Fair Work Ombudsman v S H Millicent Pty Ltd
[2012] FMCA 178
•15 March 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v S H MILLICENT PTY LTD & ORS | [2012] FMCA 178 |
| INDUSTRIAL LAW – Penalty hearing for contravention of provisions in the Workplace Relations Act and Regulations and the Fair Work Act and Regulations – agreed facts – factors to consider. |
| Crimes Act 1914 (Cth), s.4AA Fair Work Act 2009 (Cth), ss.546, 557, 539, 12, 546, 535, 550, sub-s.535 Fair Work Regulations 2009 (Cth), regs.4.01A, 3.44, subregs.344 Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth), Schedule 16 subitem.16 Notional Agreement Preserving a State Award derived from the Hotel’s, Clubs, etc Award (SA), Clause 6.6.4 Award Based Transitional Instrument derived from the NAPSA, Clause 6.6.4 Workplace Relations Act 1996 (Cth), ss.719, sub-ss.4, 846, 728, 550 Workplace Relations Regulations 2006 (Cth), regs.14.4, sub-regs.14.5, 19.4, 19.11, 19.16, 19.17 |
| Salandra v Risborg Services Pty Ltd & Ors [2008] FMCA 76 Olsen v Sterling Crown Pty Ltd [2008] FMCA 1392 FMEU v Cole & Allied Operations Pty Ltd (No. 2) [1999] FCA 1714 [7, 8] Cotis v Pow Juice Pty Ltd [2007] FMCA 140 Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 Cotis (Office of Workplace Services) v MacPherson [2007] FMCA 2060 Jones v Hanssen Pty Ltd [2008] FMCA 291 Kelly v Fitzpatrick [2007] FCA 1080 Commissioner for Public Employment (Department for Correctional Services) v Public Service Association of South Australia Inc [2003] SAIRC 71 (an unreported decision of the South Australian Industrial Relation Court (Jennings, Parsons and Gilchrist JJ on 2 October 2003) Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | S H MILLICENT PTY LTD |
| Second Respondent: | JOHN PATRICK BOWLER |
| Third Respondent: | PAUL HENRY CARROLL |
| File Number: | ADG 82 of 2011 |
| Judgment of: | Simpson FM |
| Hearing date: | 22 November 2011 |
| Date of Last Submission: | 22 November 2011 |
| Delivered at: | Adelaide |
| Delivered on: | 15 March 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Edmonds-Wilson |
| Solicitors for the Applicant: | Fair Work Ombudsman |
| Counsel for all the Respondents: | Ms Fuller |
| Solicitor for all the Respondents: | Fisher Jeffries |
THE COURT DECLARES:
That the first respondent, S H Millicent Pty Ltd (ACN 076 284 921), has breached:
(a)Clause 6.6.4 of the Notional Agreement Preserving a State Award derived from the Hotel’s, Clubs, etc Award (SA) (“NAPSA”);
(b)Clause 6.6.4 of the Award Based Transitional Instrument derived from the NAPSA (“ABTI”);
(c)Subregulation 19.4(1) of the Workplace Relations Regulations 2006 (Cth) (“WR Regulations”);
(d)Subregulation 19.11(2) of the WR Regulations;
(e)Subregulation 19.11(3) of the WR Regulations;
(f)Subregulation 19.16(2) of the WR Regulations;
(g)Subregulation 19.17(1) of the WR Regulations;
(h)Subsection 535(1) of the Fair Work Act 2009 (Cth) (“FW Act”);
(i)Subsection 535(2) of the FW Act;
(j)Subregulation 3.44(1) of the Fair Work Regulations 2009 (Cth) (“FW Regulations”);
(k)Subregulation 3.44(2) of the FW Regulations;
(l)Subregulation 3.44(6) of the FW Regulations;
That pursuant to section 728 of the Workplace Relations Act 1996 (Cth) (“WR Act”) the second respondent, John Patrick Bowler, was involved in the contraventions referred to in subparagraphs 1(a), (c), (d), (e), (f) and (g) of these orders during the period 27 March 2007 until about December 2008.
That pursuant to section 728 of the WR Act the third respondent, Paul Henry Carroll, was involved in the contraventions referred to in subparagraphs 1(a), (c), (d), (e), (f) and (g) of these orders during the period from about January 2009 until 30 June 2009.
That pursuant to section 550 of the FW Act the third respondent, Paul Henry Carrroll, was involved in the contraventions referred to in subparagraphs 1(b), (h), (i), (j), (k) and (l) of these orders during the period 1 July 2009 until 21 December 2009.
IT IS ORDERED THAT:
Pursuant to section 719 of the WR Act, and regulation 14.4 of the WR Regulations the first respondent pay a pecuniary penalty of $15,500 in respect of the contraventions referred to in subparagraphs 1(a), (c), (d), (e), (f) and (g) of these orders.
Pursuant to section 546(1) of the FW Act and the FW Regulations the first respondent pay a pecuniary penalty of $24,000 in respect of the contraventions referred to in subparagraphs 1(b) and (h) to (l) of these orders.
Pursuant to section 719(1) of the WR Act and regulation 14.4 of the WR Regulations the second respondent pay a pecuniary penalty of $7,900 in respect of the contraventions referred to in subparagraphs 1(a) and (c) to (g) of these orders.
Pursuant to section 719(1) of the WR Act and regulation 14.4 of the WR Act the third respondent pay a pecuniary penalty of $3,150 in respect of the contraventions referred to in subparagraphs 1(a) and (c) to (g) inclusive of these orders.
Pursuant to section 546(1) of the FW Act, the third respondent pay a pecuniary penalty of $5,350 in respect of the contraventions referred to in subparagraphs 1(b) and (h) to (l) inclusive of these orders.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADG 82 of 2011
| FAIR WORK OMBUDSMAN |
Applicant
And
| S H MILLICENT PTY LTD |
First Respondent
| JOHN PATRICK BOWLER |
Second Respondent
| PAUL HENRY CARROLL |
Third Respondent
REASONS FOR JUDGMENT
I have an application before me brought by the Fair Work Ombudsman seeking orders imposing penalties for contraventions of provisions of the Workplace Relations Act 1996 (Cth) (“WR Act”) and its Regulations (“WR Regulations”), and the Fair Work Act 2009 (Cth) (“FW Act”) and its Regulations (“FW Regulations”).
The first respondent is S H Millicent Pty Ltd, trustee of three trusts: a trust that runs the business known as, the Millicent Hotel; a trust that employs staff for the Millicent Hotel; and a trust that owns the real estate that the Millicent Hotel operates from. For convenience I will refer to the first respondent as the “Millicent Hotel”.
The second respondent, John Patrick Bowler (“Mr Bowler”) and third respondent, Paul Henry Carroll (“Mr Carroll”), were at different times directors of the first respondent and managers of the Millicent Hotel. During their respective times as managers of the hotel, Messrs Bowler and Carroll were responsible on behalf of the Millicent Hotel for determining the entitlements of employees of the Hotel.
The Court has been provided with a Statement of Agreed Facts (“the Statement”) dealing not only with the facts giving rise to the charges, but also details of the contraventions that each of the respondents admit. The Statement is an annexure to and forms part of these reasons.
I have considered all of the affidavits that have been tendered. The applicants rely on affidavits of each of the five employees and an affidavit of Natalie Clare Goldsworthy, a Fair Work Inspector who had primary carriage of the investigation giving rise to the proceedings. Ms Goldsworthy’s affidavit annexed the transcript of two interviews with each of the second and third respondents. The respondents rely upon three affidavits of Roger Leonard Wasley, two of which were affirmed on 22 November 2011 and the third affirmed on 18 November 2011; two affidavits of Paul Henry Carroll, affirmed 21 September 2011 and 22 November 2011; two affidavits of John Patrick Bowler, affirmed 23 September and 22 November 2011; and an affidavit of Mary Louise Bowler affirmed on 23 September 2011.
On the basis of the affidavit material and the Statement, I make findings of fact in relation to the matters contained in paragraphs 6 to 94 inclusive of the Statement. I propose also to make declarations in relation to the admitted contraventions contained in paragraphs 1 to 5 of the Statement.
Each of the contraventions of the Millicent Hotel can be considered to fall into one of five categories:
(a)A failure to provide employees with unpaid meal breaks or compensation in lieu of unpaid meal breaks;
(b)A failure to make and keep the prescribed employee records which contain details of employee’s hours, payments, loading allowance or entitlements;
(c)A failure to correct errors in the employees records;
(d)Making use of false or misleading records; and
(e)A failure to ensure that a record is not false or misleading.
A certain element of complexity arises from the fact that the contraventions have to be considered in relation to two time periods: Firstly, the period when the provisions of the WR Act and WRRegulations applied (27 March 2006 to 30 June 2009); and secondly, the period when the FW Act and FW Regulations applied (from 1 July 2009).
The contraventions relate to five employees of the Millicent Hotel, each of whom were employed on a casual basis. The names and periods of employment of the five employees are as follows:
(a)Lindy Hawke (20 February 2008 to 4 September 2009 during which time there were numerous contraventions of both the WR Act and WR Regulations and FW Act and FW Regulations);
(b)Cheryl Varco (27 March 2006 to 20 May 2009 during which time there were numerous contraventions of the WR Act and WR Regulations);
(c)Kerry Lawson (27 March 2006 to 15 November 2009 during which time there were contraventions of both the WR Act and WR Regulations and the FW Act and FW Regulations);
(d)Heather Wheatley (27 March 2006 to 28 May 2009 during which time there were numerous contraventions of the WR Act and WR Regulations); and
(e)Angela Jones (27 March 2006 to 21 December 2009 during which time there were numerous contraventions of both the WR Act and WR Regulations and the FW Act and FW Regulations).
Subsection 719(2) of the WR Act provides that when two or more breaches of an applicable provision are committed by the same person and the breaches arose out of a course of conduct by the person, the breaches are, for the purposes of s.719 of the WR Act to, be taken to constitute a single breach of the provision.
Subregulation 14.5(1) of the WR Regulations provides that when two or more breaches of a civil remedy provision of the WR Regulations are committed by the same person, and the breaches arose out of a course of conduct by the person, the breaches are, for the purposes of r.14.4 of the WR Regulations to, be taken to constitute a single breach of the civil remedy provisions of the WR Regulations.
Subsection 557(1) of the FW Act provides that when two or more breaches of a civil remedy provision of the FW Act or the FW Regulations are committed by the same person, and the breaches arose out of a course of conduct by the person, the breaches are, for the purposes of s.539 of the FW Act to, be taken to constitute a single breach of the civil remedy provisions of the FW Act or FW Regulations.
Subsection 4(1) of the WR Act and s.12 of the FW Act provide that “penalty unit” has the same meaning as in the Crimes Act 1914 (Cth) (“Crimes Act”). Section 4AA of the Crimes Act defines “penalty unit” to be $110.00.
Pursuant to sub-s.719(4) of the WR Act, the maximum penalty that may be imposed by the Court in relation to breaches of the NAPSA is, for a company, 300 penalty units (ie $33,000.00) and for an individual, 60 penalty units (ie $6,600.00).
Pursuant to r.14.4 of Chapter 2 of the WR Regulations and subs.846(2)(g) of the WR Act, the maximum penalty that may be imposed by the Court in relation to contraventions of the WR Regulations is for a company, 50 penalty units (ie $5,500.00) and for individuals, 10 penalty units (ie $1,100.00).
Pursuant to sub-item 16(1) of Schedule 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act2009 (“the Transitional Act”) and subs.546(2) of the FW Act, the maximum penalty that may be imposed by the Court in relation to contraventions of the Award Based Transitional Instrument (“ABTI”) is for a company, 300 penalty units (ie $33,000.00), and for individuals, 60 penalty units (ie $6,600.00).
Pursuant to sub-ss.539(2) and 546(2) of the FW Act, the maximum penalty that may be imposed by the Court in relation to breaches of s.535 of the FW Act are, for companies, 150 penalty units (ie $16,500.00), and for individuals, 30 penalty units (ie $3,300.00).
Pursuant to r.4.01A of the FW Regulations and sub-s.546(2) of the FW Act, the maximum penalty that may be imposed by the Court in relation to contraventions of r.3.44 of the FW Regulations is, for a company, 100 penalty units (ie $11,000.00), and for individuals, 20 penalty units (ie $2,200.00).
On the basis of the admissions made by the first respondent I find that the first respondent is guilty of the 12 contraventions mentioned in subparagraphs (1)(a) to (l) inclusive of the Statement. Similarly, I find that the second respondent, Mr Bowler, contravened the provisions set out in paragraph 1 of the Statement being subparagraphs (a), (c) to (e), (h) and (j) during the period 27 March 2007 to about December 2008. I further find that the third respondent, Mr Carroll, contravened the provisions set out in paragraph 1 of the Statement being subparagraphs (a) and (c) to (g) inclusive, during the period from about January 2009 until 30 June 2009 and, within the meaning of s.550 of the FW Act, contravened the provisions set out in paragraph 1 of the Statement being subparagraphs (b) and (h) to (l) during the period 1 July 2009 until 21 December 2009.
I also find on the basis of the admissions that the respondents’ contraventions resulted in underpayments to the employees totalling $48,098.71. The first respondent has reimbursed the employees for this underpayment and has also paid interest on that sum.
Although the respective provisions that were breached, on the one hand, under the WR Act and WR Regulations, and on the other, under the FW Act and FW Regulations are in identical (or near identical) terms, I must treat a breach under the Workplace Relations legislation as a different breach to the corresponding provision under the Fair Work legislation. In imposing penalties, I propose to take into account that my findings of two breaches rather than one arises merely from the fact that there was legislative change.
Table “A” below identifies the contraventions that have occurred by each of the respondents and the maximum penalty that the legislation specifies might be imposed for each such breach.
Table “A”
Provisions Contravened | Maximum Penalty for | Maximum Penalty for Second Respondent | Maximum Penalty for Third Respondent |
| 6.6.4 NAPSA | $33,000 | $6,600 | $6,600 |
| 6.6.4 ABTI | $33,000 | N/A | $6,600 |
| reg.19.4(1) | $5,500 | $1,100 | $1,100 |
| reg.19.11(2) | $5,500 | $1,100 | $1,100 |
| reg.19.11(3) | $5,500 | $1,100 | $1,100 |
| reg.19.16(2) | $5,500 | $1,100 | $1,100 |
| reg.19.17(1) | $5,500 | $1,100 | $1,100 |
| s.535(1) | $16,500 | N/A | $3,300 |
| s.535(2) | $16,500 | N/A | $3,300 |
| reg.3.44(2) | $11,000 | N/A | $2,200 |
| reg.3.44(6) | $11,000 | N/A | $2,200 |
| reg.3.44(1) | $11,000 | N/A | $2,200 |
| Totals | $159,500 | $12,100 | $31,900 |
The factors that need to be considered in assessing the quantum of penalties have been considered in a number of cases.[1] Whilst a list such as the one that follows should not restrain me from considering any other factor that I consider relevant, the following list of factors are a helpful start:
[1] See eg, Salandra v Risborg Services Pty Ltd & Ors [2008] FMCA 76; Olsen v Sterling Crown Pty Ltd [2008] FMCA 1392 at [34];FMEU v Cole & Allied Operations Pty Ltd (No. 2) [1999] FCA 1714 [7, 8]; Cotis v Pow Juice Pty Ltd [2007] FMCA 140 at [49]; Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 at [19-22, 36-37, 50, 59]; Cotis v MacPherson [2007] FMCA 2060 at [11]; Jones v Hanssen Pty Ltd [2008] FMCA 291 at [6]; Kelly v Fitzpatrick [2007] FCA 1080 at [14].
a)The nature and extent of the conduct which led to the breaches;
b)The circumstances in which the conduct took place;
c)The nature and extent of any loss or damage sustained as a result of the breaches;
d)Whether there has been similar previous conduct by the party;
e)Whether the breaches were properly distinct or arose out of the one course of conduct;
f)The size of the business enterprise involved;
g)Whether or not the breaches were deliberate;
h)Whether senior management was involved in the breaches;
i)Whether the party committing the breach had exhibited contrition for the breach firstly, by taking action to make reparation for any loss resulting from the breach whether or not there was a legal obligation to do so and second, in any other manner;
j)Whether the party committing the breach has taken corrective action to ensure that further breaches do not occur;
k)Whether the party committing the breach has cooperated with the enforcement authorities;
l)The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements;
m)The need for specific and general deterrence;
n)If the party has admitted the breaches of the applicable provisions – that fact; and
o)If the party is an individual, the character, antecedents, age, means and physical or mental condition of the party.
Mr Wasley is a director and part owner of the first respondent, the Millicent Hotel. In his affidavit of 18 November 2011, Mr Wasley stated that the hotel business was then on the market. He annexed an appraisal of the business together with advertising material.
The second respondent, Mr Bowler stated in his affidavits that he was born in 1942 and retired from the hotel business in 2009. He had managed the hotel for about seven years. He said that prior to that he had:
·been a hotel broker;
·owned a newsagency in Port Lincoln;
·been a bank teller; and
·acted as an area manager for Shell.
He said that during his time in Port Lincoln he served as volunteer on the board of the St Johns Ambulance and since retiring had become a volunteer to the Variety Charity to assist with fund raising for charities.
Mr Bowler stated that whilst he was managing the hotel, he had a one third share in the lease hold which reduced to 20% when he retired. He pointed out that as a consequence he will be responsible for 20% of whatever penalty is imposed in relation to the breaches by the Millicent Hotel.
Mr Bowler stated that in November 2002 he took over as manager of the hotel from a person by the name of Robert Nicholls. He says that when he took over the management he did not believe that the staff had been having breaks during their shifts even though the shifts were longer than five hours.
Mr Bowler says that some time after managing the hotel (he was no more specific), he was told by the hotel’s book-keeper, Lorraine Faulkner, that staff were meant to have a break after five hours. Mr Bowler stated that he had considered that implementation of shift breaks after five hours was going to be difficult bearing in mind the size of the hotel and the staffing levels that were required. He nevertheless decided to move to five hour shifts in about January 2003. A roster was prepared and posted on the staff notice board at the hotel. Staff immediately complained about the proposed roster for five hourly shifts. Mr Bowler says that staff indicated that they wanted thirty hours of work per week but wanted to do that work over four days instead of six. Staff indicated that this was the arrangement that had always been in place and they wanted to keep it that way. Mr Bowler said that it was made clear to him by staff that they did not want five hour shifts and that they wanted to continue with the way that they had been operating with longer shifts, less days of work, and no breaks.
Mr Bowler’s evidence was corroborated by his wife’s affidavit of 23 September 2011. Further corroboration was provided by one of the documents discovered by the Fair Work Ombudsman in which Ms Barco indicated that she would “jump” at the chance to work four eight hour days instead of six five hour days per week. Mr Bowler decided therefore to abandon the implementation of shift breaks.
Mr Bowler said that although the Hotel was busy at certain times, such as Friday nights, it often had periods that were very quiet. He says that although staff did not have an unpaid meal break, they were informally given the opportunity to have a meal, cigarette or toilet break regularly during their shift.
Mr Bowler said that although he felt that he was trying to keep the staff happy, he now understands that he should not have permitted staff to work other than as was required by the workplace laws. They should have been paid the appropriate allowance if they worked without a break. He is extremely sorry for what has occurred.
These contraventions represent a failure by the respondents to comply with fundamental obligations imposed by industrial legislation. The need to provide workers with adequate rest breaks was addressed in the case of Commissioner for Public Employment (Department for Correctional Services) v Public Service Association of South Australia Inc[2] There Honours said:
[2] [2003] SAIRC 71 at para 63 (an unreported decision of the South Australian Industrial Relation Court (Jennings, Parsons and Gilchrist JJ on 2 October 2003).
“The need to provide workers with adequate rest breaks to control health and safety risks and to relieve fatigue was recognised as long ago as 1885. For example, pursuant to s.21 of the Factories and Shops Act 1885 (Vic) there was a general requirement that women and minors employed continuously for more that (sic) five hours be given at least half an hour break for a meal. …. (I)t) is notable that in 1959 that Combo Conciliation and Arbitration Commission in Re: Tramway employees (Melbourne) Interim Award (1959) 92 CAR 378 at 387 accepted medical evidence that a person should not be expected to work for more than four and half hours without having a meal break and that it drafted the relevant Award accordingly.”
The failure of the respondents to provide the employees with an unpaid meal break during shifts of more than five hours during their employment deprived them of an ability to take adequate rest breaks during their shifts. The NAPSA and ABTI contemplated circumstances in which it may not be possible for a meal break to be taken and accordingly provided for extra payments to be made in addition to the time worked by way of compensation for the employees not receiving an unpaid meal break during their shift. Whilst I acknowledge the evidence from the respondents that the employees expressed the wish to have longer shifts, this is no good reason for employers to ignore the legislative provisions.
The respondent’s conduct was compounded by the respondents creating false and misleading records in the employees’ time books that indicated falsely that meal breaks were being taken during their shifts. It is submitted on behalf of the applicant that the respondents’ calculated and deceitful strategies ought to be regarded as a factor which materially aggravated the seriousness of the respondents’ conduct. I agree.
The employees were aged between 37 and 60 at the time of the contraventions. The total underpayment to the five employees was $48,098.71. The amount of the underpayment to each employee was significant for casual employees such as these. By reason of the meal break and record keeping contraventions, the first respondent obtained a dual financial benefit by not paying the employees compensation in lieu of an unpaid meal break and by avoiding the expense that they would have otherwise incurred had they engaged additional staff to cover the employees while they took their meal breaks. The second respondent stated that this financial benefit was what motivated the meal break and record keeping contraventions. The second and third respondents each derived a personal share in this benefit unlawfully obtained by the first respondent by reason of their status as two of a small pool of share holders in the first respondent.
I take into account that none of the respondents have previously contravened any Commonwealth (or for that matter State) workplace laws.
I note that the first respondent employed between 10 and 20 employees during the relevant period (ie 27 March 2006 to 21 December 2009) and can therefore be considered to be a relatively small business.
The applicant submits that the meal break and record keeping contraventions constitute a sustained and deliberate strategy by the first respondent under the active management of the second and, later the third respondents which was calculated to avoid the requirement to pay the employees in accordance with the meal break obligations. It is further put by the applicant that over a period of at least three and half years, the first respondent generated rosters that did not allow for unpaid meal breaks to be taken in accordance with the relevant legislative instrument. Even when the rosters were changed by the third respondent and seemingly provided for a meal break to be taken during the employees shifts, in reality, this still did not occur. Instead, the first respondent under the management of the third respondent instructed its employees to falsify time records and deliberately maintain records that hid the non-provision of such meal breaks. Furthermore, the first respondent then based calculations of the employee’s wages on records, knowing fully well that they did not accurately reflect the hours worked, and hence the full entitlements, of the employees. These are important matters for me to take into account in deciding the appropriate penalty.
I take into account that the second and third respondents were at different times both directors and managers of the hotel. During their times as managers the second and third respondents had active day-to-day involvement in the management of the hotel and directly observed the employees conditions of employment including the absence of meal breaks. At any stage they could have directed the first respondent’s actions by properly complying with the applicable legislation. It is therefore appropriate that I take into account that at all times senior management was involved in the first respondent’s contraventions.
I take into account the second and third respondents have each provided apologies to each of the five employees and that each of the employees have been reimbursed for the monies that they should have received together with interest. I also note that there were early admissions by each of the respondents which has avoided the need for contested litigation on liability and thereby limited to a large extent the cost of the litigation.
I note that Mr Carroll says that he is committed to ensure that there will not be a repetition of this type of behaviour by the company. He says that during his time at the hotel no-one ever complained to him that they did not get a break in their shift. He says that since early 2010, he has managed to implement breaks with all staff or to pay proper compensation as required by the Award. He says that consequently all staff employed by the first respondent since that time have either had a shift of five hours or less, had a shift longer than five hours and had the applicable break required by the Award, or had a shift longer than five hours and had no break but in such cases they have been paid the compensation in lieu of the same as required by the award. I am satisfied that the respondents are contrite, that corrective action has been taken and that the respondents have co-operated with the authorities.
The penalty that I impose should act as a deterrent to persons failing to comply with this and other similar legislation. The substantial penalties that are set by the legislature for contravention of obligations such as these are obviously aimed at reinforcing the importance placed on compliance with minimum standards.
I accept that the penalty in this matter must reflect the need for both general and specific deterrence. In Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 [93], Lander J had this to say on the question of general deterrence:
“In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts [1979] 22 SASR 108. The penalty therefore should be of a kind that it would be likely to work as a deterrent in preventing similar contraventions by likeminded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson [1975] 11 SASR 217.”
A little later in his reasons His Honour had this to say on the general topic of deterrence:
“The penalty must recognise the need for deterrence, both personal and general. In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend … The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by likeminded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section.”[3]
[3] Ponzio (supra) at [93].
In considering the penalty, I must consider the principle of totality. I must “… determine an appropriate level of penalty for each contravention, as if it were a separate offence and then … look at the aggregate of those penalties in the light of the overall conduct of the (respondent), to form a view as to whether that aggregate was out of proportion to that overall conduct.”[4]
[4] See Australian Opthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at para 23 and see also paras 18-25, 50-54 and 66-70.
Taking all the above matters into account, I propose to impose penalties for each contravention as show in Table B of these reasons.
Table “B”
Provisions Contravened | Penalties for | Penalties for Second Respondent | Penalties for Third Respondent |
| 6.6.4 NAPSA | $7,500 | $3,300 | $1,650 |
| 6.6.4 ABTI | $7,500 | N/A | $1,650 |
| reg.19.4(1) | $1,000 | $1,000 | $300 |
| reg.19.11(2) | $1,000 | $1,000 | $300 |
| reg.19.11(3) | $1,000 | $1,000 | $300 |
| reg.19.16(2) | $2,500 | $800 | $300 |
| reg.19.17(1) | $2,500 | $800 | $300 |
| s.535(1) | $3,000 | N/A | $1,100 |
| s.535(2) | $3,000 | N/A | $1,000 |
| reg.3.44(2) | $3,500 | N/A | $500 |
| reg.3.44(6) | $3,500 | N/A | $500 |
| reg.3.44(1) | $3,500 | N/A | $500 |
| Totals | $39,500 | $7,900 | $8,500 |
The total penalty imposed on the first respondent is therefore $39,500, the second respondent $7,900 and the third respondent $8,500. I am satisfied that the penalties to be imposed satisfy the totality principle.
I make the declarations and orders to be found at the beginning of these reasons.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Simpson FM
Date: 15 March 2012
Annexure to Reasons
STATEMENT OF AGREED FACTS
THE ADMITTED CONTRAVENTIONS
On the basis of the facts set out below, the First Respondent admits to contravening the following provisions:
(a)clause 6.4.4 of the Notional Agreement Preserving a State Award derived from the Hotels, Clubs, Etc. Award (SA) (NAPSA);
(b)clause 6.6.4 of the Award Based Transitional Instrument derived from the NAPSA (ABTI);
(c)subregulation 19.4(1) of the Workplace Relations Regulations 2006 (Cth) (WR Regulations);
(d)subregulation 19.11(2) of the WR Regulations;
(e)subregulation 19.11(3) of the WR Regulations;
(f)subregulation 19.16(2) of the WR Regulations;
(g)subregulation 19.17(1) of the WR Regulations;
(h)subsection 535(1) of the Fair Work Act 2009 (Cth) (FW Act);
(i)subsection 535(2) of the FW Act;
(j)subregulation 3.44(1) of the Fair Work Regulations 2009 (Cth) (FW Regulations);
(k)subregulation 3.44(2) of the FW Regulations; and
(l)subregulation 3.44(6) of the FW Regulations.
Bowler admits to his involvement within the meaning of section 728 of the Workplace Relations Act 1996 (Cth) (WR Act), in the First Respondent’s contraventions of the provisions set out above at paragraphs 1(a) and 1(c) to 1(g) during the period from 27 March 2007 until about December 2008.
Carroll admits to his involvement within the meaning of section 728 of the WR Act, in the First Respondent’s contraventions of the provisions set out above at paragraphs 1(a) and 1(c) to 1(g) during the period from about January 2009 until 30 June 2009.
Carroll admits to his involvement within the meaning of section 550 of the FW Act, in the First Respondent’s contraventions of the provisions set out above at paragraphs 1(b) and 1(h) to 1(l) during the period from 1 July 2009 until 21 December 2009.
The Respondents admit that the contraventions set out above resulted in underpayments to the Employees totalling $48,098.71.
AGREED FACTS
The parties
The Applicant is and was at all relevant times:
(a)a statutory appointee of the Commonwealth appointed by the Governor-General by written instrument on 1 July 2009, pursuant to subsection 687(1) of the FW Act; and
(b)a Fair Work Inspector by force of section 701 of the FW Act.
The First Respondent is and was at all relevant times:
(a)a corporation registered in accordance with the Corporations Act 2001 (Cth);
(b)a person capable of being sued;
(c)a constitutional corporation within the meaning of subsection 4(1) of the WR Act and section 12 of the FW Act respectively;
(d)an employer within the meaning of subsection 6(1) of the WR Act;
(e)a national system employer within the meaning of section 14 the FW Act; and
(f)a person carrying on business from about March 2002 as a licensed hotel and bistro principally from premises located at 72 George Street in Millicent, South Australia being the business called ‘The Sportsman’s Hotel’ (Hotel).
Bowler:
(a)was at all material times a director of the First Respondent;
(b)was from about October 2002 to about December 2008 the manager of the Hotel on behalf of the First Respondent; and
(c)was during the period that he was manager of the Hotel responsible on behalf of the First Respondent for determining the entitlements of employees employed to work in the Hotel.
Carroll:
(a)was at all material times a director of the First Respondent;
(b)was from about January 2009 the manager of the Hotel on behalf of the First Respondent;
(c)replaced Bowler as the manager of the Hotel; and
(d)was during the period that he was manager of the Hotel responsible on behalf of the First Respondent for determining the entitlements of employees employed to work in the Hotel;
The Employees
During the period between about March 2002 and December 2009, the First Respondent employed the following individuals to work in the Hotel:
(a)Lindy Hawke (Hawke);
(b)Cheryl Varcoe (Varcoe);
(c)Kerry Lawson (Lawson);
(d)Heather Wheatley (Wheatley);
(e)Angela Jones (Jones), (collectively, the Employees).
Hawke commenced employment as a casual with the First Respondent on or about 20 February 2008, and continued in that employment until she resigned on or about 4 September 2009.
Varcoe commenced employment as a casual with the First Respondent on about 11 March 2002 when the First Respondent commenced operating the Hotel, and continued in that employment until she resigned on or about 20 May 2009.
Lawson commenced employment as a casual at the Hotel on or about 4 September 1992, and commenced employment with the First Respondent on about 11 March 2002 when the First Respondent commenced operating the Hotel and continued in that employment until on or about 15 November 2009.
Wheatley commenced employment on a casual basis with the First Respondent on or about 18 August 2003, and continued in that employment until she resigned on or about 28 May 2009.
Jones commenced employment on a casual basis with the First Respondent on or about 18 March 2006, and continued in that employment until on or about 21 December 2009
The industrial instruments
On and from 27 March 2006 until 30 June 2009 (WR Act Period of Employment), the employment of the Employees by the First Respondent in the Hotel was governed by the NAPSA.
On and from 1 July 2009 until 21 December 2009 (FW Act Period of Employment), the employment of those of the Employees (Hawke, Lawson and Jones) who remained in the employment of the First Respondent in the Hotel for periods of the FW Act Period of Employment was governed by the ABTI.
Minimum break entitlements
For the duration of the WR Act Period of Employment and the FW Act Period of Employment, the First Respondent was required by clause 6.6.4 of the NAPSA and the ABTI respectively to provide employees employed on a casual basis in the Hotel with the following minimum entitlements:
(a)For a shift of between five – six hours’ duration:
(i)an unpaid meal break of 20 minutes; or
(ii)if it was not possible to grant a meal break, extra payment of 20 minutes’ wages in addition to the time worked; and
(b)for a shift for a duration in excess of six hours:
(i)an unpaid meal break of 30 minutes; or
(ii)if it was not possible to grant a meal break, extra payment of 60 minutes’ wages in addition to time worked.
For the duration of the WR Act Period of Employment and the FW Act Period of Employment, it was a breach of clause 6.6.4 of the NAPSA and the ABTI respectively by the First Respondent if employees employed on a casual basis in the Hotel worked in excess of six hours without a meal break unless the First Respondent paid the employees in addition to time worked, 60 minutes wages at the applicable rate.
Record-keeping obligations under the WR Regulations
Under subregulation 19.4(1) of Division 2 of Part 19 (Division 2) of the WR Regulations, an employer who employs an employee must make, or cause to be made, a record in accordance with Divisions 3 and 4 of Part 19 of the WR Regulations relating to the employee.
Division 3 of Part 19 of the WR Regulations (Division 3) prescribes the content of the record which an employer is required to make, or cause to be made, under subregulation 19.4(1).
Under Division 3:
(a)by subregulation 19.11(2) if the employee is a casual employee who is guaranteed a basic periodic rate of pay, the record relating to the employee must also contain a record of hours worked by the employee;
(b)by subregulation 19.11(3) if the employee is entitled to be paid, inter alia, a loading or another monetary allowance or separately identifiable entitlement the record relating to the employee must contain details of the payment, loading, allowance or entitlement.
Under regulation 19.16 of the WR Regulations:
(a)by subregulation 19.16(2) an employer must correct any error in a record required to be kept under Division 2 or Division 3 as soon as the employer becomes aware of the error; and
(b)by subregulation 19.16(3), an employer who corrects an error in a record must record the nature of the error with the correction.
Under subregulation 19.17(1) of the WR Regulations a person must not make, or make use of, an entry in a record required to be kept under, inter alia, Division 2 or Division 3 if the person does so knowing that the entry is false or misleading.
The obligations referred to in paragraphs 20 to 24 above applied to the First Respondent in relation to its employment of the Employees in the Hotel in respect of the WR Act Period of Employment.
Record-keeping obligations under the FW Act and FW Regulations
Under subsection 535(1) of the FW Act an employer must make employee records of the kind prescribed by regulations in relation to each of its employees.
Under subsection 535(2) of the FW Act, the records must:
(a)if a form is prescribed by the regulations – be in that form; and
(b)include any information prescribed by the regulations.
Regulation 3.33 of the FW Regulations:
(a)prescribes records which an employer must make and keep for the purposes of subsection 535(1) of the FW Act;
(b)provides by subregulation 3.33(2) that if the employee is a casual employee who is guaranteed a rate of pay set by reference to a period of time worked, the record must set out the hours worked by the employee; and
(c)provides by subregulation 3.33(3) that if the employee is entitled to be paid, inter alia, a loading or monetary allowance or separately identifiable entitlement the record must set out details of the payment, loading, allowance or entitlement.
Under regulation 3.44 of FW Regulations:
(a)by subregulation 3.44(1) an employer must ensure that a record that the employer is required to keep under the FW Act or the FW Regulations is not false or misleading to the employer’s knowledge;
(b)by subregulation 3.44(2) an employer must correct a record that the employer is required to keep under the FW Act or the FW Regulations as soon as the employer becomes aware that it contains an error; and
(c)by subregulation 3.44(6) a person must not make use of an entry in an employee record made and kept by an employer for subdivision 1 of Division 2 of Part 3-6 of the FW Regulations (which includes the records required under regulations 3.33 and 3.44 of the FW Regulations) if the person does so knowing that the entry is false or misleading.
The obligations referred to in paragraphs 26 to 29 above applied to the First Respondent in relation to its employment of the Employees (Hawke, Lawson and Jones) in the Hotel in respect of the FW Act Period of Employment.
Contraventions of NAPSA and ABTI – Meal Break Contraventions
During the WR Act Period of Employment in relation to the Employees and during the FW Act period of Employment in relation to the Employees (Hawke, Lawson and Jones) the First Respondent contravened the obligations set out in paragraphs 18 and 19 above in respect of each of the Employees by:
(a)its failure to grant an unpaid meal interval of 30 minutes to Employees when the First Respondent required the employee to work, and the employee did work, for a continuous period in excess of 6 hours;
(b)permitting the Employees to work in excess of a continuous period of six hours without a meal break where, when a meal break was not granted to an employee, the First Respondent did not pay the employee in addition to time worked, 60 minutes at the applicable rate;
(c)its failure to pay Employees who were required by it to work, and did work, in excess of a continuous period of six hours without a meal break, in addition to time worked, 60 minutes at the applicable rate;
(d)its failure to grant an unpaid meal interval of 20 minutes to Employees when the First Respondent required the employee to work, and the employee did work, for a continuous period in excess of five hours but no more than six hours; and
(e)its failure to pay Employees who were required by it to work, and did work, for a continuous in excess of five hours but no more than six hours without a meal break, in addition to time worked, 20 minutes at the applicable rate,
(collectively, the Meal Break Contraventions).
By reason of the Meal Break Contraventions the Employees were underpaid the following gross amounts by the First Respondent:
(a)Hawke $3,852.77;
(b)Varcoe $11,326.89;
(c)Lawson $14,111.39;
(d)Wheatley $8,270.86; and
(e)Jones $10,536.80;
Total $48,098.71 (collectively, Underpayments).
The Meal Break Contraventions in relation to the WR Act Period of Employment constituted breaches of an applicable provision under section 717 of the WR Act.
The Meal Break Contraventions in relation to the FW Act Period of Employment:
(a)were in contravention of the terms of an award-based transitional instrument that applied to the First Respondent under Item 2 of Schedule 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Transitional Act) being the ABTI; and
(b)consequently were in respect of a civil remedy provision for the purposes of the FW Act under Item 16 of Schedule 16 of the Transitional Act and Part 4-1 of the FW Act.
Contraventions of WR Act, WR Regulations and FW Regulations – Record Keeping
During both the WR Period of Employment and the FW Period of Employment the First Respondent:
(a)did not make or cause to be made a record of the hours worked by the Employees which accurately stated the hours in fact worked by the Employees;
(b)by its managers Bowler and Carroll (during their respective periods as manager) and by its administrative employee Lorraine Faulkner (during her period of employment by the First Respondent until about May 2009) advised the Employees to complete and sign time record books provided by the First Respondent which incorrectly stated the number of hours worked during a day by an employee by advising the employee to state in the record:
(i)falsely that the employee had time off during the hours of employment during the day corresponding to the meal break to which the employee was entitled but in fact was not granted or paid;
(ii)falsely that the employee had worked more hours than the employee had in fact worked by inclusion of the false entry relating to ‘Time off for the day’ and by inclusion of the ‘time off’ period in the calculation of the period of ‘Hours Worked Daily’ stated in the record;
(c)recorded in its payroll journal the hours purportedly worked by each Employee as provided in the time record books where the record was not an accurate record of the hours in fact worked by the Employees;
(d)made use of the records made or kept by the Employees at its direction in order to calculate and pay entitlements to the Employees;
(e)made use of the false entries in the records made or kept by the Employees at its direction purportedly showing ‘time off’ for meal breaks as reason not to pay Employees the additional sums required to be paid under clause 6.6.4 of the NAPSA or ABTI in addition to time worked;
(f)failed to correct the entries in the time record books kept by the Employees despite the First Respondent, by its managers Bowler and Carroll and by its employee Faulkner, knowing or being aware that the entries were false or misleading by incorrectly stating the number of hours worked by the Employees and by the recording incorrectly the taking of ‘time off’ purportedly for meal breaks; and
(g)failed to make or cause to be made in relation to the record for the Employees a record of the Employees entitlement to payment of the additional sums required to be paid in lieu of unpaid meal breaks under clause 6.6.4 of the NAPSA or ABTI.
By reason of the matters set out in paragraph 35 above, during the WR Act Period of Employment the First Respondent contravened subregulations 19.4(1), 19.11(2), 19.11(3), 19.16(2) and 19.17(1) of the WR Regulations.
By reason of the matters set out in paragraph 35 above, during the FW Act Period of Employment, the First Respondent contravened subsections 535(1) and 535(2) of the FW Act and subregulations 3.44(1), 3.44(2) and 3.44(6) of the FW Regulations.
Involvement in contraventions by First Respondent of WR Act and WR Regulations
Under subsection 728(1) of the WR Act a person who is involved in a contravention of a civil remedy provision is treated as having contravened that provision.
Subsection 728(2) of the WR Act provides that, for the purpose of subsection 728(1), a person is involved in a contravention of a civil remedy provision, if and only if, the person inter alia:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention.
Under sections 717, 718, 719 and 727 and clause 43 of Schedule 8 of the WR Act the contraventions by the First Respondent of the provisions of the NAPSA referred to in the preceding paragraphs herein are breaches of civil remedy provisions.
Subregulations 19.4(1), 19.11(2), 19.11(3), 19.16(2) and 19.17(1) of the WR Regulations are civil remedy provisions.
Involvement in contraventions by First Respondent of FW Act and FW Regulations
Under subsection 550(1) of the FW Act a person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
Subsection 550(2) of the FW Act provides that, for the purpose of subsection 550(1), a person is involved in a contravention of a civil remedy provision, if and only if, the person inter alia:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention.
Pursuant to subsection 539(1) of the FW Act:
(a)subsection 535(1) of the FW Act is a civil remedy provision; and
(b)subsection 535(2) of the FW Act is a civil remedy provision.
Under Item 16 of Schedule 16 of the Transitional Act and Part 4-1 of the FW Act, Item 2 of Schedule 16 of the Transitional Act is a civil remedy provision for the purposes of the FW Act.
Item 16 of Schedule 16 of the Transitional Act provides that Part 4-1 of the FW Act applies to civil remedy provisions under Schedule 16 of the Transitional Act in the same way as that Part applies to civil remedy provisions contained in the FW Act.
By reason of paragraphs 45 and 46 above, the contraventions by the First Respondent of the provisions of the ABTI referred to in the preceding paragraphs of this statement of claim are breaches of civil remedy provisions for the purposes of the FW Act.
Subregulations 3.44(1), 3.44(2) and 3.44(6) of the FW Regulations are civil remedy provisions for the purposes of the FW Act.
Involvement of Bowler in the contraventions of the First Respondent of the WR Act and WR Regulations
Bowler, in respect of contraventions occurring during the WR Act Period of Employment until about December 2008:
(a)was involved in each of the contraventions of civil remedy provisions of the WR Act and WR Regulations by the First Respondent referred to in the preceding paragraphs for the purposes of subsection 728(1) the WR Act; and
(b)is pursuant to subsection 728(1) of the WR Act to be treated as having contravened the relevant civil remedy provisions,
in that he:
(i)aided, abetted, counselled or procured the contraventions by the First Respondent; or
(ii)was by his acts or omissions directly or indirectly knowingly concerned in or party to those contraventions by the First Respondent.
Bowler, at all times during the period of the contraventions of the First Respondent referred to in paragraph 49:
(a)was a director of the First Respondent;
(b)was the person having the management of the Hotel and of the Employees in relation to their employment in the Hotel on behalf of the First Respondent;
(c)had active, day to day management and control of the Employees;
(d)was the person with primary responsibility for the engagement, management, payment and control of the Employees on behalf of the First Respondent;
(e)knew of and determined the rostering and allocation of hours of work to Employees including the allocation of hours to Employees without provision for the taking of unpaid meal breaks, and knew of the non provision of unpaid meal breaks to Employees who were entitled to meal breaks;
(f)determined that the First Respondent would not, and caused the First Respondent not to make the additional payments to Employees required under clause 6.6.4 of the NAPSA where meal breaks were not provided to Employees;
(g)knew that the First Respondent did not make the additional payments to Employees required under clause 6.6.4 of the NAPSA where meal breaks were not provided to Employees;
(h)had primary responsibility on behalf of the First Respondent for the making and keeping of, or causing to be made or kept on behalf of the First Respondent, records in relation to employees employed in the Hotel by the First Respondent;
(i)knew that the records of hours worked which the Employees were directed to complete were false or misleading in that the records did not accurately state the hours in fact worked by the Employees;
(j)knew that the Employees were advised by the First Respondent to complete and sign time record books provided by the First Respondent which incorrectly stated the number of hours worked during a day by the employee by falsely recording the taking of ‘time off’ for meal breaks when such meal breaks were not in fact provided to the employee or taken by the employee;
(k)knowing of the errors in the records kept by the Employees at the direction of the First Respondent as to the hours worked by the Employees failed to take any steps to correct the entries or cause the entries to be corrected;
(l)knew of the means by which the First Respondent kept, and omitted or failed to keep, records in relation to the Employees; and
(m)knew how, and of the extent to which, records were kept by the First Respondent in respect of the Employees.
Involvement of Carroll in the contraventions of the First Respondent of the WR Act, WR Regulations, FW Act and FW Regulations
Carroll:
(a)in respect of contraventions occurring during the WR Act Period of Employment from about January 2009 to 30 June 2009 was involved in each of the contraventions of the civil remedy provisions of the WR Act and WR Regulations by the First Respondent referred to in the previous paragraphs of this statement of claim for the purposes of subsection 728(1) of the WR Act; and
(b)in respect of contraventions occurring during the FW Act Period of Employment was involved in each of the contraventions of the FW Act (or of provisions of the Transitional Act taken to be civil remedy provisions for the purposes of the FW Act) and FW Regulations by the First Respondent referred to in the previous paragraphs of this statement of claim for the purposes of subsection 550(1) the FW Act; and
(c)is pursuant to subsection 728(1) of the WR Act and subsection 550(1) of the FW Act to be treated as having contravened the relevant civil remedy provisions,
in that he:
(i)aided, abetted, counselled or procured the contraventions by the First Respondent; or
(ii)was by his acts or omissions directly or indirectly knowingly concerned in or party to those contraventions by the First Respondent.
Carroll, at all times during the period of the contraventions of the First Respondent referred to in paragraph 51:
(a)was a director of the First Respondent;
(b)was the person (in replacement for Bowler) having the management of the Hotel and of the Employees in relation to their employment in the Hotel on behalf of the First Respondent;
(c)had active, day to day management and control of the Employees;
(d)was the person with primary responsibility for the engagement, management, payment and control of the Employees on behalf of the First Respondent;
(e)knew of and determined the rostering and allocation of hours of work to Employees including the allocation of hours to Employees without provision for the taking of unpaid meal breaks, and knew of the non provision of unpaid meal breaks to Employees who were entitled to meal breaks;
(f)knew or became aware of upon becoming manager of the Hotel in place of Bowler, and thereafter caused the First Respondent to continue the practice that the First Respondent would not, and caused the First Respondent not to make, the additional payments to Employees required under clause 6.6.4 of the NAPSA where meal breaks were not provided to Employees;
(g)knew that the First Respondent did not make the additional payments to Employees required under clause 6.6.4 of the NAPSA where meal breaks were not provided to Employees;
(h)had primary responsibility on behalf of the First Respondent for the making and keeping of, or causing to be made or kept on behalf of the First Respondent, records in relation to employees employed in the Hotel by the First Respondent;
(i)knew that the records of hours worked which the Employees were directed to complete were false or misleading in that the records did not accurately state the hours in fact worked by Employees;
(j)knew that the Employees were advised by the First Respondent to complete and sign time record books provided by the First Respondent which incorrectly stated the number of hours worked during a day by the employee by falsely recording the taking of ‘time off’ for meal breaks when such meal breaks were not in fact provided to the employee or taken by the employee;
(k)knowing of the errors in the records kept by the Employees at the direction of the First Respondent as to the hours worked by the Employees failed to take any steps to correct the entries or cause the entries to be corrected;
(l)knew of the means by which the First Respondent kept, and omitted or failed to keep, records in relation to the Employees; and
(m)knew how, and of the extent to which, records were kept by the First Respondent in respect of the Employees.
The investigation
On 25 November 2009 Fair Work Inspector Natalie Goldsworthy (Inspector Goldsworthy) notified Carroll of a complaint received from Lawson regarding unpaid meal breaks by telephone and subsequently emailed a formal Notification of complaint letter. The letter encouraged Carroll to resolve the complaint directly with Lawson and advised that if no resolution could be achieved within 14 days, a full investigation of the complaint would be initiated.
On 27 November 2009 Inspector Goldsworthy had a telephone conversation with Carroll. Carroll confirmed receipt of Inspector Goldsworthy’s email dated 25 November 2009.
On 3 December 2009 Inspector Goldsworthy had a telephone conversation with Trevor Evans, Manager, Industrial Relations and Human Resources, Australian Hotels Association (South Australia) (Mr Evans) regarding Lawson’s complaint. Mr Evans informed Inspector Goldsworthy that he represented the First Respondent and indicated that the First Respondent was willing to copy the time records back to 26 March 2006. Inspector Goldsworthy informed Mr Evans that the FWO had received other complaints regarding the same issue.
On 8 December 2009, Inspector Goldsworthy issued a written notice to produce records and documents (NTP) pursuant to section 712 of the FW Act to Carroll, as director of the First Respondent, which required the production of, in relation to Lawson, Hawke and Varcoe:
(a)all time and wage records;
(b)all employment contracts and workplace agreements; and
(c)all other documents that may assist in ascertaining compliance with WR Act, WR Regulations and FW Act;
to FWO by 3.00 pm on 24 December 2009 (First Notice).
The First Notice was served by facsimile transmission on Mr Evans in his capacity as representative for the Respondents.
On 23 December 2009, Mr Evans sent a letter to Inspector Goldsworthy, acknowledging receipt of the First Notice on 8 December 2009. Evans provided details of employment, payroll records and time sheets for Lawson, Hawke and Varcoe in compliance with the First Notice.
On 21 January 2010 Inspector Goldsworthy received a letter from Tina Fahy, Industrial Relations and Human Resources Adviser, Australian Hotels Association (South Australia) (Ms Fahy). Ms Fahy advised that:
(a)Lawson, Varcoe and Hawke:
(i)specifically requested not to take their breaks as they wanted to leave early every day;
(ii)despite ongoing attempts by the Hotel to get them to take breaks, they continually refused or complained; and
(iii)they were never told to fill in their time books to show a meal break which was not taken or that if they failed to do so their hours would be cut; and
(b)the Hotel had now taken active steps to ensure that all staff working at the Hotel take meal breaks as provided for by the Hospitality Industry (General) Award 2010.
On 4 February 2010, Inspector Goldsworthy had a telephone conversation with Mr Evans in which she advised that on the evidence obtained from Jones, she was in a position to issue a contravention letter. Mr Evans requested a copy of Jones’ evidence to enable him to discuss it with the Respondents.
On 5 February 2010, Inspector Goldsworthy emailed Mr Evans, providing time records kept by Jones including contemporaneous notes made by Jones regarding the recording of half hour breaks. Inspector Goldsworthy indicated that based on the evidence of Jones, she was ready to issue a formal Determination of contravention letter. Inspector Goldsworthy provided Mr Evans with an opportunity to discuss the evidence with the Respondents before proceeding.
On 24 February 2010 Inspector Goldsworthy emailed Mr Evans, providing calculations of the amounts owing to Lawson, Varcoe and Hawke on a without prejudice basis. Inspector Goldsworthy sought feedback from Mr Evans and Carroll as to whether or not the First Respondent would be prepared to resolve the matter voluntarily. Inspector Goldsworthy indicated that FWO had receive a further complaint from Wheatley and intended to issue a NTP the following day.
On 25 February 2010, Inspector Goldsworthy issued a NTP pursuant to section 712 of the FW Act to Carroll, as director of the First Respondent, which required the production of, in relation to Wheatley:
(a)all time and wage records;
(b)all employment contracts and workplace agreements; and
(c)all other documents that may assist in ascertaining compliance with WR Act, WR Regulations and FW Act;
to FWO by 3.00 pm on 12 March 2010 (Second Notice).
The Second Notice was served by facsimile transmission on Mr Evans in his capacity as representative for the Respondents.
On 30 March 2010, Inspector Goldsworthy issued a written notice pursuant to section 712 of the FW Act to Carroll, as director of the First Respondent, which required the production of:
(a)all rosters compiled since 26 March 2006; and
(b)all other documents that may assist in ascertaining compliance with WR Act, WR Regulations and FW Act;
to FWO by 3.00 pm on 14 April 2010 (Third Notice).
On 30 March 2010, the Third Notice was served by facsimile transmission on Mr Evans in his capacity as representative for the Respondents.
On 10 April 2010, Carroll provided a generic template of the Hotel’s roster in response to the Third Notice issued 30 March 2010. In his cover letter, Carroll indicated that that all expired rosters were recycled and that the First Respondent did not possess any further documentation relating to the matter (excluding time books and pay slips, which had been previously produced to Inspector Goldsworthy). The Third Notice required the production of all rosters compiled since 26 March 2006.
On or around 11 April 2010, Inspector Goldsworthy had a telephone conversation with Carroll in which she requested a copy of the current roster, which Carroll agreed to provide.
On 7 May 2010 Inspector Goldsworthy had a telephone conversation with Mr Evans in which she explained that Carroll had breached the Third Notice by failing to provide a copy of the Hotel’s current roster, as requested by telephone on or around 11 April 2010. Carroll subsequently provided a copy of the roster for the week 26 April to 9 May 2010.
On 12 May 2010, Inspector Goldsworthy conducted a recorded interview with Carroll at the Mount Gambier office of the FWO with Mr Evans and Fair Work Inspector Colleen Black in attendance.
On 27 May 2010, Inspector Goldsworthy conducted a recorded interview with Bowler at the Adelaide office of the FWO with Mr Evans and Fair Work Inspector Angeliek Peters in attendance.
On 15 June 2010, Mr Evans provided payroll records and time sheets for Wheatley for the period 2 March 2006 to 31 May 2009 in response to the Second Notice. The date of compliance of the Second Notice was 12 March 2010.
On 2 August 2010, Inspector Goldsworthy issued a NTP pursuant to section 712 of the FW Act to Carroll, as director of the First Respondent, which required the production of:
(a)the Trust deed for the Sportsman Unit Trust;
(b)the hotel licence for the Hotel between 27 March 2006 and 26 March 2007; and
(c)pay records relating to Jones for period 27 March 2007 until her termination of employment
to FWO by 5.00 pm on 18 August 2010 (Fourth Notice).
The Fourth Notice was served by facsimile transmission on Mr Evans in his capacity as representative of the Respondents.
On 19 August 2010, Inspector Goldsworthy had a telephone conversation with Mr Evans in which Mr Evans informed Inspector Goldsworthy that Carroll had compiled the documents in response to the Fourth Notice, which Inspector Goldsworthy should receive on 20 August 2010.
On 23 August 2010, Inspector Goldsworthy had a telephone conversation with Mr Evans in which Inspector Goldsworthy informed Mr Evans that she had not received any documents in response to the Fourth Notice. Mr Evans informed Inspector Goldsworthy that:
(a)Carroll had promised to post the documents on 20 August;
(b)Carroll had difficulty obtaining a copy of the Trust Deed because the First Respondent’s accountant was on holidays; and
(c)Carroll didn’t have the time and wages for Jones’ last period of employment.
On 27 August 2010:
(a)Fair Work Inspector Goldsworthy received a bundle of handwritten timesheets for Jones and the hotel licence issued on 11 January 2010 in response to the Fourth Notice; and
(b)Fair Work Inspector Goldsworthy emailed Mr Evans confirming receipt of the documents referred to in the preceding paragraph and indicated that neither the Trust Deed nor the hotel licences for the period from 26 March 2006 had been produced as required by the Fourth Notice.
On 30 August 2010, Inspector Goldsworthy emailed Mr Evans regarding the First Respondent’s failure to produce all of the documents requested in the Fourth Notice (namely, the payroll advices for Jones, the Trust Deed, or the hotel licence for the period between 27 March 2006 and 26 March 2007).
On or around 1 September 2010, Inspector Goldsworthy was provided with Payroll Summaries for Jones in response to the Fourth Notice.
On 7 September 2010, the Trust Deed for Sportsman Unit Trust was provided to Inspector Goldsworthy in response to the Fourth Notice.
On 10 September 2010, Inspector Goldsworthy had a telephone conversation with Mr Evans in which she informed Mr Evans that she had received all the documents required by the Fourth Notice except the hotel licence.
On 21 September 2010, Inspector Goldsworthy emailed Mr Evans to ascertain whether he had obtained a copy of the hotel licence for the period between 27 March 2006 and 27 March 2007.
On 24 September 2010, Inspector Goldsworthy had a telephone conversation with Mr Evans in which Mr Evans informed Inspector Goldsworthy that he had requested Carroll to provide the hotel licence for the period between 27 March 2006 and 26 March 2007 but had not heard a response.
On 27 September 2010, Inspector Goldsworthy had a telephone conversation with Mr Evans in which Mr Evans informed Inspector Goldsworthy that Carroll was in Europe and he was therefore unable to take further action to obtain the hotel licence from Carroll.
The Respondents failed to comply with the Fourth Notice to the extent that the hotel licences for the Hotel between 27 March 2006 and 26 March 2007 were not provided to Inspector Goldsworthy by the Respondents at all.
On 22 November 2010, Inspector Goldsworthy issued a NTP pursuant to section 712 of the FW Act to the Department of the Office of the Liquor and Gambling Commissioner, which required the production of the hotel licence for the Hotel between 26 March 2006 and 27 March 2007 to FWO by 3.00 pm on 8 December 2010 (Fifth Notice).
On or around 29 November 2010, Inspector Goldsworthy received, from the Department of the Office of the Liquor and Gambling Commissioner, the hotel licences for the Hotel dated 8 May 2003, 21 July 2006 and 26 March 2007 in response to the Fifth Notice.
On 1 December 2010, Inspector Goldsworthy sent a Determination of Contravention letter to each of the Respondents by post (contravention letter). The contravention letter:
(a)set out details of the alleged record-keeping and underpayment contraventions;
(b)required the rectification of the Underpayments by 17 December 2010 and the provision of evidence of payment once made;
(c)asked that the Respondents take immediate action to ensure compliance with all the requirements of the NAPSA and relevant modern award; and
(d)noted that the FWO reserved the right to commence proceedings against the First Respondent to recover outstanding amounts and further to seek penalties against the First Respondent and any individuals involved in the First Respondent’s contraventions.
On 8 December 2010, Carey Trundle, Director Regional Services and Targeting of FWO (Ms Trundle) had a telephone conversation with Mr Evans in which Mr Evans sought an extension until 28 January 2011 to provide a response to the contravention letter and indicated that the Respondents would be denying liability. Ms Trundle granted the extension.
Between 1 February 2011 and 14 April 2011, the Applicant and Respondents negotiated settlement options. These negotiations were unsuccessful in resolving the matter prior to the commencement of these proceedings.
Institution of proceedings
On 15 April 2011, the FWO filed the Application and Statement of Claim in this Court in this matter.
On 18 April 2011, the Application and Statement of Claim were served on the Respondents by email to Nicholas Linke, Partner, Fisher Jeffries (Mr Linke), accompanied by a letter from Fiona Pickett, Senior Lawyer, FWO (Ms Pickett) seeking rectification of the Underpayments, the payment of interest on the Underpayments, and admissions of the alleged contraventions. The letter sought a response by 6 May 2011.
Rectification of Underpayments
On 6 May 2011, Mr Linke sent a letter to Ms Pickett:
(a)indicating that the Respondents admitted liability in relation to the contraventions alleged;
(b)enclosing cheques for the full amount of the Underpayments for each of the Employee, namely:
(i)Hawke $3,852.77;
(ii)Varcoe $11,326.89;
(iii)Lawson $14,111.39;
(iv)Wheatley $8,270.86;
(v)Jones $10,536.80; and
Total $48,098.71.
(c)offering to make payment of interest in respect of the Underpayments.
On 9 May 2011, Mr Linke sent a letter to Ms Pickett enclosing cheques for interest in respect of the Underpayments for each the Employees, as foreshadowed in the letter dated 6 May 2011, in the sums of:
(a)Hawke $733.16;
(b)Varcoe $3,946.62;
(c)Lawson $3,996.87;
(d)Wheatley $2,356.41;
(e)Jones $3,247.78; and
Total $14,280.84.
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