Fair Work Ombudsman v Robit Nominees Pty Ltd

[2018] FCCA 183

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v ROBIT NOMINEES PTY LTD & ANOR [2018] FCCA 183

Catchwords:
INDUSTRIAL LAW – Admitted contraventions of s.44, s.45, s.325, and s.536 of the Fair Work Act 2009 (Cth) – assessment of penalties – agreed penalties – whether agreed penalties are appropriate given the admitted contraventions – agreed penalties imposed.

Legislation:

Crimes Act 1914 (Cth), s.4AA
Fair Work Act 2009 (Cth), ss.12, 44, 45, 61(3), 87, 90, 323, 325, 536, 539, 546, 550, 557

Cases cited:

Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46

Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557

Kelly v Fitzpatrick [2007] FCA 1080
Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70
Ponzio v B & P Caelli Constructions [2007] FCAFC 65

Applicant: FAIR WORK OMBUDSMAN

First Respondent: ROBIT NOMINEES PTY LTD
(ACN 080 702 012)

Second Respondent: TIBOR VERTES

File Number: SYG 3200 of 2016

Judgment of: Judge Manousaridis

Hearing date: 20 September 2017

Date of Last Submission: 20 September 2017

Delivered at: Sydney

Delivered on: 25 January 2018

Orders Pronounced: 20 September 2017

REPRESENTATION

Counsel for the Applicant: Ms E Raper

Solicitors for the Applicant: Office of the Fair Work Ombudsman

Counsel for the Respondents: Mr I Latham

Solicitors for the Respondents: JPM Lawyers Pty Ltd

DECLARATIONS

1. The First Respondent contravened:

   (a)section 325 of the Fair Work Act 2009 (Cth) (FW Act), because it was unreasonable in the circumstances for Robit Nominees to require Ms Coianiz to make the Weekly Repayments and spend an amount payable to her in relation to the performance of work;

   (b)section 45 of the FW Act, by failing to pay Ms Coianiz Saturday penalty rates for ordinary hours worked on a Saturday, in accordance with clause 34.1 of the Restaurant Industry Award 2010 (Restaurant Award);

   (c)section 45 of the FW Act, by failing to pay Ms Coianiz Sunday penalty rates for ordinary hours worked on a Sunday, in accordance with clause 34.1 of the Restaurant Award;

   (d)section 45 of the FW Act, by failing to pay Ms Coianiz public holiday penalty rates for hours worked on a public holiday, in accordance with clause 34.1 of the Restaurant Award;

   (e)section 45 of the FW Act, by failing to pay Ms Coianiz overtime rates for overtime worked on a Monday to Friday, in accordance with clause 33.2(a) of the Restaurant Award;

   (f)section 45 of the FW Act, by failing to pay Ms Coianiz overtime rates for overtime worked on a Saturday, in accordance with clause 33.2(b) of the Restaurant Award;

   (g)section 45 of the FW Act, by failing to pay Ms Coianiz overtime rates for overtime worked on a Sunday, in accordance with clause 33.2(c) of the Restaurant Award;

   (h)section 44 of the FW Act, by failing to pay Ms Coianiz annual leave entitlements in accordance with sections 87 and 90(1) of the FW Act;

   (i)section 45 of the FW Act, by failing to pay Ms Coianiz annual leave loading entitlements in accordance with clause 35.2 of the Restaurant Award; and

   (j)section 44 of the FW Act, by failing to pay Ms Coianiz annual leave entitlements upon her termination in accordance with sections 87 and 90(2) of the FW Act;

   (k)section 536(1) of the FW Act, by failing to provide Ms Coianiz with a pay slip within one working day of paying an amount to her in relation to the performance of work.

2. The Second Respondent was involved in, for the purposes of section 550 of the FW Act, the contraventions committed by the First Respondent referred to in paragraphs 1(a), 1(h), 1(j) and 1(k).

ORDERS

1. Pursuant to section 546 of the FW Act, the First Respondent pay a total pecuniary penalty of $87,345 for the contraventions of the FW Act set out in declaration 1 above, made up of the following:

   (a)$29,160 for the contravention set out in declaration 1(a) above;

   (b)$2,430 for the contravention set out in declaration 1(b) above;

   (c)$2,295 for the contravention set out in declaration 1(c) above;

   (d)$9,720 for the contravention set out in declaration 1(d) above;

   (e)$24,300 for the contraventions set out in declarations 1(e), 1(f) and 1(g) above;

   (f)$4,860 for the contraventions set out in declarations 1(h) and 1(i) above;

   (g)$9,720 for the contraventions set out in declaration 1(j) above; and

   (h)$4,860 for the contraventions set out in declaration 1(k) above.

2. Pursuant to section 546 of the FW Act, the Second Respondent pay a total pecuniary penalty of $9,720 for its involvement in the contraventions of the FW Act committed by the First Respondent as set out in declaration 1 above, which is made up of the following:

   (a)$5,832 for the contravention set out in declaration 1(a) above;

   (b)$972 for the contravention set out in declaration 1(h) above;

   (c)$1,944 for the contraventions set out in declaration 1(j) above; and

   (d)$972 for the contraventions set out in declaration 1(k) above.

3. Pursuant to section 546(1) of the FW Act, the penalties in orders 1 and 2 be paid to the Consolidated Revenue Fund of the Commonwealth within 28 days of these orders being made.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 3200 of 2016

FAIR WORK OMBUDSMAN

Applicant

And

ROBIT NOMINEES PTY LTD (ACN 080 702 012)

First Respondent

TIBOR VERTES

Second Respondent

REASONS FOR JUDGMENT

Introduction

1. In these proceedings the applicant (FWO) claimed the first respondent contravened various provisions of the Fair Work Act 2009 (Cth) (FW Act), and that the second respondent, who is a director of the first respondent, was involved in the first respondent’s contraventions.

2. The matter came for hearing before me on 20 September 2017. By that date the respondents accepted they had contravened various provisions of the FW Act, and they and the FWO reached agreement on the relevant facts and the declarations and penalties which they would submit the Court should make and impose. The facts agreed between the parties are set out in a document titled “Statement of Agreed Facts”; and the declarations and penalties the parties agreed they would submit the Court ought to make and impose were set out in the draft short minutes of order attached to the written submissions filed on behalf of the FWO (SMO).

3. On 20 September 2017 I heard submissions on the declarations and penalties I should impose. I also heard submissions on one point of dispute between the parties; and that concerned two orders the FWO submitted the Court ought to make, and which the respondents submitted the Court ought not to make. These were the orders set out in orders 4 and 5 of the SMO.

4. At the conclusion of the hearing I indicated to the parties that I was disposed to make declarations to the effect of the declarations set out in paragraphs 1 and 2 of the SMO, that I would make an order to the effect of orders 1, 2, and 3 of the SMO, but that I would not make orders to the effect of orders 4 and 5 of the SMO. I then made orders, and said I would publish my reasons for making the orders and refusing to make the additional orders the FWO submitted I should make. These are my reasons.

Agreed facts

General

1. The first respondent (Robit Nominees) operated a licenced café called “Bar Coluzzi”. Robit Nominees employed eight employees, three on a fulltime basis, and five on a casual basis. The second respondent, Mr Vertes, was a director and secretary of Robit Nominees, and is currently responsible for the management of Robit Nominees. Mr Vertes was admitted as a solicitor of the Supreme Court of New South Wales on 12 February 1971, and he currently holds a practising certificate. He also is the director and secretary of four other companies.

2. In or about January 2014 Ms Coianiz commenced employment with Robit Nominees at Bar Coluzzi on a casual basis. At that time Ms Coianiz was in Australia on a working holiday visa. On about 10 April 2014 she asked Mr Vertes whether Robit Nominees could sponsor her under a Long-Stay Business Visa (457 visa) so that she could stay in Australia after November 2014 when her working holiday visa was due to expire.

3. On or about 22 June 2014 Ms Coianiz entered into a contract of employment with Robit Nominees under which the contract would commence on the approval of a 457 visa or such other date to be agreed, Ms Coianiz would be engaged full time as a cook working 40 hours per week from 5.00am to 1.00pm on Wednesdays to Sundays, and she would be paid a salary of $56,000 per annum exclusive of superannuation.

4. Ms Coianiz’s employment with Robit Nominees was covered by the Restaurant Industry Award 2010 (Restaurant Award). Robit Nominees was an employer in the “restaurant industry” and Ms Coianiz was a Cook Grade 3 (tradesperson) as defined in cl.B3.6 of Schedule B to the Restaurant Award.

5. Ms Coianiz commenced employment with Robit Nominees on 4 August 2014 after she had been granted a 457 visa. From 4 August 2014 to 3 November 2015 (Contravention Period) Ms Coianiz held a Certificate IV in Commercial Cookery, and performed cooking services at Bar Coluzzi. During the Contravention Period, however, Ms Coianiz worked 54 hours each week, working from 5.00am to 2.00pm six days a week.

Facts relevant to admitted contravention of s.325 of the FW Act

1. Before and during the Contravention Period Mr Vertes informed Ms Coianiz that Robit Nominees could not afford to pay Ms Coianiz her whole salary, and that Ms Coianiz would need to make weekly cash payments of $218 from her pay to Mr Vertes (Weekly Repayments) because Robit Nominees required those amounts to pay Ms Coianiz’s tax and superannuation contributions. Ms Coianiz states she agreed to make the Weekly Repayment because she was concerned she may lose her job and have to return to Italy. During the Contravention Period Ms Coianiz made Weekly Repayments totalling $13,952.

Facts relevant to admitted contraventions of s.45 of the FW Act.

1. During the Contravention Period Robit Nominees was required to pay Ms Coianiz:

   a)under cl.34.1 of the Restaurant Award, 125% of Ms Coianiz’s minimum wage for ordinary hours worked on a Saturday;

   b)under cl.34.1 of the Restaurant Award, 150% of Ms Coianiz’s minimum wage for ordinary hours worked on a Sunday;

   c)under cl.34.1 of the Restaurant Award, public holiday penalty rates of 250% of Ms Coianiz’s minimum wage for ordinary hours worked on a public holiday;

   d)under cl.33.2(a) of the Restaurant Award, 150% of Ms Coianiz’s ordinary base rate of pay for the first two hours of overtime worked on Monday to Friday, and 200% of Ms Coianiz’s ordinary base rate of pay for the rest of overtime worked on Monday to Friday; and

   e)under cl.35.2(b) of the Restaurant Award, an additional 17.5% loading on any annual leave taken.

2. During the Contravention Period:

   a)Ms Coianiz worked 456 ordinary hours on Saturdays resulting in an entitlement of $11,268.98, but Robit Nominees underpaid Ms Coianiz by $183.04;

   b)Ms Coianiz worked 9 ordinary hours on Sundays resulting in an entitlement of $295.12 which Robit Nominees did not pay;

   c)Ms Coianiz worked 98.5 hours on public holidays resulting in an entitlement of $4,847.42, but Robit Nominees underpaid Ms Coianiz by $2,765.78;

   d)Ms Coianiz worked 354.5 hours overtime on Mondays to Fridays resulting in an entitlement of $10,583.42; but Robit Nominees underpaid Ms Coianiz by $7,284.45;

   e)Ms Coianiz worked 102 overtime hours on a Saturday resulting in an entitlement of $3,593.74, but Robit Nominees paid to Ms Coianiz none of this amount;

   f)Ms Coianiz worked 549 overtime hours on a Sunday resulting in an entitlement of $21,697.02, but Robit Nominees paid to Ms Coianiz none of this amount; and

   g)as I note in the following paragraph, Ms Coianiz took 68.4 hours of annual leave from 9 August 2015 to 19 August 2015 resulting in an entitlement under s.87 of the FW Act of $1,376.89 for annual leave, but Robit Nominees failed to pay the 17.5% loading on that amount, namely, $240.96.

Facts relevant to annual leave and annual leave loading

1. Under s.87 and s.90 of the FW Act Robit Nominees was required to pay to Ms Coianiz annual leave at the base rate. Ms Coianiz took 68.4 hours of annual leave from 9 August 2015 to 19 August 2015 resulting in an entitlement of $1,376.89. Robit Nominees, however, failed to pay Ms Coianiz $764.94 of that amount.

Facts relevant to failure to pay leave entitlements on termination

1. Under s.90(2) of the FW Act and cl.35.2(b) of the Restaurant Award, Robit Nominees was required to pay to Ms Coianiz an amount equal to the accrued untaken annual leave entitlement at the base rate at the time of termination together with a loading of 17.5% on the amount of that accrued untaken annual leave entitlement.

2. As at the time her employment was terminated, Ms Coianiz had accrued 122.25 hours of untaken annual leave, resulting in her being entitled to $2,891.55. Robit Nominees did not pay to Ms Coianiz any of that amount.

Facts relevant to payslip contraventions

1. Robit Nominees did not give Ms Coianiz a pay slip within one working day of payments to her in relation to the performance of work.

Facts relevant to Mr Vertes’ involvement

1. During the Contravention Period Mr Vertes was a director and secretary and controlling mind of Robit Nominees, and was responsible for the management of Robit Nominees and the day to day running of Bar Coluzzi. During that period, Mr Vertes knew Robit Nominees required Ms Coianiz to make the Weekly Repayment to him, Ms Coianiz took annual leave during the Contravention Period, Ms Coianiz was not paid annual leave for all of the annual leave she had taken, Ms Coianiz was not paid annual leave entitlements on the termination of her employment, and Ms Coianiz did not receive payslips within the required time. Finally, Mr Vertes was an intentional participant in Robit Nominees’ requiring Ms Coianiz to make the Weekly Repayment and Robit Nominee’s not paying the amounts due to Ms Coianiz under s.87 and s.90 of the FW Act.

Contravention of s.325 of the FW Act

1. Subsection 325(1) of the FW Act provides:

   An employer must not directly or indirectly require an employee to spend any part of an amount payable to the employee in relation to the performance of work if the requirement is unreasonable in the circumstances.

2. The parties agree it was unreasonable in the circumstances for Robit Nominees to require Ms Coianiz to make the Weekly Repayments and spend an amount payable to her in relation to the performance of work.

3. On the facts stated in paragraphs 5 to 10 of these reasons, I am satisfied that, by requiring Ms Coianiz to make the Weekly Repayments, Robit Nominees contravened s.325 of the FW Act.

Contraventions of s.45 of the FW Act

1. Section 45 of the FW Act provides that an employer must not contravene a term of a modern award. The Restaurant Award is a modern award. I am satisfied that, on the facts stated in paragraphs 11 and 12 of these reasons, Robit Nominees failed to comply with cl.33.2(a), cl.34.1, and cl.35.2(b) of the Restaurant Award, and thus contravened s.45 of the FW Act.

Contraventions of s.44 of the FW Act

1. Subsection 44(1) of the FW Act provides that an employer must not contravene a provision of the “National Employment Standards”. That expression is defined in s.61(3) to mean the provisions of Divisions 3 to 12 of Part 2.2 of the FW Act. Sections 87 and 90 of the FW Act are contained in Division 6, and their combined operation required Robit Nominees to pay to Ms Coianiz four weeks annual leave at her base rate.

2. As I have already noted, Robit Nominees failed to pay $794.94 of $1,376.89 to which Ms Coianiz became entitled, and also failed to pay to Ms Coianiz $2,891.55, being the amount of untaken accrued annual leave and loading. Robit Nominees therefore contravened s.44 of the FW Act.

Contraventions of s.536 of the FW Act

1. Subsection 536(1) of the FW Act provides that 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. Because of the fact set out in paragraph 16 of these reasons Robit Nominees contravened s.536(1) of the FW Act.

Mr Vertes’ involvement in contraventions

1. Given the facts I have set out in paragraph 17 of these reasons, I am satisfied Mr Vertes was a person knowingly concerned in Robit Nominees contraventions of s.44, s.324, and s.536 of the FW Act and, for that reason, is a person involved in those contraventions within the meaning of s.550(1) of the FW Act.

Approach to assessing penalty

1. Subsection 546(1) of the FW Act confers jurisdiction on this Court to make an order that a person pay a pecuniary penalty for contravening a civil remedy provision of the FW Act. It provides that this 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”. The expression “civil remedy provision” is defined in s.539(1) of the FW Act to mean a provision referred to in column 1 of an item in the table contained in s.539(2) of the FW Act. Column 1 of that table includes s.44, s.45, s.323, and s.536 of the FW Act.

2. It is open to the parties on the hearing of the assessment of penalties to submit to the Court the amount of penalties that should be ordered.[1] That is what the parties before me have done. The parties submitted that it is appropriate that I order that Robit Nominees pay a penalty of $87,345 and that Mr Vertes pay a penalty of $9,720. The basis of that assessment in relation to Robit Nominees is as follows:

   [1] Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 (Civil Penalty Decision)

Contravention	Max. penalty	Penalty percentage	Proposed penalty with 10% discount
1.	Unreasonable requirement to spend – s.325 FW Act	$54,000	60%	$29,160
2.	Failing to pay Saturday penalty rates – s.45 FW Act	$54,000	5%	$2,430
3.	Failing to pay Sunday penalty rates – s.45 FW Act	$51,000	5%	$2,295
4.	Failing to pay public holiday penalty rates – s.45 FW Act	$54,000	20%	$9,720
5.	Failing to pay overtime rates – s.45 FW Act	$54,000	50%	$24,300
6.	Failing to pay annual leave entitlements including loadings – s.44, s.45 FW Act	$54,000	10%	$4,860
7.	Failing to pay annual leave entitlements on termination – s.44 FW Act	$54,000	20%	$9,720
8.	Failing to provide pay slips – s.536 FW Act	$27,000	20%	$4,860
TOTALS	$402,000	$87,345

1. The basis of the assessment of the penalty in relation to Mr Vertes is as follows:

Contravention	Max. penalty	Penalty percentage	Proposed penalty with 10% discount
1.	Unreasonable requirement to spend – s.325 FW Act	$10,800	60%	$5,832
2.	Failing to pay annual leave entitlements, s.44 FW Act	$10,800	10%	$972
3.	Failing to pay annual leave entitlements on termination – s.44 FW Act	$10,800	20%	$1,944
4.	Failing to provide pay slips – s.536 FW Act	$5,400	20%	$972
TOTALS	$37,800	$9,720

1. Although the parties may submit to the Court agreed penalties, the assessment of penalties is always a matter for the discretion of the Court. The approach the Court should take is as follows:[2]

   NW Frozen Foods and Mobil Oil do not suggest that the task of a judge faced with an agreed civil penalty submission is to determine whether the submitted penalty is “wholly outside” the “range of penalties reasonably available” or that the court is “bound to impose [an agreed] penalty irrespective of whether it is considered appropriate” To the contrary, as was emphasised in Mobil Oil, those cases make plain that the court is not bound by the figure suggested by the parties.  The court asks “whether their proposal can be accepted as fixing an appropriate amount” and for that purpose the court must satisfy itself that the submitted penalty is appropriate.

   [2] Civil Penalty Decision, [48]

1. The question I had in mind when I made the orders on 20 September 2017 was whether the amount of the penalties submitted by the parties was appropriate. The FWO submitted that the following procedure should be undertaken when assessing that question:

   a)First, the Court should identify the number of separate contraventions of the FW Act resulting from the respondents’ conduct. The Court should then consider whether any of the contraventions arise from a single course of conduct and can be grouped pursuant to s.557 of the FW Act.

   b)Second, to the extent that two or more contraventions have common elements, the Court should take this into account in considering what an appropriate penalty is in all the circumstances for each contravention.

   c)Third, the Court should consider the factors relevant to penalty and an appropriate penalty to impose for each contravention.

   d)Fourth, having fixed an appropriate penalty the Court should apply the totality principle to determine whether the aggregate penalty is an appropriate response to the contravening conduct.

2. At the time I made the orders, I was satisfied that this was the appropriate procedure for assessing penalties, and for determining whether the agreed penalties were appropriate.

Number of contraventions

1. I have described above the contravening conduct of Robit Nominees and the provisions of the FW Act that Robit Nominees contravened. The parties agreed that Robit Nominees’ and Mr Vertes’ contraventions may be grouped into the categories I have set out in paragraphs 27 and 28 of these reasons.

Value of penalty units

1. Under s.546(2) of the FW Act, the pecuniary penalty the Court may impose must not, where the person is an individual, be more than “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)” and, where the person is a corporation, must not be more than “5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2) of the Act”. The maximum penalty units specified in the table in s.539(2) of the FW Act for the contravention of each of s.44, s.45 and s.325 of the FW Act is 60 penalty units, and the maximum penalty units for contravention of s.536 of the FW Act is 30 penalty units. Thus, the maximum penalty units for which Robit Nominees is liable for each of its contraventions of s.44, s.45, and s.325 is 300 penalty units and 150 penalty units for its contraventions of s.536 of the FW Act. The maximum penalty units for which Mr Vertes is liable is 60 for his involvement in Robit Nominee’s contraventions of s.44 and s.325 of the FW Act, and 30 for his involvement in Robit Nominee’s contraventions of s.536 of the FW Act.

2. Under s.12 of the FW Act, “penalty unit” has the meaning given by s.4AA of the Crimes Act 1914 (Cth) (Crimes Act). From 4 August 2014 to 31 July 2015 a penalty unit was $170. From 1 August 2015 to 3 November 2015 a penalty unit was $180. Five of Robit Nominee’s contraventions occurred both when the penalty unit was $170 and when it was $180. In relation to those contraventions the parties agreed that the contraventions began when the penalty unit was $170 and continued after the penalty unit had increased to $180. The parties relied on the judgment of Katzmann J in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2).[3]

   [3] [2017] FCA 557 at [397]

Factors relevant to penalty

1. Counsel for the respondents referred to the judgment of Tracey J in Kelly v Fitzpatrick where his Honour identified the following non-exhaustive range of considerations to which regard may be had when assessing penalties:[4]

   [4] [2007] FCA 1080 at [14]

   a)The nature and extent of the conduct which led to the breaches.

   b)The circumstances in which that conduct took place.

   c)The nature and extent of any loss or damage sustained as a result of the breaches.

   d)Whether there had been similar previous conduct by the respondent.

   e)Whether the breaches were properly distinct or arose out of the one course of conduct.

   f)The size of the business enterprise involved.

   g)Whether or not the breaches were deliberate.

   h)Whether senior management was involved in the breaches.

   i)Whether the party committing the breach had exhibited contrition.

   j)Whether the party committing the breach had taken corrective action.

   k)Whether the party committing the breach had cooperated with the enforcement authorities.

   l)The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements.

   m)The need for specific and general deterrence.

2. The following matters were referred to by the FWO as being relevant to whether I should impose penalties in the amounts agreed by the parties.

Nature, extent, and deliberateness of the contravening conduct and circumstances in which it took place

1. The relevant matters include the following:

   a)As to the contraventions of s.325 of the FW Act, the manner in which the Weekly Repayments were paid suggested it was a scheme established to create the false impression that Ms Coianiz was being paid her lawful entitlements; the scheme was implemented in relation to an employee who was vulnerable because she relied on Robit Nominees to remain in Australia; the scheme was implemented throughout the Contravention Period, which was a significant period; and the scheme deprived Ms Coianiz of $13,952 which is a significant amount of money, particularly when considered in the context of an agreed salary of $56,000.

   b)As to the contraventions of s.45 of the FW Act, these consisted in Robit Nominees consistently failing to pay over a 15 month period overtime and penalty rates resulting in the underpayment of amounts totalling $39,686.62, a significant amount of money.

   c)As to the contravention of s.536 of the FW Act, Robit Nominees did not provide a pay slip during the Contravening Period.

   d)In relation to the contraventions of s.44, s.325, and s.536 of the FW Act, it was Mr Vertes himself who implemented the Weekly Repayment scheme; and, given Mr Vertes had previous dealings with the FWO as general counsel of a company regarding a failure to pay an employee’s entitlement on termination, and that Mr Vertes was an experienced business person and an admitted legal practitioner, it is inconceivable Mr Vertes was unaware of the legal obligations of Robit Nominees as employer to Ms Coianiz.

Contrition, corrective action, and cooperation

1. Robit Nominees rectified the underpayments twelve months after Ms Coianiz ceased her employment. Robit Nominees and Mr Vertes have cooperated with the FWO’s investigation apart from agreeing to participate in a record of interview, but they have expressed no contrition for the contraventions. Robit Nominees and Mr Vertes have agreed to the SAF, although this occurred some ten months after the FWO commenced these proceedings.

2. On the basis of these matters, I am satisfied that Robit Nominees and Mr Vertes have admitted liability and by so doing have indicated an acceptance of wrongdoing and a willingness to facilitate the course of justice;[5] and that it is appropriate that this be recognised, as the parties have recognised, by applying a discount of 10% on the penalty that would otherwise be assessed.

   [5] Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 at [76]

Deterrence

1. The FWO submitted that the need for specific deterrence is central to the imposition of penalties under the FW Act, and that the primary purpose of the imposition of civil penalties is to promote the public interest in compliance with the FW Act by attempting to put a price on a contravention that is sufficiently high to deter repetition by the contravener and by others who may be tempted to contravene the FW Act.

2. As for specific deterrence the relevant factors include Robit Nominees continuing to operate Bar Coluzzi and the likelihood Robit Nominees is currently employing and will continue to employ people, and Mr Vertes currently being responsible for the management of the day to day running of Bar Coluzzi. There is therefore a need to impress on Robit Nominees and Mr Vertes that the Court does not tolerate the contravening conduct.

3. As for general deterrence, it has been said 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”.[6] The FWO submits that general deterrence is a critical factor in these proceedings. She submits there is a need to send a message to employers, and particularly employers of visa-holders, that employees must be paid their correct entitlements, and the keeping and providing of accurate employment records and pay slips are not optional features of employment. The FWO also relies on the particular features of the hospitality industry in which Robit Nominees operates. In that regard, facts that include the following are admitted:

   a)The restaurant industry accounted for 11% of all disputes lodged with the FWO from July 2015 to June 2015.

   b)During the FWO’s 2015 National Hospitality Industry Campaign – Restaurants, Cafes, and Catering, the FWO conducted 1,066 compliance activities and found 615 businesses (representing 58% of all those businesses) to be in contravention of the FW Act. That campaign led to the recovery of $1,215,212 for 2,752 employees.

   c)Of s.457 visa holders the most commonly nominated industry was in the Accommodation and Food Services Industry, which includes the cafes, restaurants, and takeaway food services industry.

   d)Three of the four most commonly nominated jobs of 457 visa holders include “cooks”, “café or restaurant manager”, and “chefs”.

   [6] Ponzio v B & P Caelli Constructions [2007] FCAFC 65, at [93] (Lander J)

4. I accept there is a need to send a strong message to the restaurant industry in which Mr Vertes works.

Overall assessment

1. Having regard to the matters I have set out above, I was satisfied at the time I made the declarations and orders that the agreed penalties are appropriate. In particular, I was satisfied the agreed penalties are an appropriate response to the contraventions in which Robit Nominees and Mr Vertes admitted they engaged. The penalties reflect the seriousness of the contraventions without being oppressive. I was also satisfied that Robit Nominees and Mr Vertes contravened the FW Act in the manner they admitted they had contravened that Act. It was because I was satisfied of these matters that on 20 September 2017 I made the declarations and orders on that day.

Additional orders

1. As I noted at the beginning of these reasons, there was a dispute about whether I should make two additional orders the FWO submitted I should make. One was an order requiring Mr Vertes to undergo education courses specified in the draft order (Education Order). The other order was that the FWO have liberty to apply in the event the orders (including the Education Order) are not complied with.

2. The respondents submitted the Court does not have power to make the Education Order; and that, in any event, it is not clear what purpose the making of the order was intended to serve. As I informed the parties at the hearing, I did not consider it necessary to determine whether the Court had power to make orders in the nature of the Education Order because I was satisfied that even if I was of the view the Court did have power I would not make the order. My reason is that the apparent purpose of making the Education Order is to educate Mr Vertes of the obligations of employers under the FW Act. There is nothing in the agreed statements of facts, however, that suggests Mr Vertes is unaware of his obligations as an employer under the FW Act. On the contrary, as I have already noted, the FWO submitted that, given her office had previous dealings with the Mr Vertes when he was general counsel of a company regarding a failure to pay an employee’s entitlement on termination, and that Mr Vertes was an experienced business person and an admitted legal practitioner, it is inconceivable Mr Vertes was unaware of the legal obligations of Robit Nominees as employer to Ms Coianiz. There would therefore have been no utility in my ordering Mr Vertes to undergo any education program. It is for that reason I did not make the Education Order.

3. I did not make the order granting liberty to apply partly because I decided not to make the Education Order, and partly because there was no reason to reserve liberty to apply in relation to the implementation of the other orders, which were orders for the payment of money to the Commonwealth. Any failure to pay would have been subject to execution like any other judgment of the Court.

I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Associate: 

Date:  25 January 2018