Fair Work Ombudsman v Sai Enterprises Pty Ltd

Link copied
Case Copied 55 min read

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…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Fair Work Ombudsman v Sai Enterprises Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2025] FedCFamC2G 1372
Decision Date

CaseChat Overview and Summary

The matter before the court involves a dispute between the Fair Work Ombudsman and Sai Enterprises Pty Ltd, a fuel and retail outlet in Adelaide. The dispute pertains to the failure of Sai Enterprises to pay certain entitlements to its employees, leading to proceedings for the imposition of penalties. The court was tasked with determining the appropriate financial penalties for the admitted breaches of the Fair Work Act 2009 (Cth). The legal issues included the calculation of penalties, taking into account factors such as the nature and extent of the breaches, the culpability of the respondents, and the need for general deterrence. The court considered the submissions of both parties, the totality principle, and the factors that should be taken into account in determining the penalties.

The court deliberated on the appropriate penalties, balancing the need for deterrence with the financial circumstances and contrition shown by the respondents. It noted the submissions from both the Fair Work Ombudsman and the respondents regarding the calculation of penalties. The court acknowledged the importance of considering the totality of the penalties imposed on each respondent and the need for an outcome that reflects both general deterrence and the specific circumstances of the case. The court also took into account the cooperation and corrective actions taken by the respondents, as well as their financial situation.

In its judgment, the court determined that the penalties proposed by the Fair Work Ombudsman were excessive and did not appropriately balance the need for deterrence with the circumstances of the respondents. Instead, the court opted for a more balanced approach, reducing the penalties to reflect the totality principle and the specific circumstances of the respondents. The court imposed a penalty of $62,000.00 on Sai Enterprises and $5,700.00 on Mr Monga, reflecting a discount for admissions and taking into account the totality of the penalties.

The final orders of the court reflect the penalties imposed on the respondents, taking into account the specific circumstances and the need for an outcome that is both fair and effective in terms of deterrence. The court's decision underscores the importance of a balanced approach in penalty calculations, considering both the need for deterrence and the specific circumstances of the respondents.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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.

Evidence

Evidence Before The Court

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.

Decision

Reasons for decision

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].

Ratio Decidendi

Legal Principle Established

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].