Fair Work Ombudsman v Rocky Holdings Pty Ltd & Ors
[2013] FCCA 1549
•4 October 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v ROCKY HOLDINGS PTY LTD & ORS | [2013] FCCA 1549 |
| Catchwords: INDUSTRIAL LAW – Admitted contraventions of ss.340 and 557 of the Fair Work Act 2009 (Cth) – whether s.557 of the Fair Work Act 2009 (Cth) provides for all alleged individual breaches of s.557(2) of the Fair Work Act2009 (Cth) to be regarded as one course of conduct – whether each alleged breach of s.557(2) of the Fair Work Act2009 (Cth) is to be considered individually – appropriate civil penalty to be paid by each of the first, second and third respondent. |
| Legislation: Acts Interpretations Act 1901 (Cth) ss.15AA and 15AB. Fair Work Act 2009 (Cth) ss.44, 45, 536, 546, 557. Fair Work Bill 2009 [1345] Industrial Relations Act 1988 (Cth) s.178. Workplace Relations Act 1996 (Cth) s.719. |
| Cases Cited: Australian Ophthalmic Supplies Pty Ltd v McAlary Smith [2008] FCAC 8. CEPU v QR Limited (No2) [2010] FCA 652. Fair Work Ombudsman v A Dalley Holdings Pty Ltd [2013] FCA 509. Fair Work Ombudsman v Bosen Pty Ltd [2011] VMC 81. Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408. Gibbs v Mayor, Councillors and Citizens of City of Altona (1992) 37 FCR 216. Kelly v Fitzpatrick (2007) 166 IR 14. Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7. McIver v Healy [2008] FCA 425. Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70. QR Limited v SEPU [2010] FCAFC 150; 2010 204 IR14. Rajagopalanv BM Sydney Building Materials Pty Ltd [2007] FMCA 1412. Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550. |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | ROCKY HOLDINGS PTY LTD (ACN 078 167 845) |
| Second Respondent: | DR AHMED MOHAMED |
| Third Respondent: | DR ISMAIL MOHAMED |
| File Number: | SYG 3052 of 2012 |
| Judgment of: | Judge Emmett |
| Hearing date: | 3 September 2013 |
| Date of Last Submission: | 3 September 2013 |
| Delivered at: | Sydney |
| Delivered on: | 4 October 2013 |
REPRESENTATION
| Solicitors for the Applicant: | Ms Janine Dennis (Fair Work Ombudsman) Ms Mais Bwaadi (Fair Work Ombudsman) |
| Counsel for the Respondents: | Mr David Stewart |
| Solicitors for the Respondents: | Ms Amy Cook (Tresscox Lawyers) |
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 3052 of 2012
| FAIR WORK OMBUDSMAN |
Applicant
And
| ROCKY HOLDINGS PTY LTD (ACN 078 167 845) |
First Respondent
| DR AHMED MOHAMED |
Second Respondent
| DR ISMAIL MOHAMED |
Third Respondent
Contents
A. Background
B. Statement of Agreed Facts
C. The Evidence
D. Proper construction of s.557 of the FWA
E. Contraventions
(a) Adverse Action Contraventions
(b) Underpayment Contraventions
(c) Payslip Contraventions
F. Factors Relevant to Determining Penalties
a), b) and c) – Nature, Circumstances and Extent of the Loss
d) - Similar Previous Conduct
e) - Whether the Breaches Arose Out of One Course of Conduct
f) - Size and Financial Circumstances of the Business
g) - Deliberateness of the Breaches
h) - Involvement of Senior Management
i), j) and k) - Contrition, Corrective Action, Cooperation with Authorities
l) - Ensuring Compliance with Minimum Standards
m) - General Deterrence
m) - Specific Deterrence
G. Totality
H. Accessorial Liability
I. Penalty
J. Proposed declarations and orders
Schedule 1
Extract of the Fair Work Bill 2009 Explanatory Statement
Section 557 - Course of conduct
Industrial Relations Act 1988 (Cth)
Section 178 - Imposition and recovery of penalties
Workplace Relations Act 1996 (Cth)
Section 719 Imposition and recovery of penalties
Acts Interpretation Act 1901 (Cth)
Section 15AA Interpretation best achieving Act’s purpose or object
Section 15AB Use of extrinsic material in the interpretation of an Act
REASONS FOR JUDGMENT
A. Background
By statement of claim filed on 20 December 2012, the applicant seeks declarations in respect of conduct engaged in by the respondents in breach of various sections of the Fair Work Act 2009 (Cth) (“the FWA”) in respect of a disabled employee, Ms Heba El-Ali, (“the Employee”) in the period from 15 February 2010 to 1 February 2012.
Pursuant to s.546 of the FWA, the Fair Work Ombudsman (“FWO”) also seeks penalties against the first respondent in light of the alleged contraventions, including adverse action, and penalties against the second and third respondents for their knowing involvement in the contraventions of the first respondent.
B. Statement of Agreed Facts
The status of the applicant, the respondents and the Employee, the circumstances of the Employee’s employment, the relevant industrial instruments and the contravening conduct are the subject of a Statement of Agreed Facts filed by the applicant on 18 June 2013.
I make findings in accordance with the Statement of Agreed Facts below.
The Statement of Agreed Facts is as follows:
“This Statement of Agreed Facts is an agreed document of the applicant and the respondents and is made for the purpose of section 191 of the Evidence Act 1995 (Cth).
The parties agree as set out below.
THE APPLICANT
1. The applicant has standing and authority to bring these proceedings.
2. The applicant has standing to pursue civil remedy penalties in relation to the respondents’ contraventions (as set out in paragraphs 52 to 109 below).
THE FIRST RESPONDENT
3. On 10 April 1997, the first respondent incorporated as a proprietary company under the Corporations Act 2001 (Cth).
4. The first respondent is capable of being sued in and by its corporate name and style.
5. At all material times the first respondent was a constitutional corporation within the meaning of section 12 of the Fair Work Act 2009 (Cth) (“FW Act”).
6. At all material times the first respondent was a national system employer within the meaning of section 14 of the FW Act.
7. The first respondent is and was at all material times an entity carrying on a medical practice business trading as Medical Centre 2000 (“Business”) at Shop 16, 315 Macquarie Street, Liverpool NSW 2170 (“Surgery”).
8. At all relevant times in the period from 15 February 2010 to 1 February 2012 (“Employment Period”), the first Respondent was the employer of Ms Heba El-Ali (“Ms El-Ali”).
THE SECOND RESPONDENT
9. During the Employment Period, the second respondent was:
(a) a director of the first respondent;
(b) a majority shareholder of the first respondent;
(c) along with the third respondent, responsible for:
(i) the overall direction, management and control of the first respondent;
(ii) the engagement and dismissal of Ms El-Ali;
(iii) determining Ms El-Ali’s terms and conditions of employment;
(iv) the overall direction, management and supervision of the first respondent’s operations in relation to industrial instruments and arrangements, setting and adjusting pay rates, and determining wages and conditions of employment; and
(v) responsible for ensuring that the first respondent complied with its legal obligations to its employees under the FW Act.
THE THIRD RESPONDENT
10. At all relevant times during the Employment Period, the third respondent was:
(a) a director of the first respondent;
(b) one of two persons responsible for the overall direction, management and control of the first respondent;
(c) along with the second respondent, responsible for:
(i) the overall direction, management and control of the first respondent;
(ii) the engagement and dismissal of Ms El-Ali;
(iii) determining Ms El-Ali’s terms and conditions of employment;
(iv) the overall direction, management and supervision of the first respondent’s operations in relation to industrial instruments and arrangements, setting and adjusting pay rates, and determining wages and conditions of employment; and
(v) responsible for ensuring that the first respondent complied with its legal obligations to its employees under the FW Act.
THE EMPLOYEE
11. Ms El-Ali was born on 17 February 1991.
12. Ms El-Ali suffers a disability affecting her vision, being retina detachment, cataracts and high pressure (“Disability”).
13. During the Employment Period, Ms El-Ali was employed by the first respondent on a part-time basis as a medical receptionist.
14. In her role as receptionist for the first respondent, Ms El-Ali reported to both the second and third respondent.
15. At all material times, Ms El-Ali’s duties included but were not limited to:
(a) greeting patients;
(b) answering phones and referring calls to the doctors;
(c) completing Medicare vouchers and collecting patients Medicare card details;
(d) retrieving medical files for the doctors and filing;
(e) cleaning the surgery and restocking the doctors’ offices;
(f) providing the doctors with the vaccines and medication samples; and
(g) restocking as necessary.
16. During the Employment Period, Ms El-Ali standard working hours were Monday to Friday from 3:00 pm to 6:00 pm and on Saturday from 9:00 am to 2.30 pm (“Standard Hours”). Ms El-Ali, from time to time, worked hours outside her Standard Hours including Sunday work.
CIRCUMSTANCES OF MS EL-ALI’S EMPLOYMENT
Offer of employment
17. In about December 2009 or January 2010, Ms El-Ali attended the Surgery as a patient of the third respondent who was one of Ms El-Ali’s treating doctors.
18. At the consultation Ms El-Ali’s employment status was discussed, the third respondent advised her that the position of part-time medical receptionist with the first respondent may be available.
19. In about mid-January 2010, the second respondent interviewed Ms El-Ali.
20. Ms El-Ali performed an unpaid period of work as a medical receptionist.
21. In mid-February 2010, the second respondent offered Ms El-Ali the position of part-time medical receptionist employed by the first respondent to be paid at a rate of $7.00 per hour. Ms El-Ali accepted the offer of employment and commenced paid employment with the first respondent.
22. On about 15 February 2010, Ms El-Ali commenced paid employment with the first respondent.
23. At all material times, the second and third respondents were aware of Ms El-Ali’s Disability.
24. On 17 May 2010, Ms El-Ali commenced a Traineeship to undertake a Certificate III in Business Administration through South Western Sydney Institute of TAFE (“TAFE”), a Registered Training Organisation.
25. From the commencement of the traineeship, the first respondent began to receive a wage subsidy through the Disabled Australian Apprentice Wage Support (“DAAWS”) program.
26. For the period from 15 February 2010 to 18 July 2010, the first respondent paid Ms El-Ali an hourly rate of $7.00 per hour.
27. In July 2010, the first respondent decided to increase Ms El-Ali’s hourly rate in recognition of her improved performance. For the period from 19 July 2010 to 25 September 2011, the first respondent paid Ms El-Ali an hourly rate of $7.50 per hour.
28. For the period from 26 September 2011 to 1 February 2012, the first respondent decided to increase Ms El-Ali’s hourly rate of pay to $8.00 per hour.
29. On or around 11 October 2011, Ms El-Ali asked the second respondent to increase her pay in line with the Modern Award. The second respondent informed Ms Eli-Ali that he would address the matter at the end of the traineeship, provided she was able to work competently unsupervised. Ms El-Ali indicated that if she did not receive an increase in her pay, she would look for work elsewhere. The second respondent told Ms El-Ali that he would advertise for a replacement. Ms El-Ali continued to work for the first respondent while they were looking for a replacement and she sought alternative work. On or about 27 January 2012, the first respondent had not found a replacement for Ms El-Ali, however, Ms El-Ali advised that her final day of employment with the first respondent would be on 31 January 2012.
30. Ms El-Ali’s final day of employment with the first respondent was ultimately on 1 February 2012.
Other employees of the first respondent
31. As at 15 February 2010 and for a period thereafter, the first respondent employed one other receptionist, Leila Eleter (“Ms Eleter”).
32. On 13 March 2010 and for a period thereafter, the first respondent employed another receptionist, Safa Alsaadi (“Ms Alsaadi”).
33. The duties and the work performed by Ms Eleter and Ms Alsaadi were the same as those performed by Ms El-Ali during the Employment Period.
34. Both Ms Eleter and Ms Alsaadi were paid a higher hourly rate than Ms El-Ali.
35. Ms Eleter was born on 3 September 1990 and was paid the following rates of pay during her employment:
(a) from commencement of employment to 2 August 2010 she was paid $10.64 per hour;
(b) from 3 August 2010 to 3 July 2011 she was paid $11.45 per hour;
(c) from 4 July 2011 to 11 September 2011 she was paid $14.03 per hour; and
(d) from 12 September 2011 to 12 October 2012 she was paid $15.50 per hour.
36. Ms Alsaadi was born on 15 April 1988 and was paid a rate of $10.64 per hour during the period from 13 March 2010 to 11 September 2010.
37. On about 31 January 2012, the first respondent employed another receptionist, Manal Hbous (“Ms Hbous”).
38. Ms Hbous performed the same duties as had been performed by Ms El-Ali during the Employment Period.
39. Ms Hbous ordinarily worked the hours of 3:00 pm to 6:00 pm Monday to Friday and 9:00 am to 2:30 pm Saturday.
40. Ms Hbous was paid more than Ms El-Ali from the commencement of her employment and thereafter.
41. Ms Hbous was born on 15 June 1993 and was paid the following rates of pay during her employment:
(a) from commencement until 17 June 2012 she was paid $11.00 per hour; and
(b) from 17 June 2012 to 21 October 2012 she was paid $11.57 per hour.
42. The first respondent paid Ms El-Ali a lower rate of pay than that paid to other employees of the first respondent performing the same role.
RELEVANT LEGISLATION
43. At all relevant times during the Employment Period, the first respondent was bound in respect of Ms El-Ali’s employment by the FW Act.
COVERAGE OF INDUSTRIAL INSTRUMENT
44. During the Employment Period Ms El-Ali’s employment with the first respondent was covered by the Health Professionals and Support Services Award 2010 [MA000027] (“Modern Award”).
45. During the period from 15 February 2010 to 16 May 2010, the first respondent was required to pay Ms El-Ali in accordance with the transitional arrangements under Schedule A of the Modern Award. The enforceable pay scale derived from the Clerical and Administrative Employees (State) Award (“Clerical Pay Scale”) is the transitional instrument.
46. At all relevant times, Ms El-Ali performed the duties of a Grade 1 employee under the Clerical and Administrative Employees (State) Award (“Clerical NAPSA”).
47. During the period from 15 February 2010 to 16 May 2010 pursuant to the enforceable pay scale derived from the Clerical Pay Scale the hourly rate of pay for a junior 19 year old part-time employee at Grade 1 was $10.52.
48. During the period from 17 May 2010 to 30 June 2010, the first respondent was required to pay Ms El-Ali a transitional rate of pay derived from the Training Wages State Award 2002 (“Training Pay Scale”).
49. Pursuant to subclause E5.3(a) of Schedule E of the Modern Award, Ms El-Ali should not suffer a reduction in pay by virtue of becoming a trainee. Therefore, Ms El-Ali’s rate of pay remained at $10.52 for the period from 17 May 2010 to 30 June 2010.
50. From 1 July 2010 until the end of Ms El-Ali’s employment, the pay rates in the Modern Award commenced and pursuant to subclause E5.2(f)(iii) of Schedule E of the Modern Award if the approved training is part-time, partly on-the-job and partly off-the-job, the rate of pay is calculated by taking the minimum wage in subclauses E5.2(a)-(e) of Schedule E of the Modern Award and subtracting 20 per cent.
51. The rate of pay paid by the first respondent to Ms El-Ali, the rate of pay that was due to Ms El-Ali, and the instrument and classification from which the rate was derived during the Employment Period is set out in the table below:
Period Derived from Classification Award Hourly Rate Rate paid by Employer 15 February 2010 to 17 May 2010 Clerical Pay Scale All other Juniors 19 years of age $10.52 $7.00 17 May 2010 to 30 June 2010 Training Pay Scale Skill level A, Completed year 12, 1 year out of school $10.52
(by operation of Clause E5.3(a) of Schedule E of the Modern Award as $9.87 is below the rate prior to the traineeship)
$7.00 1 July 2010 to 31 December 2010
Modern Award Skill level A, Completed year 12, 1 year out of school $10.52
(by operation of Clause E5.3(a) of Schedule E of the Modern Award as $10.29 is below the rate prior to the traineeship)
$7.00 until 15 July 2010
From 16 July 2010 $7.501 January 2011 to 30 June 2011 Modern Award Skill level A, Completed year 12, 2 year out of school $11.98 $7.50 1 July 2011 to 31 December 2011 Modern Award Skill level A, Completed year 12, 2 year out of school $12.38 $7.50
From 2 October 2011 $8.001 January 2012 to 31 January 2012 Modern Award Skill level A, Completed year 12, 3 year out of school $14.18 $8.00 CONTRAVENING CONDUCT
Legislative Provision
52. At all material times, Ms El-Ali suffered from a physical disability for the purposes of subsection 351(1) of the FW Act.
53. Pursuant to subsection 351(1) of the FW Act an employer is prohibited from taking adverse action against an employee because of reasons which include that he or she suffers from a disability.
Contravention 1 - Prospective employee – Subsection 342(1), Item 2(b) of the FW Act
54. The first respondent took adverse action against Ms El-Ali for the purposes of subsection 342(1), item 2(b) of the FW Act by discriminating against Ms El-Ali by offering Ms El-Ali a lower rate of as a prospective employee than the rate offered to other prospective employees performing the same role, namely, Ms Eleter and Ms Alsaadi.
55. The first respondent took adverse action against Ms El-Ali as set out in paragraph 54 above because of Ms El-Ali’s Disability.
56. By reason of the matters admitted in paragraphs 54 and 55 above, the first respondent contravened subsection 351(1) of the FW Act which is a civil remedy provision under subsection 539(2) of the FW Act.
Contravention 2 – Discriminate between employees – Subsection 342(1), Item 1(d) of the FW Act
57. The first respondent took adverse action against Ms El-Ali for the purpose of subsection 342(1), item 1(d) of the FW Act in that it discriminated between Ms El-Ali and other employees of the first respondent by paying Ms El-Ali a lower hourly rate of pay than that paid to employees performing the same role, namely Ms Eleter, Ms Alsaadi and Ms Hbous.
58. The first respondent paid Ms El-Ali a lower rate of pay than that paid to other employees of the first respondent because of Ms El-Ali’s Disability.
59. By reason of the matters admitted in paragraphs 57 and 58, the first respondent contravened subsection 351(1) of the FW Act, which is a civil remedy provision under subsection 539(2) of the FW Act.
Non-Economic Loss
60. By reason of the first respondent’s conduct referred to at paragraphs 54 to 59 above, it is alleged Ms El-Ali suffered non-economic loss, including but not limited to hurt, humiliation and distress.
61. The respondents have agreed to pay Ms El-Ali $5,000.00 by way of compensation for this loss.
UNDERPAYMENT CONTRAVENTIONS
Contravention 3 - Section 45 of the FW Act by contravening the Modern Award in failing to pay Ms El-Ali the relevant minimum rate of pay
62. During the Employment Period, the first respondent was required to pay Ms El-Ali at least minimum rates as set under the Modern Award.
63. During the Employment Period, Ms El-Ali worked 1718.5 ordinary hours Monday to Friday for the first respondent and was entitled to be paid a total of $19,872.81 by the first respondent for the Monday to Friday ordinary hours she worked. Ms El-Ali was paid $11,663.62 by the first respondent for her ordinary hours of work.
64. The amount paid by the first respondent was insufficient to meet Ms El-Ali’s entitlement to the minimum rate of pay, causing Ms El-Ali to be underpaid $8,209.19.
65. The first respondent contravened section 45 of the FW Act by failing to pay Ms El-Ali the correct minimum rate of pay for her ordinary hours worked, which is a civil remedy provision under subsection 539(2) of the FW Act.
Contravention 4 - Section 45 of the FW Act by contravening subclause 28.1 of the Modern Award in failing to pay overtime rates for overtime work performed on a Sunday
66. During the Employment Period, pursuant to subclause 28.1 of the Modern Award an employee who works outside of their ordinary hours on any day should be paid at the rate of:
(a) time and a half for the first two hours; and
(b) double time thereafter and on a Sunday.
67. Pursuant to subclauses 24.2 and 28.1(b) of the Modern Award, all work performed by Ms El-Ali on a Sunday is to be treated as overtime and paid at double time.
68. During the Employment Period, Ms El-Ali worked overtime hours on a Sunday and was not paid the overtime rate, rather the first respondent paid Ms El-Ali the flat rate of pay set out in the table at paragraph 51.
69. During the Employment Period, Ms El-Ali worked 34:35 overtime hours for the first respondent on a Sunday and was entitled to be paid $796.22 for the total of her overtime hours of work. Ms El-Ali was paid $259.38 by the first respondent for the overtime hours she worked on a Sunday this was insufficient to meet Ms El-Ali’s entitlement in respect of the overtime rate of pay, causing Ms El-Ali to be underpaid $536.84.
70. The first respondent contravened subclause 28.1 of the Modern Award and therefore contravened section 45 of the FW Act, which is a civil remedy provision under subsection 539(2) of the FW Act.
Contravention 5 – Section 45 of the FW Act by contravening subclause 26.1 of the Modern Award in failing to pay Saturday loadings for Saturday work
71. During the Employment Period, pursuant to subclause 26.1 and subclauses A.4 and A.6 of Schedule A to the Modern Award Ms El-Ali was entitled to be paid the following loading and hourly rates for work performed on a Saturday:
First Full pay period on or after
Transitional Saturday loading/per week
Transitional Saturday hourly rate
1 January 2010
$10.10
$11.57
1 July 2010
$8.08
$13.18
1 July 2011
$6.06
$14.86
1 January 2012
$6.06
$17.02
72. The first respondent paid Ms El-Ali the flat rate of pay set out in the table at paragraph 51.
73. During the Employment Period, Ms El-Ali worked 413:35 hours on a Saturday and was entitled to be paid $6,106.90 in respect of Saturday loadings. Ms El-Ali was paid $3,144.83 by the first respondent for the Saturday hours she worked.
74. The first respondent failed to pay Ms El-Ali any Saturday loading, causing Ms El-Ali to be underpaid $2,962.07.
75. The first respondent contravened subclause 26.1 of the Modern Award and therefore contravened section 45 of the FW Act, which is a civil remedy provision under subsection 539(2) of the FW Act.
Contravention 6 – Section 45 of the FW Act by contravening subclause 32.2 of the Modern Award in failing to pay public holiday rates for work performed of a public holiday
76. During the Employment Period, pursuant to subclause 32.2 of the Modern Award any employee required to work on a public holiday is to be paid double time and a half for all time worked.
77. In respect of the hours that Ms El-Ali worked during public holidays, the first respondent paid Ms El-Ali the flat rate of pay set out in the table at paragraph 51.
78. During the Employment Period, Ms El-Ali worked a total of 27:25 hours on public holidays for the first respondent and was entitled to be paid a total of $791.12 for the hours she worked on a public holiday. Ms El-Ali was paid $200.50 by the first respondent for the hours she worked on public holidays.
79. The amount paid by the first respondent was insufficient to meet Ms El-Ali’s entitlement to the public holiday rate of pay, causing Ms El-Ali to be underpaid $590.62.
80. The first respondent contravened subclause 32.2 of the Modern Award and therefore also contravened section 45 of the FW Act, which is a civil remedy provision under subsection 539(2) of the FW Act.
Contravention 7 - Section 45 of the FW Act by contravening subclause E.6.3 of Schedule E of the Modern Award by failing to pay ordinary wages for hours spent attending training and assessment associated with the training contract
81. During the period from 17 May 2010 to 1 February 2012, pursuant to subclause E6.3 of Schedule E of the Modern Award an employer is to treat the time spent by an employee undertaking a traineeship, or attending any training or assessment associated with the traineeship, as time worked for the employer and paid as such.
82. During the period from 14 September 2010 to 30 December 2011, Ms El-Ali regularly attended TAFE for the purpose of her traineeship. Ms El-Ali attended TAFE for a total of 361 hours during the period of her employment and was required to be paid $4,242.25 for the hours she attended TAFE.
83. During the period from 14 September 2010 to 30 December 2011, the first respondent contravened subclause E6.3 of Schedule E of the Modern Award by failing to pay Ms El-Ali ordinary wages for hours spent attending training and assessment associated with the training contract, causing Ms El-Ali to be underpaid $4,242.25.
84. The first respondent contravened section 45 of the FW Act, which is a civil remedy provision under subsection 539(2) of the FW Act.
Contravention 8 – breach of Section 44 of the FW Act by contravening the National Employment Standards specifically Annual Leave standard in section 90 of the FW Act
85. During the Employment Period, pursuant to subsection 87(1) of the FW Act an employee is entitled to 4 weeks’ paid annual leave for each year of service.
86. Pursuant to subsection 90(2) of the FW Act, when the employment ends and an employee has a period of untaken annual leave the employer must pay the employee the amount that would have been payable to the employee had the employee taken the leave.
87. Ms El-Ali was entitled to accrue leave on the following ordinary hours; the 1718:30 Monday to Friday ordinary hours worked, 413:35 Saturday ordinary hours, the 361 hours spent at TAFE, the 46:30 hours of public holidays not worked and 39:00 sick leave hours, that is, a total of 2578:35 hours. Accordingly, pursuant to subsection 87(1) of the FW Act, during the period from 15 February 2010 to 1 February 2012, Ms El-Ali accrued 198:21 annual leave hours.
88. During the Employment Period, Ms El-Ali took no paid annual leave. On termination of Ms El-Ali’s employment Ms El-Ali’s hourly rate of pay under the Modern Award was $14.18 per hour. At the termination of her employment Ms El-Ali was entitled to be paid $2,812.64 for her accrued annual leave entitlement.
89. In contravention of subsection 90(2) of the FW Act, the first respondent did not pay Ms El-Ali any accrued unused annual leave on termination and underpaid Ms El-Ali $2,812.64.
90. The first respondent contravened section 44 of the FW Act, which is a civil remedy provision under subsection 539(2) of the FW Act.
Contravention 9 - breach of Section 45 of the FW Act by contravening subclause 31.2(a) of the Modern Award failure to pay annual leave loading
91. During the Employment Period, pursuant to subclause 31.2(a) of the Modern Award in addition to her ordinary pay, Ms El-Ali is entitled to be paid 17.5per cent leave loading of her ordinary rate of pay on her annual leave hours.
92. As Ms El-Ali was entitled to be paid $2,812.64 accrued annual leave at the termination of her employment, she was entitled to be paid $492.21 as annual leave loading.
93. In contravention of subclause 31.2(a) of the Modern Award, the first respondent did not pay Ms El-Ali any annual leave loading causing Ms El-Ali to be underpaid $492.21.
94. The first respondent contravened section 45 of the FW Act, which is a civil remedy provision under subsection 539(2) of the FW Act.
Contravention 10 – breach of Section 44 of the FW Act by contravening the National Employment Standards specifically the paid personal/carer’s leave entitlement in section 99 of the FW Act.
95. During the Employment Period, pursuant to section 96 of the FW Act an employee is entitled to 10 days paid personal/carer’s leave per year of service and this leave accrues progressively according to the employee’s ordinary hours of work.
96. Pursuant to section 99 of the FW Act if an employee takes a period of paid personal/carer’s leave, the employer must pay the employee at the employee’s base rate of pay for the ordinary hours.
97. During the Employment Period, Ms El-Ali took personal/carer’s leave on the following occasions:
(a) Thursday 4 March 2010;
(b) Friday 5 March 2010;
(c) Wednesday 5 May 2010;
(d) Tuesday 15 June 2010;
(e) Friday 18 June 2010;
(f) Thursday 30 September 2010;
(g) Tuesday 1 February 2011;
(h) Monday 4 April 2011;
(i) Tuesday 5 July 2011;
(j) Monday 7 November 2011;
(k) Tuesday 15 November 2011;
(l) Monday 28 November 2011;
(m) Tuesday 10 January 2012; and
(n) Tuesday 24 January 2012.
98. In contravention of section 99 of the FW Act, during the Employment Period, the first respondent did not pay Ms El-Ali for any days she was absent from work on personal/carer’s leave causing Ms El-Ali to be underpaid $463.32.
99. The first respondent contravened section 44 of the FW Act, which is a civil remedy provision under subsection 539(2) of the FW Act.
Contravention 11 - breach of Section 44 of the FW Act by contravening the National Employment Standards, specifically the payment for absence on a public holiday in section 116 of the FW Act
100. Pursuant to subsection 114(1) of the FW Act, an employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday in the place where the employee is based for work purposes.
101. Pursuant to section 116 of the FW Act, if an employee is absent from his or her employment on a public holiday the employer must pay the employee the employee’s base rate of pay.
102. During the Employment Period, Ms El-Ali’s ordinary working hours fell on a public holiday on the following occasions:
(a) Friday 2 April 2010;
(b) Monday 4 October 2010;
(c) Monday 27 December 2010;
(d) Tuesday 28 December 2010;
(e) Saturday 1 January 2011;
(f) Monday 3 January 2011;
(g) Wednesday 26 January 2011;
(h) Monday 25 April 2011;
(i) Monday 13 June 2011;
(j) Monday 3 October 2011;
(k) Monday 26 December 2011;
(l) Tuesday 27 December 2011; and
(m) Thursday 26 January 2012.
103. During the Employment Period, the first respondent did not require Ms El-Ali to work on the occasions listed at paragraph 102 above.
104. During the Employment Period, Ms El-Ali was entitled to be paid her base rate of pay for the hours she would have worked on the occasions listed at paragraph 102 above, a total of $538.80. The first respondent did not pay Ms El-Ali at all for the occasions listed at paragraph 102 above and thereby caused Ms El-Ali to be underpaid.
105. The first respondent contravened section 116 of the FW Act and therefore also contravened section 44 of the FW Act, which is a civil remedy provision under subsection 539(2) of the FW Act.
TOTAL UNDERPAYMENT
106. By reason of the contraventions admitted in paragraphs 62 to 105 above, the first respondent caused Ms El-Ali to be underpaid a total of $20,847.94.
Contravention 12 - breach of section 536 of the FW Act by failing to provide Ms El-Ali pay slips
107. Pursuant to section 536 of the FW Act, the first respondent was required to give Ms El-Ali a written pay slip relating to each payment of any amount to Ms El-Ali within one working day of paying an amount to the employee in relation to the performance of work.
108. During the period from 15 February 2010 to 1 February 2012, the first respondent failed to provide pay slips to Ms El-Ali in respect of the pay periods in which she worked.
109. The first respondent contravened section 536 of the FW Act, which is a civil remedy provision under subsection 539(2) of the FW Act.
INVOLVEMENT OF THE SECOND RESPONDENT
110. At all material times the second respondent knew that the first respondent:
(a) had offered Ms El-Ali lesser terms and conditions of employment than it offered to other prospective employees;
(b) had discriminated between Ms El-Ali and other employees in the terms and conditions of employment provided during the Employment Period;
(c) was not paying or providing Ms El-Ali with her entitlements under the Modern Award; and
(d) was not providing Ms El-Ali with a pay slip pursuant to section 536 of the FW Act.
111. By reason of the matters admitted in paragraph 62 to 105 above, pursuant to section 550 of the FW Act, the second respondent:
(a) aided, abetted, counselled or procured; or
(b) by way of his acts or omissions, was directly or indirectly knowingly concerned in or a party to,
each of the contraventions admitted by the first respondent.
INVOLVEMENT OF THE THIRD RESPONDENT
112. At all material times the third respondent knew that the first respondent:
(a) had offered Ms El-Ali lesser terms and conditions of employment than it offered to other prospective employees;
(b) had discriminated between Ms El-Ali and other employees in the terms and conditions of employment provided during the Employment Period;
(c) was not paying or providing Ms El-Ali with her entitlements under the Modern Award; and
(d) was not providing Ms El-Ali with a pay slip pursuant to section 536 of the FW Act.
113. By reason of the matters admitted in paragraphs 62 to 105 above, pursuant to section 550 of the FW Act, the third respondent:
(a) aided, abetted, counselled or procured; or
(b) by way of his acts or omissions, was directly or indirectly knowingly concerned in or a party to;
each of the contraventions admitted by the first respondent.
INVESTIGATION INTO RESPONDENT
114. On 13 February 2012, the applicant commenced an investigation into a complaint lodged with the applicant by Ms El-Ali concerning her employment with the first respondent.
115. On 20 December 2012, these proceedings were commenced.
116. On 27 May 2013, the first respondent has rectified the underpayments to Ms El-Ali.
117. The first, second and third respondents have adopted a co-operative approach with the applicant to resolving these proceedings.
ADMISSIONS
118. The first respondent admits that it contravened the following provisions of the FW Act:
Subsection 351(1) of the FW Act by taking adverse action against Ms El-Ali by:
i.discriminating against Ms El-Ali when she was a prospective employee; and
i.i. discriminating between Ms El-Ali and other employees of the first Respondent by paying Ms El-Ali less than other employees of the first Respondent;
for reasons that included that Ms El-Ali had a disability.
(b) Section 45 of the FW Act, by failing to pay Ms El-Ali the applicable minimum rate of pay during the Employment Period in contravention of the Modern Award;
(c) Section 45 of the FW Act, by failing to pay Ms El-Ali the applicable overtime rates for overtime work performed during the Employment Period in contravention of subclause 28.1 of the Modern Award;
(d) Section 45 of the FW Act, by failing to pay Ms El-Ali the applicable Saturday loadings in contravention of subclause 26.1 of the Modern Award;
(e) Section 45 of the FW Act, by failing to pay Ms El-Ali public holiday rates for work performed on a public holiday during Employment Period in contravention of subclause 32.2 of the Modern Award;
(f) Section 45 of the FW Act, by failing to pay Ms El-Ali ordinary wages for hours spent attending training and assessment associated with the training contract during the period from 17 May 2010 to 1 February 2012 in contravention of Clause E.6.3 of Schedule E of the Modern Award;
(g) Section 44 of the FW Act, by failing to pay Ms El-Ali annual leave during the Employment Period in contravention of the National Employment Standards specifically Annual Leave standard in subsection 90(2) of the FW Act;
(h) Section 45 of the FW Act, by failing to pay Ms El-Ali annual leave loading during the Employment Period in contravention of clause 31.2(a) of the Modern Award;
(i) Section 44 of the FW Act, by failing to provide Ms El-Ali paid personal/carer’s leave during the Employment Period in contravention of the National Employment Standards specifically personal/carer’s leave in section 99 of the FW Act;
(j) Section 44 of the FW Act, by failing to provide Ms El-Ali payment for absence on a public holiday during the Employment Period in contravention of the National Employment Standards specifically public holiday standard in section 116 of the FW Act; and
(k) Section 536 of the FW Act, by failing to provide Ms El-Ali pay slips.
(l) The second respondent admits that he was involved in (within the meaning of subsection 550 of the FW Act) each of the contraventions engaged in by the first respondent set out in the paragraphs above.
(m) The third respondent admits that he was involved in (within the meaning of subsection 550 of the FW Act) each of the contraventions engaged in by the first Respondent set out in the paragraphs above.”
C. The Evidence
The applicant filed written submissions on 9 August 2013 and the respondents filed an outline of submissions on 23 August 2013. The submissions of the parties addressed the issues relating to penalty in respect of the agreed contraventions.
In support of her submissions relating to penalty, the applicant read the affidavit of Deborah Ellen Absalom sworn 29 July 2013 and filed on 29 July 2013, affidavits of the Employee, sworn 25 June 2013 and on 29 July 2013, and the affidavit of Matthew Christie, sworn 27 June 2013.
In support of their submissions, the respondents read the affidavits of the second respondent, sworn 11 July 2013, and the affidavit of the third respondent, sworn 11 July 2013. The respondents also tendered a statement of the first respondent, dated 12 April 2012, as evidence of the extent of the cooperation of the second respondent. That document was marked Exhibit 1R. The respondents also tendered a copy of a media release, dated 26 February 2013, prepared and distributed by the applicant. That document was marked Exhibit 2R.
D. Proper construction of s.557 of the FWA
Extracts of the relevant legislation were compiled by the applicant, including a copy of the Explanatory Memorandum of the Fair Work Bill 2009 [1345], insofar as it commented upon s.557 of the FWA. In addition, the respondents relied on s.178 of the Industrial Relations Act 1988 (Cth), s.719 of the Workplace Relations Act1996 (Cth) and ss.15AA and 15AB of the Acts Interpretations Act 1901 (Cth). Copies of those extracts are attached to these reasons and marked Schedule 1.
The significant point of contention between the parties is the proper construction of s.557 of the FWA in relation to its application to the course of conduct engaged in by the first respondent.
The applicant contends that there are nine contraventions by the first respondent of s.557 of the FWA, being various breaches of ss.44, 45, 536(1), and 536(2) of the FWA, arising from the failure of the first respondent to pay the Employee the minimum rates of pay, Sunday overtime rates, Saturday penalty rates, public holiday penalty rates, ordinary wages for hours spent training, annual leave on termination, annual leave loading, personal/carers leave, and public holiday pay; and, a breach of s.536 of the FWA arising from the first respondent’s failure to give the Employee payslips.
It is common ground that the contraventions arose out of a course of conduct engaged in by the first respondent.
However, the respondents contend that, given that all the contraventions were committed by the first respondent in a course of conduct by the first respondent, all the contraventions should be taken to constitute a single contravention.
In particular, the respondents rely on ss.557(1) and 557(2) of the FWA which, relevantly, are as follows.
“FAIR WORK ACT 2009 - SECT 557
Course of conduct
(1) For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a) the contraventions are committed by the same person; and
(b) the contraventions arose out of a course of conduct by the person.
(2) The civil remedy provisions are the following:
(a) subsection 44(1) (which deals with contraventions of the National Employment Standards);
(b) section 45 (which deals with contraventions of modern awards);
(o) subsections 536(1) and (2) (which deal with employer obligations in relation to pay slips);”
The respondents contend that a proper construction of s.557 of the FWA has the effect that each of the contraventions of ss.44, 45, 536(1), and 536(2) of the FWA are to be taken to constitute a single contravention where they are committed by the same person, in this case the first respondent, and arise from a course of conduct by the first respondent.
In support of their contention, the respondents referred to a decision of Logan J in CEPU v QR Limited (No2) [2010] FCA 652 and the decision of the Full Court of the Federal Court of Australia in QR Limited v SEPU [2010] FCAFC 150; 2010 204 IR142 (“QR”). However in QR the contraventions were not committed by the same person or arose from the same course of conduct by that person. In such circumstances, the Full Court of the Federal Court of Australia held that s.557 of the FWA did not apply.
In the light of that finding in QR, it is difficult to see what assistance this Court can derive from that decision. It appears not to be relevant to the circumstances of this case. Certainly, the Full Court of the Federal Court of Australia did not consider an argument in relation to the proper construction of s.557 of the FWA as contended for by the respondents.
The respondents concede that the forerunner to s.557 of the FWA, s.178 on the Industrial Relations Act1988 (Cth), had the effect that each separate obligation found in an award was to be regarded as a “term” for the purposes of s.178 and should attract a separate punishment. In particular, s.178 referred to “two of more breaches of a term of an award or order”, whereas s.557(1) of the FWA referred to “two or more contraventions of a single remedy provision referred to in subsection 2” .
The respondents contend that the language of s.178 is sufficiently different to s.557 of the FWA such that the Court should not rely on the accepted construction of s.178 in construing s.557 of the FWA (see Gibbs v Mayor, Councillors and Citizens of City of Altona (1992) 37 FCR 216 at 223).
I am not persuaded by the submissions of the respondents in relation to the proper construction of s.557 of the FWA. I am satisfied that the language is clear on its face. Moreover, I am satisfied that “two or more contraventions of a civil remedy provision referred to in subsection 2” is intended to refer to two or more contraventions of each of “the civil remedy provisions” identified in s.557(2) of the FWA relevant to the admitted contraventions by the first respondent and referred to above.
Section 557 of the FWA addresses a course of conduct in respect of potential breaches of each of the circumstances referred to in s.557(2) of the FWA.
Further, I am satisfied that the approach adopted by the applicant in considering an appropriate penalty in respect of the course of conduct in respect of each individual breach is correct. This is particularly so in the context where the Court must also consider whether any imposed penalty as a whole is manifestly excessive. It is well established that, having fixed an appropriate penalty for each course of conduct, the Court should take a final look at the aggregate penalty to determine whether it is an appropriate response to the conduct which led to the breaches and is not otherwise oppressive or crushing (see Kelly v Fitzpatrick (2007) 166 IR 14; Australian Ophthalmic Supplies Pty Ltd v McAlary Smith [2008] FCAC 8 at [23]).
In relation to the common elements of some of the contraventions, I accept the submissions of the applicant that those common elements should be taken into account to ensure that the respondents are not punished more for the same, or substantially similar conduct.
In particular, the applicant accepts that the two occasions on which the first respondent took adverse action against the Employee, that is, when she was a prospective employee and she became employed, have common elements. I accept the applicant’s submission that these two contraventions appear to have arisen from the same decisions by the respondents to pay the Employee a lower rate of pay because of her disability. I accept the applicant’s submission that the Court should exercise its discretion to consider these two acts as one contravention.
E. Contraventions
Based on the evidence before me and the Statement of Agreed Facts, the respondents have contravened 11 obligations owed to the Employee. Those are as follows:
a)Discriminating against a prospective employee and between employees;
b)Failure to pay minimum rates of pay to the Employee;
c)Failure to pay Sunday Overtime rate to the Employee;
d)Failure to pay Saturday Penalty rate to the Employee;
e)Failure to pay Public Holiday Penalty rates to the Employee;
f)Failure to pay the Employee ordinary wages for hours spent attending training;
g)Failure to pay the Employee annual on termination of employment;
h)Failure to pay annual leave loading to the Employee;
i)Failure to pay the Employee personal/carer’s leave;
j)Failure to pay the Employee for absence on a public holiday; and
k)Failure to provide the Employee with payslips.
In the circumstances, the maximum penalty that the Court could impose on the first respondent is $346, 500. In respect of each of the second and third respondents, the maximum penalty is $69, 300.
The contraventions consisted of three broad categories. They are as follows:
a)Adverse Action Contraventions – which relate to discriminating against the Employee when she was a prospective employee and discriminating between the Employee and other employees by paying the Employee an hourly rate below that rate paid to other employees performing the same duties because of her disability;
b)Underpayment Contraventions – which relate to the failure to pay minimum rates of pay, Sunday overtime rates, Saturday penalty rates, public holiday rates, training rates, annual leave, annual leave loading, personal/carer’s leave and absence on public holidays; and
c)Payslip Contraventions – failing to provide payslips.
(a) Adverse Action Contraventions
Section 351 of the FWA provides that an employer must not take adverse action against a person who is an employee, or prospective employee, of the employer because, inter alia, of the person's physical disability.
The applicant submits that the adverse action contraventions involved the first respondent treating the Employee differently because of her physical disability, being a type of vision impairment (see paragraph 12 of the Agreed Statement of Facts), by offering her employment at an underpayment, and employing her at a rate different to those of other employees. A principle purpose of the general protections provisions is to protect employees from workplace discrimination (see Explanatory Memorandum of the FAIR WORK BILL 2009 [1345]).
The applicant submits that the Employee was a vulnerable employee by reason of being nineteen years old and disabled by reason of her vision impairment. The applicant submitted that the adverse action contraventions were serious because they occurred within a relationship of trust between the Employee and her treating doctor, the third respondent, who was well aware of her age and disability. It was the third respondent who proposed that the Employee be paid by the first respondent at $7 per hour. Further, the Employee was not, in fact, paid $7 per hour until she had completed a six week unpaid period.
The respondents submit that the period during which the Employee was not paid was not an “unpaid trial period”, but that the Employee had agreed that this period would be unpaid and was to be work experience.
I accept the respondents’ submissions that at the outset of the Employee’s employment, their intention was to assist the Employee into moving into a workplace situation and entering the workforce.
In the circumstances, the maximum penalty payable by the first respondent in respect of the adverse action of discrimination against the Employee as a prospective employee and discrimination among employees is $33,000. The applicant contends that the maximum penalty should attract a 20 per cent discount because of the cooperation of the respondents and that a further 20 per cent discount should be applied to that figure, having regard to the full circumstances of the contravention. In other words, the applicant contends that an appropriate penalty for the respondents in respect of the s.342(1) Item 2(b) and s.351(1) of the FWA is $21,120.
However, as stated above, I accept the respondents’ evidence that when they first offered the Employee paid employment, it was on the understanding that she was already being subsidised by Centrelink and that they were enabling her to ease into an employment situation in the light of her age and disability. I accept that the respondents continued under the belief that they were dealing with the Employee appropriately and fairly until it was drawn to their attention some eighteen months later that they were, in fact, not.
Accordingly, as at the time the Employee was offered employment and when she was, in fact, employed, I am satisfied that it is appropriate that a modest penalty be imposed on the first respondent, primarily for their failure to make further inquiries and satisfy themselves as to the proper entitlements of the Employee at the time of the commencement of her employment.
The amount of the penalty in those circumstances should be $3,300 in respect of the adverse action engaged in by the first respondent in proposing employment to the Employee and the Employee’s subsequent employment.
(b) Underpayment Contraventions
It is common ground that the Employee was paid a total of $15, 268.33 during the period of her employment, whereas she was entitled to be paid $36,116.26, making an underpayment of $20,847.94 over a period of just under two years. In the circumstances, the Employee received approximately 43 per cent of her actual entitlements over the relevant period.
Further, the respondents did not provide the Employee with the entitlements that were due to her as a part time employee such as sick leave and annual leave, or any overtime or penalty rates.
As s.3 of the FWA makes clear, the Fair Work legislation is intended to provide a safety net, ensuring adequate minimum entitlement to employees and an even playing field with regard to employers with regard to employment costs. In addition, in breach of the Disabled Australian Apprentice Wage Support Scheme (“DAAWS”) agreement, the first respondent failed to pay the Employee the applicable rate under the Modern Award and failed to pay her for time she spent at TAFE. In such circumstances, the first respondent profited from the DAAWS payments by receiving payments without meeting their obligations. As such, the cost to the first respondent of the Employee’s employment was $3.59 to $4.59 per hour during the period in which she was undertaking the DAAWS traineeship.
Further, the respondents did not make any inquiry as to the appropriate terms and conditions upon which the Employee was entitled to be engaged. However, from September 2011 onwards, the conduct of the respondents in relation to their obligations to the Employee were at least reckless. I accept the applicant’s concession that their conduct was not deliberately exploitative of the Employee.
However, about four months after the Employee commenced her paid employment with the respondents, the third respondent asked her to enter into a training contract under the DAAWS. In accordance with the training contract, the second respondent agreed to meet all legal requirements relating to the Employee under the relevant employment industrial instruments. On that basis, the second respondent sought wages support in accordance with that scheme with the DAAWS, as a result of which the first respondent received $104.30 per week in respect of the Employee.
This wage support payment was made on the basis that the first respondent was paying the Employee a wage based on an appropriate award or agreement and was not receiving any form of financial support or subsidy for the Employee. I accept the applicant’s submission that the respondents were diligent in ensuring they received payments in accordance with the DAAWS during the period of the Employee’s employment, however, made no enquiry as to any relevant industrial instrument that may cover the Employee’s employment.
Based on the evidence before me, I am satisfied that in September 2011, Catholic Care, which provided support to the Employee, became aware that the Employee was not being paid in accordance with the Modern Award and for that reason were obliged to withdraw their assistance to the Employee. I accept that in or around September/October 2011, the respondents were told by Catholic Care that the Employee was being underpaid. Nevertheless, the respondents still took no steps to increase the Employee’s rate of pay.
On the evidence before me, I accept that the Employee told the respondents on 11 October 2011 that she needed to be paid in accordance with the Modern Award.
However, I do accept the respondents’ submission in respect of their evidence that it was their understanding that Catholic Care had an overarching care and support role for the employee. Indeed, it was Catholic Care that suggested that the first respondent may be entitled to a wage subsidy for employing the Employee.
I further accept the respondents’ submissions that, based on the evidence before me, the second respondent told Catholic Care that the Employee was receiving $7 per hour on the understanding that she was being subsidised by Centrelink and that on the DAAWS form, the second respondent disclosed the Employee’s hourly rate of $7 per hour.
I further accept the respondent’s submission that the first respondent believed that Catholic Care did not have concerns about the hourly rate being paid to the Employee because at no time was such a concern raised with any of the respondents until September/October 2011.
I also accept the evidence of Ms Absalom of Catholic Care that they had not indicated approval of the pay arrangements, nor were they responsible to ensure that the Employee was paid the appropriate rate.
(c) Payslip Contraventions
In accordance with the Statement of Agreed Facts, the respondents concede they failed to provide the Employee with pay slips for the hours that she worked. Such conduct denied her the opportunity to review payments made to her to ensure that there were no errors. In fact, there were calculation errors that were only rectified following the applicant’s involvement in this matter.
F. Factors Relevant to Determining Penalties
Relevant factors in relation to the imposition of a penalty were usefully summarised by Mowbray FM in Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7. However, those factors are not to prescribe or restrict the matters which may be taken into account in the exercise of the Court’s discretion (see Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 per Buchanan J (“Merringtons”)).
The relevant factors include the following:
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 defendant;
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; and
m)The need for specific and general deterrence.
a), b) and c) – Nature, Circumstances and Extent of the Loss
As stated above, the loss suffered by the Employee over the two year period of her employment was approximately 43 per cent of her actual entitlement. That loss is significant by any standard.
Further, the respondents at no stage took any step to inform themselves as to the proper remuneration to which the Employee was entitled.
Moreover, it is common ground that the first respondent continued to fail to address the underpayment, even after it was brought to the first respondent’s attention, both by the Employee and by Catholic Care.
Further, it is common ground that the respondents knowingly discriminated against the Employee because of her disability. The first respondent had other employees in respect of which it made inquiries as to their workplace entitlements to ensure it was meeting its obligations. The respondents were aware that the Employee had a disability and was a vulnerable young lady without employment experience. At no stage throughout the employment period did the respondents make inquiries as to the proper entitlements of the Employee. Moreover, even though the underpayments and full extent of the Employee’s terms and conditions were brought to their attention in September 2011, there was no rectification by the first respondent in respect of the contraventions until 27 May 2013, after the commencement of this proceeding by the applicant.
I also refer to these reasons above in relation to the Underpayment Contraventions.
d) - Similar Previous Conduct
In March 2007, the first respondent was subject to an investigation by the Workplace Ombudsman, which found that the first respondent had contravened the applicable industrial instrument at the time by failing to pay overtime to employees and failing to pay rates for Sundays worked and public holidays to two employees, failing to keep records and failing to issue payslips to two employees. The underpayments totalled $1,221.82 and were voluntarily rectified by the first respondent.
On the evidence before me, I accept that the second respondent was aware of this investigation, as the correspondence regarding the investigation was addressed to him.
e) - Whether the Breaches Arose Out of One Course of Conduct
I accept the applicant’s submissions that the following principles that should be taken into account in determining the question of an appropriate penalty are as follows:
a)First, the Court should identify the separate contraventions involved. Each breach of each separate obligation found in the FWA is a separate contravention (see Gibbs v Mayer, Counsellors and Citizens of Altona (1992) 37 FCR 216 at 223; McIver v Healy [2008] FCA 425 at [16]). Also each breach of a term of a workplace instrument, such as the Modern Award, is a separate contravention.
b)Secondly, the Court should consider whether the breaches arising in the first step constitute a single course of conduct (see s.557(1) of the FWA).
c)Thirdly, to the extent that two or more contraventions have common elements, this should be taken into account in considering what is an appropriate penalty in all the circumstances for each contravention. The respondents should not be penalised more than once for the same conduct. The penalties imposed by the Court should be an appropriate response to the respondents’ conduct. This task is distinct from and in addition to the final application of the “totality principle” (see Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 at [41]-[46] per Stone and Buchanan JJ; Merringtons at [46] per Graham J).
d)Fourthly, consider the appropriate penalty for the single breaches and, if relevant, each group of contraventions, taking into account all of the relevant circumstances.
e)Fifthly and finally, consider whether, in all the circumstances, the penalty is an appropriate response to the conduct which led to the breaches (see Kelly v Fitzpatrick (2007) 166 IR 14 at [30] per Tracy J; Merringtons at [23] per Gray J, [71] per Graham J and [102] per Buchanan J). The Court should apply an “instinctive synthesis” in making this assessment (see Merringtons at [27] per Gray J, [55] and [78] per Graham J). This is known as an application of the “totality principle”.
I accept the submissions of the applicant in relation to the course of conduct of the respondents and the principles of common element addressed in the submissions. Those submissions are as follows:
“Course of Conduct
28. Section 577 of the FW Act sets out that multiple breaches of particular provisions may, depending upon the particular circumstances attract the operation of the course of conduct provisions. The onus of establishing the benefit of s.557 of the FW Act is on the Respondents.[1] Particularly relevant is whether the breaches arose out of separate acts or decisions of the employer, or out of a single act or decision. The latter case will constitute a course of conduct but the former will not.[2]
29. Subsection 557(2) of the FW Act contains the specific list of penalty provisions to which the course of conduct provisions apply. Subsection 351(1) of the FW Act (Adverse Actions Contraventions) is not included in this specific list. Therefore, the course of conduct provisions do not apply to the adverse Action Contravention. In contrast, ss.44, 45, and 536 of the FW Act are included in the list at subsection 557(2) of the FW Act.
30. Accordingly, the Respondents have the benefit of s.557(2) of the FW Act in relation to repeated breaches of each of the Underpayment Contraventions and Payslip Contraventions where they occur on multiple occasions. Therefore, whilst Ms El-Ali was repeatedly underpaid her minimum wage and entitlements, the Applicant will only seek a single contravention for each of the separate contraventions.
[1] Workplace Ombudsmen v Securit-E Holdings Pty Ltd (In Liquidation) & Ors [2009] FMCA 700 at [5].
[2] Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241 at 266-67 per Gray J (with whom Northrop J agreed at 245).
Common Element
31. In addition to the course of conduct provision (s.557(2) of the FW Act), some of the contraventions have common elements that should be taken into account to ensure that the Respondents are not punished more than once for the same or substantially similar conduct.
32. Although the Respondents do not have the benefit of s.557 of the FW Act in relation to multiple contraventions of s.342(1) of the FW Act, based on the facts of this case, the Applicant accepts that the two occasions in which the First Respondent took Adverse Action against Ms El-Ali, that is, when she was a prospective employee and when she became employed, have common elements. These two contraventions appear to have arisen from the same decisions by the Respondents to pay Ms El-Ali a lower rate of pay because of her disability. The Applicant submits that the Court should exercise its discretion to consider the two acts as one contravention.[3]”
[3] See, for example, Fair Work Ombudsman v Contracting Plus Pty Ltd [2011] FMCA 191 at [79].
Further, I accept the submission of the applicant that each of the underpayment contraventions arose from the failure to pay different entitlements. As stated above, the respondents have contravened eleven obligations that were owed to the Employee, as identified above.
f) - Size and Financial Circumstances of the Business
I am satisfied that the respondents operate a profitable medical practice generating substantial income and employing up to three administrative employees. I accept that on the evidence before the Court, the second and third respondents billed Medicare a total of $293,498.40 and $386,941.90 respectively, from 1 January 2011 to 31 December 2011. There is no updated evidence since that date of the profit generated by the respondents.
I am satisfied that the respondents had the financial resources to obtain advice, including professional legal advice, in respect of their obligations to all their employees. However, in relation to the Employee, they failed to do so.
I also accept the applicant’s submissions in relation to the principles enunciated in the following cases:
“64. Even if the Respondents are considered to be under financial difficulty, which the Respondents are not, the Applicant submits that the Courts have previously found that sanctions should be imposed on a meaningful level[4]even where a company is small or under financial difficulty. By way of example, the Applicant refers to Workplace Ombudsman v Saya Cleaning Pty Ltd & Anor [2009] FMCA 38 at [27]-[28] and the authorities referred to in those paragraphs where it is stated:
[4] Fair Work Ombudsman v Secom Australia (ACT) Pty Ltd [2013] FCCA 694 at [46].
“27. In Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412 at paras.27 to 29 it was said:
“Employers must not be left under the impression that because of their size or financial difficulty that they are able to breach an award. Obligations by employers for adherence to industrial instruments arise regardless of their size. Such a factor should be of limited relevance to a Court’s consideration of penalty.”
28. Notwithstanding financial hardship that an employer may be experiencing, in Lynch v Buckley Sawmills Pty Ltd [1984] FCA 306; (1984) 3 FCR 503, 508, Keely J said:
“In this connection it is important that the respondent – and other employers bound by the award or by other awards under the Act – understand the importance of complying with an award and it follows that any decision taken by them which is regarded as affecting their obligation to comply with particular provisions of the award or the award generally should only be taken after careful consideration. They must not be left under the impression that in times of financial difficulty they can breach an award made under the Act either with impunity or in the belief that no substantial penalty will be imposed in respect of a breach found by a court to have been committed.”
65. The Applicant also relies on the decision in FWO v Bosen Pty Ltd [2011] VMC 81 where the Court stated at [51]:
“There is a need to send a message to the community at large, and small employers particularly, that the correct entitlements for employees must be paid and that steps must be taken by employers (of all sizes) to ascertain and comply with minimum entitlements (as opposed to ignoring those obligations). Compliance should not be seen as the bastion of the large employer, with human resources staff and advisory consultants (accountants, consultants, lawyers) behind them.””
g) - Deliberateness of the Breaches
The respondents were aware of the availability of the Fair Work Infoline and indeed made inquiries with respect to other employees. The respondents determined the rate of pay to the Employee without reference to any advice, professional or otherwise.
The respondents accessed the DAAWS program, resulting in payments being made to them in circumstances where they acknowledged on the DAAWS form that the Employee was being paid in accordance with the relevant industrial instrument.
The respondents ignored requests from the Employee and Catholic Care to confirm and pay the Employee the correct rate of pay. The second respondent was, or should have been, aware of the legal obligations imposed on employers because of his previous involvement with the workplace contraventions in 2007.
At least by September 2011, the respondents were, or should have been, aware that the rate they were paying the Employee was not appropriate as they were informed of that circumstance by Catholic Care, whom the respondents say they relied upon for such advice. Even after this notification by Catholic Care, the respondents failed to take any rectification action. I accept that the failure of the respondents to take any rectification action caused the Employee to resign from her employment.
As stated above, I am satisfied on the evidence before me that the respondent’s conduct was taken in the context of a degree of reliance on Catholic Care. I accept that they had no previous experience in employing a person with a disability and a person who had access to and support from Catholic Care as well as receiving Centrelink payments.
However, as stated above, from at least September 2011, the fact of the underpayments being made to the Employee was brought to the attention of the respondents, who from that point on, acted with complete disregard to their statutory obligations. In particular, I have regard to the fact that there was no attempt to inform themselves of their proper obligations and no attempt to rectify the underpayments until after the applicant had commenced this proceeding against them.
As the authorities make clear, ignorance is no excuse for non-compliance with legal obligations, and there is no evidence that these respondents sought clarification to ensure they were meeting their legal obligations to the Employee (see Rajagopalanv BM Sydney Building Materials Pty Ltd [2007] FMCA 1412 at [13]; Fair Work Ombudsman v Bosen Pty Ltd [2011] VMC 81 at [37].
h) - Involvement of Senior Management
I accept that at all relevant times the second and third respondents were directors of the first respondent and the controlling mind of the first respondent. Further, it is common ground that the second and third respondents were involved in each of the contraventions of the first respondent, as stated above in the Statement of Agreed Facts.
i), j) and k) - Contrition, Corrective Action, Cooperation with Authorities
The underpayments owed to the Employee were rectified by the respondents on 22 May 2013.
Further, the respondents agreed to pay the Employee $5,000 by way of non-economic loss. I note that as at 9 August 2013, when the applicant’s submissions were filed, that payment had not yet been made. I was informed at the commencement of the hearing by the respondents’ counsel that the $5,000 had been paid that morning.
The applicant acknowledged the cooperative attitude of the respondents throughout the investigation, noting in particular that the first respondent produced all records and documents to the applicant when requested; the second respondent voluntarily participated in a recorded interview with the applicant at an early date; and, the respondents admitted all the alleged contraventions at the earliest opportunity after the commencement of the proceedings.
I am satisfied that all of the above conduct by the respondents reflects a reasonable degree of contrition. Otherwise, I accept the applicant’s submission that there is no evidence of any other statement of regret or remorse by the respondents.
l) - Ensuring Compliance with Minimum Standards
I accept that in imposing a penalty, the Court must impose a penalty that reinforces the fundamental importance of compliance with the safety net of entitlements specified by the National Employment Standards and the General Protection Provisions of the FWA (see Fair Work Ombudsman v A Dalley Holdings Pty Ltd [2013] FCA 509).
m) - General Deterrence
I accept that general deterrence is relevant and high in situations involving young workers undertaking a traineeship, such as this Employee. Such employees are usually inexperienced, have little or no skills, and rely on the employment in order to complete their traineeship, thereby making them vulnerable workers. This Employee was aged 19 years old and also suffered a disability, of which the respondents were aware.
However, as stated above, I am not persuaded that the respondents set out to exploit the Employee. Up until September 2011, I accept that they believed that they were offering the Employee an opportunity to enter the workplace. However, the failure of the respondents to make any further inquiries or to satisfy themselves that they were meeting their statutory obligations to the Employee after it had been brought to their attention that they were not, is of significant concern.
It is right and proper that employers provide their employees with the correct entitlements, and employers should take steps to ensure that they understand and comply with all such entitlements that their employees may have.
m) - Specific Deterrence
The first respondent and the second respondent were involved in earlier contraventions, referred to above, in March 2007. Three of the contraventions found in March 2007 are the same as the contraventions the respondents have admitted to in respect of this proceeding. In the circumstances, I accept that the first and second respondents were aware of the requirement to pay overtime, Sunday and Public Holiday pay rates, and provide pay slips to employees and failed to do so in relation to the Employee.
At least from September 2011 onwards, following notification by Catholic Care, the respondents should have taken steps immediately to inform themselves of their full obligations to the Employee. No such steps were taken by the respondents. Further, the failure to take any such steps was in the context of having engaged in earlier non-compliance in March 2007, where their full responsibilities as employers must have been apparent to them.
In the light of the respondent’s prior contraventions, albeit relatively minor, and their wilful failure to make any inquiries as to their obligations to the Employee after September 2011 when their underpayments to the Employee were brought to their attention by Catholic Care and the Employee, specific deterrence must be reflected in the penalty.
G. Totality
I accept that in fixing an appropriate penalty for each course of conduct, the Court should take a final look at the aggregate penalty, to determine if it is an appropriate response to the conduct which led the breaches and is not oppressive or crushing (see Kelly v Fitzpatrick (2007) 166 IR 14 at [30] per Tracy J; Merringtons at [23] per Gray J, [71] per Graham J, [102] per Buchanan J).
Reaching these penalties, I have also had regard to and accept the submissions of the applicant as follows:
a)The significance of the underpayment, given it impacted only one employee over a period of just under two years;
b)The respondents’ failure to make any enquires as to the proper entitlement of the Employee, despite having been subject to an investigation by the Workplace Ombudsman in 2007;
c)The financial means available to the respondents;
d)The fact that the respondents were receiving a wage subsidy payment in accordance with the DAAWS which required them to comply with workplace laws;
e)The fact that the respondents were on notice of their breach of the Modern Award by the Employee, Catholic Care and through their phone calls to the Fair Work Infoline about proper terms and conditions for other employees, yet only rectified the underpayments when these proceedings were commenced;
f)The fact that the respondents’ conduct was deliberate, or at best grossly reckless, from September 2011, onwards;
g)The need for general deterrence in discrimination matters;
h)The need for specific deterrence as the respondents continue to operate the medical centre and employ personnel; and
i)Previous findings of the regulator have not had a deterrent effect.
I am satisfied that the penalties proposed below in respect of each of the first, second and third respondents are appropriate and are not oppressive or crushing.
H. Accessorial Liability
As stated above, the second and third respondents accept that they have accessorial liability in respect of the contraventions of the first respondent. I accept that the same considerations should apply in determining penalty in respect of all of the first respondent and the second and third respondents.
I also accept the applicant’s submission that the legislation reflects different maximum penalties in respect of each of the first, second and third respondents (see Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408).
On the evidence before me, I accept that the second and third respondents were equally responsible and involved in the contraventions by the first respondent. Both the second and third respondents were aware of the rate of pay the Employee was receiving, and both were, or should have been, aware from September 2011 that they were not meeting their obligations to the Employee, this matter having been brought to their attention by Catholic Care and the Employee. Yet, neither the second or the third respondent took any step to inform themselves as to the full entitlements of the Employee or their obligations to meet them.
I am also satisfied that each of the first and second respondents were aware of the earlier contraventions of a similar nature engaged in by the first respondent in 2007 in relation to other employees.
Penalty
It is in the light of all the matters referred to above that I have made the following determination in respect of each of the contraventions in respect of each of the respondents as follows:
| Penalty Imposed upon the First Respondent | |||
| Provision | Description of Contravention | Maximum Penalty | Penalty Imposed |
| s.342(1), Item 2(b) and s.351(1) of the FWA. | Discrimination against a prospective employee and discrimination between employees. | $33, 000 | $3, 300 |
| s.45 of the FWA | Failure to pay the minimum rates of pay | $33, 000 | $21, 120 |
| s.45 of the FWA by contravening subclause 28.1 of the Modern Award | Failure to pay Sunday Overtime Rate | $33, 000 | $6, 600 |
| s.45 of the FWA by contravening subclause 26.1 of the Modern Award | Failure to pay Saturday Penalty rate | $33, 000 | $6, 600 |
| s.45 of the FWA by contravening subclause 32.2 of the Modern Award | Failure to pay Public Holiday Penalty Rates | $33, 000 | $6, 600 |
| s.45 of the FWA by contravening subclause E.6.3 of Schedule E of the Modern Award | Failure to pay ordinary wages for hours spent attending training | $33, 000 | $10, 000 |
| s.44 of the FWA by contravening s.90(2) of the FWA | Failure to pay annual leave on termination | $33, 000 | $6, 600 |
| s.45 of the FWA by contravening subclause 31.2(a) of the Modern Award | Failure to pay annual leave loading | $33, 000 | $6, 600 |
| s.44 of the FWA by contravening s.99 of the FWA | Failure to pay personal/carer’s leave | $33, 000 | $6, 600 |
| s.44 of the FWA by contravening s.116 of the FWA | Failure to pay for absence on a public holiday | $33, 000 | $6, 600 |
| s.536 of the FWA | Failure to provide payslips | $16, 500 | $8, 250 |
| Sub Total | $346,500 | $88, 870 | |
| Penalty Imposed upon Each of the Second and Third Respondents | |||
| Provision | Description of Contravention | Maximum Penalty | Penalty Imposed |
| s.342(1), Item 2(b) and s.351(1) of the FWA. | Discrimination against a prospective employee and discrimination between employees. | $6,600 | $660 |
| s.45 of the FWA | Failure to pay the minimum rates of pay | $6,600 | $3,300 |
| s.45 of the FWA by contravening subclause 28.1 of the Modern Award | Failure to pay Sunday Overtime Rate | $6,600 | $1,200 |
| s.45 of the FWA by contravening subclause 26.1 of the Modern Award | Failure to pay Saturday Penalty rate | $6,600 | $1,200 |
| s.45 of the FWA by contravening subclause 32.2 of the Modern Award | Failure to pay Public Holiday Penalty Rates | $6,600 | $1,200 |
| s.45 of the FWA by contravening subclause E.6.3 of Schedule E of the Modern Award | Failure to pay ordinary wages for hours spent attending training | $6,600 | $3, 300 |
| s.44 of the FWA by contravening s.90(2) of the FWA | Failure to pay annual leave on termination | $6,600 | $2,000 |
| s.45 of the FWA by contravening subclause 31.2(a) of the Modern Award | Failure to pay annual leave loading | $6,600 | $1, 000 |
| s.44 of the FWA by contravening s.99 of the FWA | Failure to pay personal/carer’s leave | $6,600 | $1, 000 |
| s.44 of the FWA by contravening s.116 of the FWA | Failure to pay for absence on a public holiday | $6,600 | $1,000 |
| s.536 of the FWA | Failure to provide payslips | $3,300 | $1,550 |
| Sub Total | $69, 300 | $17,410 | |
J. Proposed declarations and orders
Accordingly, I propose that the following declarations and orders be made:
THE COURT DECLARES THAT
1. The first respondent, Rocky Holdings Pty Ltd, contravened the following provisions:
(a) Subsection 341(1) of the Fair Work Act 2009 (Cth), by taking adverse action against the Employee by:
(i) discriminating against the Employee when she was a prospective employee; and
(ii) discriminating between the Employee and other employees of the first respondent by paying the Employee less than other employees of the first respondent,
for reasons that included that the Employee had a disability;
(b) Section 45 of the Fair Work Act 2009 (Cth), by failing to pay the Employee the applicable minimum rate of pay during the Employment Period in contravention the Modern Award;
(c) Section 45 of the Fair Work Act 2009 (Cth), by failing to pay the Employee the applicable overtime rates for overtime work performed during the Employment Period in contravention of subclause 28.1 of the Modern Award;
(d) Section 45 of the Fair Work Act 2009 (Cth), by failing to pay the Employee the applicable Saturday loadings during the Employment Period in contravention of subclause 26.1 of the Modern Award;
(e) Section 45 of the Fair Work Act 2009 (Cth), by failing to pay the Employee public holiday rates for work performed on a public holiday during the Employment Period in contravention of subclause 32.2 of the Modern Award;
(f) Section 45 of the Fair Work Act 2009(Cth), by failing to pay the Employee ordinary wages for hours spent attending training and assessment associated with the training contract during the period from 17 May 2010 to 1 February 2012 in contravention of Clause E.6.3 of Schedule E of the Modern Award;
(g) Section 44 of the Fair Work Act 2009(Cth), by failing to pay the Employee annual leave during the Employment Period in contravention of subsection 90(2) of the Fair Work Act 2009(Cth).
(h) Section 45 of the Fair Work Act 2009(Cth),by failing to pay the Employee annual leave during the Employment Period in contravention of clause 31.2(a) of the Modern Award;
(i) Section 44 of the Fair Work Act 2009(Cth), by failing to provide the Employee paid personal/carer’s leave during the Employment Period in contravention of s.99 of the Fair Work Act 2009(Cth);
(j) Section 44 of the Fair Work Act 2009(Cth), by failing to provide the Employee payment for absence on a public holiday during the Employment Period in contravention of s.116 of the Fair Work Act 2009(Cth); and
(k) Section 536 of the Fair Work Act 2009(Cth), by failing to provide the Employee payslips.
2. The second respondent, Dr Ahmed Mohamed, was involved in each of the contraventions committed by the first respondent (within the meaning of s.550(1) of the Fair Work Act 2009(Cth)) as set out in paragraph 1 of section J, above.
3. The third respondent, Dr Ismail Mohamed, was involved in each of the contraventions committed by the first respondent (within the meaning of s.550(1) of the Fair Work Act 2009(Cth)) as set out in paragraph 1 of section J, above.
THE COURT ORDERS THAT:
4. The first respondent is to pay penalties pursuant to s.546(1) of the Fair Work Act 2009(Cth) in the total amount of $88,870 in respect of the first respondent’s contraventions listed in paragraph 1 of section J, above, which is made up of:
a penalty of $3,300 be imposed on the first respondent in respect of its contravention of s.351(1) of the Fair Work Act 2009(Cth) by taking adverse action against the Employee;
a penalty of $21,120 be imposed on the first respondent in respect of its contravention of s.45 of the Fair Work Act 2009(Cth) by failing to pay the Employee the applicable minimum rate of pay during the Employment Period;
a penalty of $6,600 be imposed on the first respondent, in respect of its contravention of s.45 of the Fair Work Act 2009(Cth), by failing to pay the Employee the applicable overtime rates for overtime work performed during the Employment Period in contravention of subclause 28.1 of the Modern Award;
a penalty of $6,600 be imposed on the first respondent, in respect of its contravention of s.45 of the Fair Work Act 2009(Cth), by failing to pay the Employee the applicable Saturday loadings in contravention of subclause 26.1 of the Modern Award;
a penalty of $6,600 be imposed on the first respondent, in respect of its contravention of s.45 of the Fair Work Act 2009(Cth), by failing to pay the Employee public holiday rates for work performed on a public holiday during the Employment Period in contravention of subclause 32.2 of the Modern Award;
a penalty of $10,000 be imposed on the first respondent in respect of its contravention of s.45 of the Fair Work Act 2009 (Cth), by failing to pay the Employee ordinary wages for hours spent attending training and assessment associated with the training contract during the period from 17 May 2010 to 1 February 2012 in contravention of clause E.6.3 of Schedule E of the Modern Award;
a penalty of $6,600 be imposed on the first respondent, in respect of its contravention of s.44 of the Fair Work Act 2009 (Cth), by failing to pay the Employee annual leave during the Employment Period in contravention of s.90(2) of the Fair Work Act 2009 (Cth);
a penalty of $6,600 be imposed on the first respondent, in respect of its contravention of s.45 of the Fair Work Act 2009 (Cth), by failing to pay the Employee annual leave loading during the Employment Period in contravention of clause 31.2(a) of the Modern Award;
a penalty of $6,600 be imposed on the first respondent, in respect of its contravention of s.44 of the Fair Work Act 2009 (Cth), by failing to provide Ms El-Ali paid personal/carer’s leave during the Employment Period in contravention of s.99 of the Fair Work Act 2009 (Cth);
a penalty of $6,600 be imposed upon the first respondent in respect of its contravention of s.44 of the Fair Work Act 2009 (Cth), by failing to provide the Employee payment for absence on a public holiday during the Employment Period in contravention of s.116 of the Fair Work Act 2009 (Cth);
a penalty of $8,250 be imposed on the first respondent, in respect of its contravention of s.536 of the Fair Work Act 2009 (Cth), by failing to provide the Employee with pay slips.
5. The second respondent is to pay penalties pursuant to s.546(1) of the Fair Work Act 2009 (Cth) to a total amount of $17,410 in respect of the second respondent’s involvement in the contraventions of the first respondent listed in paragraph 1 of section J, above, which is made up of:
a penalty of $660 be imposed on the second respondent in respect of his contravention of s.351(1) of the Fair Work Act 2009(Cth) by taking adverse action against the Employee;
a penalty of $3,300 be imposed on the second respondent in respect of his contravention of s.45 of the Fair Work Act 2009(Cth) by failing to pay the Employee the applicable minimum rate of pay during the Employment Period;
a penalty of $1,200 be imposed on the second respondent, in respect of his contravention of s.45 of the Fair Work Act 2009(Cth), by failing to pay the Employee the applicable overtime rates for overtime work performed during the Employment Period in contravention of subclause 28.1 of the Modern Award;
a penalty of $1,200 be imposed on the second respondent, in respect of his contravention of s.45 of the Fair Work Act 2009(Cth), by failing to pay the Employee the applicable Saturday loadings in contravention of subclause 26.1 of the Modern Award;
a penalty of $1,200 be imposed on the second respondent, in respect of his contravention of s.45 of the Fair Work Act 2009(Cth), by failing to pay the Employee public holiday rates for work performed on a public holiday during the Employment Period in contravention of subclause 32.2 of the Modern Award;
a penalty of $3,300 be imposed on the second respondent in respect of its contravention of s.45 of the Fair Work Act 2009 (Cth), by failing to pay the Employee ordinary wages for hours spent attending training and assessment associated with the training contract during the period from 17 May 2010 to 1 February 2012 in contravention of clause E.6.3 of Schedule E of the Modern Award;
a penalty of $2,000 be imposed on the second respondent, in respect of his contravention of s.44 of the Fair Work Act 2009 (Cth), by failing to pay the Employee annual leave during the Employment Period in contravention of s.90(2) of the Fair Work Act 2009 (Cth);
a penalty of $1,000 be imposed on the second respondent, in respect of his contravention of s.45 of the Fair Work Act 2009 (Cth), by failing to pay the Employee annual leave loading during the Employment Period in contravention of clause 31.2(a) of the Modern Award;
a penalty of $1,000 be imposed on the second respondent, in respect of his contravention of s.44 of the Fair Work Act 2009 (Cth), by failing to provide the Employee paid personal/carer’s leave during the Employment Period in contravention of s.99 of the Fair Work Act 2009 (Cth);
a penalty of $1,000 be imposed upon the second respondent in respect of his contravention of s.44 of the Fair Work Act 2009 (Cth), by failing to provide the Employee payment for absence on a public holiday during the Employment Period in contravention of s.116 of the Fair Work Act 2009 (Cth);
a penalty of $1,550 be imposed on the second respondent, in respect of his contravention of s.536 of the Fair Work Act 2009 (Cth), by failing to provide the Employee with pay slips.
6. The third respondent is to pay penalties pursuant to s.546(1) of the Fair Work Act 2009 (Cth) to a total amount of $17,410 in respect of the third respondent’s involvement in the contraventions of the first respondent listed in paragraph 1 of Section J, above, which is made up of:
a penalty of $660 be imposed on the third respondent in respect of his contravention of s.351(1) of the Fair Work Act 2009(Cth) by taking adverse action against the Employee;
a penalty of $3,300 be imposed on the third respondent in respect of his contravention of s.45 of the Fair Work Act 2009(Cth) by failing to pay the Employee the applicable minimum rate of pay during the Employment Period;
a penalty of $1,200 be imposed on the third respondent, in respect of his contravention of s.45 of the Fair Work Act 2009(Cth), by failing to pay the Employee the applicable overtime rates for overtime work performed during the Employment Period in contravention of subclause 28.1 of the Modern Award;
a penalty of $1,200 be imposed on the third respondent, in respect of his contravention of s.45 of the Fair Work Act 2009(Cth), by failing to pay the Employee the applicable Saturday loadings in contravention of subclause 26.1 of the Modern Award;
a penalty of $1,200 be imposed on the third respondent, in respect of his contravention of s.45 of the Fair Work Act 2009(Cth), by failing to pay the Employee public holiday rates for work performed on a public holiday during the Employment Period in contravention of subclause 32.2 of the Modern Award;
a penalty of $3,300 be imposed on the third respondent in respect of its contravention of s.45 of the Fair Work Act 2009 (Cth), by failing to pay the Employee ordinary wages for hours spent attending training and assessment associated with the training contract during the period from 17 May 2010 to 1 February 2012 in contravention of clause E.6.3 of Schedule E of the Modern Award;
a penalty of $2,000 be imposed on the third respondent, in respect of his contravention of s.44 of the Fair Work Act 2009 (Cth), by failing to pay the Employee annual leave during the Employment Period in contravention of s.90(2) of the Fair Work Act 2009 (Cth);
a penalty of $1,000 be imposed on the third respondent, in respect of his contravention of s.45 of the Fair Work Act 2009 (Cth), by failing to pay the Employee annual leave loading during the Employment Period in contravention of clause 31.2(a) of the Modern Award;
a penalty of $1,000 be imposed on the third respondent, in respect of his contravention of s.44 of the Fair Work Act 2009 (Cth), by failing to provide the Employee paid personal/carer’s leave during the Employment Period in contravention of s.99 of the Fair Work Act 2009 (Cth);
a penalty of $1,000 be imposed upon the third respondent in respect of his contravention of s.44 of the Fair Work Act 2009 (Cth), by failing to provide the Employee payment for absence on a public holiday during the Employment Period in contravention of s.116 of the Fair Work Act 2009 (Cth);
a penalty of $1,550 be imposed on the third respondent, in respect of his contravention of s.536 of the Fair Work Act 2009 (Cth), by failing to provide the Employee with pay slips.
7. An order pursuant to s.546(3) of the Fair Work Act 2009 (Cth) that all pecuniary penalties imposed by the Court be paid to the Consolidated Revenue Fund of the Commonwealth within 28 days of the date of this order.
I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of Judge Emmett
Associate:
Date: 4 October 2013
Schedule 1
Extract of the Fair Work Bill 2009 Explanatory Statement
Clause 557 - Course of conduct
2188. Subclause 557(1) provides that where the same person commits two or more contraventions of a civil remedy provision referred to in subclause 557(2), arising out of a course of conduct by that person, the contraventions are to be taken to constitute a single contravention for the purposes of this Part.
2189. For example, if a company contravenes a single term of a modern award in respect of ten employees, these ten contraventions are taken to be a single contravention. This means that the maximum penalty that the Court can impose for the contravention is 300 penalty units.
2190. Similarly, if a company contravenes five separate terms of a modern award in respect of ten employees, these 50 contraventions are taken to be five contraventions. This means that the maximum penalty that the Court can impose is five times a maximum penalty of 300 penalty units.
2191. Subclause 557(2) sets out the civil remedy provisions to which the course of conduct rule applies. Under the Workplace Relations Act 1996 (Cth) (“WR Act”), the course of conduct rule only applies to civil remedy provisions in Part 14 of the WR Act. Broadly speaking, the civil remedy provisions in that Part relate to employee entitlements. There is also a course of conduct rule in relation to industrial action in Part 9 of the WR Act. Subclause 557(2) is similar to the position under the WR Act in that it applies the course of conduct rule to civil remedy provisions dealing with entitlements and industrial action.
2192. Subclause 557(3) provides that the course of conduct rule does not apply to a contravention of a civil remedy provision that is committed by a person after a court has already imposed a pecuniary penalty on the person for an earlier contravention of the same provision.
Industrial Relations Act 1988 (Cth)
178 - Imposition and recovery of penalties
178.(1): Subject to s.182, where an organisation or person bound by an award or an order of the Commission breaches a term of the award or order, a penalty may be imposed by the Court or, except in the case of a breach of a bans clause, by a court of competent jurisdiction.
(2) Subject to subsection (3), where:
(a) two or more breaches of a term of an award or order are committed by the same organisation or person; and
(b) the breaches arose out of a course of conduct by the organisation or person;
the breaches shall, for the purposes of this section, be taken to constitute a single breach of the term.
(3) Subsection (2) does not apply in relation to:
(a) a breach of a term of an award or order that is committed by an organisation or person after a court has imposed a penalty on the organisation or person for an earlier breach of the term; or
(b) a breach of a term of an award or order that is taken to have been committed by a person under a provision included in an award or order under paragraph 111(1)(e).
(4) The maximum penalty that may be imposed under subsection (1) for a breach of a term of an award or order is:
(a) where the penalty is imposed by the Court:
(i) if the breach is taken to have been committed under a provision included in an award or order under paragraph 111 (1) (e) - $500; and
(ii) in any other case - $1,000; and
(b) where the penalty is not imposed by the Court - $500.
(5) A penalty for a breach of a term of an award or order may be sued for and recovered by:
(a) an inspector;
(b) a party to the award or order;
(c) a member of an organisation who is affected by the breach;
(d) an organisation that is affected, or any of whose members are affected, by the breach; or
(e) an officer of an organisation that is affected, or any of whose members are affected, by the breach where the officer is authorised, under the rules of the organisation, to sue on behalf of the organisation.
(6) Where, in a proceeding against an employer under this section, it appears to the court concerned that an employee of the employer has not been paid an amount to which the employee is entitled under an award or order, the court may order the employer to pay to the employee the amount of the underpayment.
(7) An order shall not be made under subsection (6) in relation to so much of an underpayment as relates to any period more than six years before the commencement of the proceeding.
(8) A proceeding under this section in relation to a breach of a term of an award or order shall be commenced not later than six years after the commission of the breach.
(9) In this section:
"court of competent jurisdiction" means:
(a) a District, County or Local Court; or
(b) a magistrate's court.
Workplace Relations Act 1996 (Cth)
719 - Imposition and recovery of penalties
(1) An eligible court may impose a penalty in accordance with this Division on a person if:
(a) the person is bound by an applicable provision; and
(b) the person breaches the provision.
(2) Subject to subsection (3), where:
(a) 2 or more breaches of an applicable provision are committed by the same person; and
(b) the breaches arose out of a course of conduct by the person;
the breaches shall, for the purposes of this section, be taken to constitute a single breach of the term.
(3) Subsection (2) does not apply to a breach of an applicable provision that is committed by a person after an eligible court has imposed a penalty on the person for an earlier breach of the provision.
(4) The maximum penalty that may be imposed under subsection (1) for a breach of an applicable provision is:
(a) 60 penalty units for an individual; or
(b) 300 penalty units for a body corporate.
(5) If, in a proceeding under this section in relation to an Australian workplace agreement (“AWA”), it appears to the eligible court that a party to the AWA has suffered loss or damage as a result of a breach of the AWA by the other party, the court may order the other party to pay the amount of the loss or damage to the first-mentioned party.
(6) Where, in a proceeding against an employer under this section, it appears to the eligible court that an employee of the employer has not been paid an amount that the employer was required to pay under an applicable provision (except a term of an AWA), the court may order the employer to pay to the employee the amount of the underpayment.
(7) Where, in a proceeding against an employer under this section, it appears to the eligible court that the employer has not paid an amount to a superannuation fund that the employer was required, under an applicable provision (except a term of an AWA), to pay on behalf of a person, the court may order the employer to make a payment to or in respect of that person for the purpose of restoring the person, as far as practicable, to the position that the person would have been in had the employer not failed to pay the amount to the superannuation fund.
(8) Without limiting the generality of subsection (7), the eligible court may order that the employer pay to the superannuation fund referred to in subsection (7), or another superannuation fund, an amount equal to the amount (in this subsection called the unpaid amount) that the employer failed to pay together with such additional amount as, in the opinion of the court, represents the return that would have accrued in respect of the unpaid amount had it been duly paid by the employer.
(9) An order must not be made under subsection (6) or (7) in relation to so much of an underpayment as relates to any period more than six years before the commencement of the proceeding.
(10) A proceeding under this section in relation to a breach of an applicable provision must be commenced not later than six years after the commission of the breach.
Acts Interpretation Act 1901 (Cth)
15AA Interpretation best achieving Act’s purpose or object
In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.
15AB Use of extrinsic material in the interpretation of an Act
(1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:
(a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or
(b) to determine the meaning of the provision when:
(i) the provision is ambiguous or obscure; or
(ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.
(2) Without limiting the generality of subsection (1), the material that may be considered in accordance with that subsection in the interpretation of a provision of an Act includes:
(a) all matters not forming part of the Act that are set out in the document containing the text of the Act as printed by the Government Printer;
(b) any relevant report of a Royal Commission, Law Reform Commission, committee of inquiry or other similar body that was laid before either House of the Parliament before the time when the provision was enacted;
(c) any relevant report of a committee of the Parliament or of either House of the Parliament that was made to the Parliament or that House of the Parliament before the time when the provision was enacted;
(d) any treaty or other international agreement that is referred to in the Act;
(e) any explanatory memorandum relating to the Bill containing the provision, or any other relevant document, that was laid before, or furnished to the members of, either House of the Parliament by a Minister before the time when the provision was enacted;
(f) the speech made to a House of the Parliament by a Minister on the occasion of the moving by that Minister of a motion that the Bill containing the provision be read a second time in that House;
(g) any document (whether or not a document to which a preceding paragraph applies) that is declared by the Act to be a relevant document for the purposes of this section; and
(h) any relevant material in the Journals of the Senate, in the Votes and Proceedings of the House of Representatives or in any official record of debates in the Parliament or either House of the Parliament.
(3) In determining whether consideration should be given to any material in accordance with subsection (1), or in considering the weight to be given to any such material, regard shall be had, in addition to any other relevant matters, to:
(a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; and
(b) the need to avoid prolonging legal or other proceedings without compensating advantage.
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