account” portal at and complete the profile including the Award options;
(b)Within a further month after the period in subparagraph 6(a) above, provide to the Applicant her “My Account” registration number; and
(c)Within a period of two months, register with the Applicant’s online learning centre at and complete all education courses designed for employers and provide the Applicant with evidence of completion of those courses within a further one month.
The Applicant has liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 10 of 2016
| FAIR WORK OMBUDSMAN |
Applicant
And
| POISSON PTY LTD |
First Respondent
And
| MIYUKI YOGO |
Second Respondent
REASONS FOR JUDGMENT
Background
The first respondent was at all relevant times the operator of an à la carte restaurant which traded as Mature Yogo from “Pier Shopping” shop G9, Pierpoint Road, Cairns in the State of Queensland (the restaurant).
Ms Yogo was, at all relevant times, a director of the first respondent. Ms Yogo was solely responsible for the management and day-to-day running of the restaurant, including recruitment and payroll for the first respondent.[1]
[1] statement of agreed facts, filed on 2 March 2018 at para 9 and affidavit of Miyuki Yogo at para 13
Ms Tai was employed by the first respondent during the periods set out below (the employment period).
Commencement date
End date
Status
10 May 2012
4 July 2013
Casual
5 July 2013
20 March 2015
Full time
Ms Tai:
a. is a Japanese national;
b. first came to Australia subject to a working holiday (subclass 417) visa on 20 May 2007;
c. applied for the position as a food and beverage attendant by attending at the restaurant with a resume and speaking with Ms Yogo;
d. commenced employment with the first respondent on 10 May 2012 as a food and beverage attendant, grade 3, on a casual basis;
e. applied for a regional employer nomination visa, which was sponsored by the first respondent and signed by Ms Yogo on 8 May 2013;
f. having obtained the regional employer nomination visa, her engagement with the first respondent was converted to full-time employment on 5 July 2013;
g. was engaged solely by reference to an hourly rate of pay; and
h. was paid a fixed hourly rate of $17 an hour, which increased to $19 per hour until the end of her employment, including when she worked evenings, Saturdays, Sundays and public holidays.
The first respondent admits the following contraventions of the Fair Work Act (2009) (Cth) (FW Act) in respect of one employee, Ms Yuriko Tai (Ms Tai):
a. section 45 of the FW Act by contravening the following provisions of the Restaurant Industry Award 2010 (Award):
i.clause 20.1 of the Award and clause A.2.5 of Schedule A to the Award, by failing to pay Ms Tai the applicable minimum rate of pay for ordinary time hours worked on Monday to Friday;
ii.clause 13.1 of the Award and clause A.6.4 of Schedule A to the Award, by failing to pay Ms Tai the applicable casual loading for all ordinary time hours worked on Monday to Friday;
iii.clause 34.1 of the Award and clause A.5.4 of Schedule 8 to the Award, by failing to pay Ms Tai penalty rate for ordinary time hours worked on Saturday;
iv.clause 34.1 of the Award and clause A.5.4 of Schedule A to the Award, by failing to pay Ms Tai penalty rate for ordinary time hours worked on Sundays;
v.clause 34.1 of the Award and clause A.5.4 of Schedule A to the Award, by failing to pay Ms Tai a penalty rate for ordinary time hours worked on public holidays;
vi.clause 24.2 of the Award, by failing to pay Ms Tai a split shift allowance;
vii.subclause 34.2(a)(i) of the Award and clause A.5.4 of Schedule A to the Award, by failing to pay Ms Tai a penalty rate for evening work performed on Monday to Friday;
viii.clause 33.1 of the Award, by failing to pay Ms Tai overtime for work performed outside of ordinary hours on Monday to Friday; and
ix.clause 35.2(b) of the Award, by failing to pay Ms Tai her annual leave loading on annual leave taken;
b. subsection 44(1) of the FW Act by contravening subsection 90(2) of the FW Act by failing to pay Ms Tai termination of her employment, accrued annual leave in the amount to which she would have been entitled had she taken her annual leave;
c. subsection 535(1) of the FW Act by failing to make and keep records in respect of Ms Tai as prescribed by the FW regulations;
d. subsection 536(2) of the FW Act by failing to give Ms Tai payslips which included information prescribed by the FW regulations.
The second respondent, Miyuki Yogo (Ms Yogo) admits that she was involved in each of those contraventions by the first respondent, for the purposes of subsection 550(2) of the FW Act, and is therefore taken to have committed those contraventions herself.
All of the contraventions alleged in the statement of claim filed on 11 January 2016 have been admitted by the respondents by way of a statement of agreed facts, filed on 23 March 2016 and on 2 March 2018 respectively.
The applicant seeks imposition of pecuniary penalties pursuant to section 546(1) of the FW Act against the first and second respondent in relation to the contraventions of the FW Act.
The respondents failed to pay Ms Tai her correct Award entitlements to the sum of $33,693.58 that represents a substantial underpayment for a single employee.
Upon being notified by the applicant of the underpayment the respondents took immediate action to pay Ms Tai the total amount of the underpayment. Ms Tai did not receive that payment until November 2015, which was over 3 and a half years after she commenced working for the first respondent.
Material Relied Upon
The applicant relied upon the following documents:
a. application and statement of claim filed 11 June 2016;
b. statement of agreed facts in respect of the first respondent filed 23 March 2016;
c. statement of agreed facts in respect of the second respondent filed 2 March 2018;
d. affidavit of Yuriko Tai affirmed 6 April 2016;
e. affidavit of Lara Lee Hurrell affirmed on 6 April 2016; and
f. affidavit of Emma Travers affirmed on 15 March 2018; and
g. outline of submissions filed 13 April 2018.
The respondent relied upon the following documents;
a. affidavit of Miyuki Yogo filed 16 March 2018;
b. affidavit of Kayoko Inoue filed 6 April 2018; and
c. outline of submissions filed 18 April 2018.
Consideration of Penalty
The applicant sought a penalty in the range of $135,000 to $165,000 for the first respondent and $25,000 to $30,000 for the second respondent.[2]
[2] Annexure A of the Applicants outline of submissions
The respondent submitted that the appropriate penalty for the first respondent was $110,000 and for the second respondent was $22,000.[3]
[3] Page 8 Respondents outline of submissions
The court has a broad discretion to assess the appropriate penalty, ultimately adopting an approach of “instinctive synthesis”.[4]
[4] Fair Work Ombudsman v Jet Star Airways Ltd [2014] FCA 33 at 28
Bromwich J recently summarised how that discretion is to be approached:[5]
“1. identify 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.
2. consider whether each separate contravention should be dealt with independently with some degree of aggregation for those contraventions arising out of a course of conduct, noting that section 557 of the Fair Work 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.
3. consider 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.
4. consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
5. consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO (as permitted by Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) HCA 46; 258 CLR 482 at 64) and what is proposed by the respondents, 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] FCA 1080; 166 IR 14 at (30); Australian Ophthalmic supplies Pty Ltd v Mcalary-Smith [2008] FCAFC 8; 165 FCR 560 at (23), (71) and (102).”
[5] Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghi Charlestown [2017] FCA 1301 at 36
In Commonwealth v Director Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [215] HCA 46, the High Court explained the purpose for the imposition of civil penalties:
[55]… Whereas criminal penalties import motions of retribution rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Limited, is primarily if not wholly protective in promoting the public interests in compliance:
punishment for breaches of the criminal law traditionally involved three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution or rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]… The principal, and I think probably the only, object of the penalties imposed by s76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener, and by others who might be tempted to contravene the act."[6]
[6] Commonwealth v Director Fair Work Building Industries Inspectorate [55] citing Trade Practices Commission v CSR Limited (1991) ATPR 41-076; [1990] FCA 521
Lander J set out the principles to apply as follows:[7]
a. the penalty determined in respect of each contravention should be proportionate to the nature and features of that contravention, and in accordance with the prevailing standards of punishment.
b. the penalty should constitute a personal, as well as general, deterrence. The question of personal deterrence involves an assessment in the case of each respondent of the risk that they will reoffend. The question of general deterrence is intended to send a message to others in the community who are in similar situations to the contravener, and who might be likely to offend. However, with respect to deterrence of others, consideration should also be given to ensuring that the penalty does not;
“crush the person upon whom the penalty is imposed, or… make that person a scapegoat”[8]
[7] Ponzio v B & P Caelli Constructions Pty Ltd and Ors [2007] FCAFC 65
[8] Caelli (supra); Lander J at judgment paragraph 93
In determining this matter I will follow the approach referred to taking into account the purpose of imposing penalties as outlined in those cases I have referred to.
Identification of each Contravention
| Provision | Contravention | Maximum Penalty First Respondent | Maximum Penalty Second Respondent | Reference to Max Penalty | |
| 1. | FW Act s45 | Minimum wages | $51,000 | $10,200 | FW Act |
Identification of each Contravention
| 2. | FW Act s45 | Casual loading | $51,000 | $10,200 |
| 3. | FW Act s45 | Saturday penalty rates | $51,000 | $10,200 |
| 4. | FW Act s45 | Sunday penalty rates | $51,000 | $10,200 |
| 5. | FW Act s45 | Public holidays | $51,000 | $10,200 |
| 6. | FW Act s45 | Split Shift Allowance | $51,000 | $10,200 |
| 7. | FW Act s45 | Evening rates | $51,000 | $10,200 |
| 8. | FW Act s45 | Monday to Friday Overtime | $51,000 | $10,200 |
| 9. | FW Act s45 | Annual leave loading on annual leave taken | $51,000 | $10,200 |
Identification of each Contravention
| 10. | FW Act s44(1) | Annual leave loading on accrues untaken annual leave | $51,000 | $10,200 | |
| 11. | FW Act s535(1) | Recording keeping | $25,500 | $5,100 | FW Act |
| 12. | FW Act s536(2) | Pay Slips | $25,500 | $5,100 |
Section 557 Grouping of Contraventions
It was accepted by the applicant that the respondents are entitled to the benefit of the statutory course of conduct provision (section 557(1) of the FW Act) in relation to the repeated breaches of sections 45, 535(1) and 536(2) of the FW Act.
The effect of section 557(1) of the FW Act results in the identification of 12 separate contraventions as set out in the table set out in these reasons.
It was submitted on behalf the respondent's that the contraventions admitted in paragraph 3(a) (iii), (iv), (v) and (vii) of the agreed facts all have a common theme, that is, a failure to pay penalty rates payable under the Award.
It was submitted by the respondent's that a concession should be made that those “penalty rate contraventions” particularised in the aforementioned paragraphs of the agreed facts comprise four separate contraventions.
It was however submitted by the respondents that as the contraventions have a common element the court may take that common element into account in considering the appropriateness in all the circumstances of the quantum of penalty for the four contraventions.
It was submitted that in doing so the court would reflect the basic principle that a contravener should not be penalised more than once for what, in a practical sense, amounts to the same contravening conduct.[9]
[9] Fair Work Ombudsman v Siner Enterprises Pty Ltd and Anor (No 2) [2018] FCCA 589 per Lucev J
The applicant conceded that it is open to the court to group separate contraventions together where the contraventions overlap with each other or, if treated separately, would result in the respondents being penalise twice for substantially similar conduct.[10]
[10] Page 8 of the applicant's submissions referring to Mcalary-Smith v Australian Ophthalmic Supplies Pty Ltd [2008] FCAFC 2
Neither the course of conduct principle nor the totality principle permits the court to impose a single penalty for multiple contraventions.
The correct approach is to fix separate penalties for each separate contraventions, consider whether the aggregate is excessive, and if so, adjust each separate penalty to avoid that outcome.[11]
[11] Australian Building and Construction Commissioner v Huddy (No 2) [2017] FCA 1088 per White J
I have therefore fixed a separate penalty for each separate contravention.
Assessment of appropriate Penalties
Sections 539(2) and 546(2) of the FW act, set out the maximum penalties that can be imposed:
a. 300 penalty units for the first respondent and 60 penalty units for the second respondent for each contravention of section 45 of the FW act; and
b. 150 penalty units for the first respondent and 30 penalty units for the second respondent contraventions of sections 535(1) and 536(2) of the FW Act.
Section 12 of the FW Act defines a “penalty unit” as meaning the same as is found in section 4AA of the Crimes Act 1914 (Cth) (Crimes Act). A perusal of the act shows that up until 27 December 2012 a penalty unit amount was defined as $110. From 28 December 2012 until 19 April 2015 a penalty unit was increased and defined in the crimes act is $170.[12]
[12] Crimes Legislation Amendment (serious drugs, Identity, Crime and other measures) Act 2012 (Cth)
It was submitted on behalf of the applicant that it would be appropriate for the court to apply the higher penalty unit as each contravention is being treated as a single contravention occurring over the whole of the employment period by reason of section 557 of the FW Act.
It was further submitted the higher sum was the applicable penalty unit amount for the majority of Ms Tai’s employment period and at the point in time when the contravening conduct ended.
A consideration of the respondent's submissions on penalty shows that the respondent was adopting a similar approach. As a result I will adopt the same approach.
In accepting that approach the maximum penalty I can impose is $561,000 on the first respondent and $112,200 for the second respondent.
It is important to consider the maximum penalties when determining the appropriate penalty as those penalties, “taken and balanced with all of the other relevant factors (provide) a yardstick”[13]
[13] Markarian v R [2005] HCA 25; (2006) 228 CLR 357 at [31] per Gleeson CJ, Gummow, Hayne and Callinan JJ
Factors Relevant to Penalty
Mowbray FM in Mason v Harrington Corporation Pty Ltd trading as Pangaea Restaurant and Bar [2007] FMCA 7 at [26] to [59] as endorsed by the Federal Court in Kelly v Fitzpatrick[14] set out a non-exhaustive list of factors as follows;
[14] [2007] FCA 1080; (2007) 166 IR 14 at [14[
a. the nature and extent of the conduct which led to the contravention;
b. the circumstances in which the conduct took place;
c. the nature and extent of any loss or damage sustained as a result of the contravention;
d. whether there had been similar previous conduct by the respondent;
e. whether the contraventions were properly distinct to arose out of the one course of conduct;
f. the size of the business enterprise involved;
g. whether or not the contraventions were deliberate;
h. whether senior management was involved in the contravention;
i. whether the party committing the contraventions had exhibited contrition, taking corrective action and/or had cooperated with the enforcement authorities;
j. the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
k. the need for specific and general deterrence.
Nature and Extent of the Contravening Conduct
The first respondent failed to pay 10 fundamental and basic entitlements under the Award to Ms Tai, minimum wages, casual loading, Saturday, Sunday, evening and public holiday penalty rates and overtime, split shift allowance, annual leave loading and annual leave loading on termination.
As previously stated, the end result was that Ms Tai had been underpaid $33,693.58. That is a considerable underpayment for an individual over a relatively short period of time.
It was submitted by the applicant and I accept the submission that the first respondent's conduct was aggravated by the informal method of engagement of Ms Tai, where Ms Tai was not informed of her status of employment (whether she was permanent or casual) or of her classification under the Award, and no records were kept in relation to either of these matters.
It was conceded by the respondent's that the first respondent failed to issue payslips to Ms Tai, which in my view causes the first respondent's conduct to be further aggravated.
I also accept the submission that when an employer does not make and keep employment records, an effective safety net for employees is difficult to maintain and results in those employees being more vulnerable to exploitation.[15]
[15] Fair Work Ombudsman v Han Investments Pty Ltd [2017] FCA 623 at [114] to [115]
One of the main purposes of the FW Act and the FW Regulations is to provide an effective safety net for employees.
The contraventions themselves are serious they are contraventions of minimum standards of the most basic kind.
Circumstances in which the Conduct took Place
The first respondent had operated the restaurant since 2006 and in those circumstances, at the time Ms Tai commenced employment, would be considered an experienced employer within the industry.
Ms Yogo admitted that she has worked in the restaurant industry in Australia since December 1996 and had worked in the restaurant since December 2006.[16]
[16] March affidavit of Ms Yogo at para 11
Perhaps even more concerning is that Ms Yogo admits that she was aware that the Award applied to the employees of the business and that she had the day-to-day management of the business.[17]
[17] Second respondents statement of agreed facts at para 9
I accept that the underpayment to Ms Tai was an isolated underpayment and that all other employees of the first respondent had been paid correctly.[18]
[18] March affidavit of Ms Yogo at para 29
The applicant submits that I should consider the underpayment to Ms Tai as a deliberate act on behalf of the respondent's in those circumstances. I am not persuaded by that submission.
Nature and Extent of the Loss
As previously stated the total loss was $33,693.58. I have already found that to be a significant loss to a single employee over a relatively short period of time.
Ms Tai did not receive the benefit of her underpayment until 2015, some 3 and a half years after she commenced working for the first respondent. It follows that the first respondent had the benefit of this underpayment amount for the whole period.
Previous Similar Conduct
As previously said I accept that this was an isolated underpayment. The applicant accepts that the respondents have not previously been the subject of findings of contraventions of Commonwealth Workplace laws.
The applicant submits that the absence of prior contraventions is not a mitigating factor, but means that there is no evidence of that nature which might otherwise have contributed to an increase in the penalty imposed.
In making that submission the applicant cites Sayed v Construction, Forestry Mining Energy Union (No 2) [2015] FCA 338 at paragraph 51.
In the absence of evidence of any prior contraventions the respondent's conduct must be measured in and of itself, without reference to any previous conduct.[19]
[19] Murrihy v Betezy.com.au Pty Ltd (No 2) [2013] 221 FCR 118; [203] FCA 1146
I am of the view that the decision of Sayed can be distinguished from this case. The matter of Sayed involved unlawful discrimination by the CFMEU and as Mortimer J said in those cases the true reasons for conduct are often difficult to uncover.
The respondents here are not being penalised for a deliberate course of conduct. I accept that the respondents in this case have engaged in conduct that has led to the underpayment to Ms Tai. I do not accept that there was any deliberate act on behalf of the defendants at all.
In those circumstances it is open to me to accept that the respondents have not engaged in misconduct previously and I do so.
Size and Financial Circumstances of the Business
It is well accepted that an employer cannot be absolved of its legal responsibility to comply with the law in relation to the employment of its employees, regardless of the size of the business or financial position.[20]
[20] Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14
Whilst the respondent submits that the respondent is a small family company, effectively a partnership of husband and wife it is also conceded by the respondents that the necessary funds available to pay, Ms Tai her full entitlements were available at all times to the respondent.
It is important, however when considering a penalty that is appropriate that I not make an order that is oppressive or crushing.[21]
[21] Caelli (supra)
Was Senior Management Involved in the Contravention
Ms Yogo admits that she was responsible for the first respondent complying with its legal obligations and that she was the person who engaged Ms Tai and she set Ms Tai’s hourly rate and knew the days and hours that Ms Tai worked.[22]
[22] Second respondent statement of admitted facts at para 9
I accept, as was submitted by the applicant, that Ms Yogo was the human agent through whom the first respondent committed the primary contraventions.
Cooperation Contrition and Corrective Action
The respondents have admitted all the contraventions and did rectify the underpayment prior to the commencement of proceedings.
The first respondent has ceased trading and the second respondent now works in the restaurant industry as an employee however she continues to be a director of the first respondent and also of another company, Quatre Cinq Pty Ltd.[23]
[23] Affidavit of Emma Travers at para 9
The applicant accepts that the respondents have engaged in corrective action and/or expressed contrition because the first respondent rectified the total underpayment prior to the commencement of the proceedings and the respondents admitted liability and avoided the time and costs of a liability hearing.
The applicant does not accept however that the admission of liability was done at the first opportunity.
It is a fact that the respondents filed an application to withdraw the admissions made in the first statement of agreed facts, filed on 23 March 2016 and the application was dismissed on 10 November 2017.
The second statement of agreed facts was then signed by the second respondent on 2 March 2018, some two years after the proceedings were commenced.
During the hearing of this case submissions made on behalf of the respondent were to the extent that the application to withdraw the admissions previously made was made on a technical basis and the respondent had a right to pursue an application in those circumstances.
I was persuaded by the submissions of the respondent on this point and do not consider the fact that the second statement of agreed facts signed on 2 March 2018 negatively impacts the admission of liability made by the respondents.
The applicant submits that there was some delay in the contrition shown because the offer of apology to Ms Tai was not made until March 2018.
I infer that the offer of an apology may have impacted the respondent's application to withdraw the admissions and in those circumstances I am satisfied it was appropriate for Ms Yogo to delay the apology.
It is also accepted by the applicant that the respondents cooperated with the applicant's office during the investigation. In those circumstances the respondents may be entitled to a discount on penalty.[24]
[24] Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383 (Mornington Inn) at para 88 per Stone & Buchanan JJ
Compliance with Minimum Standards
There is a need to show there are serious consequences for failing to comply with Commonwealth Workplace laws. The courts through their penalties imposed must create an incentive for the respondents and other employers to change their practices.
Section 3(b) provides that one of the objects of the act is “ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern Awards and national minimum wage orders.”
As I said earlier the contraventions admitted by the respondent’s amount to contraventions of minimum standards that every employee should expect to receive.
I accept the submission by the applicant that the failure to adhere to the obligations of the Award amounted to the first respondent undermining the objects of the Act.
Furthermore the contraventions in relations to failing to keep records amounts to a further non-compliance with minimum standards. Record keeping obligations are important in assisting the regulator to monitor and enforce compliance with minimum employment standards. This too has been described as a loss to or subversion of the statutory objects of the FW Act.[25]
[25] Fair Work Ombudsman v Dosanjh [2016] FCCA 923 at para 46
Specific and General Deterrence
Ms Yogo now works as an employee and the company no longer trades. However Ms Yogo is a director of two companies currently. In the event that Ms Yogo decides to take up a position of responsibility in the management or running of any subsequent restaurant there is a strong need for an appropriate penalty to ensure her future compliance with Australian Workplace laws.
In Ponzio v B & P Caelli Constructions[26] it was held that a penalty “should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like-minded persons or organisations.”
[26] [2007] FCAFC 65; (2007) 158 FCR 543 at para 93
It is important that the community and employers understand that employees must be provided with their correct entitlements and that there must be accurate and compliant record keeping.
Determination
Annexure A to these reasons is a table setting out the penalties I have applied to the first respondent.
Annexure B to these reasons is a table setting out the penalties I have applied to the second respondent.
Having fixed those penalties I consider it appropriate having regard to the aggregate penalty to reduce those penalties in relation to both the first and second respondent by a further 10% on the basis of totality.
Accordingly the end result will be that the first respondent is fined a total sum of $142,144 and the second respondent is fined a total sum of $26,780.
Declarations
I have discretionary power to make declarations. I am of the view that declarations are important because they succinctly set out and identify the contravening conduct and if there is to be general deterrence clarity is essential.
The second respondent consents to the declarations sought by the applicant. In those circumstances, I will make the declarations sought.
For these reasons I make the orders set out at the commencement of these reasons.
I certify that the preceding eighty nine (89) paragraphs are a true copy of the reasons for judgment of Judge Middleton
Date: 5 October 2018
Annexure A
| Contravention | Description of Contravention | Maximum Penalty | Penalty | Penalty Amount |
| S45 of FW Act – clauses 20.1 and A.2.5 of the Restaurant Industry Award 2010 (Restaurant Award) | Failure to pay minimum hourly rates of pay ($2326.75) | $51,000 | 30% | $13,770 |
| S45 of FW Act – clauses 13.1 and A.6.4 of the Restaurant Award | Failure to pay casual loading ($6177.02) | $51,000 | 45% | $20,665 |
| S45 of the FW Act – clauses 34.1 and A.5.4 of the Restaurant Award | Failure to pay Saturday penalty rates ($6295.42) | $51,0000 | 45% | $20,665 |
| S45 of the FW Act – clauses 34.1 and A.5.4 of the Restaurant Award | Failure to pay Sunday penalty rates ($6277.33) | $51,000 | 45% | $20,665 |
| S45 of the FW Act – clauses 34.1 and A.5.4 of the Restaurant Award | Failure to pay public holiday penalty rates ($2674.43) | $51,000 | 30% | $13,770 |
| S45 of the FW Act – clause 24.2 of the Restaurant Award | Failure to pay split shift allowance ($855.05) | $51,000 | 10% | $4590 |
| S45 of the FW Act – clauses 34.2(a)(i) and A.5.4 of the Restaurant Award | Failure to pay evening penalty rates ($80.64) | $51,000 | Very low range | $350 |
| S45 of the FW Act – clause 33.1 of the Restaurant Award | Failure to pay Monday to Friday overtime ($7875.28) | $51,000 | 65% | $29,835 |
| S45 of the FW Act – clause 35.2(b) of the Restaurant Award | Failure to pay annual leave loading on annual leave taken ($7875.28) | $51,000 | 20% | $9180 |
| S44(1) of the FW Act – s90(2) of the FW Act | Failure to pay annual leave loading on accrued untaken annual leave on termination of employment ($98.58) | $51,000 | Very low range | $350 |
| S535(1) of the FW Act – Regulations 3.32(c)-(e), 3.33(1)-(3), 3.34 & 3.36(1) of the Fair Work Regulations 2009 (Cth) (FW Regulations) | Failing to make and keep records of the kind prescribed by the FW Regulations | $25,500 | 65% | $14,917 |
| S536(2) of the FW Act – Regulations 3.46(1)(g) & 3.46(5) of the FW Regulations | Failure to provide slips with all of the prescribed information | $25,500 | 40% | $9180 |
| TOTAL | $157,937 |
Annexure B
| Contravention | Description of Contravention | Maximum Penalty | Penalty | Penalty Amount |
| S45 of FW Act – clauses 20.1 and A.2.5 of the Restaurant Industry Award 2010 (Restaurant Award) | Failure to pay minimum hourly rates of pay ($2326.75) | $10,200 | 30% | $2754 |
| S45 of FW Act – clauses 13.1 and A.6.4 of the Restaurant Award | Failure to pay casual loading ($6177.02) | $10,200 | 45% | $4131 |
| S45 of the FW Act – clauses 34.1 and A.5.4 of the Restaurant Award | Failure to pay Saturday penalty rates ($6295.42) | $10,200 | 45% | $4131 |
| S45 of the FW Act – clauses 34.1 and A.5.4 of the Restaurant Award | Failure to pay Sunday penalty rates ($6277.33) | $10,200 | 45% | $4131 |
| S45 of the FW Act – clauses 34.1 and A.5.4 of the Restaurant Award | Failure to pay public holiday penalty rates ($2674.43) | $10,200 | 30% | $2754 |
| S45 of the FW Act – clause 24.2 of the Restaurant Award | Failure to pay split shift allowance ($855.05) | $10,200 | 10% | $918 |
| S45 of the FW Act – clauses 34.2(a)(i) and A.5.4 of the Restaurant Award | Failure to pay evening penalty rates ($80.64) | $10,200 | Very low range | $75 |
| S45 of the FW Act – clause 33.1 of the Restaurant Award | Failure to pay Monday to Friday overtime ($7875.28) | $10,200 | 65% | $5967 |
| S45 of the FW Act – clause 35.2(b) of the Restaurant Award | Failure to pay annual leave loading on annual leave taken ($7875.28) | $10,200 | 20% | $1836 |
| S44(1) of the FW Act – s90(2) of the FW Act | Failure to pay annual leave loading on accrued untaken annual leave on termination of employment ($98.58) | $10,200 | Very low range | $75 |
| S535(1) of the FW Act – Regulations 3.32(c)-(e), 3.33(1)-(3), 3.34 & 3.36(1) of the Fair Work Regulations 2009 (Cth) (FW Regulations) | Failing to make and keep records of the kind prescribed by the FW Regulations | 5100 | 65% | 2983 |
| S536(2) of the FW Act – Regulations 3.46(1)(g) & 3.46(5) of the FW Regulations | Failure to provide slips with all of the prescribed information | $5100 | 40% | $1836 |
| TOTAL | $29,755 |
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