Fair Work Ombudsman v Rubee Enterprises Pty Ltd
[2016] FCCA 3456
•2 December 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v RUBEE ENTERPRISES PTY LTD & ANOR | [2016] FCCA 3456 |
| Catchwords: INDUSTRIAL LAW – Imposition of pecuniary penalties – where matter proceeded undefended. |
| Legislation: Crimes Act 1914, s.4AA. Fair Work Act 2009, ss.44, 45, 325, 340, 343, 535, 536, 539, 557. |
| Cases cited: Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2006] FCA 1427) Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | RUBEE ENTERPRISES PTY LTD |
| Second Respondent: | FARES GHAZALE |
| File Number: | SYG 3577 of 2014 |
| Judgment of: | Judge Altobelli |
| Hearing date: | 2 December 2016 |
| Date of Last Submission: | 2 December 2016 |
| Delivered at: | Sydney |
| Delivered on: | 2 December 2016 |
REPRESENTATION
| Solicitors for The Applicant: Fair Work Ombudsman |
| There was no appearance by or on behalf of the Respondents. |
ORDERS
Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) (FW Act), the First Respondent (in the sum of $444,100) and Second Respondent (in the sum of $88,810) pay pecuniary penalties in respect of each of the contraventions set out in order 1 of the Court’s Orders of 19 September 2016 (Orders).
Pursuant to section 546(3)(a) of the FW Act, the pecuniary penalties be paid to the Commonwealth within 28 days of the Courts orders.
Pursuant to section 546(3) of the FW Act, in the event that the some or all of the amounts payable to the Employees in accordance with orders 3 and 4 of the Orders are extinguished as a result of insolvency, the Fair Work Ombudsman may remit, at its discretion, the penalties paid to the Commonwealth to the Employees in the percentages referred to in the Orders, until the Employees’ claims are met.
Within 7 days, the Applicant is to notify the Respondents of the Orders made today.
THE COURT NOTES THAT:
A.There was no appearance by or on behalf of the Respondents when the matter was called at 3:19pm.
B.These orders are made in the absence of the Respondents and they are at liberty to make such application as they may be advised pursuant to Rule 16.05 of the Federal Circuit Court Rules 2001.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 3577 of 2014
| FAIR WORK OMBUDSMAN FAIR WORK OMBUDSMAN |
Applicant
And
| RUBEE ENTERPRISES PTY LTD RUBEE ENTERPRISES PTY LTD |
First Respondent
| FARES GHAZALE |
Second Respondent
REASONS FOR JUDGMENT
Introduction
On 19 December 2014, the Applicant commenced proceedings against the Respondents alleging contraventions of the Fair Work Act 2009 (Cth) (FW Act) and Fair Work Regulations 2009 (Cth) (FW Regulations).
Background
These proceedings concern five former employees of the First Respondent, who worked at the First Respondent’s restaurant business in Albury, NSW (Business) between 3 December 2012 and 14 September 2012 (Employees) (Statement of Agreed Facts (‘SOAF’), paragraphs 9 and 11). The contraventions in respect of these employees can be broadly summarised as follows:
a)the First Respondent unreasonably required Senju Francis and Sunil Badhan to spend a portion of their wages, by requiring these amounts to be repaid to the Second Respondent in cash. Francis and Badhan were required to pay amounts to the Second Respondent, and did pay these amounts, under threat of cancellation of their visas and termination of their employment. This conduct gave rise to contraventions of section 325 (unreasonable requirement to spend), section 343(1)(coercion) and section 340(1)(adverse action) of the FW Act in respect of each of Francis and Badhan;
b)the Respondents failed to pay former employees Francis, Badhan, Johanne Crouch, Maree Garratt and Wade Demosani amounts that were sufficient to meet their entitlements under the Restaurant Industry Award 2010 (Award), including in respect of minimum wages, penalty rates for weekends, public holiday and extended shifts without meal breaks and overtime rates of pay, giving rise to contraventions of section 45 of the FW Act;
c)the Respondents failed to provide annual and personal leave entitlements to Badhan and Crouch, and failed to make payment to Crouch in lieu of being provided with notice of termination, giving rise to contraventions of section 44 of the FW Act;
d)the Respondents created employment records that included inaccurate information in respect of amounts paid to employees and hours worked by employees, knowing this information was false. The Respondents subsequently knowingly provided these false records to the Fair Work Ombudsman (FWO) on two occasions. This conduct gave rise to contraventions of regulations 3.44(1) and 3.44(6) of the FW Regulations; and
e)the Respondents failed to keep records of the amounts paid to, or the overtime hours worked by, Badhan, giving rise to contraventions of section 535(2). Additionally, the Respondents failed to issue payslips to the Employees, giving rise to contraventions of 536(1) of the FW Act.
The Second Respondent was involved in each of the First Respondent’s contraventions, and was at all relevant times the sole director, sole shareholder and controlling mind of the First Respondent.
On 10 February 2016, the Respondents entered into an agreed statement of facts with the Applicant, making admissions in respect of some of the alleged contraventions of sections 44, 45 and 536(1) of the FW Act (Statement of Agreed Facts (SOAF), paragraph 3). The Respondents did not make admissions to the remaining alleged contraventions including contraventions associated with Francis and Badhan’s repayment of wages.
On 25 May 2016, lawyers for the Respondents ceased acting. Since this date, the Respondents have not participated in these proceedings, failing to file affidavit material in accordance with the Court’s Orders on 26 February 2016, failing to respond to correspondence and failing to attend a mention and interlocutory hearing.
On 19 September 2016, the Court entered default judgment against the Respondents pursuant to rule 13.03A of the Federal Circuit Court Rules 2001 (Cth). The Order is reproduced in the first schedule to these reasons. The Court made declarations that the Respondents had contravened each of the contraventions alleged by the Applicant. On this date, the Court ordered that the Respondents (on a joint and several basis) pay the total underpayment amount of $87,909.65 to the Employees. To date, no payment has been received.
The Applicant submitted that the conduct of the Respondents giving rise to the proceedings was extremely serious and highly aggravating. The Applicant submitted that some of the most concerning aspects of this matter include:
a)Badhan and Francis were required to repay significant portions of their wages under threat of cancellation of their visa and threats of violence. The Respondents deliberately and blatantly exploited the vulnerability of visa holders reliant on their employer to remain in Australia;
b)the Respondents created false and misleading records and provided these to the regulator as part of a deliberate strategy of deceit, to maintain the appearance of compliance while operating with a complete disregard for workplace laws;
c)the total underpayments, which are in excess of $87,000, are very significant, and left Badhan and Francis in a position where they were working in excess of full-time hours, yet couldn’t even afford to meet their most basic costs, including groceries. None of the underpayments have been rectified.
The Applicant made recommendations as to appropriate pecuniary penalties which are reproduced in the second schedule to these reasons. The Applicant submitted that the aggregate penalties that are an appropriate response to the contraventions of the Respondents are:
a)$372,800 to $444,100 in respect of the First Respondent; and
b)$74,630 to $88,910 in respect of the Second Respondent.
Detailed submissions on these recommended penalties were made.
Documents Relied On
The Applicant relied on the following material in support of its case:
a)Amended Statement of Claim filed on 19 August 2016 with the leave of the Court (ASOC) (As the proceedings have progressed by way of default judgment, the facts pleaded in the ASOC are deemed to have been admitted: Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd [2006] FCA 1427);
b)Statement of Agreed Facts filed on 10 February 2016 (SOAF);
c)Materials filed in support of the application in a case for default judgment, filed on 1 August and 6 September 2016;
d)Affidavit of Fair Work Inspector Darren Lang (Inspector Lang), filed on 29 March 2016 (First Lang Affidavit);
e)Supplementary Affidavit of Inspector Lang filed on 17 October 2016 (Second Lang Affidavit);
f)Affidavit of Johanne Crouch, filed on 24 March 2016 (Crouch Affidavit);
g)Affidavit of Senju Francis, filed on 29 March 2016 (Francis Affidavit);
h)Affidavit of Sunil Badhan, filed on 29 March 2016 (Badhan Affidavit); and
i)Affidavit of Wade Demosani, filed on 29 March 2016 (Demosani Affidavit).
Principles Relevant to Determination of Penalty
The High Court recently explained the purpose of the imposition of civil penalties in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 (Cth v FWBII):
[55] ... whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:
Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]...The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act. (Cth v FWBII at [55], citing Trade Practices Commission v CSR Ltd [1990] FCA 521)
In agreeing with French J (as he then was) the High Court confirmed that consideration of the well-known penalty factors, set out in CSR but adopted in this jurisdiction in Mason v Harrington Corporation Pty Ltd t/as Pangea Restaurant and Bar [2007] FMCA 7 (Pangea), is to be undertaken within the overarching consideration of what penalty will achieve the principal object of deterrence; both specific and general.
As a preliminary matter in determining the quantum of any penalty to be imposed, the Court should identify the number of separate contraventions that attach to the Respondents’ conduct. Each contravention of each separate obligation found in the FW Act and FW Regulations is a separate contravention of a civil remedy provision for the purposes of section 539(2) of the FW Act (Gibbs v The Mayor, Councillors and Citizens of City of Altona (1992) 37 FCR 216 at 223 (Gibbs); McIver v Healey [2008] FCA 425 at [16] (McIver). The Court should then consider whether any of the contraventions constitute a single course of conduct, or whether it is otherwise appropriate to treat the contraventions as a single contravention, or group them, for the purposes of imposing penalties.
Identified Contraventions
The Court has declared that the Respondents contravened the following provisions of the FW Act and FW Regulations (Orders, 19 September 2016):
a)section 325(1) of the FW Act by requiring Badhan to spend part of an amount payable to him in relation to performance of work where that requirement was unreasonable in the circumstances;
b)section 325(1) of the FW Act by requiring Francis to spend part of an amount payable to him in relation to performance of work where that requirement was unreasonable in the circumstances;
c)section 343(1) of the FW Act, by taking action, or threatening to take action, against Badhan with intent to coerce him to not exercise his rights in March 2014 and in May 2014;
d)section 343(1) of the FW Act, by taking action, against Francis with intent to coerce him to not exercise his rights;
e)section 340(1) of the FW Act, by threatening to alter Badhan's position to his prejudice, or alternatively injuring Badhan in his employment, because he exercised a workplace right;
f)section 340(1) of the FW Act, by threatening to alter Francis’ position to his prejudice because he exercised a workplace right;
g)contravened section 45 of the FW Act, by failing to pay:
i)each of Francis, Badhan, Crouch and Garratt the adult minimum rate of pay prescribed by clauses A.2.5 and 20.1 of the Award;
ii)Demosani the minimum junior rate of pay prescribed by clause 20.3 of the Award;
iii)Demosani the minimum apprentice rate of pay, prescribed by clause 20.2 of the Award;
iv)each of the Employees’ Saturday penalty rate prescribed by clauses A.7.3 and 34.1 of the Award;
v)each of Crouch, Demosani, Francis and Garratt Sunday penalty rates prescribed by clauses A.7.3 and 34.1 of the Award;
vi)each of Badhan, Crouch, Demosani and Garratt public holiday penalty rates prescribed by clauses A.7.3 and 34.1 of the Award;
vii)each of the Employees overtime rates prescribed by clause 33.1 of the Award; and
viii)Crouch at the rate of 150% of her base rate of pay for not being provided with a meal break during the first six hours of her shift, as prescribed by clause 32.4 of the Award,
h)contravened subsection 44(1) of the FW Act, by failing to:
i)accrue and pay annual leave to Badhan and Crouch as required by the FW Act;
ii)accrue and pay paid personal/carer's leave to Badhan and Crouch as required by the FW Act; and
iii)provide Crouch with the appropriate notice of termination or payment in lieu thereof, as required by the FW Act,
i)contravened regulation 3.44(1) of the FW Regulations, by failing to ensure that the records it kept in respect of each of the Employees were not false or misleading to its knowledge;
j)contravened regulation 3.44(6) of the FW Regulations, by making use of entries in employee records for each of the Employees knowing that those records were false or misleading, in response to two Notices to Produce Records or Documents dated 3 September 2013 and 19 September 2014 respectively;
k)contravened section 535(2) of the FW Act, by failing to keep records for Badhan with information prescribed by the FW Regulations; and
l)contravened section 536(1) of the FW Act, by failing to give any of the Employees a pay slip within one working day of paying an amount to that Employee in relation to the performance of work.
Course of Conduct and Grouping
Section 557 of the FW Act provides that, for specified contraventions of the FW Act (Which includes sections 44, 45, 325, 340, 343, 535 and 536 of the FW Act.), two or more contraventions of the same civil remedy provision will be treated as a single contravention where that contravention was committed by the same person, and arose from the same course of conduct. Section 557 of the FW Act does not apply to coercion or adverse action contraventions.
As is reflected in 13 above, the Court accepts that contraventions of the same term of the Award, and sections 44, 535 and 536 FW Act or the FW Regulations, in relation to multiple employees, may be treated as one contravention under section 557 of the FW Act, provided that there is one course of conduct. The Court further accepts that such grouping is appropriate in this proceeding.
The Applicant submitted that the contraventions of section 325 in respect of Badhan and Francis cannot be treated as a single contravention, as the requirement to repay wages occurred as part of two distinct courses of conduct: Badhan and Francis were employed for discrete periods that did not overlap (SOAF, [11]) and the requirement to repay arose out of separate decisions by the Respondents. (See e.g. Rowe v Capital Territory Health Commission [1982] FCA 3; Seymour v Stawell Timber Industries Pty Ltd [1985] FCA 236.) The Court accepts this.
Additionally, the applicant submits that the court should treat the two instances of production of false records to the Applicant, as separate and distinct courses of conduct pursuant to regulation 3.44(6). The two productions occurred on separate occasions, in response to two separate Notices to Produce, and in the second production occurred after the Respondents had been put on notice that the production was unlawful. The conduct was deliberate and on each occasion a decision was taken to produce false records to the regulator in order to obfuscate its investigations. To treat such contraventions as a single instance would not reflect the seriousness of such conduct. The Court accepts this.
In addition to the statutory course of conduct provisions, it is open to the Court to group separate contraventions where the contraventions contain common elements or can be said to overlap with each other (See: Pearce v R (1998) 194 CLR 610 at [40], Johnson v R (2004) 205 ALR 346 at [27]-[34], Merringtons at [46], [72] (Graham J) and [93] (Buchanan J) and Fair Work Ombudsman v Tiger Telco Pty Ltd (in liq) [2012] FCA 479 at [24]-[25] (Bromberg J). It is appropriate for the Court to group contraventions where, if they were treated separately, this would potentially penalise the Respondents twice for the same or substantially similar conduct.
The Applicant submitted that it is appropriate on the particular facts of this case to group the adverse action and coercion contraventions, such that there is a single group of contraventions for each of Badhan and Francis. The Court accepts that the adverse action and coercion contraventions in respect of Francis are underpinned by the same conduct, being the ongoing threats to withdraw Francis’ visa and terminate his employment (Francis Affidavit, [47]-[73]). The different contraventions came about, largely, due to a different legal characterisation of the same conduct.
In respect of Badhan, the Second Respondent demanded that Badhan repay a portion of wages under threat of cancellation of his visa, or as a requirement of the maintenance of his visa. These threats manifested in two discrete incidents in March and May 2014 (Badhan Affidavit, [39]-[61]). The Applicant submitted that in the specific circumstances of these proceedings, it may be appropriate to view these two incidents as sharing common elements on the basis that the separate threats form part of an ongoing course of conduct of taking unlawful action to procure payments from Badhan. Similarly to Francis, the separate adverse action and coercion contraventions that arose as a result of each of these incidents came about due to the different legal characterisation of the same underlying conduct. The Court agrees.
The Court also recognises that it is appropriate to group the following contraventions:
a)contraventions of minimum wages in respect of the adult employees, and Demosani, as both an apprentice and junior employee;
b)the failure to accrue and pay annual leave entitlements; and
c)the failure to accrue and pay personal leave entitlements.
On the basis of the above, the Applicant submitted, and the Court accepts that, there are 18 groups of contraventions for which the Applicant seeks penalties against each of the Respondents. This is set out in detail in the second schedule to these reasons.
Maximum Penalties
The Applicant has standing to seek penalties in respect of each of the contraventions (Section 539(2) of the FW Act. Regulation 4.01A of the FW Regulations).
Section 539(2) of the FW Act provides for the maximum penalty the Court may impose against an individual respondent for each of the contraventions (The maximum penalties are 60 penalty units in respect of contraventions of sections 44, 45, 325, 340 and 343, 30 penalty units in respect of contraventions of sections 535 and 536 and 20 penalty units in respect of regulation 3.44). Section 546(2)(b) of the FW Act provides that each of the maximum penalties set out in section 539(2) are multiplied by five for corporate respondents.
Save for the first four weeks of Crouch’s employment, at the time that the contraventions occurred, a penalty unit was defined as $170 (A “penalty unit” in the FW Act has the same meaning as in the Crimes Act 1914 (Cth). Section 4AA(1) of the Crimes Act currently provides that a penalty unit is $180. At the time of the enactment of the FW Act and until 28 December 2012 a penalty unit was $110. From 28 December 2012 until 26 June 2015 it was $170). Prior to this time a penalty unit of $110 applied.
Contraventions in respect of sections 44, 325, 340, 343, 535 and 536 of the FW Act and regulations 3.44(1) and 3.44(6) of the FW Regulations each occurred in their entirety at the time the increased penalty unit applied. In the first four weeks of Crouch’s employment she was as not paid amounts sufficient to meet her Award entitlements to minimum wages, overtime rates of pay, and penalty payments in lieu of meal breaks, meaning these grouped contraventions occurred across periods where two separate penalty unit definitions applied.
The Applicant submitted the penalty unity of $170 should be used to calculate each of the maximum penalties (This is consistent with the approach taken in Fair Work Ombudsman v Amritsaria Four Pty Ltd and Anor [2016] FCCA 986, [52], citing with approval R v White (New South Wales Court of Criminal Appeal, unreported, 25 July 1991, Gleeson CJ, Lee CJ at CL and Hunt J) for the following reasons:
a)a lower penalty unit applied for a period of four weeks, whereas the increased penalty unit applied for the remaining 21 months of the period in which the contraventions occurred;
b)each of the groups of contraventions that commenced in the first four weeks of Crouch’s employment (excluding the meal break contraventions), affected all five Employees and the Applicant has recommended grouping the contraventions not only as a single course of conduct in respect of Crouch, but also in respect of all five Employees;
c)to apply the lower penalty unit to these grouped contraventions, would result in anomalous outcomes, such as:
i)the previous maximum penalty applying indefinitely to existing contraveners while the course of conduct continues;
ii)contraventions occurring over a longer period being subject to a lower maximum penalty than shorter courses of conduct commenced after this date (effectively rewarding persistent contraventions); or
iii)significantly different penalties being imposed for similar courses of conduct where one is shown to have commenced shortly before, and the other on or after, 28 December 2012; and
d)adopting the FWO’s approach would not result in manifestly excessive penalties, as the increase of the value of a penalty unit was intended to maintain rather than increase the value of the maximum penalty (In Kelly v Fitzpatrick [2007] FCA 1080 at [29], the Court considered the issue of an increase to maximum penalties, not an increase to the value of a penalty unit. The increase in penalties considered was one of 330 percent).
The Court accepts these submissions.
The maximum amounts the Court could impose, in monetary terms, for each of the groups of contraventions is set out in the second schedule.
If the Court accepts (as it does) the Applicant’s approach to course of conduct and grouping, the maximum penalties which the Court could impose are:
a)for the First Respondent: $764,000; and
b)for the Second Respondent $153,000.
It is not inappropriate for the Court to consider the maximum penalties that could be imposed on each of the Respondents, as part of the comparative exercise of determining where the admitted contraventions sit (Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 (Mornington Inn) at [88] per Stone & Buchanan JJ.) The maximum penalties “taken and balanced with all of the other relevant factors [do provide] a yardstick.” (Markarian v R [2005] HCA 25; (2006) 228 CLR 357 at [31] per Gleeson CJ, Gummow, Hayne & Callinan JJ.)
Application of Principles on the Imposition of Penalties
A non-exhaustive list of factors relevant to the imposition of penalty was summarised by Federal Magistrate Mowbray in Pangea and endorsed by the Federal Court in Kelly v Fitzpatrick [2007] FCA 1080 at [14]. These factors are well-settled, but are not a “rigid catalogue of matters for attention”: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 (Merringtons) at [88]-[91].
These factors closely reflect the matters referred to by French J in Trade Practices Commission v CSR Ltd [1990] FCA 521 when determining what level of penalty will achieve a deterrent outcome (At [42]).
Nature and Extent of the Contravening Conduct
The contraventions in these proceedings were widespread and continued for a period of over 18 months. The Applicant submitted, and the Court accepts that, the breadth of the contravening conduct − ranging from the extraction of money from vulnerable employees under threat of deportation, to underpayment of the most basic of employee minimum entitlements, to the creation of false and misleading employment records − is extremely serious and warrants condemnation from the Court in the strongest terms.
The different types of contravening conduct are described in further detail below.
Repayment of Wages under Coercion and in the Face of Adverse Action
During their employment periods each of Badhan and Francis were required to repay significant portions of their wages to the Respondents almost each week of their employment. Although the requirement to repay amounts to the Respondents was imposed on Francis and Badhan separately, and at different periods of time, the conduct largely followed the following pattern:
a)prior to working for the Respondents, Francis and Badhan performed work trials. Francis did not receive payment for his trial, despite initial promises to be paid by the Second Respondent (Francis Affidavit, [9]);
b)prior to, or around the time of commencement, Francis and Badhan were both provided with contracts providing for base annual salaries in excess of $50,000 for 38 hours of work per week, with additional amounts to be paid for applicable penalties and allowances. This occurred in the context of the Respondents agreeing to sponsor Francis and Badhan’s visas (Badhan Affidavit, [23] (Annexure SKB-4); Francis Affidavit, [13]. SOAF, [14], [25]);
c)shortly after commencing employment, Francis and Badhan were both told that, they would be required to pay back a portion of their weekly wages. Francis was told he would only be entitled to keep about $200 to $250 of his wages each week, and Badhan was told he would be able to keep $300 each week (Francis Affidavit, [48]. Badhan Affidavit, [39]);
d)to make payments to the Respondents, Francis and Badhan were each verbally instructed as to the amount they were expected to pay and each attended ATMs close to the Business to get cash out and then gave this cash either to the Second Respondent or the Second Respondent’s son, Safwan Ghazale (Francis Affidavit, [56]. Badhan Affidavit, [60]-[61]);
e)Francis and Badhan were required to make the repayments for close to their entire employment periods; and
f)the amounts Francis and Badhan were instructed to repay to the Respondents varied during Francis’ and Badhan’s employment periods, and varied from between $360 to $2000 a week for Badhan (Badhan Affidavit, [60]) (an amount in excess of his weekly wage) and between $450 and $940 a week for Francis (Francis Affidavit, [67]). Francis repaid $11,050 spanning a period of around seven months, and Badhan repaid $10,680 spanning a period of six months (Francis Affidavit, [67]; Badhan Affidavit [60]).
Francis and Badhan are each Indian nationals (Francis Affidavit, [1]. Badhan Affidavit, [1]) and were reliant on the First Respondent to remain in Australia lawfully. The First Respondent sponsored Francis for a Temporary Work (Skilled) subclass 457 visa (457 visa) (Francis Affidavoit, [14] (Annexure SF-3). Francis’ wife, was also in Australia holding a visa dependent on Francis’ 457 visa (Francis Affidavit, [46]). As a condition of the 457 visa, Francis was required to work for the First Respondent (Francis Affidavit (Annexure SF-3). In the event that Francis ceased working for the First Respondent, he had 28 days before his visa expired (Francis Affidavit (Annexure SF-3).
During his employment, the First Respondent made an application to sponsor Badhan for a 457 visa (SOAF. [12(b)]). While this application was being processed, Badhan was on a bridging visa, pending the outcome of the 457 visa application (Badhan Affidavit, [22] (Annexure SKB-3). In the event that Badhan’s application for the 457 visa was withdrawn or rejected, Badhan had 28 days before his visa expired (Badhan Affidavit (Annexure SKB-3).
In order to secure the payments each week, the Second Respondent made numerous threats to Francis and Badhan to terminate their employment, cancel Francis’ visa, or Badhan’s visa application. In respect of Francis, the Second Respondent made threats including:
a)“If you don’t give the money back to me then I will cancel your visa”;( Francis Affidavit, [48])
b)“If you don’t pay this money to me then I will cancel your visa and you will not have a job”;( Francis Affidavit, [53]) and
c)“If anything happens to my business, I will kill you. If you complain to anyone, I will kill you and cancel your visa” (Francis Affidavit, [59]).
The Second Respondent made threats to Badhan to secure the repayment of wages, including:
a)“If you don’t do it I’ll throw out your visa application tomorrow”;( Badhan Affidavit, [43])
b)“If you want your visa, you do it. If you do not want it, I will call my lawyer tomorrow and he will take the visa application away”; (Badhan Affidavit, [48]) and
c)following Badhan’s refusal to repay money to the Second Respondent in May 2014, the Second Respondent, dragged Badhan by the collar, told him “you need to pay me $500 per week”, attempted to punch Badhan and told him to leave the restaurant premises (Badhan Affidavit, [50]-[52]).
The Applicant submitted, and the Court agrees, that the conduct of the Respondents, coercing Francis and Badhan to repay significant portions of their wages was grossly exploitative. The Second Respondent was aware Francis and Badhan were each dependent on him (through the First Respondent) to remain in Australia and he exploited his position of power to extract significant sums from each of the employees, and in effect, pay them wages as low as $6 an hour. It is also highly aggravating that the Second Respondent used violence, and threats of violence, to obtain the repayments.
Not only are the tactics employed by the Second Respondent to secure the repayment of wages particularly egregious, the Applicant submitted, and the Court agrees, that the strategy of requiring repayment of wages is in itself extremely serious conduct. The Applicant submitted it was open to the Court to infer that the repayment scheme was put in place in order to conceal the reality of the amounts that Francis and Badhan were paid for their work. The Court draws this inference.
The Second Respondent was aware that minimum wages were required to be paid to Francis and Badhan (SOAF, [80(c),(d)]), put in place contracts purporting that Francis and Badhan would be paid the amounts required under both immigration and workplace laws (SOAF, [13]-[14], [24]-[25]. Badhan Affidavit (Annexure SKB-4). Francis Affidavit (Annexure SF-2), and, as described in further detail at paragraph 48 below, prepared records consistent with Francis and Badhan being paid approximately the contractual salaries. The Applicant submitted that the Respondents required the repayment of wages to obtain the end result of paying extremely low amounts to Francis and Badhan while maintaining an outward appearance of legality. The Applicant submitted this deceit demonstrates a contemptuous disregard for Australian workplace laws (See Fair Work Ombudsman v Mai Pty Ltd and Anor [2016] FCCA 1481, [8]). The Court accepts these submissions.
Underpayment of wages and leave entitlements
The underpayment contraventions affected each of the Employees, resulting in individual underpayments of between $21,383 (to Badhan, not including the amounts he repaid to the Respondents) and $6,766 (to Demosani) (ASOC, Table 14). The underpayments continued throughout the whole of the Employees’ employment periods. The underpayment contraventions came about because the Employees frequently worked hours in excess of 38 hours a week, across weekdays, weekends and public holidays, and were paid as follows:
a)Crouch was paid between $15 and $15.55 per hour (SOAF, [17]); Demosani was not paid for the first week of his employment, and otherwise paid between $8 and $10 per hour (SOAF, [22]);
b)Garratt was paid between $11 and $16.50 per hour (SOAF, [28]);
c)following repayments, Badhan was not paid for three weeks, and at other times was paid between $300 and $830 per week (ASOC, Table 1); and
d)following repayments, Francis was not paid for 11 weeks, and at other times was paid weekly rates of pay of between $60 and $1000 (ASOC, Table 2).
The Employees frequently worked in excess of 38 hours per week, regularly working over 50 hours per week. The Award prescribed penalty payments of between 150% and 200% of the minimum hourly rates for working overtime, yet the Employees were not paid any additional amounts for working these additional hours.
Despite being engaged on a full-time basis, the Respondents did not afford either personal or annual leave entitlements to Badhan and Crouch. For Crouch, this meant she did not receive any payment when she was taking carer’s leave while looking after her young daughter when she was sick (Crouch Affidavit, [45]-[47]).
False and Misleading Record Keeping
During the FWO’s investigation into the workplace complaints of the Employees, the Respondents produced records to the FWO including:
a)on 12 September 2013, “weekly time, pay and wages books” and “time and pay sheets” for Francis, Crouch and Garratt (First Lang Affidavit, [28); and
b)on 8 October 2014, “weekly time, page and wages book” and “pay history” for Badhan (First Lang Affidavit, [83]),
(collectively, the Time and Wage Records).
The two sets of Time and Wage Records were both produced to FWO in response to a statutory notice requiring the production of documents. The Time and Wage Records included false information in respect of both the amounts paid and the hours worked by each of Francis, Crouch, Garratt and Badhan (First Lang Afidavit, [65]-[74]. ASOC, [137]-[156]). In particular, the Time and Wage Records showed:
a)Francis was paid $1000 (gross) each week;
b)Francis worked 38 hours each week;
c)Badhan worked 38 hours each week; and
d)Badhan was paid $1000 (gross) each week.
The Time and Wage Records were created by the Second Respondent. The Applicant submitted that, on the basis of the evidence before the Court, it is open to the Court to infer that the creation of the false Time and Wage Records was part of the Respondents’ usual business practices. The Court does draw this inference. Crouch, Francis and Badhan each gave evidence that on a regular basis they were asked to sign timesheets or wage records that were either blank or had the relevant time and wage data obscured (Crouch Affidavit, [23]-[28]. Badhan Affidavit, [30]-[34]. Francis Affidavit, [29]-[33]). The records signed by the employees are consistent with the ones produced by the Respondents to the FWO (Crouch Affidavit, [23]-[28]. Badhan Affidavit, [30]-[34]. Francis Affidavit, [29]-[33]). Further, the two sets of false records were provided to FWO over a year apart, with the Badhan records being provided to the FWO months after the FWO had issued correspondence to the Respondents including findings that the Respondents had created false and misleading records and provided these to the FWO (First Lang Affidavit, [74] (Tab 73).
In addition to this regular practice, it also appears that the Respondents created false records in response to the FWO’s investigation. The evidence before the Court is that the FWO issued a statutory notice seeking the production of time and wage records on 3 September 2013 (First Lang Affidavit, [26]), in mid-September 2013, the Second Respondent asked Crouch and Francis to sign multiple blank timesheets (Crouch Affidavit, [29]-[31]; Francis Affidavit, [34]-[36]) and on 12 September 2013, the Respondents produced the first set of false Time and Wage Records to the FWO (First Lang Affidavit, [28]). On the basis of this timeframe, the Applicant submitted it was open to the Court to infer that at least a portion of the Time and Wage Records were created specifically to respond to the FWO’s notice and to deliberately disguise the underpayments. The Court does draw this inference.
When the deliberate falsification of the Time and Wages Records is viewed together with the requirement imposed on Badhan and Francis to repay portions of their wages, the Applicant submitted the Respondents engaged in a deliberate strategy of deceit to hide the ongoing contraventions of workplace laws. The Court agrees.
The creation and production of false records was a deliberate attempt by the Respondents to avoid complying with the minimum protections in the FW Act. This conduct frustrated the ability of the Employees to know their minimum entitlements, and hold their employer to account for the failure to provide these (Fair Work Ombudsman v Mai Pty Ltd and Anor [2016] FCCA 1481). It also frustrated the ability of the FWO to efficiently investigate the concerns of the Employees, requiring Inspector Lang to undertake extensive investigations and cross referencing of records (First Lang Affidavit, [65]-[73], [84]-[89]).
The Court finds that the creation and production of false records is highly aggravating. As observed by Judge Burchardt in the recent decision Fair Work Ombudsman v Oz Staff Career Services Pty Ltd and Ors [2016] FCCA 2594, it is conduct that is “about as serious as it gets” (At [34]).
Additionally, the Employees were never provided payslips during their employment (SOAF, [74]-[76]). The Court is strongly of the view that the failure to provide payslips should not be viewed merely as an administrative matter. Rather, it has serious consequences for employees, limiting their ability to monitor and pursue their legal entitlements (Fair Work Ombudsman v Hiyi Pty Ltd and Ors [2016] FCCA 1634, [34]. Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd [2012] FMCA 258, [67). In the circumstances where the other employment records kept by the Respondents were false, the failure to provide pay-slips meant the Employees had no means to verify their wages or hours.
Circumstances in which the conduct took place
The Court finds that a particularly aggravating aspect of the contravening conduct in respect of Francis and Badhan, was the deliberate exploitation of the two employees’ vulnerability in the workplace (See Jones v Hanssen Pty Ltd [2008] FMCA 291, [8]). As outlined above, both Francis and Badhan were reliant on the Respondents for their ability to remain in Australia. The Second Respondent was aware of this reliance, repeatedly using the threat of visa cancellation to extract payment from each of Francis and Badhan on a weekly basis.
During their employment periods, Francis and Badhan each sought to mitigate the ongoing impact of the Respondents’ conduct by seeking alternative employment (Francis Affidavit, [60]. Badhan Affidavit [57]). Each of Badhan and Francis felt they were unable to leave their employment with the Respondents prior to gaining alternative employment because of the conditions on their visas (Francis Affidavit, [52], [60]. Badhan Affidavit, [57]).
Additionally, when applying for the role at the Business, Francis responded to an online job advertisement specifically seeking employees looking to be sponsored for 457 visas (Francis Affidavit, [5]). The inference is available that the Respondents specifically sought out an employee on a sponsored visa because of these known vulnerabilities.
Nature and extent of loss suffered
The conduct of the Respondents resulted in total underpayments of $87,909.65 to the Employees. The Applicant submitted, and the Court agrees, that the extent of this loss is objectively serious.
Francis and Badhan
The amounts Badhan and Francis were required to repay, and the amounts they were otherwise underpaid was significant: Francis was underpaid $28,858.67 over six months, and Badhan was underpaid a total of $32,063.84 over seven months. After the repayments were made for their entire employment periods, Francis was paid wages totalling $9,950 and Badhan was paid wages of $8,970. In other terms, Francis was paid just over a quarter of his total Award entitlements and Badhan received just over 21% of what he was entitled to be paid. Viewed in this context, the Court finds, Francis and Badhan were grossly underpaid.
Francis received no wages at all for work performed over 11 weeks, sometimes going up to four weeks without receiving any wages. Francis did not receive any back-payment for the weeks he was not paid.
As outlined above, Badhan was paid between $300 and $830 a week during his employment period. Where Badhan regularly worked up to 50 hours, this equated to rates of pay of between $6 and $16.60 an hour. Badhan was most commonly left with $400 after making repayments, resulting in an average hourly rate of pay of $8 an hour.
Francis was left with between $60 and $1000 during his employment period, most commonly being left with $450 a week, or around $9 per hour. Francis received less than $6 an hour or less for 14 weeks is his 32 week employment period.
In stark contrast to the amounts actually paid to Francis and Badhan, they were entitled to be paid a minimum hourly rate of between $18.58 and $19.64 per hour, with overtime rates of up to between $27.87 and $39.27 per hour.
The minimal payments made to Francis and Badhan had a significant impact on their lives and wellbeing. Francis was unable to meet his rent payments and day to day expenses on the amounts he was being paid, relying on existing savings, a credit card, a loan from his sister and eventually a personal loan from the bank (Francis Affidavit, [79]-[81]). In March of 2016, Francis was still paying off this loan (Francis Affidavit, [81]). In some weeks, Francis was not even in a position to afford groceries (Francis Affidavit, [81]-[82]).
Badhan gave evidence that he lost significant amounts of weight from the stress he felt under while working for the Respondents (Badhan Affidavit, [73]). Badhan was left in the position of borrowing a mattress from a friend because he was not able to afford any furniture for his rented Albury apartment (Badhan Affidavit, [73]). He was also unable to buy any clothes or go out socially (Badhan Affidavit, [73]).
The evidence of the impact that the underpayments had on Francis and Badhan is particularly saddening in the context of them being employees in Australia on sponsored skilled visas, utilising their tertiary qualifications. Francis and Badhan were each entitled to expect meaningful employment. Instead, the Respondents’ conduct deprived them of the ability to meet even the most basic of needs and enjoyments.
Crouch, Garratt and Demosani
Over their employment periods, Crouch and Garratt were entitled to be paid minimum hourly rates of between $16.89 and $17.49 per hour, with hourly rates of up to $34.98 for working overtime hours and $38.48 for working on public holidays. In contrast, Crouch was never paid more than $15.55 per hour and Garratt was paid between $11 and $16.50 an hour. Crouch was underpaid $11,273 over 11 months and Garratt was underpaid $8,946 over seven months.
Demosani was a junior during his employment, and in the period from 9 September to 21 November 2013, was engaged as an apprentice. Consistent with the other employees, Demosani was at all times paid rates of pay below the Award minimum hourly entitlements. As a result, Demosani was underpaid $6,766 over his eight month employment period. Demosani was paid just over 60% of his Award entitlement.
The Award provides for apprentice rates of pay lower than junior or adult rates of pay. The rationale behind the reduced rates is that they may be less productive as time is invested in training and skill development (Modern Awards Review 2012 - Apprentices, Trainees and Juniors [2013] FWCFB 5411, [132]). In contrast, Demosani’s rates of pay were reduced from $10 to $8 an hour following the cancellation of his apprenticeship, and where he performed general kitchen hand duties without the opportunity for training and skills development.
These amounts remain unpaid, and there is no immediate likelihood that the Employees will receive those funds.
Deliberateness of Contraventions
The Applicant submitted that the deliberateness of the Respondents’ conduct is a highly aggravating factor in these proceedings.
The conduct in respect of Francis and Badhan is particularly objectionable. The Second Respondent deliberately exploited the imbalance of power between sponsor and visa holder in order to achieve financial gain. The Second Respondent was explicitly aware how little Francis and Badhan were in effect being paid following the repayments, asserting he only intended to pay Francis $3 an hour (Francis Affidavit, [64]), and that he would only pay Badhan $300 for 60 hours of work (Badhan Affidavit, [39]).
The extremely low amounts received by Francis and Badhan were paid in the context of previous representations by the Respondents that Francis and Badhan could expect to be paid an annual salary of over $50,000 with additional penalty entitlements (Badhan Affidavit, [23] (Annexure SKB-4); Francis Affidavit, [13]. SOAF, [14], [25]). The disparity between the promised annual salary and the amounts in fact paid demonstrates the particular cruelty of the minimal payments Francis and Badhan retained for their work.
The Respondents were also acutely aware of the significant impact of the extremely low amounts paid to Badhan and Francis (Badhan Affidavit, [39], [45], [50]-[59]. Francis Affidavit, [45], [47], [59]), yet responded with threats of violence or cancellation of their visas almost each time Francis and Badhan sought to contest the repayments (Badhan Affidavit, [50]-[54]. Francis Affidavit, [59], [65]). The Second Respondent also simply refused to pay Francis for over a month of work (Francis Affidavit, [45]).
At all relevant times, the Second Respondent knew of the requirement to pay minimum wages to the Employees (SOAF, [80]. First Lang Affidavit, [48] (Tab 58). Yet instead of even paying close to Award entitlements, the Respondents paid flat rates of pay to Garratt, Crouch and Demosani, at amounts at all times below the Award minimums.
The requirement for Francis and Badhan to repay their wages, and the creation of false and misleading records to disguise the underpayments formed part of a calculated strategy to disguise the unlawful conduct, and to allow the conduct to continue. The Applicant submitted this calculated and deceitful conduct warrants condemnation from the Court in the strongest terms. The Court accepts this submission.
Similar Previous Conduct
The Applicant acknowledged the Respondents have not previously been the subject of proceedings by the Applicant for contraventions of workplace laws, and the Applicant is not aware of any other findings of contravention by a Court in respect of the Respondents. However, the Applicant submitted that this should be given limited (if any) weight, particularly in circumstances where the evidence before the Court is that the Respondents unlawfully took steps to conceal their contravening conduct through the creation of false time and wage records, and the conduct continued after warnings from the FWO.
In General Manager of the Fair Work Commission v Thomson (No. 4) [2015] FCA 1433 at [7], Jessup J made a similar finding in relation to contraventions of the Fair Work (Registered Organisations) Act 2009 (Cth) which had been concealed until the Fair Work Commission conducted an investigation:
“There is no suggestion that the respondent has previously contravened the provisions of the schedule upon which the applicant relied. But the impact of this consideration, which might of itself be regarded as mitigatory, is muted in the present case because of two factors. First, the fact that the respondent has come before the court once only is largely the result of the circumstance that, of their nature, the acts and omissions which led to the court’s findings of contraventions involved concealments on his part. He has left it to others to investigate his conduct and to join the necessary dots. The acts and omissions were many, and occurred over a number of years. Any one or more of them could not, therefore, be regarded as isolated, and it would be unrealistic to treat the respondent’s record as clear of any relevant blemishes simply because, as things have turned out, all of these acts and omissions have become the subject of a single proceeding...”.
Involvement of Senior Management
At all relevant times, the Second Respondent was the sole director and sole shareholder of the First Respondent and was in control of all operations of the First Respondent’s business (SOAF [10], [80]-[81]). The Second Respondent, who with his son (Francis Affidavit, [42], [56]-[57], [77]. Badhan Affidavit, [15]-[16] was the only level of management within the First Respondent, and was intimately involved in each of the First Respondent’s contraventions. He was the “hands and brain” of the First Respondent, and it was through his actions that the First Respondent perpetrated each of the contraventions (Hamilton v Whitehead [1988] HCA 65; Fair Work Ombudsman v Kentwood Industries Pty Ltd (No 2) [2010] FCA 1156).
The available evidence before the Court is that the Second Respondent has been involved in Australian businesses, and held senior positions in these businesses since 1988 (Second Lang Affidavit, [12]). The Court believes that penalties should be imposed at a meaningful level to reflect the involvement of an experienced businessman, in what can only be described as blatant breaches of workplace laws.
Contrition, corrective action and cooperation
Contrition and Corrective Action
There is no evidence before the Court of any contrition or remorse expressed by the Respondents. The strong impression is created that rather than accepting responsibility for their conduct, the Respondents have, since at least May 2016, largely sought to avoid the consequences of their behaviour, by failing to engage in the Court proceedings.
Despite making admissions to a number of contraventions and admitting that the First Respondent had underpaid the Employees at least $22,360, the Respondents have not paid any amounts to the Employees (Affidavit of Caitlin Baillie, filed 1 August 2016 filed in support of the Applicant’s application in a case for default judgement (First Baillie Affidavit), [36]-[39]. Affidavit of Caitlin Baillie, filed 6 September 2016 in support of the applicant’s application in a case for default judgment (Second Baillie Affidavit), [9]-[10]). Although the First Respondent is apparently no longer trading, there is no evidence before the Court that any measures were taken to ensure compliance while the Respondents were operating a restaurant business while the proceedings were on foot. Rather, the evidence before the Court is that the contravening conduct continued until the First Respondent ceased operating the Business in September 2014, despite intervention from the FWO (The Respondents ceased operated the Business or around 14 September 2014 (ASOC, [2(e)]. Badhan was employed by the Respondents up until 14 September 2014 (SOAF, [11]) and was not paid for the period from 25 August to 14 September 2014 (Badhan Affidavit, [35(e)]).
Cooperation
The Applicant acknowledged that the Respondents cooperated to a degree in the investigation of Inspector Lang. The Respondents produced documents during the investigation (First Lang Affidavit, [28], [64], [83]), and the Second Respondent voluntarily participated in a recorded interview (First Lang Affidavit, [46). However, the Applicant submitted that no weight should be given to this cooperation in circumstances where:
a)the Time and Wage Records provided to the FWO and relied on by the Respondents in the course of the investigation were false and misleading;
b)as outlined at paragraph 49 above, it appears that at least a portion of the Time and Wage Records were created specifically in response to the FWO investigation; and
c)the Second Respondent made assertions in his interview with the FWO that were false and inaccurate, despite being warned that it was an offence to provide false information to a commonwealth official (First Lang Affidavit (Tab 58, page 2).
The Court accepts these submissions.
Any cooperation with the FWO stands in stark contradistinction to the decision to make, keep and then rely on the false records (Fair Work Ombudsman v Oz Staff Career Services Pty Ltd and Ors [2016] FCCA 2594, [43]).
Additionally, any cooperation of the Respondents with the FWO was entirely undermined by the fact that, during the investigation, the Respondents were engaging in the same unlawful conduct that was being investigated by the FWO. In the same week that the Second Respondent was denying to Inspector Lang that Francis was required to repay portions of his wages (First Lang Affidavit, [54] (Tab 58), he was coercing Badhan to repay portions of his wages, under threat of cancellation of his visa (Badhan Affidavit, [39], [43]-[44], [60]). Similarly, the Respondents were paying Demosani an hourly rate of $8 (SOAF, [22](c)]), at the same time the Second Respondent maintained to Inspector Lang that he paid in accordance with the Award (First Lang Afidavit, [46]-[48]).
Admissions and Application of Penalty Discount
The Respondents admitted to some, but not all, of the alleged contraventions. In summary, in the SOAF, the First Respondent admitted to the underpayment of minimum wages to Crouch, Garratt and Demosani, the failure to pay penalty rates of pay to all Employees (as applicable), the failure to accrue and pay annual leave entitlements and the failure to issue payslips. The Second Respondent admitted he was involved in each of these contraventions. The Respondents admitted that the above contraventions gave rise to underpayments totaling $22,360.60 (SOAF, [5]), only a small proportion of the total underpayment.
The Respondents did not admit, in summary, to all contraventions arising from the requirement imposed on Francis and Badhan to pay portions of their wages to the Second Respondent (including the consequential failure to pay minimum wages), the failure to pay overtime rates of pay to all Employees, the failure to accrue and pay personal leave entitlements, the failure to pay Crouch in lieu of providing any notice of termination, the creation and use of false and misleading records and the failure to keep employment records. The Parties agreed that the contraventions that were not admitted by the Respondents gave rise to underpayments totaling $65,549.05 (SOAF, [7]).
In Mornington Inn, the Full Federal Court discussed the circumstances where admissions of contravention give rise to a discount on penalty. Stone and Buchanan JJ observed that it is not a sufficient basis for a discount that any admissions have saved the costs of a contested hearing (Mornington Inn , [74]). Rather, “the benefit of such a discount should be reserved for cases where it can be fairly said that an admission of liability: (a) has indicated an acceptance of wrongdoing and a suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate to course of justice.” (Mornington Inn , [76])
Applying these principles to the current proceedings, the Applicant submitted that it would not be appropriate for the Court to apply a discount on penalty on the basis of the Respondents’ limited admissions for the following reasons:
a)the admissions did not save the costs of a contested hearing. As the admissions were only partial, the Applicant was still put to the cost of preparing for a contested liability hearing, prior to the Respondents’ disengagement in the proceedings;
b)as outlined above, despite making admissions in February 2016 that the Employees were each underpaid, the Respondents have not rectified any amounts owing to the Employees, taken any steps to commence making payments, nor made any attempts to express contrition or remorse to either the Employees or the Court (First Baillie Affidavit, [36]-[39]. Second Baillie Affidavit, [9]-[10]);
c)the admissions were made in the face of overwhelming evidence presented by the Applicant, and should be viewed as an acceptance of the inevitable rather than a genuine intention to facilitate the course of justice;
d)the admissions made by the Respondents should not be viewed as an acceptance of responsibility for the contravening conduct in circumstances where a number of admissions made are inconsistent with other contraventions being contested. For example;
i)the Respondents made admissions that Garratt worked weekends, and that they had failed to pay Garratt Saturday and Sunday rates (SOAF), yet did not admit that the Time and Wage Records produced in respect of Garratt, which show her only working from Monday to Friday (First Lang Affidavit, [28], (Tabs 23 – 33), were false;
ii)the Respondents admitted to the fact that Francis was not paid any wages for the first five weeks of his employment and for seven other weeks while he was employed by the Fist Respondent (SOAF, [26(a)]), yet did admit to a contravention arising from failing to pay minimum wages to Francis; and
iii)the Respondents admitted to paying Badhan $220 for one week of full-time employment, and no wages in another week of employment (SOAF, [15]), yet again did not admit to a contravention arising from the failure to pay minimum wages to Badhan; and
e)rather than demonstrating a willingness to facilitate the course of justice, following the making of admissions, the Respondents ceased participating in these proceedings (First Baillie Affidavit, [22]-[29]). The Applicant submits this behaviour is consistent with attempts to avoid responsibility for the contravening conduct (even when admitted) and demonstrates a disregard for the judicial process.
The Court accepts these submissions.
While the Applicant acknowledged that the appropriate penalty should be determined by reference to the specific circumstances of the matter before the Court, the Applicant noted that Courts have previously been satisfied that there are circumstances where a discount on penalty is not appropriate even where admissions have been made (See for example, Fair Work Ombudsman v Jay Group Services Pty Ltd and Ors [2014] FCCA 2869, [75]; Fair Work Ombudsman v Contracting Plus Pty Ltd and Anor [2011] FMCA 20 [125]-[127]; Fair Work Ombudsman v Jetstar Airways Ltd [2014] FCA 33, [37]-[39]).
In the event the Court considers that the partial admissions warrant a discount on penalty, the Applicant submits that a discount of no more than 5% would be appropriate. As it turns out, the Court accepts the submission that it is not appropriate in this case to apply any discount on penalty in this regard, given the circumstances referred to in these reasons for judgment.
Compliance with Minimum Standards
Ensuring compliance with minimum standards is a very important consideration in this case. It is important for the Court to recognise the seriousness of the contraventions in this matter.
One of the principal objects of the FW Act is to ensure “a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders” for all employees (FW Act, section 3.) It is fundamental to the effectiveness of workplace regulation in Australia that this safety net is extended to all employees, regardless of their visa status or nationality.
The Applicant submitted that the conduct at the core of these proceedings – the repayment of wages, the grossly inadequate hourly rates paid and the false and misleading record keeping – is an affront to the minimum employment standards that all employees should be able to expect to receive in Australia. The Court agrees.
As well as protecting employees, the FW Act is also designed to provide an even playing field for all employers with regard to employment costs. By failing to adhere to the requirements of the Award, the Respondents have undermined this objective.
Through sponsoring employees through the 457 visa program, the Respondents obtained all the benefits of this program: skilled, full-time workers, committed to staying with the Business for a minimum of two years. Yet the Respondents didn’t even attempt to meet their obligations under that same program, flaunting the contract signed by the Second Respondent. This type of conduct undermines the integrity of the skilled visa program, which specifically seeks to ensure that visa workers are employed on terms and conditions no less favourable that Australian employees (See Francis Affidavit (SF-3).
Deterrence
It is well-established, most recently in Cth v FWBII at [55] and [110], that the need for specific and general deterrence is central to the imposition of a penalty under the FW Act (See for example, Pangaea at [26]-[59] and Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543 at 559-60 (Lander J). A primary purpose of civil penalties is to promote the public interest in compliance, and to attempt to put a price on a contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene legislation. A civil penalty must also “be fixed with a view to ensuring that the penalty is not such as to be regarded by [the] offender or others as an acceptable cost of doing business” (Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20 at [62]-[63]; (2012) 287 ALR 249 at 265).
Specific Deterrence
In assessing the relevance of specific deterrence to appropriate penalties, the Court looks at the attitude expressed by the Respondents, including by looking to any remorse or contrition expressed and any steps they have taken to ensure that no future breaches will occur (Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170, [37]).
As noted above, there is no evidence that the Respondents have shown any remorse, taken any steps to rectify the amounts owing to the employees or taken any action to ensure future compliance with workplace laws. Rather, the evidence before the Court is that the contravening conduct continued until the First Respondent ceased operating the Business in September 2014, despite intervention from the FWO (The Respondents ceased operated the Business or around 14 September 2014 (ASOC, [2(e)]. Badhan was employed by the Respondents up until 14 September 2014 (SOAF, [11]) and was not paid for the period from 25 August to 14 September 2014 (Badhan Affidavit, [35(e)]). Clearly, the investigation itself, and the warning provided to the Respondents by Inspector Lang (First Lang Affidavit, [74] (Tab 73), did not deter the Respondents.
Although it appears that the First Respondent is not currently trading (First Baillie Affidavit, [34]-[35) and it is not known whether the Second Respondent is currently engaged in business or employing employees, the Applicant submitted that specific deterrence remains a relevant factor in assessing appropriate penalties. Given the Second Respondent’s extensive prior involvement in the leadership and operation of a number of businesses, an inference is available that the Second Respondent may either currently, or in the future, engage in employing people. In light of the Respondents’ apparent disregard for the seriousness of their contraventions or the impact that this had on the Employees, the Applicant submitted there is a need to send a message to the Respondents, in the strongest terms, that the Court does not tolerate the contravening conduct. The Court agrees that there is this need.
General Deterrence
In order to be useful as a general deterrent, a penalty should be imposed at a level that is likely to act as a deterrent in preventing similar contraventions by like-minded individuals or organisations (Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20 at [62]-[63]; (2012) 287 ALR 249 at 265).
The Applicant submitted that general deterrence is a critical factor in these proceedings. The Court agrees. There is a need to send a message to the community, and particularly employers, that employees must be provided with the correct entitlements and steps should be taken to properly understand and comply with those entitlements.
The Applicant submitted, and the Court agrees that on the facts of this case it should consider sending a message to the industry in which the Respondents operate (Flattery v Zefferelli’s Pizza Restaurant [2007] FMCA 9 at [63]-[66]. See also Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357 (Plancor) at [37]). The hospitality industry in which the Respondents operate is an industry which is notorious for non-compliance and is an industry in which enforcement of those standards has proved to be notoriously difficult (Plancor at [37]. Fair Work Ombudsman v Kojima and Anor [2013] FCCA 976, [1]).
The need for general deterrence in the hospitality industry is also reflected in research conducted by the FWO, which reveals:
a)of all the requests for assistance received by FWO, the highest proportion of all complaints arise from the hospitality industry (Second Lang Affidavit, [7] (DJL-C);
b)of all the requests for assistance received by FWO from employees subject to 457 visas, again the highest proportion arise in the hospitality industry (Second Lang Affidavit, [6] (DJL-B); and
c)the underpayment of hourly rates is the issue of greatest concern to employees in the hospitality industry contacting FWO (Second Lang Affidavit, [7] (DJL-C).
The Applicant submitted it is equally important to send a message to employers of migrant workers in Australia that the failure to afford the Australian safety net of minimum entitlements to migrant workers will not be tolerated. The Applicant submitted that general deterrence is of fundamental importance to deter those employers who may be tempted to exploit the specific vulnerabilities of employees reliant on their employers for the ability to remain in Australia. The Court accepts these submissions. The Court should send a message to Australian employers that there is a single set of workplace protections in Australia that provide a safety net to all employees, regardless of their visa status.
Size of the Business
The available evidence before the Court indicates that, during the operation of the Business, the First Respondent employed approximately 10 employees (See for example, First Lang Affidavit, [64] (Tab 65). and operated at a single site. The Applicant acknowledged that the Business is best characterised as a small business.
The Respondents ceased operating the Business around September 2014. Following this, the First Respondent operated a further restaurant business in Wandin, Victoria (SOAF, [9(g)]) On the basis of information before the Court, it appears likely that the restaurant in Wandin is no longer operating (First Baillie Affidavit, [35]) and there is no other evidence that the First Respondent is trading in any capacity. There is also no information before the Court as to the current financial position of the Second Respondent, save for his ownership of a residential property (Second Lang Affidavit, [10]).
It is well established that the size and financial circumstances of the Respondents do not exculpate breaches of workplaces laws (Fair Work Ombudsman v Hiyi Pty Ltd and Ors [2016] FCCA 1634, [47]). Small businesses have the same obligation as larger employers to meet minimum employment standards (Kelly v Fitzpatrick [2007] FCA 1080, [28]). However, the Applicant acknowledged the financial circumstances of a respondent may be a relevant consideration in determining an appropriate penalty and whether the size of that penalty is “meaningful” (Hansen v Mt Martha Community Learning Centre Inc (No 2) [2015] FCA 1283, [5]). Where the Respondents’ conduct was exploitative and deliberate, the Applicant submitted that only a penalty in the high ranges would be meaningful. The Court agrees.
The Respondents have chosen not to participate in these proceedings and have not put any financial evidence before the Court. To the extent the Court may have concerns about the Respondent’s capacity to pay the appropriate penalties, the Applicant relied on the relevant line of authority regarding the primacy of general deterrence. In ACCC v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254, in the context of determining appropriate civil penalties under consumer protection law, Merkel J stated:
“The size of the contravening companies and their respective capacities to pay a penalty were relied upon as factors in mitigation in the present case. Plainly, such factors can be relevant to the penalty that is necessary to deter the company from contravening the Act in the future. … However, a contravening company’s capacity to pay a penalty is of less relevance to the objective of general deterrence because that objective is not concerned with whether the penalties imposed have been paid. Rather, it involves a penalty being fixed that will deter others from engaging in similar contravening conduct in the future. Thus, general deterrence will depend more on the expected quantum of the penalty for the offending conduct, rather than on a past offender’s capacity to pay a previous penalty.” (ACCC v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254, [9]).
These comments have been applied and endorsed in the workplace relations context. In Jordan v Mornington Inn Pty Ltd [2007] FCA 1384, Heerey J stated at [99]:
“As to the respondent’s own financial position, however, in considering the size of a penalty, capacity to pay is of less relevance than the objective of general deterrence: Leahy (No 2) at [9]. In any event, to the extent that financial hardship might mitigate what would otherwise be an appropriate penalty, such an argument would need to be based on evidence.”
On appeal, Stone and Buchanan JJ described the above statement of principle as being “unimpeachable” (Mornington Inn, [69]). Similarly, in Fair Work Ombudsman v Promoting U Pty Ltd [2012] FMCA 58, Burchardt FM (as he then was) observed at [57]:
“... Respondents cannot hope to have their conduct in effect exonerated by the Court merely because they are impecunious. Parliament has set significant penalties for the sort of contraventions that the Respondents engaged in and I do not think it is appropriate for the totality principle to operate simply to ensure that penalties are imposed in suitably insignificant amounts to meet the Respondents’ capacity to pay.”
In circumstances where the Respondents have not participated in the proceedings and not put any evidence before the Court in respect of any potential hardship, the Court finds that it is not appropriate to reduce the penalty on the basis of potential or inferred financial hardship. Rather, the Court imposes a penalty which reflects the seriousness of the Respondents’ conduct and emphasizes general deterrence. This is consistent with Federal Court and High Court authority (As summarised in FWBII v Cth).
Totality and Recommended Penalty
In Cth v FWBII, the High Court confirmed that parties to civil penalty proceedings can make submissions which identify a range of penalties, nominate specific penalties in respect of particular contraventions and/or urge the Court to adopt an agreed position on penalties.
In Cth v FWBII French CJ, Kiefel, Bell, Nettle and Gordon JJ held, at [60]:
“It is also true, as the Full Court observed, that the regulator in a civil penalty proceeding is not disinterested. As has been seen, under the BCII Act, the Director's statutory functions include monitoring and promoting appropriate standards of conduct by building industry participants generally. It is, therefore, naturally to be assumed that the Director will fashion penalty submissions with an overall view to achieving that objective and thus perhaps, if not probably, with one eye to considerations beyond the case in hand. That consideration, however, supports, rather than detracts from, the propriety of a court receiving joint (or separate) submissions as to facts and penalty and imposing the proposed penalty if persuaded that it is appropriate. As was emphasised in NW Frozen Foods, it is the function of the relevant regulator to regulate the industry in order to achieve compliance and, accordingly, it is to be expected that the regulator will be in a position to offer informed submissions as to the effects of contravention on the industry and the level of penalty necessary to achieve compliance.” (footnotes omitted)
The Court finds the conduct of the Respondents in this case is highly aggravating and extremely serious, with few, if any, redeeming features. In reliance on the evidence and submissions set out above, the Applicant proposed penalty ranges for each of the recommended groups of contraventions. These are set out in detail in the second schedule to these reasons. In summary, for the different groups of contraventions the Applicant recommended varied penalty ranges including:
a)very high range penalties (70-80% and 80-90% of the available maximum) for each separate contravention of section 325 of the FW Act, requiring Francis and Badhan to repay portion of their wages, for the grouped coercion and adverse action contraventions and the false and misleading record contraventions;
b)mid to high range penalties of between 40-50% and 60-70% for underpayment contraventions;
c)mid to low range penalties of between 30-40% and 40-50% for leave contraventions, payslip contraventions and remaining record keeping contraventions;
d)very low range penalties for the remaining contraventions (5-10%).
The Applicant recommended the same penalty ranges for both the First and Second Respondents on the basis that the Second Respondent was at all relevant times the primary actor and decision maker of the First Respondent.
The proposed ranges result in the following aggregate penalties:
a)$372,800 - $444,100 in respect of the First Respondent; and
b)$74,630 to $88,910 in respect of the Second Respondent.
These figures represent approximately 49% to 58% of the available maximum penalties that may be imposed against each respondent.
The Applicant considered that these ranges reflect an appropriate and proportionate penalty for each contravention when assessed separately. The Court believes that the range may well be conservative on the facts of this case. After undertaking the assessment of penalty for each contravention, the last step the Court must take is to have 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 oppressive or crushing (See Kelly, [30]; Merringtons at [23] (Gray J), [71] (Graham J), [102] (Buchanan J). Whilst the penalty imposed must not be crushing or oppressive, it must nevertheless bear relativity to the seriousness of the conduct engaged in by the Respondents (See also: Fair Work Ombudsman v Promoting U Pty Ltd & Anor [2012] FMCA 58). Even at 58% of the available maximum penalties, the Court does not believe it to be oppressive or crushing.
The Applicant submitted that in the absence of financial evidence, there is no basis for reducing the penalties imposed on account of them being crushing or oppressive. The Court agrees.
The Applicant submitted that in the event that on review of the total proposed penalties above, the Court considers the amounts proposed at paragraph 118 appear to be a particularly strong response to the contravening conduct when viewed as a whole, the Court may reduce the total penalty imposed against the Respondents. That is not the view of the Court.
The Applicant’s proposed penalty range is probably conservative in all the circumstances of the case. Nonetheless the Court accepts the recommended range, but will impose penalties at the highest end of the range, to reflect the seriousness of the contraventions as reflected in these reasons for judgment.
I certify that the preceding one hundred and twenty-three (123) paragraphs are a true copy of the reasons for judgment of Judge Altobelli
Date: 3 February 2017
Schedule 1
Orders of 19 September 2016
THE COURT ORDERS THAT:
Upon admissions which the First Respondent is taken to have made consequent upon default, pursuant to rule 13.03A(2) of the Federal Circuit Court Rules 2001 (Cth), the Court declares that the First Respondent has contravened the following civil remedy provisions:
(a)section 325(1) of the Fair Work Act 2009 (Cth), by requiring Badhan and Francis to spend part of an amount payable to each of them in relation to the performance of work, where that requirement was unreasonable in the circumstances;
(b)section 343(1) of the Fair Work Act 2009 (Cth) by:
(i) taking action against Badhan on or about 17 to 23 March 2014 with the intent to coerce him not to exercise his right to:
(A)the benefit of minimum entitlements under the Fair Work Act 2009 (Cth) and modern award; and
(B)not be required to spend an amount payable to him in relation to the performance of work, where such requirement was unreasonable;
(ii) taking action against Badhan on or about 14 May 2014 with intent to coerce him not to exercise his right to:
(A)the benefit of minimum entitlements under the Fair Work Act 2009 (Cth) and modern award; and
(B)not be required to spend an amount payable to him in relation to the performance of work, where such requirement was unreasonable;
(iii) taking action against Francis during his employment period, with intent to coerce him not to exercise his right to:
(A)the benefit of minimum entitlements under the Fair Work Act 2009 (Cth) and modern award; and
(B)not be required to spend an amount payable to him in relation to the performance of work, where such requirement was unreasonable.
(c)section 340(1) of the Fair Work Act 2009 (Cth), by:
(i) threatening to alter Badhan’s position to his prejudice on or about 17 to 23 March 2014, because he exercised a workplace right:
(A)to not be required to spend an amount payable to him in relation to the performance of work, where such requirement was unreasonable;
(B)and by making a complaint or enquiry in relation to his employment;
(ii) threatening to alter Badhan’s position to his prejudice on or about 14 May 2014 because he exercised a workplace right:
(A)to not be required to spend an amount payable to him in relation to the performance of work, where such requirement was unreasonable; and
(B)by making a complaint or enquiry in relation to his employment;
(iii) threatening to alter Francis’ position to his prejudice, during his employment period, because he exercised a workplace right:
(A)to not be required to spend an amount payable to him in relation to the performance of work, where such requirement was unreasonable; and
(B)by making a complaint or enquiry in relation to his employment;
(d)section 45 of the Fair Work Act 2009 (Cth), by failing to pay each of Badhan, Francis, Crouch and Garratt the minimum rates of pay prescribed by clauses A.2.5 and 20.1 of the Restaurant Industry Award 2010;
(e)section 45 of the Fair Work Act 2009 (Cth), by failing to pay Demosani, during the periods 2 to 8 September 2013 and 22 November 2013 to 4 May 2014, the required minimum junior rates of pay prescribed by clause 20.3 of the Restaurant Industry Award 2010;
(f)section 45 of the Fair Work Act 2009 (Cth), by failing to pay Demosani, during his apprenticeship, the required minimum apprentice rates of pay prescribed by clause 20.2 of the Restaurant Industry Award 2010;
(g)section 45 of the Fair Work Act 2009 (Cth), by failing to pay each of Badhan, Francis, Crouch, Garratt and Demosani (the Employees) Saturday penalty rates prescribed by clauses A.7.3 and 34.1 of the Restaurant Industry Award 2010;
(h)section 45 of the Fair Work Act 2009 (Cth), by failing to pay each of Crouch, Demosani, Francis and Garratt Sunday penalty rates prescribed by clauses A.7.3 and 34.1 of the Restaurant Industry Award 2010;
(i)section 45 of the Fair Work Act 2009 (Cth), by failing to pay each of Badhan, Crouch, Demosani and Garratt public holiday penalty rates prescribed by clauses A.7.3 and 34.1 of the Restaurant Industry Award 2010;
(j)section 45 of the Fair Work Act 2009 (Cth), by failing to pay each of the Employees overtime rates prescribed by clause 33.1 of the Restaurant Industry Award 2010;
(k)section 45 of the Fair Work Act 2009 (Cth), by failing to pay Crouch at the rate of 150% of her base rate of pay for not being provided with a meal break during the first six hours of her shift, as prescribed by clause 32.4 of the Restaurant Industry Award 2010;
(l)section 44(1) of the Fair Work Act 2009 (Cth), by:
(i) failing to accrue annual leave to Badhan as required by section 87 of the Fair Work Act 2009 (Cth); and
(ii) failing to pay untaken paid annual leave upon termination to Badhan and Crouch, as required by section 90(2) of the Fair Work Act 2009 (Cth);
(m)section 44(1) of the Fair Work Act 2009 (Cth), by:
(i) failing to accrue paid personal/carer’s leave to Badhan as required by section 96 of the Fair Work Act 2009 (Cth); and
(ii) failing to pay Badhan and Crouch at their respective base rate of pay for ordinary hours of work during periods when they took personal/carer’s leave, as required by section 99 of the Fair Work Act 2009 (Cth);
(n)section 44(1) of the Fair Work Act 2009 (Cth), by terminating Crouch’s employment without providing the appropriate notice or payment in lieu thereof, as required by section 117(2) of the Fair Work Act 2009 (Cth);
(o)regulation 3.44(1) of the Fair Work Regulations 2009 (Cth), by failing to ensure that the records it kept in respect of each of the Employees was not false or misleading to its knowledge;
(p)regulation 3.44(6) of the Fair Work Regulations 2009 (Cth), by making use of entries in employee records for each of the Employees on 12 September 2013 and 8 October 2014, knowing that those records were false or misleading;
(q)section 535(2) of the Fair Work Act 2009 (Cth), by failing to keep records for Badhan with information prescribed by the Fair Work Regulations 2009 (Cth);
(r)section 536(1) of the Fair Work Act 2009 (Cth), by failing to give any of the Employees a pay slip within one working day of paying an amount to that Employee in relation to the performance of work.
Upon the admissions which the Second Respondent is taken to have made consequent upon default, pursuant to subrule 13.03A(2) of the Federal Circuit Court Rules 2001 (Cth), the Court declares that the Second Respondent was involved in each of the contraventions committed by the First Respondent.
Pursuant to section 545(2)(b) of the Fair Work Act 2009 (Cth), the First Respondent and the Second Respondent, jointly and severally, pay the amount of $87,909.65 (Total Wages Underpayment) to the Applicant within 28 days of the Court’s order, to be distributed by the Applicant as follows:
Employee Underpayment Amount Percentage of Total Wages Underpayment Sunil Badhan $32,063.84 36.47% Johanne Crouch $11,273.27 12.82% Wade Demosani $6,766.98 7.70% Senju Francis $28,858.67 32.83% Maree Garratt $8,946.89 10.18%
In the event that the Applicant receives a partial payment of the Total Wages Underpayment, the amount received shall be distributed to the Employees in accordance with the respective percentage of the Total Wages Underpayment.
Pursuant to section 547(2) of the Fair Work Act 2009 (Cth), the First Respondent and the Second Respondent, jointly and severally, pay interest in the amount of $9,437.63 on the Total Wages Underpayment. Such amounts are to be paid to the Applicant and distributed to the employees in accordance with paragraph 3 above.
An order that the Applicant have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
The matter is to be adjourned to 2 December 2016 at 3:00pm for a further hearing in respect of the Applicant’s claim for penalties and additional orders to be imposed on the First and Second Respondent.
The Applicant is to file and serve any written submissions and further evidence in respect of penalty within 28 days.
The First and Second Respondents are to file and serve any written submissions and further evidence in respect of penalty within a further 28 days thereafter.
Within 7 days, the Applicant is to notify the First and Second Respondent of the Orders made today at their last known address.
Schedule 2
Pecuniary Penalties Recommendations
| Contravention | Proposed Grouping | Maximum Penalty | Proposed Range | Penalty Amount | ||||
| Rubee | Ghazale | Rubee | Ghazale | Rubee | Ghazale | |||
| 1. | Section 325 – unreasonably requiring wages to be repaid - Badhan | 1. Unreasonable requirement to spend - Badhan | $51,000 | $10,200 | 80-90% | 80-90% | $40,800 - $45,900 | $8,160 - $9,180 |
| 2. | Section 325 – unreasonably requiring wages to be repaid - Francis | 2. Unreasonable requirement to spend - Francis | $51,000 | $10,200 | 80-90% | 80-90% | $40,800 - $45,900 | $8,160 - $9,180 |
| 3. | Section 343 – Coercion – Action against Badhan March 2014 | 3. Coercion and adverse action - Badhan | $51,000 | $10,200 | 70-80% | 70-80% | $35,700 - $40,800 | $7,140 - $8,160 |
| 4. | Section 340 – adverse action – Badhan March 2014 | |||||||
| 5. | Section 343 – Coercion – Action against Badhan May 2014 | |||||||
| 6. | Section 340 – adverse action – Badhan May 2014 | |||||||
| 7. | Section 343 – Coercion – Action against Francis | 4. Coercion and adverse action - Francis | $51,000 | $10,200 | 70-80% | 70-80% | $35,700 - $40,800 | $7,140 - $8,160 |
| 8. | Section 340 – adverse action – Francis | |||||||
| 9. | Section 45 – adult minimum rates of pay | 5. Failure to pay minimum rates | $51,000 | $10,200 | 60-70% | 60-70% | $30,600-$35,700 | $6,120 - $7,140 |
| 10. | Section 45 – junior rates of pay | |||||||
| 11. | Section 45 – apprentice minimum rates of pay | |||||||
| 12. | Section 45 – Saturday penalties | 6. Failure to pay Saturday penalties | $51,000 | $10,200 | 40-50% | 40-50% | $20,400 - $25,500 | $4,080 - $5,100 |
| 13. | Section 45 – Sunday penalties | 7. Failure to pay Sunday penalties | $51,000 | $10,200 | 40-50% | 40-50% | $20,400 - $25,500 | $4,080 - $5,100 |
| 14. | Section 45 – public holiday penalties | 8. Failure to pay public holiday penalties | $51,000 | $10,200 | 40-50% | 40-50% | $20,400 - $25,500 | $4,080 - $5,100 |
| 15. | Section 45 – overtime rates of pay | 9. Failure to pay overtime rates of pay | $51,000 | $10,200 | 60-70% | 60-70% | $30,600-$35,700 | $6,120 - $7,140 |
| 16. | Section 45 – failure to provide meal break penalties | 10. Failure to pay penalty rate where no meal break provided | $51,000 | $10,200 | 5-10% | 5-10% | $2,550 - $5,100 | $510 - $1,020 |
| 17. | Section 44 – failure to accrue annual leave | 11. Failure to accrue and pay annual leave | $51,000 | $10,200 | 30-40% | 30-40% | $15,300 - $20,400 | $3,060 - $4,080 |
| 18. | Section 44 – failure to pay annual leave on termination | |||||||
| 19. | Section 44 – failure to accrue personal leave | 12. Failure to accrue and pay personal leave | $51,000 | $10,200 | 40-50% | 40-50% | $20,400 - $25,500 | $510 - $1,020 |
| 20. | Section 44 – failure to pay personal leave | |||||||
| 21. | Section 44 – failure to make payment in lieu of notice of termination | 13. Failure to pay notice | $51,000 | $10,200 | 5-10% | 5-10% | $2,550 - $5,100 | $510 - $1,020 |
| 22. | Section 535(2) – failure to keep employee records | 14. Failure to keep records | $25,500 | $5,100 | 30-40% | 30-40% | $7,500 - $10,000 | $1,530 - $2,040 |
| 23. | Section 536(1) – failure to provide payslips | 15. Failure to issue payslips | $25,500 | $5,100 | 40-50% | 40-50% | $10,000 - $12,500 | $2,040 - $2,550 |
| 24. | Regulation 3.44(1) failing to ensure records were not false or misleading | 16. Creation of false or misleading records | $17,000 | $3,400 | 70-80% | 70-80% | $11,900 - $13,600 | $1,530 - $2,040 |
| 25. | Regulation 3.44(6) knowingly making use of false and misleading record – Production of records September 2013 | 17. Use of false or misleading records – September 2013 | $17,000 | $3,400 | 80-90% | 80-90% | $13,600 - $15,300 | $2,720 - $3,060 |
| 26. | Regulation 3.44(6) knowingly making use of false or misleading record – Production of records October 2014 | 18. Use of false or misleading records – October 2014 | $17,000 | $3,400 | 80-90% | 80-90% | $13,600 - $15,300 | $2,720 - $3,060 |
| Total | $764,000 | $153,000 | $372,800 - $444,100 | $74,630 - $88,910 | ||||
| If 5% discount applied | $726,750 | $145,350 | $354,493 - $422,323 | $70,899 - $84,265 | ||||
| Example Totality Reduction (15%) | $316,880 - $377,485 | $63,436 - $75,574 | ||||||
| Example Totality Reduction (20%) | $298,240 - $355,280 | $59,704 - $71,128 | ||||||
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