Fair Work Ombudsman v Sai Enterprises Pty Ltd
[2025] FedCFamC2G 1372
•29 August 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v SAI Enterprises Pty Ltd [2025] FedCFamC2G 1372
File number(s): ADG 391 of 2023 Judgment of: JUDGE BROWN Date of judgment: 29 August 2025 Catchwords: INDUSTRIAL LAW – FAIR WORK – penalty hearing – failure to pay entitlements to employees – liability determined – first time offender – respondent remedied mistake before proceedings took place – calculation of penalty – matters to be considered Legislation: Acts Interpretation Act 1901 (Cth) s 15AB
Crimes Act 1914 (Cth) s 4AA
Evidence Act 1995 (Cth) s 191
Fair Work Act 2009 (Cth) ss 44, 45, 87, 90, 536, 539, 546, 550, 557, 682, 701, 706, 712
Fair Work Regulations 2009 (Cth) rr 3.45, 3.46
Cases cited: ACCC v Reckitt Benckiser (Australia Pty Ltd) (2016) 340 ALR 25
ACE Insurance Limited v Trifunovski (No 2) [2012] FCA 793
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Blandy v Coverdale NT Pty Ltd [2008] FCA 1533
Buckingham v KSN Engineering Pty Ltd [2008] FMCA 546
Fair Work Ombudsman v 86 Degrees Coffee Australia Pty Ltd [2024] FCA 576
Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365
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 Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408
Fair Work Ombudsman v Taj Place tandoori Indian Restaurant Pty Ltd & Anor [2012] FMCA 258
Fair Work Ombudsman v Yogurberry World Square [2016] FCA 1290
Fair Work Ombudsman v Zillion Zenith International Pty Ltd [2014] FCCA 433
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Mornington Inn v Jordan [2008] FCAFC 70
Plancor Pty Ltd v Liquor Hospitality & Miscellaneous Union [2008] FCAFC 170
Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543
Qantas Airways Ltd v Transport Workers’ Union of Australia (2011) 280 ALR 503
Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412
Rocky Holdings Pty Ltd & Anor v Fair Work Ombudsman [2014] FCAFC 62
Veen v R (No 2) (1988) 164 CLR 465
Environment Protection Authority v Ransey Food Processing Pty Ltd [2009] NSWLEC 152
Division: Division 2 General Federal Law Number of paragraphs: 172 Date of hearing: 14 May 2025 Place: Adelaide Counsel for the Applicant: Ms Stewart Solicitor for the Applicant: Fair Work Ombudsman Counsel for the Respondents: Ms Sheriden Solicitor for the Respondents: Henry James Legal ORDERS
ADG 391 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: SAI ENTERPRISES PTY LTD (ACN 635 029 088)
First Respondent
RAMAN MONGA
Second Respondent
ORDER MADE BY:
JUDGE BROWN
DATE OF ORDER:
29 AUGUST 2025
THE COURT DECLARES THAT:
A.During the period of 29 June 2020 to 6 June 2021, the First Respondent contravened:
i.Section 45 of the Fair Work Act 2009 (Cth) (“the Act”) by failing to make part-time written agreements in relation to Manpreet Kaur, Ranchana Devanaboyina and Ritika Gupta (“Employees”) in contravention of clause 10.3 of the Vehicle Repair, Services and Retail Award 2020.
ii.Section 44 of the Act by failing to pay accrued but untaken annual leave on termination to each of the Employees pursuant to section 90(2) of the Act; and
iii.Section 536(1) of the Act by failing to give the Employee’s pay slips within one working day of paying them amounts in relation to the performance of work.
B.During the period of 22 December 2020 to 7 March 2021, pursuant to section 550(1) of the Act the Second Respondent was involved in, and therefore committed the contraventions declared at:
i.Paragraph 1(a)(ii) in relation to Ms Gupta and Ms Devanaboyina; and
ii.Paragraph 1(a)(iii) in relation to each of the Employees.
THE COURT ORDERS THAT:
1.Pursuant to section 546(1) of the Act, the First Respondent pay a pecuniary penalty in the amount of THIRTY-FIVE THOUSAND DOLLARS ($35,000.00).
2.Pursuant to section 546(1) of the Act, the Second Respondent pay a pecuniary penalty in the amount of THREE THOUSAND FIVE HUNDRED DOLLARS ($3,500.00).
3.All penalties imposed on the First and Second Respondent be paid to the Consolidated Revenue Fund of the Commonwealth pursuant to section 546(3)(a) of the Act within sixty (60) days of the date of the orders.
4.The Applicant have liberty to apply on seven (7) days’ notice in the event that any of the preceding orders are not complied with.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE BROWN:
INTRODUCTION
The Fair Work Ombudsman[1] commenced these proceedings against Sai Enterprises Pty Ltd[2] and Raman Monga on 15 December 2023 pursuant to the provisions of the Fair Work Act 2009 Cth).[3]
[1] Hereinafter referred to as “the FWO” or “the Ombudsman”.
[2] Hereinafter referred to as “Sai” or “the employer”.
[3] Hereinafter referred to as “the FWA’ or “the Act’.
Sai and its relevant manager Mr Monga have admitted breaches of the FWA in respect of the employment of three individuals. As a result, a statement of agreed facts,[4] detailing the natures of the breaches in question, has been filed with the court.
[4] Hereinafter referred to as “the SOAF”.
Pursuant to section 191 of the Evidence Act 1995 (Cth) the matters agreed to in this document are taken not to be in dispute. As such, they form the evidentiary basis for the court’s necessary findings in the case.
These reasons for judgment are directed to the determination of what are the appropriate financial penalties which should be imposed in respect each of the admitted breaches of the Act. In the relevant jargon, the relevant proceedings are characterised as a penalty hearing.
BACKGROUND
The Office of the Fair Work Ombudsman is created by section 682 of the FWA. One of the functions of the Ombudsman is to enforce compliance with the Act, including any workplace obligations falling on employers, pursuant to any relevant industrial awards, mandating rates of pay and conditions of employment. The Act itself prescribes certain minimum standard that apply to all employees in Australia. These are known as the National Employments Standards.
As a consequence of these responsibilities, the FWO may appoint Fair Work Inspectors,[5] who are authorised to utilise what are characterised as compliance powers.[6] In general terms, FWIs are directed to investigate complaints in respect of breaches of the industrial law and are authorised to enter workplaces and determine whether an employer has contravened the law, including in respect of the application of any relevant modern award or a provision of the National Employment Standards or otherwise failed to comply with the industrial safety net.
[5] Hereinafter referred to as “FWIs”.
[6] See Fair Work Act 2009 (Cth) s 706.
Pursuant to section 701 of the Act, the FWO is also a Fair Work Inspector. The FWA empowers the Ombudsman to delegate its statutory responsibilities to Fair Work Inspectors. The Act confers upon such inspectors a number of powers in order to ensure compliance with provisions of the Act. Among other things, inspectors can enter the workplace and require the production of employee records.[7]
[7] Ibid s 712(1).
In addition, the FWO, as a consequence of its status as a Fair Work Inspector, has statutory authority to bring proceedings under the Act and seek the imposition of penalties, if breaches of the FWA are established.[8]
[8] Ibid s 539(2).
At relevant times Sai operated a fuel and retail outlet at 1-7 Port Road, Queenstown, in suburban Adelaide. It had a licence to sell petrol and other fuels which had been granted by United Petroleum. Its premises operated seven days per week between 5.00 am and 11.00 pm selling fuel and convenience store items to domestic customers.
Necessarily, it was required to employ staff to operate consoles relating to the supply of fuels and to either take cash for sales or complete electronic transactions in this regard and generally manage its premises. The relevant award for such employees is the Vehicle Repair, Services and Retail Award 2020.[9]
[9] Hereinafter referred to as “the Award”.
United Petroleum is an Australian owned petrol retailer and importer. It owns petrol outlets throughout the country and operates through a franchise system. United Petroleum supplies petrol to its franchisees, who receive a fixed commission in respect of the numbers of litres of fuel which are sold.
In general terms, a franchise agreement enables an individual (the franchisor) who owns a particular business and the rights related to it to contract with another person (the franchisee) to enable the franchisee to operate the relevant business under the franchisor’s brand and system and utilise any relevant trademarks. The agreement details the rights and obligations of the parties arising from the franchise.
Sai was incorporated in July 2019, and it is from this date that Sai has held it franchise/licence agreement in respect the Queenstown fuel outlet. Its sole director and shareholder is Pooja Arora. She is the spouse of Raman Monga – the second respondent. Mr Monga has a background in the management of other fuel outlets. At relevant times, he was the manager of the fuel outlet.
In respect of his role at Sai, Mr Monga has deposed as follows:
Since 2020, I have performed managerial responsibilities for Sai Enterprises Pty Ltd. My managerial duties include, but are not limited to; recruitment, payroll, rostering, record keeping and all employment responsibilities for those employed by Sai Enterprises.[10]
[10] See affidavit of Mr Monga filed on 12 February 2025 at [9].
In this context, he further deposed as to his acceptance of responsibility for issuing payslips; payment of all wage entitlement of the business’ employees; and ensuring the business complied with the FWA and the relevant award applicable to any of its employees.[11]
[11] Ibid at [18].
Mr Monga worked in the business with the assistance of Ms Arora. Given the hours the outlet was open, it was impossible for the two of them to attend to all of the tasks entailed in operating the business. As a result, from time to time, Sai engaged casual employees to assist, particularly as console operators.
Three such casual employees were Ms Ranchana Devanaboyina; Ms Ritika Gupta; and Ms Manpreet Kaur. Each of them was the holder of a student visa, to which attached conditions restricting the hours of paid employment which they could undertake. In general terms, each of them worked 15 hours per week during weekdays at the Queenstown fuel outlet. The terms of each of their employment was subject to the conditions detailed in the Award.
It is agreed between the parties that:
·Ms Devanboyina worked for Sai between 1 July 2020 until 27 December 2020;
·Ms Gupta worked between 28 December 2020 and 28 February 2021; and
·Ms Kaur worked between 29 June 2020 and 30 May 2021.
It is also agreed that each worked less than 38 hours per week on a more or less predictable basis. The last day of work indicated in respect of each employee was the date on each their respective employment with Sai ended.
It is important to note that none of Ms Devanaboyina, Ms Gupta nor Ms Kaur formally complained to the Office of the FWO in respect of how they had been treated in their employment with Sai and Mr Monga.
Rather, irregularities in respect of their employment came to the notice of the FWO as a result of a wider inquiry it undertook in respect of a broader, proactive investigation into allegations of non-compliance within the United Petroleum network.[12] .This general investigation into a number of United Petroleum franchise operators began in December 2020.
[12] See affidavit of Kim Woodhead filed on 12 December 2024 at [7].
As a consequence of this general investigation FWI May visited the Queenstown premises of Sai on 24 February 2021 and 22 September 2021. During her first visit, FWI May requested access to Sai’s work records, particularly timesheets for each of its employees, which were apparently produced by Mr Monga. Following her second visit, she issued a formal request for the production of further records, which included records from Sai’s accountant and its bank.
FWI Woodhead took over the investigation in October of 2022. As a result of the FWO’s examination of the documents produced to it and other investigations undertaken by the two FWIs assigned to the matter, which included interviews with Mr Monga, it was determined that Sai had contravened the relevant award and other provisions of the FWA in respect of three major issues, which can be summarised as follows:
·Failure to provide each of the employees indicated above with a written agreement detailing the terms and parameters of their respective part-time employment with Sai;
·Failure to pay each of those employees with their accrued annual leave on the termination of their employment; and
·Failure to provide a payslip within one working day of payment.
Section 44(1) of the FWA provides that a person must not contravene a provision of the National Employment Standards. As previously indicated, these contain the minimum employment conditions germane to all employees in Australia.
Section 45 of the FWA provides that a person must not contravene a term of a modern award. There is no controversy that Vehicle Repair, Services and Retail Award 2020 is such a modern award and covers the employment of part-time employees such as Ms Devanaboyina, Ms Gupta and Ms Kaur and applies to individuals employed in businesses concerned with selling, distributing or supplying running requirements for vehicles (including motor fuels, gas and oils).
Clause 10.2 defines a part-time employee in this industry as being persons employed to work less than 38 ordinary hours per week; who have reasonably predictable hours of work; and receives, on a pro rata basis, equivalent pay and conditions to those of full-time employees who do the same kind of work. Again, there is no controversy that the individuals concerned in this case meet these criteria.
Accordingly, this state of affairs engages clause 10.3 of the Award, which reads as follows:
10.3 At the time of engagement, the employer and the part-time employee will agree in writing on the following:
(a) the hours worked each day;
(b) which days of the week the employee will work;
(c) the actual starting and finishing times each day;
(d) that any variation must be in writing;
(e) all time worked in excess of agreed hours is paid at overtime rates; and
(f)the times of taking and the duration of meal breaks.
Essentially, the Award mandates a regime in which the work roster of casual employees are to be subjected to some formality in terms of their structure and predictability. The objective being to avoid potential exploitation by cavalier changes to such regimes and give part-time employees some level of certainty about how and when they will be employed.
Sai has formally admitted that it did not provide each of the relevant employees such a written agreement at the time their respective employment commenced.[13] Accordingly, it has admitted liability for breaching the provisions of section 45 of the Act.
[13] See SOAF at [14].
Part 2-2 of the FWA contains the National Employment Standards, which amongst other matters deal with the entitlement of employees to accrue and take annual leave. Pursuant to section 87, each of the relevant employees was entitled to annual leave which accrued to them progressively during each year of employment.
Significantly, pursuant to provisions of section 90(2) each was entitled to be paid any annual accrued by them but not as yet taken, upon the cessation of any employment relationship. This sum is also subject to a leave loading of 17.5%. Pursuant to clause 17.6(a)(ii) of the Award, an employer is required to pay accrued untaken leave with seven days of the termination of employment.
As noted above, each of Ms Devanaboyina, Ms Gupta and Ms Kaur have left the employ of Sai and each had accrued unpaid annual leave at the relevant dates of the termination of their employment. The inquiries of the relevant fair work inspectors revealed that these sums had not been paid in accordance with the Award.
Sai has formally admitted that the following amounts are involved:
Employee Hours of Untaken Leave Cash Sum Loading Total Due Ms Devanaboyina 28.85 $692.40 $121.17 $813.57 Ms Gupta 10.39 $249.36 $43.64 $293.00 Ms Kaur 55.39 $1,329.36 $232.64 $1,562.00
The parties also agree that each employer has now been paid the sums due to them. However, this occurred on 14 June 2023. This was after the first site visit of the FWO to the Queenstown petrol station but prior to FWI Woodhead’s formal finding of contravention, which was conveyed to Sai by way of letter on 11 July 2023.[14] Accordingly, the payment occurred as a consequence of the involvement of the FWO.
[14] See Annexure KW-3 to Mr Woodhead’s affidavit filed on 1 May 2025.
In these circumstances, Sai has also formally acknowledged breaching the provision of section 44 of the Act by its failure to comply with the applicable provisions of the National Employment Standards.[15]
[15] See SOAF at [22].
Section 536(1) and (2) of the Act require employers to provide their employees with pay slips, within one day of paying wages, which contains information prescribed by regulation.[16] This information must include the name of the employer and employee; the pay period; gross and net amounts of payment; and any amount referable to loading, allowance or other penalty.
[16] Fair Work Regulations 2009 (Cth) rr 3.45-3.46.
Sai has formally admitted that it did not provide the relevant employees with payslips, within the prescribed period of one day following payment, on the following 19 occasions and so breached section 536:
Ms Devanaboyina 21 December 2020 22 December 2020 29 December 2020 30 December 2020 Ms Gupta 4 January 2021 5 January 2021 11 January 2021 12 January 2021 25 January 2021 26 January 2021 1 February 2021 2 February 2021 8 February 2021 9 February 2021 15 February 2021 16 February 2021 22 February 2021 23 February 2021 Ms Kaur 21 December 2020 22 December 2020 29 December 2020 30 December 2020 4 January 2021 5 January 2021 11 January 2021 12 January 2021 18 January 2021 19 January 2021 25 January 2021 26 January 2021 1 February 2021 2 February 2021 8 February 2021 9 February 2021 15 February 2021 16 February 2021 22 February 2021 23 February 2021
In the industrial context, payslips play a central role in respect of the maintenance of minimum wage standards. The provision of appropriate and correct payslips is an essential component of a fair system of wage regulation. Employees, particularly vulnerable ones, are entitled to know what they have been paid and by whom and specifically how their wages are broken down.
This is important so that in cases of dispute, the industrial regulator is able to quickly ascertain the identity of the relevant employer so that any misunderstanding can be expeditiously sorted out and any shortfall in entitlements remedied. In this context, I respectfully adopt what was said by Judge Reithmuller in Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd & Anor[17] as follows:
Without proper payslips, employees are significantly disempowered, creating a structure within which breaches of the industrial laws can easily be perpetrated.
[17] Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd & Anor [2012] FMCA 258 at [67].
In this particular matter, without payslips – certainly on the termination of their employment – the relevant employees are likely to have been oblivious of their entitlement to accrued annual leave. This lack of knowledge being exacerbated by the lack of provision to them of a written agreement, on the commencement of employment as to what were their employment entitlements. As temporary visa holders, Ms Devanaboyina, Ms Gupta and Ms Kaur may well not have known that casual employees, in Australia, have entitlements to accrue and take annual leave, which attracts a leave loading.
The chief area of controversy between the parties arises in respect of the accessorial liability of Mr Monga, as the manager of Sai at the time of the contraventions. As indicated above, in his affidavit he has acknowledged managerial responsibility for the petrol outlet, which included oversight of employment arrangements for all those employed by Sai, particularly in respect of the issue of payslips and the payment of wages and entitlements.
From the perspective of the FWO, Mr Monga is to be regarded as having accessorial liability for the actions and omissions of Sai pursuant to the provisions of section 550 of the Act, which reads as follows:
(1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.
The statement of agreed facts indicates that Mr Monga was through his acts or omissions, directly or indirectly knowingly concerned in or a party to Sai in two of contraventions detailed in the statement of claim issued in these proceedings – namely those related to the failure to issue payslips and pay accrued annual leave on termination – pursuant to the provisions of section 550(2)(c).
In a formal sense, Mr Monga must be taken to have admitted such accessorial liability and he has deposed to this effect in respect of the payslip contravention and the annual leave on termination contravention.[18] He characterises these as being errors which arose between him and the firm of accountants – Taxxed – which he had retained since mid-2020 to provide payroll services to the business.
[18] See affidavit of Mr Monga filed on 12 February 2025 at [29] – [30].
In this context, he has deposed as follows:
I informed Taxxed each week of how many hours each worker had worked for that week and when work was performed. The accountant would then calculate that employee's wage, and I then paid the worker each week.
During this time, I was not aware of my obligation to provide my employees with payslips, although Taxxed was producing them in the MYOB system.
Also, during this period no employee had made any inquiries or requested me to provide their payslips as such I was not alerted to the error.
I formed the impression that the accountant was issuing payslips because the accountant had each of the employee's personal data including names, dates of birth, email addresses and phone numbers.
…
I had expected that the accountant would advise me of the requirement to make payments including, the accrued annual leave on termination, since the accountant was advised of the employment arrangements and was notified of the resignation dates.[19]
[19] Ibid at [37] – [44].
Mr Monga has deposed that as soon as became aware of the failure to pay each employee what was due to her by way of annual leave and to provide payslips, as a result of the investigations of the relevant fair work inspectors, he expeditiously corrected these omissions and made good the payments due.
Essentially, Mr Monga has deposed that, whilst accepting some level of personal responsibility, the contraventions in question arose because of his reliance on his external professional advisor and a combination of its failure to inform him of his obligations and his assumption that it would attend to all the administrative/payroll obligations of the business. The implication being that this substantially reduces the culpability of both him and Sai.
Mr Monga has further deposed that he had no personal knowledge of the requirement that each part-time employee be provided with a written agreement in respect of the hours to be worked and so. Rather he has deposed that he had oral discussions with each of them about their hours and tried to accommodate their needs to study with the requirements of the business. He deposed as follows:
I did not seek to exploit the workers and I obtained no financial gain as a consequence of the errors that I have made. Rather, I sought to support the workers and tried to accommodate their study requirements and provide support more generally during this period which coincided with the Covid – 19 pandemic.[20]
[20] Ibid at [28].
Counsel for the FWO, Ms Stuart has submitted that Mr Monga should not be permitted to attribute blame in this way. In this context, the major dispute arising between the parties concerns the quantum of the penalties to be imposed on Sai and Mr Monga respectively, given the contents of the SOAF.
Some other controversies arise as to how the various contraventions are to be grouped or consolidated. These arise as a consequence of the operation of section 557 of the FWA, which has application only to the offences relating to sections 44 and 45, concerning award and national employment standards breaches, which affected the three individuals identified in the SOAF.
In essential terms, two or more contraventions, under these sections, which are:
·Committed by the same person; and
·Arose out of the same course of conduct;
are taken to constitute a single contravention.
THE ORDERS SOUGHT BY EACH PARTY
Each of the relevant sections of the FWA – section 44; 45; and 536; – admitted to have been contravened by Sai and Mr Monga is characterised as a civil remedy provision by virtue of section 539. Section 539(2) delineates the maximum penalty to be applied to any contravention established by the court. In each case, the maximum penalty is one of 60 penalty units.
Section 546(1) of the FWA authorises the court to impose whatever pecuniary penalty it considers appropriate if it is satisfied that a person has contravened a civil remedy penalty.
At relevant times, for all of the offences, apart from one, a penalty unit amounted to $222.00.[21] The exception is the section 45 offence, as it relates to Ms Kaur, which occurred on 29 June 2020, when a penalty unit amounted to $210.00. Pursuant to the provisions of section 546(2)(b) of the FWA, if the person who has committed the offence in question is a body corporate, the maximum penalty is to be multiplied by five.
[21] See Crimes Act 1914 (Cth) s 4AA.
It is the submission of the FWO that the court should impose three distinct pecuniary penalties, on Sai in respect of each of the section 44 and 45 offences, given the application of section 557 and the fact that three distinct employees were affected by the award/condition breaches but the payslip contravention could be approached as one contravention. If this approach is adopted – for seven distinct offences – the maximum penalty to be imposed on a corporation would be 2100 penalty units, which equates to a sum of $462,600.00.
So far as Mr Monga personally is concerned. The FWO submits that he should be fined in respect of three distinct offences, which would create a maximum penalty, for an individual, of 180 penalty units, which equates to a sum of $39,960.00.
The FWO concedes that the maximum penalty should not be imposed given neither respondent has any previous history of offending. However, balancing factors relating to deterrence with how it assesses the overall seriousness of the offending, it proposes that 30% of the maximum is appropriate, which should be further reduced by another 20% to reflect the cooperation of each respondent in admitting the relevant facts and so avoiding a more extensive process of both investigation and hearing. A further reduction is then proposed.
If this approach is adopted, the penalty to be imposed on Sai would be one of $62,000.00 and that of Mr Monga one of $5,700.00. In her submissions, Ms Stewart characterises these penalties as being on the lower end of the range but contain sufficient sting in their quantum to provide specific deterrence to Mr Monga personally, who may engage in commercial activity in the future involving employment and general deterrence to employers involved in the fuel retail industry, which a relevant FWO report has indicated is one in which exploitation of vulnerable employees is prevalent.
In addition, the FWO seeks formal declarations regarding the various contraventions of the Act and that the penalties imposed be paid to the Commonwealth.
Counsel for the respondents, Ms Sheridan submits that a different approach be taken to how the award/national employment standard contraventions should be grouped. Her submission being that they should be grouped together, as a single course of conduct, so far as Sai is concerned.
More significantly, she characterises the offending in question as being characterised by inadvertence, lack of knowledge and mistake and, given that Sai and Mr Monga are no longer personally involved in the fuel retail industry, the need for either specific or general deterrence is low, which should result in a significant mitigation of the penalty for each, particularly in the context of what she would characterise a significant degree of cooperation with the industrial regulator.
In these circumstances, it is submitted that it is open to the court to impose no or a very low penalty on Sai and a heavily discounted penalty on Mr Monga. The sums proposed are $5,000.00 for Sai and $1,000.00 for Mr Monga.
CHRONOLOGY
Sai began trading in August 2019. Mr Monga had been employed as the manager of a fuel outlet between 2017 and 2019 leaving paid employment to take up the franchise opportunity, with his wife, offered by United Petroleum, when Sai entered its licence agreement with the company.
The FWO’s inquiry into United Petroleum outlets began in December 2020 and followed an earlier report, which was completed in April of 2017. As noted above, Fair Work Inspectors visited Sai’s Queenstown premises on 24 February 2021 and 22 September 2021.
There is no suggestion that either respondent failed to disclose necessary records and documents were produced to the FWO by Taxxed. As noted above, the annual leave underpayments were rectified in June of 2023. FWI Woodhead issued the contravention finding on 11 July 2023.
On 26 July 2023, the respondents’ former solicitors wrote the FWI Woodhead advising that attempts were being made to rectify mistakes made but denying any falsification of records or active attempts to underpay employees.
The FWO commenced the proceedings on 15 December 2023 and they were allocated a first return date of 21 March 2024, which was vacated by agreement on the basis that defence would be filed in mid-April prior to a mediation occurring.
In the period between the issue of proceedings and the formal filing of the defence, those advising the respondents offered to settle the proceeding by way of provision of an enforceable undertaking, which would have involved Sai paying a contrition payment of $15,000.00 and Mr Monga paying one of $5,000.00.[22] This was not acceptable to the FWO.
[22] See Exhibit D.
The defence was delayed being filed on 6 September 2024 with the proceedings consensually adjourned without need for actual appearance. The defence constituted a formal admission of contravention but qualified in general terms by assertions of reliance on professional advice from accountants that award and payroll responsibilities had been attended to. In addition it was asserted that the MYOB system on which the company’s payroll records were kept had produced payslips but through oversight none of these had been distributed and no employees had made a request for them.
In this context, it was agreed that a statement of agreed facts would be filed, which occurred on 29 October 2024. Ultimately, the matter was listed for a penalty hearing on 14 May 2025. In these circumstances, I accept that the respondents have cooperated with the regulatory authorities in the sense that it has never been asserted that a full hearing on liability would be required and responsibility, in this sense has not been denied.
ACCESSORIAL RESPONSIBILITY
Pursuant to section 550(1) of the FWA, a person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision. As indicated above, section 550(2) provides the circumstances in which a person is taken to have been involved in a contravention of a civil remedy provision.
In the current matter, this turns on the determination of the issue as to whether Mr Monga can be considered and found to be a person, who has in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention. It is significant to note that the definition of involvement is a wide one being prefaced by the expression in any way and involving both direct and indirect knowledge.
The controversy in this matter arises by the tension created by the formal admissions of Mr Monga – acknowledged by him in the SOAF – and his tacit assertion that he personally did not know of the requirement for casual employees to have a written agreement and his assumption that the firm of accountants, who he had appointed to oversight the administrative and payroll responsibilities of Sai had attended to payslip responsibilities and calculation and payment of the company’s wage obligations.
From this state of mind, arises the implied assertion that he cannot be regarded as having known about these matters in a personal sense. This, in turn, founds the submission that his personal degree of culpability (and indeed that of Sai itself) cannot be regarded as extreme.
In Buckingham v KSN Engineering[23] Lucev FM (as his Honour then was) summarised the legal test for sheeting liability to a potential accessory in the following terms; before such a person could be considered an accessory under the Act, could it be established that:
·did he or she have knowledge of the essential facts constituting the contravention;
·was he or she knowingly concerned in the contraventions;
·was he or she an intentional participant in the contravention based on actual or constructive knowledge of the essential facts constituting the contravention – although constructive knowledge may be sufficient in cases of wilful blindness; and
·however, such an individual did not need to know that the matters in question constituted a contravention.
[23] Buckingham v KSN Engineering Pty Ltd [2008] FMCA 546 at [40].
In Fair Work Ombudsman v Devine Marine Group Pty Ltd[24] White J explained the concept of a party being knowingly concerned in a contravention under the FWA in the following terms:
The notion of being “knowingly concerned” in a contravention has a different emphasis from that of aiding, abetting, counselling or procuring” a contravention. To be knowingly concerned in a contravention, the person must have engaged in some act or conduct which “implicates or involves him or her” in the contravention so that there be a “practical connection between” the person and the contravention…
[24] Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 at [178].
In Qantas Airways Ltd v Transport Workers’ Union of Australia[25] Moore J summarised a number of authorities dealing with this concept of knowingly concerned. It involves conduct with implicates or involves the person concerned in the relevant contravention such that he or she has a practical connection to the contravention. Such a connection can be inferred from the circumstances surrounding the essential matters of the contravention.
[25] Qantas Airways Ltd v Transport Workers’ Union of Australia (2011) 280 ALR 503 at 567, [324].
The SOAF, which has been executed on the respondents’ behalf, indicates acceptance of Mr Monga’s broad managerial responsibility for the oversight of Sai’s operations, which included payroll and payslips. The implication of this acknowledgement being that Mr Monga ought to have known about the relevant matters because of his managerial role.
In this context, he admits that he knew of the nature of the employment of Ms Gupta and Ms Devanaboyina and the hours which each worked and that neither had been paid their accrued leave to which they were entitled nor given a payslip.[26]
[26] For reasons which have not been provided to me, although clause 10 of the SOAF refers to all three employees, the admission does not refer to Ms Kaur. I assume that this is a typographical error or some form of administrative mistake, which all concerned have overlooked.
Incorporated entities cannot know anything as they are artificial construction not sentient beings. Such entities acquire knowledge throw the actions and responsibilities of their sentient managers or proprietors. In the industrial setting, in my view, the concept of managerial knowledge is to be given a broad construction. In this context, I accept that Mr Monga must be regarded as having a practical connection with the contraventions given the extent of his managerial responsibilities and thus knowledge of what was required of Sai.
In the vernacular, the buck stopped with him. He should have known more exhaustively about the need to provide written agreements and pay annual leave on termination. In my view, these are not abstruse or obscure employment responsibilities. In addition, the onus was on him to ensure payslips had been issued within time. As such, in my view, he is clearly implicated in the conduct of Sai and must share in its liability under the provisions of the Act.
In the industrial context, it is to be emphasised that lack of care and ignorance of the law can be no excuse.[27] As will be detailed, in due course, this is particularly so in respect of considerations of general deterrence.
[27] FWO v Lifestyle SA Pty Ltd [2014] FCA 1151 at [156] per Mansfield J.
For obvious reasons, it can provide neither protection nor consolation to vulnerable employees if it comes to accepted that an overall manager of a business (and in this case, the spouse of its sole director) can minimise or escape responsibility on the basis of not knowing the ramifications and extent of the industrial standards due to such employees.
Given the circumstances of this case, particularly Mr Monga’s formal acceptance of the SOAF, I have no difficulty accepting his accessorial liability in this matter. Section 191 of the Evidence Act provides an incentive to parties to agree facts in the context of a saving of expense both to them and, in the case of a matter involving an industrial prosecution, the general public.
As Biscoe J noted in Environment Protection Authority v Ransey Food Processing Pty Ltd[28] to allow a party, in effect, to abandon or disavow a statement of agreed facts, in the regulatory context, hardly encourages parties to make such statements, which cannot be regarded as being in the public interest.
[28] Environment Protection Authority v Ransey Food Processing Pty Ltd [2009] NSWLEC 152.
In addition, it seems to me to be a contradiction in terms if a party can, on the one hand in the context of saving court time and expense, agree to the fact on which he or she is to be sentenced, but at the same time attempt to minimise his or her culpability.
I will approach this case on the basis that Mr Monga, as he has acknowledged, was personally responsible for ensuring each of the relevant employees received what was due to them and he cannot, in a formal sense, attribute responsibility for his omissions to the accountants retained by him. However, at the time, as will detailed in due course, the process of sentencing is to be approached as a matter of intuitive synthesis, in which many competing factors are at play.
FWI WOODHEAD’S EVIDENCE
FWI Woodhead has deposed that Mr Monga and Ms Arora are the registered proprietors of their home at Findon and two other investment properties in suburban Adelaide. In addition, he has deposed that industrial regulatory non-compliance, in the retail fuel industry is relatively common and so far as United Petroleum franchise owners are concerned was subject to a detailed inquiry, by the FWO, in 2017.
This report indicated that of 12 business checked, 40% were found to be non-compliant and there was a level of underpayment. Significantly, in this context, a significant number of those who were underpaid were the holders of student visas. Statistics indicate that migration visa holders were involved in close to 20% of all disputes referred to the FWO.
One of the issues in this case is the need for specific or personal deterrence so far as both Mr Monga and Ms Arora are concerned. In this context, FWI Woodhead has deposed that Sai remains a registered company and Ms Arora continues to be its director, whilst Mr Monga is a director of a recently incorporated business Prestige Home Finance Pty Ltd.
The inference said to be open from this state of affairs being that potentially both Mr Monga and Ms Arora may engage in commercial activities, involving employment and thus need to have it emphasised to them the importance of ensuring compliance with any applicable industrial regime.
MR MONGA’S EVIDENCE
It is the effect of Mr Monga’s evidence that there are a number of extenuating factors which mitigate the seriousness of his offending and indicate that it is unlikely that he will never behave in a similar way again. In addition, he points to a number of financial factors, which should ameliorate the pecuniary penalties to be imposed. Finally, as previously indicated, it is his position that what occurred was the direct result of genuine mistakes on his part.
Mr Monga acknowledges that he and his wife own three pieces of real property, which have a reasonable value. However, he also points to the point that each of these properties is subject to mortgage and the reality is that the actual equity is in the vicinity of $690,000.00. Two of the properties are rented.
Mr Monga has deposed that he was personally named in a press release of the FWO about its investigation of the Queenstown fuel outlet and the story was picked up by Adelaide newspapers, which caused him embarrassment.
He has also pointed to the fact that the current matter has taken over four years to go from investigation to completion, which has caused him psychological stress, as well as the expense of having to instruct lawyers, which he estimates to be in the vicinity of at least $35,000.00. He has apologised to Ms Kaur and Ms Devanaboyina for his conduct towards them but has been unable to reach Ms Gupta.
In addition, he has completed training, at his own personal expense, regarding the application of modern awards in the workplace in order to understand better what his obligations as an employer are. He did this training in mid-2024.
More significantly, he has deposed that United Petroleum has abruptly terminated its franchise arrangement with Sai on 25 February 2025 forcing the company to immediately stop training and necessarily depriving him of employment and his family of income. In this context, he has been forced to sell the business’ stock in trade, which recouped him about $40,000.00, which he has used to support his family.
In a recently filed affidavit, Mr Monga has deposed as follows:
Unfortunately, I have not yet been successful securing any further employment. …The sudden closure of Sai Enterprises’ operation has taken an emotional toll on me, however I am with everyday finding more strength to actively seek re-entry into the workforce.
Any penalty either on the business or myself is going to have an impact on me as both the business and I have limited cash to be able to easily pay the penalty.[29]
[29] See affidavit of Raman Monga filed 11 April 2025 at [9] – [10].
Mr Monga has deposed that Sai has few assets, apart from three motor vehicles, which are subject to finance agreements.[30] The implication of his evidence that any pecuniary penalty imposed upon him will have significant financial implications for him and his family.
[30] See Exhibit C.
In oral evidence provided to the court, Mr Monga has deposed that the company, which he has recently incorporated is not trading and represents an attempt, on his part, to derive income for his family. He asserts that it will be a one-person operation, namely he himself and, as such, he is intent on never employing any one ever again and certainly has no plans to return to the fuel retail industry.
The effect of his evidence, which I accept, is that he has learnt a salutary lesson from his experience with the FWO in these proceedings, which he has no intention of ever repeating. He presents as remorseful. In this context, his counsel has submitted that there is no evidence that he ever embarked on a pre-mediated course of conduct to exploit the three employees concerned and he personally did not benefit financially to any great degree. I accept these submissions.
THE LEGAL PRINCIPLES APPLICABLE TO PENALTY HEARINGS
As had already been mentioned, it has been said that the calculation of a civil remedy penalty is a process of intuitive synthesis. It is a matter of balancing all relevant factors to reach an outcome which is in proportion with the degree of seriousness of the offending. Gray J in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith said as follows:
[What is required is] to 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 [offender], to form a view as to whether that aggregate [is] out of proportion to that overall conduct.[31]
[31] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [23] (Gray J).
In this context, the court is required to consider the application of section 557 and determine how individual offences, germane to individual employees and incidents of regulatory breach, are to be grouped for the purposes of penalty.
The nature of the section has recently been closely considered by the Full Court of the Federal Court in Rocky Holdings Pty Ltd & Anor v Fair Work Ombudsman.[32] That was a case broadly analogous to the current one in the sense that the appellant employer concerned had admitted several breaches of a modern award in respect of such things as the payment of penalty rates for work on Saturdays and Public Holidays, concerning multiple employees, in contravention of section 45 of the FWA.
[32] Rocky Holdings Pty Ltd & Anor v Fair Work Ombudsman [2014] FCAFC 62.
In Rocky Holdings the Full Court rejected the analysis propounded by the respondent for a number of specified reasons, significant ones of which can be summarised as follows[33]:
·The key legislative intent of the FWA is to ensure, through an effective penalty regime, compliance with the minimum terms of relevant modern awards, not to reduce the number of contraventions of civil penalty provisions; see [12].
·It is the provision of the Act, set out in subsection 557 (2), which is relevant to the course of conduct delineated in subsection (1); see [13].
·Subsections (1) and (2) are ambiguous. They are capable of referring to the existence of the identified provision or the substance of the identified provision. As such, it is acceptable to have regard to the relevant Explanatory Memorandum, in resolving the ambiguity;[34] see [14].
·The object and purpose of section 557 is to ensure that an offender is not punished twice for what is essentially the same criminality. What is or is not the same criminality is an exercise requiring close consideration. However bare identity of motive is seldom sufficient to establish the same criminality in separate and distinct acts of offending; see [18].
·It is wrong to characterise the various contraventions of the modern award in question as being merely particulars of an overall breach of section 45; see [24].
·It is potentially confusing to apply principles dealing with the punishment and sentencing of criminal offences to the application of civil penalties; see [25].
·Such an analysis has the prospect of leading to arbitrary and capricious outcomes. By way of example an employer who had contravened a wide range of award provisions, leading to widespread underpayment of a number of employees would be subject to the same maximum penalty as an employer who had contravened one award provision, in respect of one employee on one occasion. This is counter-intuitive; see [26].
[33] In what follows, reference are to paragraph numbers in the relevant judgment of the Full Court.
[34] See Acts Interpretation Act 1901 (Cth) at section 15AB(1)(b).
Of these reasons, in my view, the last one is the one most applicable to the circumstances of the current case. The court must beware of groupings of offences, which lead to capricious or artificial outcomes, bearing in mind that each contravention relates to a separate and distinct breach of a term of the FWA.
In any event, no matter how the various counts are ultimately cut and diced, the court’s fundamental obligation is to impose a penalty in keeping with the overall seriousness of the offending in question. In this context, the court’s primary objective should be to ensure future compliance with industrial regulation.
In this context, what was said by Reeves J in Blandy v Coverdale NT Pty Ltd is relevant:
In Gibbs v City of Altona Gray J made a number of observation about the operation of section 178(2), which I consider apply equally to the similar provisions of section 719(2). First, each separate obligation found in an award is to be regarded as a separate ‘term’; secondly, whether, whether a separate obligation is a separate term is determined by whether it is in substance a different obligation; and thirdly, where different terms impose cumulative obligations or obligations that substantially overlap, that may be taken into account by imposing a nominal (or no) penalty for some breaches and a substantial penalty for others… (Citations removed)[35]
[35] Blandy v Coverdale NT Pty Ltd [2008] FCA 1533 at [56].
The court is required to give recognition to the distinct legal nature of each breach arising under section 45 of the Act. Section 557 operates to allow groupings of contraventions of the same obligation or term of an industrial instrument, not the entire range of terms breached under that one instrument.
In FWO v Ramsey Food Processing Pty Ltd (No.2) Buchanan J considered the application of section 719(2) of the Workplace Relations Act, the legislative predecessor of section 557. He said as follows:
On one view, the failure to make any of the required payments arose from a single course of conduct. They all arose from a determination by the respondents that no payment would be made upon the termination of employment of any of the employees, or the employees as a group. However, this approach gives insufficient attention to the separate legal character of the three forms of obligation earlier identified. I am satisfied that each of those forms of obligation requires separate recognition. I am not, however, satisfied that each individual example of defiance of an obligation is permitted separate recognition. In my view the individual examples, constituted by the failure to make payments to particular individual employees, arise out of a course of conduct in each of the three instances. Any penalty must be assessed taking that into account. [36]
[36] FWO v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408 at [2] The passage was approved by the Full Court in Rocky Holdings (supra) at [18].
Regardless of these considerations, the fundamental task, for the court, is to determine, from all the factual circumstances arising, the gravity or seriousness of the offending, which it is called upon to penalise. How offences are grouped should not result in an overall penalty which is disproportionate to the offending overall or one which is crushing in its severity.
In this case, bearing in mind that there are three distinct examples of breaches of the FWA relating to three different employees, which occurred at different times, I propose to adopt the grouping advocated by the FWO. That is not to say that such a grouping can be utilised to result in an overall penalty which is disproportionate to the offending. Again a balance must be struck between the number of employees/offensives and any other relevant circumstances.
The considerations relevant to the task of calculating pecuniary penalties, in the industrial context, have been delineated in a number of decisions of both this court and the Federal Court.[37] The considerations are as follows:
[37] Mason v Harrington Corporation Pty Ltd [2007] FMCA 7; Kelly v Fitzpatrick [2007] FCA 1080 at [14]. (Tracey J); Blandy v Coverdale NT Pty Ltd [2008] FCA 1533 at [23] (Reeves J).
·The nature and extent of the conduct which led to the breaches;
·The circumstances in which the conduct took place;
·The nature and extent of any loss or damage sustained as a result of the breaches;
·Whether there has 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 breaches has exhibited contrition;
·Whether the party committing the breaches has taken corrective action;
·Whether the party committing the breaches has 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 court needs to be careful not to apply a formulaic approach to the imposition of penalties or attempt to extrapolate the penalties imposed in one case to the circumstances of another. Each case involving the imposition of a civil penalty warrants an idiosyncratic approach and a careful analysis of all relevant circumstances. As was stated in Australian Ophthalmic Supplies:
Penalties are not a matter of precedent. The choice of penalty must be dictated by the individual circumstances of a case, not by a line by line comparison with another case.[38]
[38] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCA 8 at [12] (Gray J).
Clearly the checklist, as enumerated above, is useful. However, it is not to be regarded as an exhaustive list of factors to be considered. The ultimate control on any sentence is that it must be proportionate to the offence committed. A court is not permitted to impose a sentence greater than is warranted by the objective circumstances of the offending.[39]
[39] Veen v R (No 2) (1988) 164 CLR 465, 472 (Mason CJ, Brennan, Dawson, and Toohey JJ).
However, in the context of the significant interest the public has in ensuring that employees are paid their proper entitlements and are accorded the protection of the industrial safety net envisaged by the legislature, the court cannot lose sight of the importance of deterrence, both in a specific and general sense.
Penalties have to be fixed at a meaningful level, not set at a level at which their imposition, on an errant employer, can be seen as an acceptable cost of doing business for the employer. In short, penalties must hurt so that others who are considering cutting corners, so far as the payment and protection of their employees are concerned, will be deterred from doing so.
In the recent case of Australian Building and Construction Commissioner v Pattinson[40] the High Court discussed the inherent problems likely to arise when principles of retributive sentencing, relevant to the criminal law, are applied in civil penalty proceedings.
[40] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13.
In this context, the High Court rejected the principle of proportionality being applied to the calculation of penalties in the civil sphere. Essentially, the High Court indicated the principle that the maximum penalty should be reserved only for the worst or most egregious examples of the applicable offence did not apply in civil penalty proceedings.
In addition, the High Court indicated that the primacy of deterrence is the objective of any civil penalty regime. As such a sentencing court, in a civil penalty matter, is required to impose a penalty which is proportionate in the sense that it strikes a reasonable balance between deterrence and what is described as oppressive severity.[41]
[41] Australian Building and Construction Commissioner v Pattinson (Pattison) [2022] HCA 13 at [41].
Nature, circumstances and deliberateness of the contravening conduct
As I have already indicated, neither Mr Monga nor Sai can hide behind the fact of the recruitment of Taxxed to attend to matters of the company’s payroll and payslip obligations. However, I accept the submission that this is not a case of brazen exploitation of workers to secure gross financial advantage.
As already indicated, I accept that payslips play a central role in the industrial system. Their prompt provision is essential to ensuring employees know what they have been paid; at what rate; over what period of time; so they can ensure the correctness of what they have been paid. In this matter, there has been a wholesale failure to provide payslips. This must be regarded as serious.
The actual amounts of money due to each of the employees, so far as accrued annual leave on termination is concerned, are not significantly large sums and have been made good. However, to each of the employees in question, it is more likely than not that the sums were significant to them, given each was a student living far away from their country of origin.
I accept that the sums in question were not trifling amounts for the individuals concerned and each was compelled to wait a significant time for reimbursement.[42] In addition, were it not for the fact of the FWO’s general investigation into United Petroleum outlets, it is unlikely that the shortfall would have ever been detected. Necessarily, this is a factor which goes to deterrence.
[42] See FWO v Zillion Zenith International Pty Ltd [2014] FCCA 433 at [52].
Again, holiday pay is an important aspect of the minimum standards of employment in Australia. It cannot be considered an arcane concept for employers. It should be known to all employers. However, it is not necessarily a part of the industrial regulation of many other countries.
In this context, I accept that student visa holders, who must seek part-time work to support themselves, whilst studying in Australia, are potentially open to exploitation because they themselves are not familiar with the concept of holiday pay.
Similar considerations apply to the requirement to supply written agreements to part-time employees in conjunction with the commencement of employment. The objective being that employees who may be unaware of their entitlements are formally informed of them. I accept that this is particularly so in respect of any penalties arising from overtime and weekend/public holiday work.
However, I also accept that neither Sai nor Mr Monga deliberately set out to take advantage of any of the employees concerned and any financial advantage derived by them was modest and has been returned to those to whom it was entitled.
In respect of the payslip offences, I accept that Mr Monga had appropriate software set up in MYOB to generate payslips and had access to email addresses for his staff to which they could be sent. In this context, he acted on the false belief that Taxxed would attend to the provision of the payslips.
This makes it less serious than it would be if an employer failed to generate payslips to conceal a gross failure to pay award level of wages and to avoid possible regulatory discovery. This is not the case here, but as will be detailed hereunder, inadvertence and mistake has less application in the industrial context than in the criminal law.
General deterrence
One of the central purposes of imposing a civil penalty, in proceedings such as these, is to deter other employers from embarking on a similar course of conduct to that engaged upon by the transgressing employer. In imposing a penalty to reflect general deterrence, the court must impose fines that cannot be seen by others as the cost of doing business.[43] In Fair Work Ombudsman v Maclean Bay Pty Ltd (No 2), Marshall J said as follows:
It is important to ensure that the protection afforded by the Act to employees are real and effective and properly enforced. The need for general deterrence cannot be understated. Rights are a mere shell unless respected.[44]
[43] Fair Work Ombudsman v Yogurberry World Square [2016] FCA 1290 at [27] (Flick J).
[44] Fair Work Ombudsman v Maclean Bay Pty Ltd (No 2) [2012] FCA 557 at [29] (Marshall J).
The role of general deterrence in fixing appropriate penalty is demonstrated by what Lander J said in Ponzio v B & P Caelli Constructions Pty Ltd[45] namely:
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 like minded 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... (citations removed)
[45] Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [93] approved by Mansfield J in Lifestyle SA (supra) at [154].
As previously noted, the High Court in Pattison has emphasised the place of general deterrence in industrial penalty matters and rejected that any maximum penalty fixed by the regulatory regime is to be regarded as the yardstick for the calculation of such penalties. This being a concept germane only to the criminal law.
In general terms, the imposition of penalties in industrial regulatory matters is to be viewed in the context of the public’s interest in reinforcing the strength and integrity of the regulator and the regulatory process. [46] However, the court must still consider the overall appropriateness of the penalty to be imposed. As such, there must be a reasonable level of relationship between considerations of deterrence and what was characterised by the High Court as oppressive severity.[47]
[46] See FWO v 85 Degrees Coffee Australia Pty Ltd [2024] FCA 576 at [51].
[47] Pattison (ibid) at [41].
Essentially, it must cost an employer less to obey the industrial law than to breach it. In this context the quantum of fines has to be considered. This is what is meant by proportionality. It cannot be referenced to the means of an individual to meet a fine alone. In ACCC v Reckitt Benckiser (Australia Pty Ltd[48]
If it costs more to obey the law than to breach it, a failure to sanction contraventions adequately de facto punishes all who do the right thing. It is therefore important that those who do comply see that those who do not are dealt with appropriately. This is, in a sense, the other side of deterrence, being a dimension of the general deterrence equation. This is not to give licence to impose a disproportionate or oppressive penalty, which cannot be done, but rather to recognise that proportionality of penalty is measured in the wider context of the demands of effective deterrence and encouraging the corresponding virtue of voluntary compliance.
[48] ACCC v Reckitt Benckiser (Australia Pty Ltd) (2016) 340 ALR 25 at [152].
In this context, I accept the submissions of the FWO that the retail fuel industry is one which is exemplified with higher rates of non-compliance with employments standards than other industries. As a consequence, issues to do with general deterrence are heightened. Consideration must not only be given to those employers who have breached the industrial law but also to those who have not but who may be tempted to do so. The penalty imposed in any matter must recognise this relationship.
As previously noted, the FWO conducted a nationwide inquiry into the industry completed in 2017 and it was only because of a further inquiry into United Petroleum fuel outlets which commenced in 2020 that the irregularities surrounding the employment of Ms Devanaboyina, Ms Gupta and Ms Kaur came to light.
The industry is characterised by a disbursed workforce, who work in outlets which are open for long hours but do not need large numbers of employees at any one time. The level of skill required is low. As such, it is the type of work likely to be attractive to student visa holders, who are not likely to be either organised or be aware of their industrial rights.
Such individuals are also likely to have less options available to them so far as part-time employment opportunities are concerned. For these reasons they are less likely to voice complaints and so be potentially more vulnerable to exploitation by both predatory employers and those whose employment practices are lax. In these circumstances I accept that there is a heightened need for general deterrence in the calculation of the penalty to be imposed.[49]
[49] Ibid at [34].
As previously noted, ignorance of employment standards cannot be regarded as an exculpatory factor. I accept that Mr Monga is not to be regarded as a predatory employer, who set out wilfully to exploit workers who were also student visa holders.
Rather, in failing to provide payslips and an agreement to the employees in question, he is guilty of what Ms Stewart characterises as careless error. I agree with her submission that this is not a factor which negates the need for the court to give significance emphasis to the factor of general deterrence.
Specific deterrence
Considerations relevant to specific deterrence focus on the individual circumstances of the offender concerned and require some degree of prognostication as to the likelihood of re-offending. The most reliable tool for such prognostication is usually the attitude expressed by the party in question.[50] In this context, contrition and remorse can be relevant considerations.
[50] See Plancor Pty Ltd v Liquor Hospitality & Miscellaneous Union [2008] FCAFC 170 at [37] (Gray J).
It is the submission of the respondents that, in the particular circumstances of this case, the need for specific deterrence is low. This is because Sai is no-longer operating the Queenstown fuel outlet and neither Mr Monga nor Ms Arora has any involvement with it.
In addition, each of the respondents is a first offender. In this context, I accept that Mr Monga has learnt a salutary lesson, which has had the consequence of deterring him from engaging in any future aspects of commercial retail, which will necessitate him employing individuals in future. He is not likely to return to the retail fuel industry.
I also accept that Mr Monga is looking to other avenues to earn an income. I acknowledge that he has become a director of another company. However, this enterprise is directed towards another area of endeavour distinct from the retailing of fuel. In my view, the fact that Mr Monga is contemplating becoming a mortgage broker does not of itself call for some added level of personal deterrence. Given these factors, I accept that the probability of him re-offending in future must be regarded as very low.
Contrition, cooperation and corrective action
For obvious reasons, it is easy for an offender to be sorry if apprehended after the commission of an offence. However, as Bromwich J observed in 85 Degrees contrition and cooperation are deserving of recognition in the calculation of penalty because of their utilitarian value.
In the current matter, through the adoption of a statement of agreed facts and the indication of an acceptance of liability, the need for a full hearing of the facts of the case was avoided. Thus, the FWO has been able to preserve some of its resources to investigate and prosecute other matters.
In Mornington Inn v Jordan,[51] the majority of the Full Court (Stone and Buchanan JJ) pointed out that:
It is important to note that it is not a sufficient basis for a discount that the plea has saved the cost of a contested hearing – that would discriminate against a person who exercised a right to contest the allegations. A discount may be justified, however, if the plea is properly to be seen as willingness to facilitate the course of justice. Remorse and an acceptance of responsibility also merit consideration where they are shown.[52]
[51] Mornington Inn v Jordan [2008] FCAFC 70.
[52] Ibid at [74] (Stone and Buchanan JJ).
I accept that Mr Monga has exhibited a willingness to facilitate the course of justice. He cooperated with the supply of records to the FWO and made appropriate admissions. He has paid the employees what is due to them and apologised to two of them and attempted to do so the third. He has undertaken a course in industrial compliance and suffered public opprobrium from being named in the FWO’s press release about his business.
Necessarily only human beings can express contrition. In ACE Insurance Limited v Trifunovski (No.2)[53] Perram J said as follows:
It is not clear to me how an artificial construct such as a corporation can experience the complex human emotion of contrition made up, as it is, of an amalgam of distinctly human emotions such as regret, shame and sympathy. I do not doubt that a corporation may exhibit signs of regret but it is too much to expect that such an artificial construct can be meaningfully contrite.
For civil penalty cases involving corporations it would be more coherent to ask only whether the corporation has changed its behaviour. Nothing more can be expected; a person who does not literally or physically exist may not wear sackcloth.
[53] ACE Insurance Limited v Trifunovski (No 2) [2012] FCA 793 at [113] – [114] approved by Mansfield J in Lifestyle SA (supra) at [136].
Sai has changed its behaviour. It has lost its United Petroleum franchise. Given his demeanour in court and his behaviour during the investigation into his commercial affairs, I accept that Mr Monga has suffered a significant degree of regret and shame. In this context, his evident contrition must be regarded as having a significant level of utilitarian value in the regulatory context.
Size of the business and capacity to pay financial penalties
Clearly, Sai must be regarded as a small business. It has one director and one manager. Mr Monga and Ms Arora worked in the business on weekends but needed additional staff to meet the need of a business that operated for long hours seven days per week to serve the needs of the driving public.
In terms of corporate offenders, I must also bear in mind the wide range of corporate employers – from publicly listed corporations, with huge payrolls, deep corporate pockets and ready access to all manner of legal and accounting advice – to small mum and dad businesses, providing modest services to members of the general public. The payroll failures of the first category, depending on the extent of the monies involved, are usually more deserving of censure than the latter.
In my view, it is clear that Mr Monga and Ms Arora fall into the second category. They had a software accounting system and engaged accounting advice. There is no evidence to indicate that either of them earned an exorbitant wage or did anything other than work hard in an effort to get ahead and secure the financial security of their family. It is salient to note that Mr Monga shares some of the attributes of Ms Devanaboyina, Ms Gupta and Ms Kaur.
He was born overseas and came to Australia on a student visa. Upon his arrival until 2013, he worked as a taxi driver, kitchen hand and cook. He subsequently obtained a vocational qualification and then engaged in a variety of administrative roles. Mr Monga became an Australian citizen in 2021 and is a married person and parent.
I do not approach him as being a wealthy person. I accept his evidence that neither he nor Sai have any obvious source of funds to pay the pecuniary penalties which are to be imposed. Currently, Mr Monga is looking for employment.
However, it is well established it is no excuse for an offender to rely on the fact that they are the operator of a small business or are otherwise impecunious and so seek a discount on the penalty which is otherwise proportional to the offending in question in the sense described earlier.
To the contrary, the court must bear in mind that small businesses of one form or another represent a large component of employers in this country and as such it is germane that the court remains cognisant of the fact that it should cost less to an employer to do the right thing by its employees than run the risk of reaping the benefits of doing the wrong thing.
In these circumstances, I adopt the comments of Driver FM in Rajagopalan v BM Sydney Building Materials Pty Ltd as follows:
Employers must not be left under the impression that because of their size or financial difficulty that they are able to breach an award. Obligations by employers for adherence to industrial instruments arise regardless of their size. Such a factor should be of limited relevance to the Court’s consideration of penalty.[54]
[54] Rajagopalan v BM Sydney Building Materials Pty Ltd [2007] FMCA 1412 at [27] (Driver FM).
At the same time, in my view, it would be unrealistic for the court to overlook the actual financial circumstances of the respondents and the genuineness of its contrition and cooperation and so unwittingly impose a penalty of oppressive severity. In my view, in the current matter, this is an exercise not without its challenges.
CONCLUSIONS
It is the submission of Ms Stewart, counsel for the FWO, that the approach to be taken in respect of the seven offences applicable to Sai is to regard them as attracting a range of penalty of between 25% and 30% of the maximum, to which should be applied a 20% discount for admissions. This calculation leads to a penalty of $103,176.00. If the same approach is adopted to the three offences applicable to Mr Monga, which indeed is what Ms Stewart advocates, it would lead to a penalty for him of $9,591.00.
As noted above, counsel for the respondents, Ms Sheridan submits that, in their totality, such penalties are manifestly excessive and should be reduced to amounts of $5,000.00 for Sai and $1,000.00 for Sai and Mr Monga respectively.
In respect of these calculations, it is my concern that they represent something of a subjective and impressionistic response to the calculation of penalties, which reflects what each respondent can cope with, rather than being a balance between what is required in the public interest by way of general deterrence and the understandable concern of each respondent about the axiomatic oppressive effect of any fine, which falls to be imposed in proceedings such as these.
Ms Stewart tacitly acknowledges some degree of oppression in her calculations as she proposes to reduce each penalty by a significant degree to reflect the totality principle – in Sai’s case down to an amount of $62,000.00 and in Mr Monga’s case down to an amount of $5,700.00, which on my calculations is around 13% to 14% of the maximum penalties available.
The totality principle arises when a court is called upon to sentence an individual, as here, in respect of a number of identifiable offences. It is directed to a review of the penalties imposed, in total, in respect of individual offences to determine whether those penalties, in aggregate, constitute a just and appropriate penalty, in all the circumstances arising.
As indicated earlier, it has been characterised as a process of intuitive synthesis – synthesis in the sense of bringing together a number of disparate and indeed contradictory considerations into one outcome; intuitive in the sense that the outcome appears to be the correct one even if it is one which does not arrive upon after a process of conscious reasoning.
Gray J in Australian Ophthalmic Supplies Pty Ltd said as follows:
What is required is to 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 [offender], to form a view as to whether that aggregate [is] out of proportion to that overall conduct.[55]
[55] Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (supra) at [23].
Regardless of these considerations, the fundamental task, for the court, is to determine, from all the factual circumstances arising, the gravity or seriousness of the offending, which it is called upon to penalise.
I acknowledge the centrality of general deterrence in this matter, given the vulnerability of employees in the retail fuel industry and the prevalence of offending in this industry. On the other hand, in my view, there are mitigating factors on which the respondents can rely, particularly the fact of rectification, contrition and the fact that the number of employees involved was small.
In my view, the total sums proposed by the FWO appear to be unduly harsh; whilst those of the respondents unduly lenient. The approach I propose to take is to adopt as the starting point 15% of the maximum penalty; which I will discount by 30% for cooperation. On my calculations this leads to a penalty of $48,510.00 for Sai and one of $4,195.80 for Mr Monga.
Given the nature of the offending and the financial circumstances of each of the respondents, particularly the fact that Sai no-longer holds its United Petroleum franchise and Mr Monga is an unemployed person, I will reduce the total amounts of these penalties to $35,000.00 for Sai and to $3,500.00 for Mr Monga. In my view, these remain very significant penalties in dollar terms and will provide a significant level of general deterrence. I will make the other declarations sought by the FWO.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding one hundred and seventy-two (172) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Brown. Associate:
Dated: 29 August 2025
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