Fair Work Ombudsman v Rum Runner Trading Pty Ltd
[2018] FCCA 1129
•9 May 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v RUM RUNNER TRADING PTY LTD & ANOR | [2018] FCCA 1129 |
| Catchwords: INDUSTRIAL LAW – Breaches of civil remedy provisions of the Fair Work Act 2009 (Cth) (“the Act”) – two proceedings initiated by applicant for the imposition of pecuniary penalties on respondents – each proceeding involved different employees – two statements of agreed facts made by the parties – admitted numerous contraventions of the Act and Fair Work Regulations 2009 (Cth) (“the Regulations”) – relevant considerations – separate declarations made regarding admitted contraventions in each proceeding – separate orders made for imposition of pecuniary penalties in each proceeding – orders made in second proceeding for the purpose of securing future compliance by the respondents with the Act and the Regulations requiring respondents to take action and restraining respondents from engaging in contravening conduct – penalties imposed. |
| Legislation: Crimes Act 1914 (Cth), s.4AA Crimes Legislation Amendment (Penalty Unit) Act 2015 (Cth), sch.1 item 2 Evidence Act 1995 (Cth), s.191 Fair Work Act 2009 (Cth), ss.3(b), 12, 44, 45, 125(1), 535(1), 536(1), 539(2), 545, 546, 547(2), 550, 557, 559, 712, 716 Fair Work Regulations 2009 (Cth), regs.3.33, 3.44, 4.01A, 4.03A, ch.3 pt.3-6 div.3 sub-div.1 Restaurant Industry Award 2010, cls.13.1, 20.1, 27.2, 32.1, 34.1, 34.2 Explanatory Memorandum, Fair Work Bill 2008 (Cth) |
| Cases cited: Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No.2) [2010] FCA 977 Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59 Fair Work Ombudsman v Absynthe Restaurant Pty Ltd [2015] FCCA 58 Fair Work Ombudsman v AJR Nominees Pty Ltd (No.2) [2014] FCA 128 Fair Work Ombudsman v Lifestyle SA Pty Ltd [2014] FCA 1151 Fair Work Ombudsman v Maclean Bay Pty Ltd (No.2) [2012] FCA 557 Fair Work Ombudsman v Nerd Group Australia Pty Ltd (No.2) [2012] FMCA 6 Fair Work Ombudsman v Sonisolar Pty Ltd & Anor [2016] FCCA 2027 Fair Work Ombudsman v Sureguard Security Pty Ltd [2017] FCA 1566 Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd & Anor [2012] FMCA 258 Fair Work Ombudsman v The Syndicate Group Pty Ltd [2015] FCCA 2847 Fair Work Ombudsman v Tiger Telco Pty Ltd (in liq) [2012] FCA 479 Fair Work Ombudsman v Trek North Tours & Anor (No.2) [2015] FCCA 1801 Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | RUM RUNNER TRADING PTY LTD |
| Second Respondent: | TODD PATRICK BUZZA |
| File Number: | MLG 1334 of 2016 MLG 2753 of 2016 |
| Judgment of: | Judge Jones |
| Hearing date: | 1 February 2018 |
| Date of Last Submission: | 1 February 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 9 May 2018 |
REPRESENTATION
| Counsel for the Applicant: | Ms Ashford of Fair Work Ombudsman |
| Solicitors for the Applicant: | Fair Work Ombudsman |
| The Second Respondent appeared in person on behalf of the First Respondent and the Second Respondent. |
MLG 1334 of 2016
DECLARATIONS
The First Respondent, Rum Runner Trading Pty Ltd, contravened the following civil remedy provisions of the Fair Work Act 2009 (Cth) (“the Act”):
(a)section 716(5) of the Act by failing to comply with three compliance notices issued on 23 December 2015 (“the December 2015 compliance notices”);
(b)section 716(5) of the Act by failing to comply with four compliance notices issued on 13 May 2016 (“the May 2016 compliance notices”);
(c)section 536(1) of the Act by failing to provide pay slips to the following employees within one day of making payment:
(i)Mr Yinn Kuiper;
(ii)Mr Jordan Dechter Levin; and
(iii)Ms Corinna Hornsby-Walsh;
(d)section 535(1) of the Act by failing to make and keep employee records of the kind prescribed by the Fair Work Regulations 2009 (Cth) (“the Regulations”); and
(e)section 44(1) of the Act by contravening a term of the National Employment Standards, namely s.125(1) of the Act, by failing to give the Fair Work Information Statement to the following employees:
(i)Ms Paloma Herrera-Brennan;
(ii)Mr Yinn Kuiper;
(iii)Mr Jordan Dechter Levin;
(iv)Mr Peter Joseph Narzisi;
(v)Ms Meghane Coucaud;
(vi)Ms Corinna Hornsby-Walsh; and
(vii)Mr Daylon Kanappa.
(collectively, “the first proceeding employees”)
The Second Respondent, Mr Todd Patrick Buzza, was involved (within the meaning of s.550(2) of the Act) in each of the First Respondent’s contraventions in declaration 1 herein.
ORDERS
Pursuant to s.547(2) of the Act, the First Respondent and the Second Respondent, jointly and severally, pay interest on the amounts set out in order 1 of the orders of this Court made on 6 November 2017 (“the November Orders”), at the applicable pre-judgment interest rate for the period from the commencement of these proceedings to the date of these orders (“the interest”).
The interest is to be paid to the Applicant by 1 June 2018, with the Applicant thereafter to pay the interest to the first proceeding employees within 14 days of receipt, or otherwise in accordance with order 1(b) of the November Orders.
Pursuant to s.546(1) of the Act, the First Respondent pay pecuniary penalties in the amount of $72,105 in respect of the contraventions set out in declaration 1 herein.
Pursuant to s.546(1) of the Act, the Second Respondent pay pecuniary penalties in the amount of $14,457 in respect of his involvement in the contraventions set out in declaration 1 herein.
Pursuant to s.546(3) of the Act, the pecuniary penalties ordered herein be paid to the Commonwealth on or before 6 June 2018, and:
(a)in the event that some or all of the amounts payable to the first proceeding employees in accordance with order 1 of the November Orders are not met, the Applicant may remit, at its discretion, the penalties paid to the Commonwealth to the first proceeding employees until their claims are met;
(b)in the event that the Applicant receives a partial payment of the penalty amount, the amounts will be distributed to the first proceeding employees in accordance with the percentage of total underpayment as set out in order 1 of the November Orders; and
(c)in the event that the Applicant cannot locate one or more of the first proceeding employees within six months of receiving the penalty amount, pay the applicable amount due to each first proceeding employee who cannot be located:
(i)firstly, to other first proceeding employees in proportionate amounts until each employee’s underpayment is met; and
(ii)secondly, for any residual amount, to the Commonwealth.
The Applicant has liberty to apply on seven days’ notice in the event that any of the orders herein are not complied with.
MLG 2753 of 2016
DECLARATIONS
The First Respondent, Rum Runner Trading Pty Ltd, contravened the following civil remedy provisions of the Act:
(a)section 45 of the Act by failing to comply with the following provisions of the Restaurant Industry Award 2010 (“the Award”):
(i)minimum rates of pay in accordance with cl.20.1;
(ii)casual loading in accordance with cl.13.1;
(iii)payment of wages and penalties fortnightly in accordance with cl.27.2;
(iv)unpaid breaks in accordance with cl.32.1;
(v)Saturday penalty rates in accordance with cl.34.1;
(vi)Sunday penalty rates in accordance with cl.34.1;
(vii)public holiday penalty rates in accordance with cl.34.1; and
(viii)late night penalty rates in accordance with cl.34.1;
(b)section 712(3) of the Act by failing to comply with the Notice to Produce Records or Documents;
(c)section 536(1) of the Act by failing to provide pay slips to the following employees within one day of making payment:
(i)Ms Esther Rachel Templeton Millard;
(ii)Mr Jahan Alex Kumarasinhe;
(iii)Ms Michele Comtois; and
(iv)Ms Eliza Melody Freeman;
(d)regulation 3.44(1) of the Regulations by failing to ensure that a record it was required to keep was not knowingly false or misleading; and
(e)regulation 3.44(6) of the Regulations by making use of entries in an employee record despite knowing them to be false or misleading.
The Second Respondent, Mr Todd Patrick Buzza, was involved (within the meaning of s.550(2) of the Act) in each of the First Respondent’s contraventions in declaration 9 herein.
ORDERS
Pursuant to s.545(1) of the Act, on or before 1 June 2018 the First Respondent produce to the Applicant the documents or records sought in the Notice to Produce Records or Documents.
Pursuant to s.547(2) of the Act, the First Respondent and the Second Respondent, jointly and severally, pay interest on the amounts referred to in order 1 of the orders of this Court made on 6 November 2017 (“the November Orders”), at the applicable pre-judgment interest rate for the period from the commencement of these proceedings to the date of these orders (“the interest”).
The interest is to be paid to the Applicant by 1 June 2018, with the Applicant thereafter to pay the interest to the employees named in order 1 of the November Orders (“the second proceeding employees”) within 14 days of receipt or otherwise in accordance with order 1(b) of the November Orders.
Pursuant to s.546(1) of the Act, the First Respondent pay pecuniary penalties in the amount of $186,390 in respect of the contraventions set out in declaration 9 herein.
Pursuant to s.546(1) of the Act, the Second Respondent pay pecuniary penalties in the amount of $37,278 in respect of his involvement in the contraventions set out in declaration 9 herein.
Pursuant to s.546(3) of the Act, the pecuniary penalties ordered herein be paid to the Commonwealth on or before 6 June 2018, and:
(a)in the event that some or all of the amounts payable to the second proceeding employees in accordance with order 1 of the November Orders are not met, the Applicant may remit, at its discretion, the penalties paid to the Commonwealth to the second proceeding employees until their claims are met;
(b)in the event that the Applicant receives a partial payment of the penalty amount, the amounts will be distributed to the second proceeding employees in accordance with the percentage of total underpayment as set out in order 1 of the November Orders; and
(c)in the event that the Applicant cannot locate one or more of the second proceeding employees within six months of receiving the penalty amount, pay the applicable amount due to each second proceeding employee who cannot be located:
(i)firstly, to other second proceeding employees in proportionate amounts until each employee’s underpayment is met; and
(ii)secondly, for any residual amount, to the Commonwealth.
Pursuant to s.545(2)(a) of the Act, the First Respondent, whether by its officers, employees, agents or otherwise, is hereby restrained from engaging in conduct that contravenes the Award or s.536 of the Act.
Pursuant to s.545(2)(a) of the Act, the Second Respondent is hereby restrained from:
(a)aiding, abetting, counselling, procuring; or
(b)being in any way knowingly concerned, whether directly or indirectly, in conduct that contravenes the Award or s.536 of the Act.
The Applicant has liberty to apply on seven days’ notice in the event that any of the orders herein are not complied with.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1334 of 2016
AND
MLG 2753 of 2016
| FAIR WORK OMBUDSMAN |
Applicant
And
| RUM RUNNER TRADING PTY LTD |
First Respondent
| TODD PATRICK BUZZA |
Second Respondent
REASONS FOR JUDGMENT
Introduction
The Fair Work Ombudsman (“the FWO”) seeks the imposition of pecuniary penalties on Rum Runner Trading Pty Ltd (“the First Respondent”) and Mr Todd Patrick Buzza (“the Second Respondent”), in relation to contraventions of the Fair Work Act 2009 (Cth) (“the Act”), the Fair Work Regulations 2009 (Cth) (“the Regulations”) and the Restaurant Industry Award 2010 (“the Award”).
The First Respondent operates a burger restaurant business, and at all material times (save for a short period of time during which contraventions occurred), the Second Respondent was the sole director, company secretary and shareholder of the First Respondent.
This decision is in relation to two separate proceedings initiated by the FWO for the imposition of pecuniary penalties on the First Respondent and the Second Respondent. The first proceeding (MLG1334/2016) was commenced by the Fair Work Ombudsman on 22 June 2016 (“the First Proceeding”) and involved the failure of the Respondents to comply with compliance notices issued by the FWO under s.716 of the Act in relation to underpayments to seven employees, and the failure to provide pay slips, make and keep employment records and give the relevant employees Fair Work Information Statements (“FW Information Statements”).
The second proceeding (MLG2753/2016) was commenced on
16 December 2016 (“the Second Proceeding”) and involved underpayments under the Award to five employees, the failure by the Respondents to comply with a Notice to Produce Records or Documents (“Notice to Produce”) and to provide pay slips, and the making and use of employment records that were false or misleading.
The FWO’s applications for the imposition of penalties in both the First Proceeding and Second Proceeding were heard concurrently on
1 February 2018 of (“the penalty hearing”), and the evidence filed by the FWO was relied on for the purpose of both proceedings. The Respondents did not file any evidence and/or written submissions in either the First Proceeding or Second Proceeding.
The parties filed two Statements of Agreed Facts (“SOAF”) for the purposes of s.191 of the Evidence Act 1995 (Cth). The first SOAF was filed on 27 January 2017 in relation to the First Proceeding, and a further SOAF was filed on 6 July 2017 in relation to the Second Proceeding.
Both of the Respondents have admitted the contraventions in the First Proceeding and the Second Proceeding. In addition to penalties and declarations, the FWO seeks the following orders in relation to the Second Proceeding:
a)an order that the First Respondent display a workplace notice containing information about the minimum rates of pay under the Award at the business operated by the First Respondent; and
b)injunctions restraining the Respondents from conduct that contravenes the Award or s.536 of the Act.
At the penalty hearing, the Second Respondent informed the Court that he agreed to the declarations and the further orders sought by the FWO.
The Court is required to determine the quantum of any penalties to be paid by each of the Respondents.
The FWO submits that aggregate penalties within the following ranges should be imposed:
a)in the First Proceeding:
i)for the First Respondent: $123,690 - $151,335; and
ii)for the Second Respondent: $24,738 - $30,267; and
b)in the Second Proceeding:
i)the First Respondent: $215,460 - $267,615; and
ii)the Second Respondent: $43,092 - $53,523.
At the penalty hearing, the Second Respondent submitted that the maximum aggregate penalties for both proceedings should be $10,000. The Second Respondent informed the Court that the business was not presently trading, and that he did not have the financial means to pay higher penalties. The Second Respondent informed the Court that the underpayments in respect of which the compliance notice was issued in the first proceeding and the underpayments the subject of the Second Proceeding still had not been paid in full by him. The Second Respondent had not filed any evidence in relation to his financial circumstances nor has the First respondent filed any evidence regarding its financial position.
The FWO relies on the following documents and evidence in both proceedings:
a)
the Initiating Application filed in the First Proceeding on
22 June 2016;
b)its Amended Statement of Claim filed in the First Proceeding on 27 January 2017;
c)
the Initiating Application filed in the Second Proceeding on
16 December 2016;
d)
its Statement of Claim filed in the Second Proceeding on
16 December 2016;
e)
the Statement of Agreed Facts filed in the First Proceeding on
27 January 2017;
f)the Statement of Agreed Facts filed in the Second Proceeding on 6 July 2017;
g)the Affidavit of Eliza Melody Freeman filed on 14 August 2017;
h)
the Affidavit of Paloma Elena Herrera-Brennan filed on
14 August 2017;
i)
the Affidavit of Jahan Alex Kumarasinhe filed on
14 August 2017;
j)the Affidavit of Jordan Dechter Levin filed on 14 August 2017;
k)
the Affidavit of Esther Rachel Templeton Millard filed on
15 August 2017;
l)the Affidavit of Peter Joseph Narzisi filed on 14 August 2017;
m)the Affidavit of Cathryn Elizabeth Ross filed on 14 August 2017;
n)
the Affidavit of Helen Louise Frances Salter filed on
14 August 2017;
o)the Affidavit of Michael Tsiaras filed on 14 August 2017;
p)the Affidavit of Fair Work Inspector, Catherine Antionette-Agnes McLindon, filed on 14 August 2017;
q)the Affidavit of Fair Work Inspector, Catherine Antionette-Agnes McLindon, filed on 23 January 2018; and
r)
the Affidavit of Fair Work Inspector, Emma Rodwell, filed on
14 August 2017,
At the date of the penalty hearing, the Respondents had not filed any affidavits and/or submissions in relation to the determination of the imposition of a pecuniary penalty.
Background
The following background is taken from the parties’ SOAFs.
The First Respondent operates an eat-in restaurant trading under the business name “Burger Buzz” in Brunswick, Victoria. Until April 2015, the First Respondent also operated a second “Burger Buzz” restaurant, located in West Melbourne, Victoria (collectively “the business”).
At all relevant times (save for the period from 29 March 2016 to
28 April 2016), the Second Respondent was the sole director, secretary and shareholder of the First Respondent. He was also responsible for the operation and management of the business.
The First Respondent employed the following employees as casual Food and Beverage Attendants, and Cooks, in the business for various periods between 21 January 2015 and 12 April 2015 (“the first assessment period”):
a)Ms Paloma Herrera-Brennan;
b)Mr Yinn Kuiper;
c)Mr Jordan Dechter Levin;
d)Mr Peter Joseph Narzisi;
e)Ms Meghane Coucaud;
f)Ms Corinna Hornsby-Walsh; and
g)Mr Daylon Kanappa.
(collectively, “the first proceeding employees”)
The Award applied to the First Respondent, and covered the employment of the first proceeding employees.
During the first assessment period, each of the first proceeding employees fell within the Food and Beverage Attendant Grade 2 classification under the Award.
During the first assessment period, Mr Kuiper, Ms Hornsby-Walsh and Ms Coucaud each held a Working Holiday (subclass 417) visas. Mr Levin held a Working Holiday (subclass 462) visa. Mr Kanappa and Ms Herrera-Brennan were 19 years old.
The First Respondent employed the following employees as casual Food and Beverage Attendants, and Cooks, in the business for various periods between 4 December 2015 and 3 July 2016 (“the second assessment period”):
a)Ms Esther Rachel Templeton Millard;
b)Mr Jahan Alex Kumarasinhe;
c)Ms Helen Louise Frances Salter;
d)Ms Michele Comtois; and
e)Ms Eliza Melody Freeman.
(collectively “the second proceeding employees”)
The Award applied to the First Respondent and covered the employment of the second proceeding employees.
All of the second proceeding employees (except Mr Kumarasinhe) were engaged as Food and Beverage Attendants Grade 2 under the Award. Mr Kumarasinhe was engaged as a Grade 1 Cook under the Award.
During the second assessment period, Ms Millard and Ms Freeman were 19 years old.
Admitted Contraventions
The First Proceeding
The First Respondent admits to contravening the following civil remedy provisions of the Act and the Regulations in relation to the employment of the first proceeding employees.
At various times between February 2015 and August 2015, the FWO received Requests for Assistance from each of the first proceeding employees in respect of their employment with the First Respondent. These Requests for Assistance resulted in the FWO issuing the First Respondent with three compliance notices on 23 December 2015, requiring the First Respondent to rectify underpayments to three of the first proceeding employees by 20 January 2016 (“the December 2015 compliance notices”). The December 2015 compliance notices required the First Respondent to:
a)pay Ms Herrera-Brennan a total of $1,444.64 in respect of minimum rates of pay, casual loading, penalty rates and late night allowances;
b)pay Mr Narzisi a total of $1,522.85 in respect of minimum rates of pay, casual loading and penalty rates; and
c)pay Mr Kanappa a total of $557.27 in respect of minimum rates of pay, casual loading and penalty rates.
The First Respondent failed to comply with the December 2015 compliance notices by the specified date.
On 13 May 2016, the FWO issued four compliance notices (“the May 2016 compliance notices”) to the First Respondent. The First Respondent was required to rectify underpayments by making payments to the following employees by 25 May 2016:
a)to pay Mr Kuiper a total of $1,185.25 in respect of minimum rates of pay, casual loading, penalty rates and late night allowances;
b)to pay Ms Hornsby-Walsh a total of $1,007.33 in respect of minimum rates of pay, casual loading, penalty rates and late night allowances;
c)to pay Ms Coucaud a total of $452.49 in respect of minimum rates of pay, casual loading, penalty rates and late night allowances; and
d)to pay Mr Levin a total of $943.54 in respect of minimum rates of pay, casual loading, penalty rates and late night allowances.
The First Respondent failed to comply with the May 2016 compliance notices by the specified date.
The First Respondent was required under s.536(1) of the Act to provide a pay slip to each of its employees within one working day of paying them an amount in relation to the performance of work. The First Respondent only made one or two payments during the first assessment period to each of Mr Kuiper, Ms Hornsby-Walsh and Mr Levin for the performance of work, and failed to provide pay slips within one working day of making the payments.
Accordingly, the First Respondent contravened s.536(1) of the Act.
The First Respondent was required under s.535(1) of the Act to make and keep for a period of seven years, records of the kind prescribed in ch.3 pt.3-6 div.3 sub-div.1 of the Regulations in relation each of its employees.
The First Respondent failed to make and keep records which contained the following information in respect of Mr Kuiper, Mr Levin, Ms Hornsby-Walsh, Ms Millard and Mr Kumarasinhe in accordance with reg.3.33 of the Regulations:
a)the rate of remuneration paid to them, in accordance with reg.3.33(1)(a) of the Regulations; and
b)the gross and net amounts paid to them, in accordance with reg.3.33(1)(b) of the Regulations.
Accordingly, the First Respondent contravened s.535 of the Act.
The First Respondent was required, pursuant to s.125(1) of the Act to give each of the first proceeding employees FW Information Statements before, or as soon as practicable after, the commencement of their respective periods of employment.
The First Respondent did not provide the first proceeding employees with a FW Information Statements at any stage prior to or during their employment.
Accordingly, the First Respondent contravened s.125(1) of the Act (a provision of the National Employment Standards) and as a result, the First Respondent also contravened s.44 of the Act.
The Second Proceeding
At various times between 4 May 2016 and 17 August 2016, the FWO received Requests for Assistance from the second proceeding employees.
The second proceeding employees were employed subsequent to the First Respondent being issued with the December 2015 compliance notices (except for the employment period of Ms Comtois). Ms Freeman was employed by the First Respondent between 7 June 2016 and 3 July 2016. Her employment period continued after the May 2016 2016 compliance notices were issued, and after the First Proceeding was commenced.
The First Respondent admits to contravening the following civil remedy provisions of the Act and the Regulations with respect to the employment of Ms Millard, Mr Kumarasinhe, Ms Salter, Ms Comtois and Ms Freeman:
a)section 45 of the Act by:
i)failing to pay them the minimum rates of pay for ordinary hours of work as required by cl.20.1 of the Award;
ii)failing to pay them casual loading as required by cl.13.1 of the Award;
iii)failing to pay Ms Millard, Ms Salter, Ms Comtois and Ms Freeman late night work penalty amounts as required by cl.34.2 of the Award;
iv)failing to pay Ms Millard, Ms Salter, Ms Comtois and Ms Freeman Saturday penalty rates as required by cl.34.1 of the Award;
v)failing to pay Ms Millard, Mr Kumarasinhe, Ms Salter and Ms Freeman Sunday penalty rates as required by cl.34.1 of the Award;
vi)failing to pay Ms Millard public holiday penalty rates as required by cl.34.1 of the Award;
vii)failing to provide any of the second proceeding employees with unpaid meal breaks of at least 30 minutes when they worked five hours or more in a day, as required by cl.32.1 of the Award; and
viii)failing to pay any of the second proceeding employees their wages, penalties and allowances at least fortnightly, as required by cl.27.2 of the Award;
b)
section 712(3) of the Act by failing to comply with a Notice to Produce issued by the FWO on 13 September 2016 requiring the First Respondent to produce records and/or documents relating to the employment of Ms Freeman, Ms Salter and Ms Comtois by
28 September 2016;
c)section 536(1) of the Act by failing to provide Ms Millard, Mr Kumarasinhe, Ms Comtois and Ms Freeman with pay slips within one day of making a payment to them for the performance of work;
d)
regulation 3.44(1) of the Regulations by failing to ensure that the employment records it was required to keep pursuant to
s.535(1) of the Act were not knowingly false or misleading; and
e)regulation 3.44(6) of the Regulations by making use of records made and kept for ch.3 pt.3-6 div.3 sub-div.1 of the Regulations, despite knowing them to be false or misleading.
The details of the breaches of the Award involving the underpayment of monetary amounts are set out below.
Clause 20.1 of the Award
The First Respondent underpaid the second proceeding employees the following amounts for ordinary hours worked:
a)Ms Millard: $277.06;
b)Mr Kumarasinhe: $300.14;
c)Ms Salter: $380.49;
d)Ms Comtois: $832.01; and
e)Ms Freeman: $174.23.
Clause 13.1 of the Award
The First Respondent failed to pay the following employees their entitlement to a casual loading in the following amounts:
a)Ms Millard: $69.31;
b)Mr Kumarasinhe: $75.08;
c)Ms Salter: $95.17;
d)Ms Comtois: $250.64; and
e)Ms Freeman: $199.69.
Clause 34.2(a)(i) of the Award
The First Respondent failed to pay the following employees their entitlement to a late night penalty in the following amounts:
a)Ms Millard: $4.02;
b)Ms Salter: $8.04;
c)Ms Comtois: $15.59; and
d)Ms Freeman: $20.61.
Clause 34.1 of the Award
The First Respondent failed to pay the following employees their entitlement to Saturday penalty rates in the following amounts:
a)Ms Millard: $304.81;
b)Ms Salter: $586.63;
c)Ms Comtois: $408.73; and
d)Ms Freeman: $872.69.
The First Respondent failed to pay the following employees their entitlement to Sunday penalty rates in the following amounts:
a)Ms Millard: $854.30;
b)Mr Kumarasinhe: $297.88;
c)Ms Salter: $351.92; and
d)Ms Freeman: $683.51.
The First Respondent failed to pay Ms Millard $927.59 for work performed on a public holiday.
Assessorial Liability
The Second Respondent admits that he:
a)was responsible for, and involved in, making decisions on behalf of the First Respondent about the terms and conditions of employment for the first proceeding and second proceeding employees (collectively, “the employees”) engaged to perform work for the First Respondent, including rates of pay;
b)was the person who employed the employees on behalf of the First Respondent;
c)was responsible for, and involved in, directing and supervising the work performed by the employees for the First Respondent;
d)was responsible for, and involved in, determining the hours of work of the employees, including their start and finish times;
e)was the person who determined if and when the First Respondent made payment of wages to the employees;
f)was the person who, on behalf of the First Respondent, was responsible for making and keeping employee records; and
g)was the person with control over, and access to, the employment and pay records of the First Respondent, including the attendance book and records of amounts paid to the employees.
The Second Respondent admits, and I accept that he had knowledge of the following matters:
a)that the First Respondent was covered by the Act, the Regulations and the Award;
b)that the First Respondent employed the employees;
c)the Act, the Regulations and the Award applied to the employees;
d)the work performed by the employees, the hours worked by the employees, and their period of employment with the business;
e)the payments made to the employees;
f)the failure of the First Respondent to issue pay slips to those employees in respect of whom the First Respondent made payments;
g)how and the extent to which records were made and kept by the First Respondent;
h)the Requests for Assistance by the employees and the investigations undertaken by the FWO into the complaints;
i)that the compliance notices had been issued to the First Respondent , that the First Respondent was required to comply with the compliance notices, that the First Respondent failed to comply, and that he intentionally participated in this failure to comply;
j)the Notice to Produce had been issued to the First Respondent, that the First Respondent was required to comply with the Notice to Produce, and that the First Respondent did not comply; and
k)that the employee records that he produced and made use of were false or misleading.
In light of the Second Respondent’s knowledge of the above matters, together with the fact that he was the sole director, secretary and shareholder of the First Respondent (for all except a short period in which the contraventions occurred), and that he acted in accordance with the scope of his actual apparent authority in the business of the First Respondent, the Second Respondent was involved, within the meaning of s.550(1) of the Act, in the contraventions by the First Respondent of the provisions of the Act, as set out above.
The Second Respondent has admitted, and I accept that, by reason of s.550(1) of the Act, he is taken to have contravened each of the provisions contravened by the First Respondent.
Orders to rectify underpayments
In circumstances where the Respondents failed to rectify the underpayments arising both proceedings, Orders were made on
13 October 2017 that the First and the Second Respondents jointly and severally pay compensation to the Commonwealth of Australia by
27 October 2017 pursuant to s.559 of the Act, in the following amounts:
a)in the First Proceeding: $7,113.37; and
b)in the Second Proceeding: $7,513.77.
In circumstances where the Respondents continued to fail to rectify underpayments arising out of both proceedings, I made orders on
6 November 2017 that within 14 days of the receipt of the compensation paid pursuant to the orders made on
13 October 2017, the FWO pay the employees the following amounts (or the applicable percentage of the amount received from the Respondents is less than the full amount owing):
a)in the First Proceeding:
i)Ms Herrera-Brennan: $1,444.64 (20.31%);
ii)Mr Kuiper: $1,185.25 (16.66%);
iii)Mr Levin: $943.54 (13.36%);
iv)Mr Narzisi: $1,522.85 (21.41%);
v)Ms Coucaud: $452.49 (6.36%);
vi)Ms Hornsby-Walsh: $1,007.33 (14.16%); and
vii)Mr Kanappa: $557.27 (7.83%); and
b)in the Second Proceeding:
i)Ms Millard: $2,034.09 (27.07%);
ii)Mr Kumarasinhe: $634.72 (8.45%);
iii)Ms Salter: $1,422.25 (18.93%);
iv)Ms Comtois: $1,506.97 (20.06%); and
v)Ms Freeman: $1,915.74 (25.5%).
At the time of the penalty hearing, the Respondents had failed to rectify the underpayments in accordance with orders of the Court.
The Court’s approach to the determination of penalty
The Court’s power to impose penalties arises under s.546 of the Act, which relevantly provides:
(1) The Federal Court, the Federal Circuit Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.
Note: Pecuniary penalty orders cannot be made in relation to conduct that contravenes a term of a modern award, a national minimum wage order or an enterprise agreement only because of the retrospective effect of a determination (see subsections 167(3) and 298(2)).
In determining what penalties, if any, ought to be applied in respect of the contravening conduct by the Respondents, the Court is required to:
a)first, identify the “separate contraventions”. Each breach of each separate obligation found in the Act and the Regulations is a separate contravention of a civil remedy provision for the purposes of s.539(2) of the Act;[1]
b)second, apply s.557(1) of the Act. Section 557(1) of the Act provides that if a person commits multiple contraventions of an applicable provision, they should be treated as a single contravention if they arise out of a single course of conduct;
c)third, to the extent that two or more contraventions have common elements, the Court may take this into account in considering the appropriateness, in all the circumstances, of the quantum of penalty for the contraventions.[2] This reflects the basic principle that a contravenor should not be penalised more than once for what, in a practical sense, amounts to the same contravening conduct, such that the penalties imposed by the Court should be an appropriate but fair response to the contravention of statutory obligations. This is a distinct exercise from, and is in addition to, the final application by the Court of the “totality principle”;[3]
d)fourth, fix an appropriate penalty for each single or grouped contravention, taking into account all relevant circumstances; and
e)finally, the Court should apply the “totality principle” by considering whether the aggregate penalty is an appropriate response to the conduct which led to the contraventions. The Court should apply an “instinctive synthesis” in making this assessment.[4]
The FWO submits that this approach should be taken in respect of each of the proceedings separately.
Each separate contravention has been identified above.
Course of conduct
The FWO accepts that the Respondents are entitled to the benefit of s.557(1) of the Act in both proceedings, and submits that it is appropriate to apply s.557(1) in the First Proceeding in relation to the contraventions of:
a)section 44 of the Act (failing to provide FW Information Statements);
b)section 536 of the Act (failure to provide employees with pay slips); and
c)section 535 of the Act (failure to keep employee records);
where these sections have been contravened on multiple occasions, and/or in relation to multiple employees.
The FWO accepts that in the Second Proceeding, the Respondents are entitled to the benefit of s.557(1) of the Act:
a)where they contravened the same provision of the Award on multiple occasions and/or in relation to multiple employee;
b)in relation to multiple contraventions of s.536 of the Act (failure to provide pay slips); and
c)in relation to the contraventions of each of regs.3.44(1) and 3.44(6) of the Regulations (false or misleading employee records). [5]
The FWO notes that in Fair Work Ombudsman v Trek North Tours & Anor (No.2) [2015] FCCA 1801, the Court confirmed that s.557 of the Act does not apply to contraventions of ss.716 (failure to comply with compliance notices) and 712 of the Act (failure to comply with Notices to Produce).[6] I accept that s.557 of the Act does not apply to contraventions of ss.716 and 712 of the Act. Section 557(1) of the Act only applies to the civil remedy provisions referred to in s.557(2) of the Act, and neither ss.712(3) nor 716(5) of the Act are included in the list of civil remedy provisions in s.557(2) of the Act.
Accordingly, the FWO submits that after applying s.557(1) of the Act, there are the following contraventions:
a)in the First Proceeding, 10 contraventions comprised of:
i)7 separate contraventions of s.716 of the Act;
ii)1 contravention of s.536(1) of the Act;
iii)1 contravention of s.535(1) the Act; and
iv)1 contravention of s.44(1) of the Act; and
b)in the Second Proceeding, 12 contraventions of the Act comprised of:
i)8 separate contraventions of s.45 of the Act, arising from the First Respondent’s failure to pay the second proceeding employees in accordance with the Award;
ii)1 contravention of s.712(3) of the Act;
iii)1 contravention of s.536(1) of the Act;
iv)1 contravention of reg.3.44(1) of the Regulations; and
v)1 contravention of reg.3.44(6) of the Regulations.
I agree with the FWO’s characterisation of the contraventions after applying s.557(1) of the Act.
Grouping of contraventions
In relation to the grouping of contraventions, the FWO made the following submissions:[7]
40. The purpose of “grouping” contraventions is to avoid penalising a respondent twice for the same conduct.[8] As Middleton and Gordon JJ observed in Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39 (Cahill) at [47],
the principle recognises that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality.
41. In some cases, the Court has approached grouping by imposing a single penalty for a group or category of contraventions where contraventions of multiple provisions of the FW Act or an Award contain common elements or can be said to overlap with each other.[9] Similarly, this approach may be taken where there are multiple contraventions of a single provision that is not covered by section 557 of the FW Act.
42. In other cases, the Court has treated each contravention separately (save where section 557 applies) but either:
a) has taken into account in the affixation of each penalty the fact that the contraventions arose from a course of conduct or that there is relevant overlap in the elements or impact of particular contraventions;[10] or
b) considered whether the penalties should be imposed cumulatively or concurrently (or partly concurrently) in order to ensure that the penalty total is just and appropriate.[11]
43. [The FWO] submits that, having regard to the authorities, both the “grouping” and “overlap” approaches are open to the Court. Indeed, the former approach may be seen as an application of the latter in cases where the degree of overlap is so substantial that it would be inappropriate or unjust to impose a separate penalty for the second or subsequent contraventions in a group.
(Footnotes and emphasis in original)
The FWO submits that it would not be appropriate to wholly group any of the contraventions arising in the First Proceeding. However, the FWO acknowledges there is some overlap in the conduct in respect of each “batch of compliance notices”. The FWO submits that this overlap is most appropriately dealt with by imposing scaled penalties, and proposes penalties in the following ranges:[12]
a)for the first failure to comply with a compliance notice issued in December 2015: 50% to 60%;
b)for the subsequent two failures to comply with the compliance notices issued in December 2015: 40% to 50%;
c)for the first failure to comply with a compliance notice issued in May 2016: 70% to 80%. The FWO submits that a higher penalty should be imposed as the Respondents had previously been issued with compliance notices, and had failed to comply; and
d)for the subsequent three failures to comply with the compliance notices issued in May 2016: 50% to 60%.
The FWO also submits that it would not be appropriate to wholly group any of the contraventions in the Second Proceeding, on the basis that the contraventions did not “…wholly arise from a single course of conduct such as a single decision to pay a particular rate of pay”.[13]
The FWO acknowledges that there is some overlap in respect of the minimum wage, casual loading, and penalty rate contraventions. This overlap arose because of the Respondents’ routine failure to pay wages, or to pay only sporadically, which had the effect that when wages were not paid for particular pay period, it gave rise to minimum rate, casual loading and penalty rate contraventions in a single pay period. The FWO submits that this overlap is most appropriately dealt with by imposing scaled penalties, and proposes penalties on the following ranges:[14]
a)for the failure to pay minimum rates of pay: 70% to 80%;
b)for the failure to pay casual loading: 40% to 50%;
c)for the failure to pay late night penalty rates: 40% to 50%
d)for the failure to pay Saturday penalty rates: 30% to 40%
e)for the failure to pay Sunday penalty rates: 30 to 40%; and
f)for the failure to pay public holiday penalty rates: 30-40%.
The First Proceeding
I am satisfied that the seven compliance notices issued by the FWO on 23 December 2015 should be grouped into one contravention. I am further satisfied that the four compliance notices issued by the FWO on 13 May 2016 should each be grouped into one contravention, for the following reasons:
a)the December 2015 and May 2016 compliance notices, in each case, were served on the First Respondent at the same time;
b)the FWO required the First Respondent to comply with the December 2015 and May 2016 compliance notices, in each case, at the same time; and
c)the December 2015 and May 2016 compliance notices, in each case, related to employees who performed work at the same business, and related to the same underlying conduct; the Respondents’ failure to pay minimum rates of pay, casual loading, penalty rates and late night allowances.
Having grouped the seven contraventions arising out of the failure of the First Respondent to comply with the December 2015 and May 2016 compliance notices into two separate contraventions, I find there are five separate contraventions in the First Proceeding.
The Second Proceeding
I am satisfied that the following penalty rate contraventions should be grouped as one contravention:
a)Saturday penalty rate contraventions;
b)Sunday penalty rate contraventions;
c)public holiday penalty rates contraventions; and
d)late night penalty rates contraventions.
(“the penalty rate contraventions”)
In my opinion, this is justified because each of the provisions contravened by the First Respondent involved the failure to pay penalty loadings for work performed during hours which might be described as “unsociable hours”. The Court is conscious of the fact that “there is no exact science” [15] in the grouping decision, but rather, that “[i]t is a question of considering the nature of the contraventions and the nature of the “criminality” involved”.[16]
I am also satisfied that the contraventions of regs.3.44(1) and (6) of the Regulations should be grouped as one contravention, as the legal and factual elements are sufficiently similar. Both contraventions involve the knowing creation and the making use of false or misleading records in relation to the second proceeding employees.
Having grouped the penalty rate contravention and the contraventions of regs.3.44(1) and 3.44(6) of the Regulations, I find that there are eight separate contraventions in the second proceedings.
The maximum penalty
An essential element of determining the penalty to be imposed is the maximum penalty set for each contravention. The maximum penalty is used as a “yardstick”, considered with all of the other relevant factors.[17]
The pecuniary penalty that is imposed depends on the type of contravention, and whether or not the person in question is an individual or a body corporate. The maximum penalty in respect of an individual must not be more than the maximum number of penalty units referred to in the relevant item in column 4 of the table in s.539(2) of the Act: s.546(2)(a) of the Act. In respect of a body corporate, the penalty must not be more than five times referred to in the relevant item in column 4 of the table in s.539(2) of the Act: s.546(2)(b) of the Act.
The maximum penalty for a contravention of the Regulations is included in the table contained in s.539(2) of the Act by the operation of reg.4.01A of the Regulations.
A “penalty unit” has the same meaning as in s.4AA of the Crimes Act 1914 (Cth): s.12 of the Act.
The value of a penalty unit was:
a)$170 between 28 December 2012 and 30 July 2015 (“the First Penalty Unit Period”);[18] and
b)$180 between 31 July 2015 and 1 July 2017 (“the Second Penalty Unit Period”).[19]
The contraventions in the Second Proceeding and all of the compliance notice contraventions in the First Proceeding occurred wholly during the Second Penalty Unit Period.
Otherwise, in the First Proceeding:
i)the payslip contraventions occurred wholly in the First Penalty Unit Period; and
ii)the record keeping contravention and failure to provide the FW Information Statements occurred predominately in the First Penalty Unit Period.
The FWO submits, and I agree, that the lower penalty unit should be applied to the contraventions identified at [80] above. I am satisfied that for all other contraventions, the higher penalty unit should apply.
Factors relevant to penalty
The courts have developed a number of guidelines for the exercise of their power to impose pecuniary penalties. In
Kelly v Fitzpatrick [2007] FCA 108 (“Kelly”), Tracey J referred to the following “potentially relevant and applicable” considerations (at [14]):· The nature and extent of the conduct which led to the breaches.
· The circumstances in which that conduct took place.
· The nature and extent of any loss or damage sustained as a result of the breaches.
· Whether there had been similar previous conduct by the respondent.
· Whether the breaches were properly distinct or arose out of the one course of conduct.
· The size of the business enterprise involved.
· Whether or not the breaches were deliberate.
· Whether senior management was involved in the breaches.
· Whether the party committing the breach had exhibited contrition.
· Whether the party committing the breach had taken corrective action.
· Whether the party committing the breach had cooperated with the enforcement authorities.
· The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
· The need for specific and general deterrence.
…
The guidelines identified in Kelly are to assist in the determination of the appropriate penalty, and do not constitute mandatory considerations. In Fair Work Ombudsman v Lifestyle SA Pty Ltd [2014] FCA 1151, Mansfield J said the following (at [74]):
74. That provides a convenient checklist, but it does not restrict matters that may be taken into account in the exercise of judicial discretion: Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550 at [11]; Australian Ophthalmic Supplies v McAlary-Smith (2008) 165 FCR 560 (Australian Ophthalmic Supplies) at [91]; Offshore Marine Services at [12]. Nor does it require specific attention to matters which are not relevant or not focused on in submissions. In the exercise of judicial discretion, the Court should not be distracted from paying “appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain the public confidence in the statutory regime which imposes the obligations”: Australian Ophthalmic Supplies at [91]; Offshore Marine Services at [12]; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Service Union of Australia v QR Limited (No 2) [2010] FCA 652 at [34]-[35].
The matters referred to in each of the guidelines identified in Kelly are by no means discrete. Particular facts may be relevant to a number of the matters. Furthermore, because of the nature of the present proceedings, where the Court is determining the imposition of penalties for two proceedings, it follows that particular facts considered under various matters in relation to the First Proceeding will also be relevant to matters considered in relation to the Second Proceeding. In other, words, there will be considerable overlap. Therefore, the failure to explicitly refer to all facts relevant to a particular consideration does not mean that the Court has not given full consideration to that matter. Rather, the following analysis sets out the facts most pertinent to each particular matter, even though those facts have also been considered as a whole.
Matters relevant to the First Proceeding
Nature, extent and circumstances of the particular contravention
The compliance notices were issued by Fair Work Inspector, Emma Rodwell, following an investigation into Requests for Assistance lodged by the first proceeding employees. Ms Rodwell personally served the December 2015 and May 2016 compliance notices on the Second Respondent. The compliance notices required that the First Respondent make payments to first proceeding employees by 20 January 2016 and 25 May 2016, respectively, to rectify underpayment contraventions.[20] The First Respondent failed to comply with the December 2015 and May 2016 compliance notices by the dates specified, or at all.[21]
The power of a Fair Work Inspector to issue a compliance notice was introduced into the Act to provide a mechanism for dealing with non-compliance with minimum entitlements in the Act, as an alternative to commencing litigation for each underlying contravention of an entitlement.[22]
The FWO notes the following:[23]
59. A properly issued compliance notice creates an opportunity for a person to whom it is served to rectify the matters set out in the notice and gain protection from civil remedy proceedings in respect of the underlying contravention(s). If that person complies with the compliance notice:
a) no civil remedy proceedings can be brought against the person in respect of an underlying contravention: subsection 716(4A) of the FW Act; and
b) the person is not taken to have admitted or been found to have contravened the civil remedy provision in respect of an underlying contravention: subsection 716(4B) of the FW Act.
The compliance notices were issued in circumstances where the Respondents had been on notice of their obligations under the Act from as early as February 2014 (see [132] and [136] below). The Respondents were able to apply for a review of the notices, and did not do so.
I agree with the submissions of the FWO that in these circumstances, the Court can infer that each decision to not comply with the compliance notices was a deliberate decision on the part of the Second Respondent.
The conduct which resulted in the issue of compliance notices arose from the First Respondent failing to pay many of the first proceeding employees any amounts which they were entitled to be paid under the Award. When amounts were paid, the First Respondent paid them a flat rate, and failed to pay for all hours worked by those employees. The FWO refers to the following evidence:[24]
65. The [first proceeding employees] all worked for [the First Respondent] on a casual basis for short periods of time ranging between 5 days and 6 weeks. The evidence demonstrates that [the First Respondent] routinely failed to pay the [first proceeding employees] their wages when they were due. In order to receive any payments, the [first proceeding employees] were required to “chase up money from [the Second Respondent] to get paid”.[25] [The Second Respondent] would time and time again make false promises to pay the employees by a certain date,[26] claim that bank transfers had been made,[27] and on one occasion, paid Mr Narzisi with a cheque that was subsequently dishonoured.[28] When payments were made they were sporadic, notionally based on a flat hourly rate of pay below the lawful minimum and did not include payment for all hours worked. These practices appear to be an ongoing pattern of conduct engaged in by the Respondents.
(Footnotes in original)
A number of the first proceeding employees were vulnerable employees by reason of their age, or the fact that they were foreign nationals working in Australia pursuant to visas.[29] The FWO notes the following in relation to the employees:[30]
a)that all of the first proceeding employees were 25 years old or younger;[31]
b)Ms Herrera-Brennan and Mr Kanappa were juniors at the time of their employment (being 19 years old);[32]
c)Mr Kuiper, Ms Hornsby-Walsh and Ms Coucaud each held Working Holiday (subclass 417) visas; [33] and
d)Mr Levin held a Working Holiday (subclass 462) visa.[34]
Furthermore, the evidence before the Court is that two of the first proceeding employees had limited knowledge about minimum entitlements.[35] It is to be noted that the First Respondent failed to provide any of the first proceeding employees with a copy of the FW Information Statement at any time before or during their employment with the First Respondent.
Only three of the seven first proceeding employees received payments from the First Respondent (Mr Kuiper, Ms Hornsby-Walsh and Mr Levin). They received one to two payments each for work performed during their respective assessment periods.[36] The First Respondent was required, but failed to provide a pay slip in respect of each of these three payments.[37]
In respect of the other employees, the First Respondent failed entirely to make any payments during their respective assessment periods, and therefore the obligation to provide pay slips did not arise. Accordingly, although the failure to provide pay slips occurred in respect of three employees only, the conduct cannot be described as an aberration.
Furthermore, in the context of previous interactions with the Respondents, the FWO had educated the Respondents regarding the requirements to issue pay slips under the FW Act.[38] The subsequent failures to issue payslips could only have been intentional.
The First Respondent failed to keep employment records in relation to each of the first proceeding employees.[39] The failure to make and keep records required by the Act and the Regulations is a serious matter. The
record-keeping obligations imposed by the Act are directed at ensuring the creation and retention of records, which are a critical tool in assessing compliance with Commonwealth workplace laws. In Fair Work Ombudsman v Han Investments Pty Ltd [2017] FCA 623, Barker J said the following (at [114]-[115]):
114. The record keeping obligations are directed at ensuring the creation and retention of records as a critical tool in the assessment of compliance with workplace laws. Unless an employer complies with the law, and makes and keeps employment records, an effective safety net for employees is difficult to maintain. The result is that employees are more vulnerable to exploitation. The job of the [Fair Work] Ombudsman, as regulator, in detecting and protecting employees’ workplace entitlements is reduced in effectiveness.
…
115. …The failure to maintain records truly strikes at the very foundation of the regulatory scheme which is designed to ensure that employees are paid their legal entitlements.
Further, Katzmann J in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No.2) [2017] FCA 557 relevantly stated (at [545]):
545. Without accurate and complete records, the extent to which an employer is complying with its other obligations is difficult, if not impossible, to determine. The failure to make and keep proper records can frustrate the operation of the Act…
Nature and extent of loss
Although it could be said that the underpayments that the First Respondent was required to rectify pursuant to compliance notices were small (totalling $7,113.37), the underpayments were significant when considered as a proportion of the first proceeding employees total entitlements. Four of the first proceeding employees did not receive any payments for work performed, and were thereby underpaid 100% of the entitlements. The underpayments for the remaining three employees ranged from 42% to 65% of their total entitlements. Furthermore, these underpayments arose in a very short period of time, ranging from five to 14 days.
The evidence before the Court is that the underpayments had a significant impact on the first proceeding employees, and contributed to difficulties in affording rent, food and paying bills.[40] Three of the first proceeding employees needed to borrow money from family members during their employment.[41]
I accept the FWO’s submission that it is likely that there were further underpayments which the FWO was unable to quantify due to the Respondents’ failure to keep records.[42]
Similar previous conduct
The FWO has informed the Court that, to its knowledge, the Respondents have not previously been the subject of court proceedings involving contraventions of workplace laws.
Size and financial circumstances of the company
I am satisfied that the First Respondent is not a large employer. However, the size and financial circumstances of the Respondents does not exculpate contraventions of the Act and the Regulations.[43] The financial circumstances of the Respondent may be a relevant consideration in determining an appropriate penalty, and whether the size of the penalty is meaningful.[44] However, the Respondents have failed to file any evidence regarding their financial and asset positions.
Involvement of senior management
As sole director, company secretary and shareholder of the First Respondent, the Second Respondent was the only level of management within the business, and involved in each of the First Respondent’s contraventions. I am satisfied that the contraventions occurred because of actions taken or not taken by the Second Respondent.
Contrition and corrective action
Other than the making of a SOAF, the Respondents have not expressed any contrition, nor have they taken any corrective action. Indeed, at the date of the penalty hearing, the Respondents have jointly and severally failed to make full rectification of the underpayments identified in the compliance notices, and have displayed a level contempt for the orders of the Court requiring them to rectify the underpayments.
At the penalty hearing, I asked the Second Respondent why, given that he said the business continued to trade for a period of time, he had failed comply with the orders of the Court. The Second Respondent was unable to give any explanation other than he was occupied with generating income from the business, and that the business had slowed down. Given the small amounts that he was required to pay, in my opinion, this is an unacceptable explanation.
I agree with the FWO that the Respondents’ behaviour displays a lack of appreciation of the seriousness of the admitted contraventions, and a blatant disregard for their obligations under the Act and the Regulations. I agree with the FWO’s submission that the Respondents’ behaviour does not show any genuine acceptance of wrongdoing, or regret. The Respondents have not taken any corrective action.
Cooperation with the enforcement authorities and corrective action
The FWO acknowledges that the Respondents have made full admissions in the First Proceeding, saving considerable cost to the public purse by avoiding the need for a fully contested liability hearing.
I find that, other than making full admissions in the SOAF, the Respondents have shown no genuine contrition or remorse, nor have they taken any corrective action. I note that although the Second Respondent has accepted the FWO’s proposed orders and injunctions designed to avoid a repeat of the conduct engaged in by the Respondents in both proceedings in the future, this agreement stands in contrast with the Second Respondent’s failure to engage co-operatively with authorities. The Second Respondent has continued to fail to comply with compliance notices issued by the FWO, and has shown a level of contempt for the court orders that required rectification of underpayments to the first proceeding employees.
Ensuring compliance with minimum standards
One of the principal objects of the Act, as set out in s.3(b) of the 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…
In setting a penalty, consideration must be given to the purpose of issuing the compliance notices. This purpose is to enforce compliance with minimum standards, without the need for litigation. The failure by the Respondents to comply with the compliance notices issued in December 2015 and in May 2016 undermined this purpose.
Likewise, consideration must be given to the purpose of
record-keeping and payslip obligations. One of the purposes is to secure the enforcement of minimum standards by enabling effective investigation and enforcement of the employee entitlements by the regulator. Another of the purposes is to enable employees to independently verify their entitlements, and thereby provide employees with an ability to enforce compliance. I agree that the failure to provide employees with pay slips in accordance with the Act and the Regulations disempowers employees from enforcing their entitlements.[45] I further agreed that the failure to provide pay slips effectively creates “a structure within which breaches of industrial laws can easily be perpetrated.”[46]
Deterrence
In Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Anor [2015] HCA 46 at [55], the High Court of Australia confirmed that deterrence was the primary purpose of civil penalties. The High Court cited with approval the statement by French J in Trade Practices Commission v CSR Ltd [1990] FCA 762; (1991) ATPR 41-076, in which his Honour stated (at 52,152):
…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.
For a penalty to have the desired deterrent effect, it must be imposed at a meaningful level: Australian Competition and Consumer Commission v ABB Transmission and Distribution Limited [2001] FCA 383 at [13].
Specific Deterrence
Specific deterrence is directed to ensuring that a contravenor is not prepared to embark upon the risk of engaging in the same contravening conduct in the future.[47] In determining the need for specific deterrence, the Court should consider the Respondents’ attitude to remorse and steps taken to prevent further contraventions.[48]
At the penalty hearing, the Second Respondent informed the Court that the business in Brunswick is no longer trading. The Second Respondent informed the Court that the landlord had taken steps to evict him and the business from the premises in which it operated.
In her second affidavit, Fair Work Inspector Ms McLindon annexed an extract from an ASIC company search dated 18 January 2018.[49] In that extract, the status of the company Rum Runner Trading Pty Ltd is identified as “registered”. Ms McLindon also annexed a photograph taken on 10 January 2018 by another Fair Work Inspector of a notice on the door of the business premises in Brunswick. The notice states, “[p]lease note that the Landlord has taken possession of these premises. If you have any queries contact the landlord’s lawyers…”[50]
Counsel for the FWO submitted that as the company had not been wound up and remains registered, there is nevertheless a real risk that the business in Brunswick will commence trading again, and that the Second Respondent remains in control of the business. Counsel for the FWO submits that specific deterrence is therefore still relevant to the Court’s consideration of a meaningful level of penalties. I agree with this submission.
As noted above, the evidence is that the Respondents have not taken any steps to rectify the underpayments, nor have they demonstrated remorse. Although, I note that the Second Respondent has agreed to proposed orders by the FWO, which are designed to ensure future compliance with workplace laws.
Nevertheless, I agree with the FWO’s submission that penalties in the First Proceeding need to be imposed at a level that makes contravening conduct unprofitable and the prospect of future contraventions commercially undesirable for the Respondents.
General deterrence
When considering the question of general deterrence, a penalty should be fixed with a view to ensuring that it is not regarded by the Respondents and others “as an acceptable cost of doing business”, and should be likely to act as a deterrent to likeminded persons or organisations.[51] Employers should be in no doubt that they carry a responsibility to ensure that they comply with the obligations which they owe to their employees under the law.[52]
I agree with the FWO’s submission that given the statutory purpose of compliance notices, a relevant consideration must be the desirability of setting a meaningful penalty to encourage other employers to take timely steps to comply with compliance notices issued by the regulator.[53]
In its submissions on penalty, the FWO also emphasises the need for general deterrence in the industry in which the Respondents operate:[54]
104. The need for general deterrence in the present case is also heightened because of the industry in which the Respondents operate. [The FWO’s] Strategic Research, Analysis and Reporting Team (Reporting Team) created an industry profile relating to the cafes, restaurants and takeaway industry (Industry Report) in February 2017 and a data snapshot for the café and restaurant industry in July 2017 (Snapshot).[55] Key findings from the Industry Report and Snapshot include:
a) that the cafes, restaurants and takeaway food services industry accounted for the highest number of disputes lodged between July 2013 and June 2016 at 11%;
b) the industry accounted for the highest proportion of disputes involving visa workers, with 22% of disputes lodged involving a visa worker (almost half of these coming from working holiday visa holders);
c) 39% of the disputes lodged in this industry between July 2013 and June 2016 involved a young worker between the ages of 15-24 years old.
d) around 35% of workers employed in this industry were born outside of Australia, with 28% born in a country other than a main English speaking country; and
e) the median full time earning for employees in the café, restaurant and take away industry is $800 per week, whereas it is $1,152 across all other industries according to data from the Department of Employment.[56]
(Footnotes and emphasis in original)
Matters relevant to the Second Proceeding
Nature, extent and circumstances of particular contraventions
The evidence before the Court is:
a)that some of the contravening conduct in the Second Proceeding is the same contravening conduct which underpinned the compliance notices that are the subject of the First Proceeding;
b)the second proceeding employees were underpaid or not paid for work performed during ordinary hours, Saturdays, Sundays, and public holidays, and late night work performed after 10.00pm on Monday to Friday (see [42]-[47] above). Some payments were made to three of the second proceeding employees based on a notional flat hourly rate, but these employees were not paid for each hour worked. Payments were made sporadically. Often payments were made late, and only made after second proceeding employees went to extensive lengths to chase up their entitlements;[57]
c)the second proceeding employees were not paid within a one week time period, in accordance with cl.27.2 of the Award. None of the second proceeding employees were provided with an unpaid meal break in accordance with cl.32.1 of the Award. On the seven occasions that payments were made to the second proceeding employees, no pay slips were provided;
d)the First Respondent failed to comply with a Notice to Produce served personally on the Second Respondent on 13 September 2017; and
e)the First Respondent produced and made use of false or misleading records in relation to amounts paid and hours worked by the second proceeding employees.
With respect to the production of false or misleading records, the FWO submits:[58]
118. The employer records were created by [the Second Respondent] on behalf of [the First Respondent]. [The FWO] submits that the Respondents’ creation and production of the employer records was a deliberate attempt by the Respondents to stymie the regulator and avoid their conduct being detected. [The FWO] submits that it is highly aggravating in circumstances where the Respondents were provided with education on numerous occasions and the First Proceeding had already commenced. It was observed by Judge Burchardt in Fair Work Ombudsman v Oz Staff Career Services Pty Ltd and Ors [[2016] FCCA 2594 at [34]] that such conduct is “about as serious as it gets”.
(Footnotes omitted)
The Second Respondent has not disputed this allegation by the FWO. Taking into account the Second Respondent’s behaviour as a whole in both proceedings, and his previous engagement with the regulator in relation to rectification of breaches of the Act (see [132] and [136] below), I am satisfied that the creation of false or misleading records were designed to avoid the FWO identifying the contraventions of the Award engaged in by the Respondents, and to undermine the enforcement scheme under the Act. There is no other explanation for the Second Respondent’s conduct. This conduct amounts to contumelious behaviour by the Respondents, which must be recognised in the penalty imposed.
The second proceeding employees (except Ms Comtois) were employed by the First Respondent across periods of time subsequent to the issue of the December 2015 compliance notices in the First Proceeding. Ms Freeman’s employment period was also subsequent to the First Proceeding being commenced.
For the reasons set out in considering the general circumstances of the first proceeding employees, two of the second proceeding employees were vulnerable because of their age and visa status.
The FWO notes that during their employment with the First Respondent:[59]
a) Ms Millard and Ms Freeman were juniors at the time of their employment (being 19 years old);[60] and
b) Ms Comtois held a Working Holiday visa (subclass 417);[61]
(Footnotes in original)
Nature and extent of loss
Although it could be said that the underpayments were small (totalling $7,513.77), the underpayments were significant when considered as a percentage of the second proceeding employees’ total entitlements. One of the employees did not receive any payments for work performed, and were thereby underpaid 100% of her entitlements. The underpayments for the remaining four employees ranged from 56% to 94% of their total entitlements. Furthermore, these underpayments arose in a short period of time ranging from 10 to 44 days.
Furthermore, the evidence before the Court is that the impact of the underpayments on two of the second proceeding employees was significant:[62]
122. The impact of the underpayments on the Second Proceeding Employees was significant. Mr Kumarasinhe attests to having to borrow money from his family and selling belongings to be able to afford to buy food and pay his rent.[63] Ms Freeman attests to having to move interstate to live with her parents because she could no longer afford to live in Melbourne.[64]
In the absence of payslips and records conforming to the requirements under the Act and the Regulations, I am satisfied that is likely that there were further underpayments that the FWO was unable to quantify.
Deliberateness of the breaches
The Respondents have had prior interactions between January 2014 and February 2015 with the regulator; the consequence of which was the rectification of underpayments by the Respondents and the previous entity which operated the business. The evidence is that the conduct resulting in the contraventions in the Second Proceeding occurred when compliance notices had been issued, and the Respondents had been warned on a number of occasions of the consequences of contravening the Act.[65]
In these circumstances, it is extraordinary that the Respondents continued to engage in conduct amounting to contraventions of the Act and the Regulations, including underpayments to its employees.
I am satisfied that the Respondents deliberately engaged in the contraventions that are the subject of the Second Proceeding. This conduct has enabled the Respondents to gain a commercial advantage at the expense of the second proceeding employees.
Similar previous conduct
Although there is no prior finding by a court that the Respondents contravened the Act or the Regulations, the Court may have regard to the Respondents’ prior conduct that is relevant to, and of similar character to, the contraventions under consideration.[66] A relevant consideration is whether the contravening conduct is “uncharacteristic aberration or a manifestation of a continuing attitude of disobedience of the law”.[67]
Between January 2014 and February 2015, the FWO received Requests for Assistance from three other employees of the First Respondent, and one employee who was employed by the previous entity who operated the business. The Second Respondent was a director of the previous entity, Key West Trading Pty Ltd (“Key West”), until it went into liquidation on 13 December 2013. These employees made similar allegations, including unpaid wages, late payment of wages, and failure to provide payslips.[68] The FWO’s investigations into these Requests for Assistance resulted in the FWO informing the Respondents of their obligations on a number of occasions. The evidence before the Court is that three of these previous Requests for Assistance were resolved by the Second Respondent and Key West or the First Respondent voluntarily rectifying the underpayments.[69]
I am satisfied that as a consequence of the investigations and the action taken by the First Respondent and Key West to rectify underpayments, the Second Respondent understood the obligations upon the business that he operated arising from the Award and the Act.
As noted earlier, the contraventions in the Second Proceeding occurred after the December 2015 compliance notices were issued, and in the case of one employee, after the date on which the First Proceeding was initiated by the FWO. Furthermore, Ms McLindon deposed that three employees of the First Respondent contacted the FWO on
24 October 2017, 21 December 2017 and 23 January 2018 regarding underpayments. Ms McLindon further deposed that a coordinator from the Young Workers Centre contacted the FWO on 6 December 2017 regarding another employee of the First Respondent who alleged underpayments by the Respondents.[70]
The Second Respondent disputed in his submission that there were other employees who have not been paid. I give greater weight to the affidavit evidence. I am satisfied that it is more probable than not that other employees are likely not being paid.
I am satisfied that the conduct of the Respondents that is the subject of the Second Proceeding (as well as the First Proceeding) displays a continuing disobedience of the law. In setting a penalty, the Court must have regard to the necessity of deterring the Respondents from engaging in future contravening conduct, and secure a change in demonstrated attitude regarding compliance with the Act and the Regulations.
Size and financial circumstances of the company and involvement of senior management
The matters set out and considered at [102]-[103] above equally apply to the consideration of penalty in the Second Proceeding.
Contrition and corrective action and cooperation with the enforcement authorities
The matters set out and considered at [104]-[108] above equally apply to the consideration of penalty in the Second Proceeding.
Ensuring compliance with minimum standards
The matters set out and considered at [109]-[111] above equally apply in relation to the consideration of penalty in the Second Proceeding.
In addition, the failure of the Respondents to comply with the Notices to Produce, and the deliberate action by the Respondents in keeping and making use of false or misleading records, further serves to undermine the objects of the Act. This conduct clearly undermines the capacity of the regulator to perform its statutory function of enforcing compliance with minimum standards.[71]
Deterrence
The applicable principles have been set out at [112]-[113] above.
Specific deterrence
The matters set out and considered at [114]-[119] above equally apply to the consideration of penalty in the Second Proceeding.
Additionally, it is relevant that despite the issue of seven compliance notices, the Respondents continued to fail to pay the second proceeding employees their entitlements under the Award, and continues to engage in conduct that contravenes the Act. After the Second Proceeding commenced, and as at the date of the penalty hearing, the Respondents have failed to rectify the underpayments that are the subject of both proceedings. Further, the evidence is that the Respondents contravening conduct continued through 2017 (see [138] above).
General deterrence
The matters set out and considered at [120]-[122] above equally apply to the consideration of penalty in the Second Proceeding.
The penalty to be imposed
General discount
In Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 (“Mornington Inn”), their Honours Stone and Buchanan JJ discussed the circumstances in which a discount on penalty is appropriate where a guilty plea is entered, and the possible quantum of that discount. Their Honours relevantly stated (Mornington Inn at [75]):
75. A conventional consideration in assessing a discount in a criminal case for a plea of guilty is the stage in the proceedings at which the plea is entered. Normally, the maximum discount for this factor, sometimes thought to be 25%, is reserved for a plea made at the first reasonable opportunity…
Their Honours went on to note that the rationale for a discount for an early plea in a criminal case (Mornington Inn at [76]):
76. …does not apply neatly to a case, such as the present, where a civil penalty is sought and the case proceeds on pleadings. Nevertheless, in our view, it should be accepted… that a discount should not be available simply because a respondent has spared the community the cost of a contested trial. 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 the course of justice.
In Mornington Inn, the appeal was against the “modest” discount of 10%, granted in circumstances where the trial judge found that there was no evidence of contrition or remorse.
Counsel for the FWO submitted that although the FWO recommended that a discount of 5% was appropriate in its written submissions, given the Respondents’ ongoing failure to rectify the underpayments and the indications that the contravening conduct is likely to have continued, the FWO now submit that no discount be applied.
In the present matter, the Respondents have failed to rectify the underpayments (the subject of both proceedings), have proffered no acceptable reason for failing to do so, and have failed to satisfy the Court that they have accepted responsibility for any wrongdoing. In these circumstances, the Respondents’ actions in entering into SOAFs amounts to simply an admission of liability, and no more. However, in my opinion, some weight ought to be given to the Respondents’ consent to orders proposed by the FWO to secure compliance with the Act and the Regulations in the future.
In the circumstances, I am satisfied that a discount of 5% is appropriate.
Appropriate penalty for the contraventions
Having considered the evidence and submissions before the Court, the factors relevant to determining the penalty that ought to be imposed in relation to the contraventions in both proceedings are:
a)the nature of the conduct, which has involved ongoing contraventions of the Act and the Regulations, being the failure to rectify underpayments in respect of which the Respondents have admitted liability;
b)that fact that the Respondents were the subject of earlier investigations into contraventions of the Award, and knew full-well their obligations under the Award, yet continued to engage in contravening behaviour;
c)the proportion that the underpayments represented of the employees’ total entitlements, and the short period in which these underpayments arose;
d)the very low level of cooperation displayed by the Respondents with the regulator, including the production and use of false or misleading employee records;
e)the absence of remorse or contrition demonstrated by the Respondents;
f)the need for specific, as well is general deterrence; and
g)the Respondents’ agreement to orders proposed by the FWO, designed to secure future compliance, and alteration of the Respondents’ behaviour in future.
Having regard to all of the circumstances, I have determined the appropriate penalty for each of the grouped contraventions in both proceedings as set out below. Annexed to this decision are tables that set out the calculations of the penalty amounts for each proceeding.
The First Proceeding
After applying the general 5% discount, I have imposed penalties of:
a)50% in relation to the Respondents’ failure to comply with the December 2015 compliance notices;
b)80% in relation to the Respondents’ failure to comply with the May 2016 compliance notices;
c)60% in relation to the Respondents’ failure to provide payslips;
d)60% in relation to the Respondents’ failure to make and keep employee records; and
e)20% in relation to the Respondents’ failure to provide employees with a FW Information Statement.
I am satisfied that for the contraventions identified in the First Proceeding:
a)a total penalty of $72,105 should be imposed on the First Respondent; and
b)a total penalty of $14,457 should be imposed on the Second Respondent.
The Second Proceeding
After applying the general 5% discount, I have imposed penalties of:
a)80% in relation to the Respondents’ failure to pay minimum rates of pay;
b)50% in relation to the Respondents’ failure to pay casual loading;
c)50% in relation to the Respondents’ failure to pay Saturday and Sunday loading, public holiday loading, and late night loading;
d)30% in relation to the Respondents’ failure to provide employees with meal breaks;
e)40% in relation to the Respondents’ failure to pay employees on a fortnightly basis;
f)60% in relation to the Respondents’ failure to comply with a Notice to Produce Records or Documents;
g)60% in relation to the Respondents’ failure to provide payslips; and
h)70% in relation to the Respondents’ false or misleading records contravention.
I am satisfied for the contraventions identified in the Second Proceeding:
a)a total penalty of $186,390 should be imposed on the First Respondent; and
b)a total penalty of $37,278 should be imposed on the Second Respondent.
Totality Principle
The final step the Court must take is to look at the aggregate penalty, to determine whether it is an appropriate response to the contravening conduct. The penalty imposed must not be crushing or oppressive; it must be proportionate to the conduct engaged in by the Respondents and not have the effect of exonerating the conduct.[72]
The FWO submits, and I accept, that the totality principle should be applied in respect of each of the proceedings, separately. The two proceedings were heard concurrently for reasons of administrative efficiency; however, each proceeding concerned separate admitted contraventions.
The Second Respondent made very general submissions at the penalty hearing about each of the Respondents’ financial positions. However, there is no evidence before the Court that any penalties imposed would be crushing or oppressive. This is because the Respondents have not provided the Court with probative evidence of their financial circumstances.
Conclusion
For the reasons set out in this judgment, I make the declarations and orders set out above.
I certify that the preceding one hundred and sixty-four (164) paragraphs are a true copy of the reasons for judgment of Judge Jones
Associate:
Date: 9 May 2018
Annexure A
| MLG1334/2016 – penalty imposed in the First Proceeding | |||||
| Contravention | Maximum penalty after discount of 5% | Penalty range sought by FWO | Penalty imposed | ||
| First Respondent | Second Respondent | First Respondent | Second Respondent | ||
| 1. Section 716(5) of the Act – failure to comply with three compliance notices issued on | $25,650 | $5,130 | 50 - 60% 40 - 50% 40 - 50% | $12,825 | $2,565 |
| 2. Section 716(5) of the Act – failure to comply with four compliance notices issued on | $25,650 | $5,130 | 70 - 80% 50 - 60% 50 - 60% 50 - 60% | $20,520 | $4,140 |
| 3. Section 536(1) of the Act – failure to provide pay slips | $24,225 | $4,845 | 50 - 60% | $14,535 | $2,907 |
| 4. Section 535(1) of the Act – failure to make and keep employee records | $24,225 | $4,845 | 50 - 60% | $14,535 | $2,907 |
| 5. Section 44(1) of the Act – contravening a term of the National Employment Standards by failing to give employees Fair Work Information Statements | $48,450 | $9,690 | 20 - 30% | $9,690 | $1,938 |
| Total penalties | $276,450 | $55,290 | $72,105 | $14,457 | |
Annexure B
| MLG2753/2016 – penalty imposed in the Second Proceeding | |||||
| Contravention | Maximum penalty after discount of 5% | Penalty range sought by FWO | Penalty imposed | ||
| First Respondent | 2nd Respondent | First Respondent | Second Respondent | ||
| 1. Section 45 of the Act – failure to pay minimum rates of pay as required by cl.20.1 of the Award | $51,300 | $10,260 | 70 - 80% | $41,040 | $8,208 |
| 2. Section 45 of the Act – failure to pay casual loading as required by cl.13.1 of the Award | $51,300 | $10,260 | 40 - 50% | $25,650 | $5,130 |
| 3. Section 45 of the Act – failure to pay weekend, public holiday and late night penalty loading as required by cls.34.1 and 34.2(a)(i) of the Award | $51,300 | $10,260 | 30 - 40% 40 - 50% | $25,650 | $5,130 |
| 4. Section 45 of the Act – failure to provide employees with meal breaks as required by cl.32.1 of the Award | $51,300 | $10,260 | 20 - 30% | $15,390 | $3,078 |
| 5. Section 45 of the Act – failure to pay employees on a fortnightly basis as required by cl.27.1 of the Award | $51,300 | $10,260 | 40 - 50% | $20,520 | $4,104 |
| 6. Section 712(3) of the Act – failure to comply with a Notice to Produce Records or Documents | $51,300 | $10,260 | 60 - 70% | $30,780 | $6,156 |
| 7. Section 536(1) of the Act – failure to provide payslips | $25,650 | $5,130 | 40 - 50% | $15,390 | $3,078 |
| 8. Regulations 3.44(1) and 3.44(6) of the Regulations – false or misleading records contravention | $17,100 | $3,420 | 60 - 70% | $11,970 | $2,394 |
| Total penalties | $521,550 | $104,310 | $186,390 | $37,278 | |
[1] Gibbs v the Mayor, Councillors and Citizens of City of Altona [1992] FCA 553; (1992) 37 FCR 216 at 223; McIver v Healey [2008] FCA 425 at [16].
[2] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8.
[3] Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70.
[4] Kelly v Fitzpatrick [2007] FCA 1080 at [30].
[5] Regulation 4.03A of the Regulations prescribes that s.557 of the Act also applies to contraventions of regs.3.44(1) and 3.44(6) of the Regulations..
[6] The Applicant’s Submissions on Penalty filed on 19 September 2017 at [39].
[7] Ibid at [40]-[43].
[8] Pearce v R (1998) 194 CLR 610 at [40]; Johnson v R (2004) 205 ALR 346 at [27]-[34], Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [46], [72] (Graham J); at [93] (Buchanan J); Fair Work Ombudsman v Tiger Telco Pty Ltd (in liq) [2012] FCA 479 at [24]-[25].
[9] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [46], [72] (Graham J); at [93] (Buchanan J); Fair Work Ombudsman v Tiger Telco Pty Ltd (in liq) [2012] FCA 479 at
[24]-[25]; Fair Work Ombudsman v Lifestyle SA Pty Ltd [2014] FCA 1151 at [61]-[71].[10] Fair Work Ombudsman v South Jin Pty Ltd (No.2) [2016] FCA 832 at [44].
[11] Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171 at [19]; Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59 at [40] (overturned by the High Court in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Anor [2015] HCA 46 on a different point); Fair Work Ombudsman v Grouped Property Services Pty Ltd (No.2) [2017] FCA 557 at [420]-[439].
[12] The Applicant’s Submissions on Penalty filed on 19 September 2017 at [44]-[45].
[13] Ibid at [46].
[14] Ibid at [47].
[15] Fair Work Ombudsman v Sureguard Security Pty Ltd [2017] FCA 1566 at [43].
[16] Ibid.
[17] Markarian v R [2005] HCA 25; (2005) 228 CLR 357 at [31].
[18] See Crimes Act 1914 (Cth) s.4AA(1), as amended by Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 (Cth) sch.3 item 7.
[19] See Crimes Act 1914 (Cth) s.4AA(1), as amended by Crimes Legislation Amendment (Penalty Unit) Act 2015 (Cth) sch.1 item 2.
[20] The Affidavit of Emma Rodwell filed on 14 August 2017, Annexures ER-20, ER-29.
[21] Ibid at [54], [71], Annexures ER-25, ER-35.
[22] Explanatory Memorandum, Fair Work Bill 2008 (Cth) [2673]; see Fair Work Ombudsman v The Syndicate Group Pty Ltd [2015] FCCA 2847 at [27]; Fair Work Ombudsman v Absynthe Restaurant Pty Ltd [2015] FCCA 58 at [36].
[23] The Applicant’s Submissions on Penalty filed on 19 September 2017 at [59].
[24] The Applicant’s Submissions on Penalty filed on 19 September 2017 at [65].
[25] The Affidavit of Jordan Dechter Levin filed on 14 August 2017 at [21].
[26] The Affidavit of Paloma Elena Herrera-Brennan filed on 14 August 2017 at [18]-[134]; the Affidavit of Jordan Dechter Levin filed on 14 August 2017 at [29]-[44]; the Affidavit of Peter Joseph Narzisi filed on 14 August 2017 at [20]-[29], [40]-[92].
The Affidavit of Paloma Elena Herrera-Brennan filed on 14 August 2017 at [20], Annexure
PEHB-02; the Affidavit of Jordan Dechter Levin filed on 14 August 2017 at [36], Annexure JDL-02; the Affidavit of Peter Joseph Narzisi filed on 14 August 2017 at [47],Annexure PJN-04.
[28] The Affidavit of Peter Joseph Narzisi filed on 14 August 2017 at [69]-[70].
[29] See Fair Work Ombudsman v Dosanjh [2016] FCCA 923 at [30] endorsing the earlier view of Wilson J in Martin v Fresho Foods Pty Limited (No.2) [2009] FMCA 191 at [28]. See also Fair Work Ombudsman v Go Yo Trading Pty Limited & Anor [2012] FMCA 865 at [15]-[16]; Fair Work Ombudsman v Sonisolar Pty Ltd & Anor [2016] FCCA 2027 at [140].
[30] The Applicant’s Submissions on Penalty filed on 19 September 2017 at [68].
[31] The Affidavit of Paloma Elena Herrera-Brennan filed on 14 August 2017 at [1]; the Affidavit of Jordan Dechter Levin filed on 14 August 2017 at [1]; the Affidavit of Peter Joseph Narzisi filed on 14 August 2017 at [2]; the Affidavit of Emma Rodwell filed on 14 August 2017, Annexures ER-10, ER-13, ER-14, ER-18.
[32] The Statement of Agreed Facts (the First Proceeding) filed on 27 January 2017 at [19].
[33] Ibid at [20].
[34] Ibid.
[35] The Affidavit of Paloma Elena Herrera-Brennan filed on 14 August 2017 at [14]; the Affidavit of Jordan Dechter Levin filed on 14 August 2017 at [20].
[36] The Statement of Agreed Facts (the First Proceeding) filed on 27 January 2017 at [39]-[41].
[37] Ibid at [42].
[38] The Affidavit of Emma Rodwell filed on 14 August 2017 at [79]-[80].
[39] The Statement of Agreed Facts (the First Proceeding) filed on 27 January 2017 at [45].
[40] The Affidavit of Paloma Elena Herrera-Brennan filed on 14 August 2017 at [137] and [139]; the Affidavit of Jordan Dechter Levin filed on 14 August 2017 at [53]; the Affidavit of Peter Joseph Narzisi filed on 14 August 2017 at [96].
[41] The Affidavit of Paloma Elena Herrera-Brennan filed on 14 August 2017 at [138]; the Affidavit of Jordan Dechter Levin filed on 14 August 2017 at [53]; the Affidavit of Peter Joseph Narzisi filed on 14 August 2017 at [97].
[42] The Applicant’s Submissions on Penalty filed on 19 September 2017 at [81].
[43] Fair Work Ombudsman v Hiyi Pty Ltd & Ors [2016] FCCA 1634 at [47].
[44] Kelly v Fitzpatrick [2007] FCA 1080 at [28].
[45] Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd & Anor [2012] FMCA 258 at [67], cited with approval in Fair Work Ombudsman v Bundaberg Security Pty Ltd [2014] FCCA 592 at [26].
[46] Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd & Anor [2012] FMCA 258 at [67]; Fair Work Ombudsman v Zillion Zenith International Pty Ltd & Anor [2014] FCCA 433 at [76].
[47] Fair Work Ombudsman v AJR Nominees Pty Ltd (No.2) [2014] FCA 128 at [50].
[48] Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union [2008] FCAFC 170 at [37] (Gray J).
[49] The Affidavit of Catherine Antoinette-Agnes McLindon filed on 23 January 2018 at [6], Annexure CAM -1.
[50] Ibid at [18], Annexure CAM-9.
[51] Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20 at [62]-[63]; Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65 at [93] (Lander J).
[52] Fair Work Ombudsman v Maclean Bay Pty Ltd (No.2) [2012] FCA 557 at [29].
[53] The Applicant’s Submissions on Penalty filed on 19 September 2017 at [103].
[54] Ibid at [104].
[55] The Affidavit of Emma Rodwell filed on 14 August 2017 at [95], Annexures ER-54, ER-55.
[56] Ibid at [95], Annexure ER-54.
[57] See the Affidavit of Eliza Melody Freeman filed on 14 August 2017 at [20]-[39]; the Affidavit of Jahan Alex Kumarasinhe filed on 14 August 2017 at [25]-[109]; the Affidavit of Esther Rachel Templeton Millard filed on 15 August 2017 at [16]-[75].
[58] The Applicant’s Submissions on Penalty filed on 19 September 2017 at [118].
[59] The Applicant’s Submissions on Penalty filed on 19 September 2017 at [105].
[60] The Statement of Agreed Facts (the Second Proceeding) filed on 6 July 2017 at [22].
[61]
The Affidavit of Catherine Antoinette-Agnes McLindon filed on 14 August 2017, Annexure
CAM-02.
[62] The Applicant’s Submissions on Penalty filed on 19 September 2017 at [122].
[63] The Affidavit of Jahan Alex Kumarasinhe filed on 14 August 2017 at [113].
[64] The Affidavit of Eliza Melody Freeman filed on 14 August 2017 at [46].
[65] The Affidavit of Emma Rodwell filed on 14 August 2017 at [43], [53], [54], [67]-[68].
[66] Veen v The Queen (No.2) [1988] HCA 14; (1988) 164 CLR 465 at 477 and Temple v Powell [2008] FCA 714 at [64] as summarised in Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No.2) [2010] FCA 977 at [47]; Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 413 at [23]-[32].
[67] Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 413 at [24].
[68] The Affidavit of Emma Rodwell filed on 14 August 2017 at [74]-[92].
[69] Ibid at [77], [86], [90].
[70] The Affidavit of Catherine Antoinette-Agnes McLindon filed on 23 January 2018 at [8]-[16].
[71] See Fair Work Ombudsman v Nerd Group Australia Pty Ltd (No.2) [2012] FMCA 6 at [118].
[72] See Kelly v Fitzpatrick [2007] FCA 1080 at [30]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [23] (Gray J); at [66]-[73] (Graham J), at [98]-[102] (Buchanan J).
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