Fair Work Ombudsman v Singh
[2023] FedCFamC2G 684
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Singh [2023] FedCFamC2G 684
File number: MLG 4576 of 2019 Judgment of: HER HONOUR JUDGE C.E. KIRTON KC Date of judgment: 3 August 2023 Catchwords: INDUSTRIAL LAW – Fair Work Ombudsman – pecuniary penalties – contraventions of s 45 of the Fair Work Act 2009 (Cth) – declarations made by consent in respect of the Respondents – appropriate penalties – principles of penalties applied – relevant factors considered – penalties ordered Legislation: Fair Work Act 2009 (Cth) ss 45, 539(2), 546, 550 and 557
Fair Work Regulations 2009 (Cth)
Federal Circuit Court Rules 2001 (Cth)
Cleaning Services Award 2010 (Cth) cls 12.5, 16.1, 20.1, 27.1(a), 27.2(a) and (b), 27.3, 28.2, 28.3, 28.4, and cl D.1, sch D
Cases cited: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113
Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482
Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39
Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128
Fair Work Ombudsman v A to Z Catering Solution Pty Ltd (No 3) [2018] FCCA 3574
Fair Work Ombudsman v Commercial and Residential Cleaning Group Pty Ltd [2017] FCCA 2838
Fair Work Ombudsman v First Group of Companies Pty Ltd [2018] FCCA 1228
Fair Work Ombudsman v NHS North Pty Ltd trading as Shanghai Charlestown [2017] FCA 1301
Fair Work Ombudsman v Priority Matters Pty Ltd (No 5) [2020] FCCA 901
Kelly v Fitzpatrick [2007] FCA 1080
Markarian v The Queen (2005) 228 CLR 357
Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70
Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62
Trade Practices Commission v CSR Ltd [1990] FCA 762
Wong v The Queen [2001] HCA 64; (2001) 207 CLR 584
Division: Division 2 General Federal Law Number of paragraphs: 111 Date of last submissions: 27 July 2021 Date of hearing: 27 July 2021 Place: Melbourne (by videoconference) Counsel for the Applicant: Ms Dowsett Solicitor for the Applicant: Australian Government Solicitor Solicitor for the First Respondent: Mendis & Gibson Lawyers Counsel for the Second Respondent: Ms Minucci Solicitor for the Second Respondent: Colin Biggers & Paisley ORDERS
MLG 4576 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: HARJOT SINGH
First Respondent
QUAYCLEAN AUSTRALIA PTY LTD (ACN 102 238 933)
Second Respondent
order made by:
HER HONOUR JUDGE C.E. KIRTON KC
DATE OF ORDER:
3 August 2023
THE COURT DECLARES BY CONSENT THAT:
1.Mr Harjot Singh (First Respondent) was, pursuant to ss 550(1) and 550(2)(c) of the Fair Work Act 2009 (Cth) (FW Act), involved in the contraventions by Lionheart Workforce Pty Ltd (in liq) (ACN 135 334 360) (Lionheart) of the following:
(a)Section 45 of the FW Act, by failing to pay the minimum hourly rate pursuant to cl 16.1 of the Cleaning Services Award 2010 (Cleaning Award);
(b)Section 45 of the FW Act, by failing to pay the casual loading pursuant to cl 12.5(a) of the Cleaning Award;
(c)Section 45 of the FW Act, by failing to pay the night shift penalty pursuant to cl 27.1(a) of the Cleaning Award;
(d)Section 45 of the FW Act, by failing to pay the Saturday penalty pursuant to cl 27.2(a) of the Cleaning Award;
(e)Section 45 of the FW Act, by failing to pay the Sunday penalty pursuant to cl 27.2(b) of the Cleaning Award;
(f)Section 45 of the FW Act, by failing to pay the public holiday penalty pursuant to cl 27.3 of the Cleaning Award;
(g)Section 45 of the FW Act, by failing to pay overtime rates pursuant to cl 28.2 of the Cleaning Award;
(h)Section 45 of the FW Act, by failing to pay Sunday overtime pursuant to cl 28.3 of the Cleaning Award;
(i)Section 45 of the FW Act, by failing to pay public holiday overtime pursuant to cl 28.4 of the Cleaning Award; and
(j)Section 45 of the FW Act, by failing to pay its employees either weekly or fortnightly pursuant to cl 20.1 of the Cleaning Award.
2.Quayclean Australia Pty Ltd (ACN 102 238 933) (Second Respondent) was, pursuant to ss 550(1) and 550(2)(c) of the FW Act, involved in Lionheart’s contraventions of the following:
(a)Section 45 of the FW Act, by failing to pay the casual loading pursuant to cl 12.5(a) of the Cleaning Award;
(b)Section 45 of the FW Act, by failing to pay the night shift penalty pursuant to cl 27.1(a) of the Cleaning Award;
(c)Section 45 of the FW Act, by failing to pay the Saturday penalty pursuant to cl 27.2(a) of the Cleaning Award;
(d)Section 45 of the FW Act, by failing to pay the Sunday penalty pursuant to cl 27.2(b) of the Cleaning Award; and
(e)Section 45 of the FW Act, by failing to pay the Public holiday penalty pursuant to cl 27.3 of the Cleaning Award.
THE COURT ORDERS THAT:
3.The First Respondent pay a total penalty of $28,512 pursuant to s 546(1) of the FW Act for his involvement in the contraventions set out at Order 1 above.
4.The Second Respondent pay a total penalty of $102,600 pursuant to s 546(1) of the FW Act for its involvement in the contraventions set out at Order 2 above.
5.The First Respondent and Second Respondent, pursuant to s 546(3) of the FW Act, pay their respective penalty amounts to the Commonwealth within 90 days of the date of these Orders.
6.The Applicant has liberty to apply on seven (7) days’ notice if 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
HER HONOUR JUDGE C.E. KIRTON KC:
INTRODUCTION
This matter concerns the underpayment of employees at the Etihad Stadium now known as the Marvel Stadium (Stadium), located in the Docklands area of Melbourne. The underpayment was made by employers engaged in a sub-contractual arrangement for the provision of cleaning services.
The proceeding commenced by way of an Originating Application filed on 23 December 2019 (Application) by the Fair Work Ombudsman (Applicant). In accordance with r 4.05(2)(b) of the Federal Circuit Court Rules 2001 (Cth) as applicable at the time, the Applicant filed a Statement of Claim on 23 December 2019 (Statement of Claim).
In the Statement of Claim, the Applicant alleged that Lionheart Workforce Pty Ltd (in liq) (ACN 135 334 360) (Lionheart) provided cleaning services at the Stadium pursuant to a contract with Quayclean Australia Pty Ltd (ACN 102 238 933) (Second Respondent).[1] The Statement of Claim also alleged that Lionheart contravened s 45 of the Fair Work Act 2009 (Cth) (FW Act) and the Cleaning Services Award 2010 (Cleaning Award). It was further alleged that both Mr Harjot Singh (First Respondent) and the Second Respondent were involved in Lionheart’s contraventions of the FW Act and the Cleaning Award.[2]
[1] Statement of Claim, filed by the Applicant 23 December 2019 (Statement of Claim), [4].
[2] Statement of Claim, [62] and [83].
The Applicant sought declarations from the Court against the First Respondent and Second Respondent (together, the Respondents). The Applicant also sought orders that pecuniary penalties be imposed on the Respondents pursuant to s 546(1) of the FW Act.
BACKGROUND
The First Respondent was a director and secretary of Lionheart.[3] Lionheart was, during the period from 1 February 2017 to 30 June 2017 (Relevant Period), a company carrying on a business providing cleaning services at the Stadium to the Second Respondent pursuant to a contract with the Second Respondent.[4] In order to provide the cleaning services to the Second Respondent during the Relevant Period, Lionheart employed 11 people (Employees).[5]
[3] Statement of Claim, [2].
[4] Statement of Claim, [3(d)] and [4]; Statement of Agreed Facts, filed 17 May 2021 (Statement of Agreed Facts), [4(d)]-[5].
[5] Statement of Claim, [5] and [11]; Statement of Agreed Facts, [6] and [13].
The Court notes the First Respondent’s submission that Lionheart was born out of a suggestion by the Second Respondent, and was ‘heavily guided by’ and operated ‘under the strict instruction of [the Second Respondent]’.[6]
[6] Submissions on Penalty, filed by the First Respondent, 5 July 2021 (First Respondent’s Penalty Submissions), [16] and [25].
During the Relevant Period, Melbourne Stadiums Limited (ACN 098 476 594) held a contract with the legal partnership of The Trustee for Loui Petrevski Business Trust, the Trustee for the Sash Petrevski Business Trust, and the Trustee for the Piwkowski Family Trust, trading as the Second Respondent, for cleaning services at the Stadium.[7] The Second Respondent provided these cleaning services through its own employees and through the use of subcontractors, such as Lionheart.[8]
[7] Statement of Claim, [7]; Statement of Agreed Facts, [8].
[8] Statement of Claim, [8]-[10]; Statement of Agreed Facts, [9]-[10].
During the Relevant Period, the Employees engaged in cleaning duties including rubbish collection, sweeping and other general cleaning duties, at the Stadium.[9]
[9] Statement of Claim, [12]; Statement of Agreed Facts, [14].
During the Relevant Period, each of the Employees:
(a)Were employed as ‘Cleaning Services Employee Level One’ within the meaning of cl D.1 of Schedule D to the Cleaning Award;
(b)Were employed by Lionheart as casual employees within the meaning of cl 12.5 of the Cleaning Award;
(c)Worked intermittent and irregular hours;
(d)Were employed to work uncertain hours; and
(e)Did not accrue or receive any paid leave entitlements.[10]
[10] Statement of Claim, [15]-[17]; Statement of Agreed Facts, [17]-[19].
During the Relevant Period, the Employees were paid as follows, as compared to their legal entitlements:
Description Amount received Entitlement Cleaning Award Total underpaid Minimum Hourly Rate Between nil and $22.82 per hour $18.91 per hour cl 16.1 $10,618.28 Casual Loading $960.85 paid to 1 employee only $4.73 per hour
25% of the ordinary hourly ratecl 12.5(a) $16,980.15 Night Shift Penalty Nil paid $2.83 per hour
15% of the ordinary hourly ratecl 27.1(a) $1,939.63 Saturday Penalty Between nil and $1,441.28 $28.36 per hour
Time and one half of the ordinary hourly rate for all hours between midnight Friday and midnight Saturdaycl 27.2(a) $13,701.26 Sunday Penalty Between nil and $1,330.98 $37.82 per hour
Double the ordinary hourly rate for all hours worked between midnight Saturday and midnight Sundaycl 27.2(b) $18,731.63 Public Holiday Penalty Between nil and $379.89 $47.27 per hour
Double time and a half of the ordinary hourly rate for all hours worked on public holidayscl 27.3 $6,336.38 Overtime Rates Between nil and $1,254.43 $28.36 per hour for the first 2 hours, and $37.82 per hour thereafter cl 28.2 $5,045.36 Sunday Overtime Between nil and $132.56 $37.82 per hour cl 27.3 $934.97 Public Holiday Overtime Between $18.76 and $168.30 $47.27 per hour cl 28.4 $850.60 Frequency of payments Not paid consistently on at least a fortnightly basis Pay wages either weekly or fortnightly cl 20.1 N/A ISSUES BEFORE THE COURT
The Respondents have admitted their involvement in contraventions of the FW Act and Cleaning Award. By virtue of these contraventions, the Court has the power to make orders for the payment of penalties pursuant to s 546(1) of the FW Act.
At the time of the hearing before the Court in relation to penalties, the First Respondent had paid all outstanding underpayments that were owing to employees of Lionheart.
The issues that the Court must therefore determine are:
(a)The penalty that is appropriate in the circumstances of this case with respect to each of the First Respondent and the Second Respondent; and
(b)The timeframe within which the Respondents would be required to pay such a penalty to the Commonwealth of Australia.
CONTRAVENTIONS
The First Respondent, as director and secretary of Lionheart during the Relevant Period, admitted that he was, pursuant to ss 550(1) and 550(2)(c) of the FW Act, involved in contraventions of the FW Act by Lionheart. The First Respondent consented to the making of orders and declarations in respect of the admitted contraventions.
The contraventions admitted by the First Respondent are as follows:
(a)Section 45 of the FW Act, by failing to pay minimum hourly rates prescribed by cl 16.1 of the Cleaning Award;
(b)Section 45 of the FW Act, by failing to pay the casual loading as prescribed by cl 12.5(a) of the Cleaning Award;
(c)Section 45 of the FW Act, by failing to pay night shift penalty as prescribed by cl 27.1(a) of the Cleaning Award;
(d)Section 45 of the FW Act, by failing to pay Saturday penalty as prescribed by cl 27.2(a) of the Cleaning Award;
(e)Section 45 of the FW Act, by failing to pay Sunday penalty as prescribed by cl 27.2(b) of the Cleaning Award;
(f)Section 45 of the FW Act, by failing to pay public holiday penalty as prescribed by cl 27.3 of the Cleaning Award;
(g)Section 45 of the FW Act, by failing to pay overtime rates as prescribed by cl 28.2 of the Cleaning Award;
(h)Section 45 of the FW Act, by failing to pay Sunday overtime as prescribed by cl 28.3 of the Cleaning Award;
(i)Section 45 of the FW Act, by failing to pay public holiday overtime as prescribed by cl 28.4 of the Cleaning Award; and
(j)Section 45 of the FW Act, by failing to pay employees either weekly or fortnightly as prescribed by cl 20 of the Cleaning Award.
(Collectively, the First Respondent’s Contraventions).
As a result of the First Respondent’s Contraventions, 11 employees of Lionheart were underpaid a total amount of $75,138.26. These underpayments were fully rectified by the time the Application was heard by the Court.[11]
[11] Statement of Claim, [56]; Submissions on Penalty, filed by the Applicant 21 June 2021 (Applicant’s Penalty Submissions), [4].
The Second Respondent has also admitted to being involved, within the meaning of ss 550(1) and 550(2)(c) of the FW Act, in contraventions of the FW Act by Lionheart. The contraventions admitted by the Second Respondent include those listed at [15](b) to (f) above (Second Respondent’s Contraventions).
As a result of the Second Respondent’s Contraventions, 11 employees of Lionheart were underpaid a total amount of $57,689.05.[12]
[12] Applicant’s Penalty Submissions, [6].
HEARING AND DOCUMENTS RELIED UPON
This matter was heard on 27 July 2021, together with another associated matter, and proceeded by way of Microsoft Teams, as a result of the health protocols adopted by the Federal Circuit Court of Australia (as the Court then was) at the time due to the ongoing COVID-19 pandemic (Penalty Hearing).
At the Penalty Hearing, the Applicant relied on the following documents:
(a)Statement of Claim;
(b)Reply, filed 20 March 2020;
(c)Statement of Agreed Facts, filed 21 September 2020;
(d)Statement of Agreed Facts, filed 17 May 2021;
(e)Affidavit of Anna Kathleen Arnold, affirmed and filed 24 May 2021, save for paragraphs 16 to 18 and the annexures referred to therein;
(f)Affidavit of Vera Jonceski, affirmed and filed 21 June 2021;
(g)Applicant’s Submissions on Penalty, filed 21 June 2021 (Applicant’s Penalty Submissions); and
(h)Applicant’s Submissions in Reply, filed 16 July 2021.
At the Penalty Hearing, the First Respondent relied on the following documents:
(a)Affidavit of the First Respondent, affirmed 7 February 2020 and filed 10 February 2020 (First Singh Affidavit);
(b)Submissions, dated 7 February 2020 and filed 10 February 2020;
(c)Affidavit of the First Respondent, sworn and filed 11 June 2021 (Third Singh Affidavit); and
(d)Submissions for Penalty Hearing, filed 5 July 2021.
At the Penalty Hearing, the Second Respondent relied on the following documents:
(a)Statement of Agreed Facts, filed 21 September 2020;
(b)Statement of Agreed Facts, filed 17 May 2021;
(c)Affidavit of Mark Peter Piwkowski, affirmed and filed 7 June 2021 (Piwkowski Affidavit); and
(d)Outline of Penalty Submissions of Second Respondent, filed 5 July 2021.
The Court also had before it: a Court Book filed by the Applicant numbering 766 paginated pages, which contains each of the documents mentioned at [20] to [22] above; and a Joint List of Authorities, filed 23 July 2021. The Court has also considered the transcript of the Penalty Hearing, where Counsel for the Applicant, the Solicitor for the First Respondent and Counsel for the Second Respondent provided oral submissions.
RELEVANT LEGAL PRINCIPLES
During the Relevant Period, Lionheart was required to comply with the FW Act, the Fair Work Regulations 2009 (Cth) and the Cleaning Award. By virtue of the Respondents’ contraventions of s 45 of the FW Act, the Court may impose penalties pursuant to s 546(1) of the FW Act.
As stated in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482 at [55], and re-emphasised by the High Court in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (Pattinson) at [9], the primary purpose of penalties for contraventions of the FW Act is the protection of the public interest in compliance with the FW Act by deterrence.
The approach of the Court in determining the quantum of penalties is well established. The Court has broad discretion to assess the appropriate penalty, ultimately adopting an approach of an ‘instinctive synthesis’ as discussed by the High Court in Wong v The Queen [2001] HCA 64; (2001) 207 CLR 584 at [75], cited with approval by the Full Court of the Federal Court in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [27]-[28], [55] and [78].
In Pattinson at [18] the High Court referred to several factors identified by French J in Trade Practices Commission v CSR Ltd [1990] FCA 762 at [42], which informed the assessment of a penalty of an appropriate deterrent value. These factors were as follows:
1.The nature and extent of the contravening conduct.
2.The amount of loss or damage caused.
3.The circumstances in which the conduct took place.
4.The size of the contravening company.
5.The degree of power it has, as evidenced by its market share and ease of entry into the market.
6.The deliberateness of the contravention and the period over which it extended.
7.Whether the contravention arose out of the conduct of senior management or at a lower level.
8.Whether the company has a corporate culture conducive to compliance with the [FW Act], as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.
9.Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the [FW Act] in relation to the contravention.[13]
[13] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (Pattinson), [18].
There are some similarity between these factors and those in Fair Work Ombudsman v NHS North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 at [36], where Bromwich J summarised the approach to determining an appropriate penalty as follows:
36 […]
(1)Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.
(2)Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.
(3)Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregates contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.
(4)Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
(5)Consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO […] and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary […]
The Court in Pattinson at [19] cautioned against the use of the list of possible relevant considerations as a ‘rigid catalogue of matters for attention’, citing Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [91]. The Court confirmed that the Court’s task remains to determine what an ‘appropriate’ penalty is in the circumstances of each case.[14]
[14] Pattinson, [19].
Maximum Penalties
Section 539(2) of the FW Act sets out a table of the maximum penalties that may be imposed for contraventions of the sort admitted to in this matter. Section 546(2) of the FW Act prescribes that a pecuniary penalty imposed by the Court must not be more than the maximum number of penalty units referred to in the table in s 539(2) of the FW Act.
In considering the maximum penalties, the Court undertakes a comparative exercise of determining where the relevant contraventions fall along the spectrum of contravening conduct: Fair Work Ombudsman v Zucco Farming Pty Ltd [2019] FCCA 1277 at [39], citing Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 at [88]. As stated by the High Court in Markarian v The Queen (2005) 228 CLR 357 at [31], maximum penalties, ‘taken and balanced with all of the other relevant factors’, will provide a ‘yardstick’ against which to determine an appropriate penalty in each particular case. It is apparent, however that the yardstick approach to the maximum penalty is only one of a number of relevant factors for its consideration.
The maximum penalties (before any discount is applied) that the Court could impose in this matter are as set out in Table 1 and Table 2 of Annexure A to the Applicant’s Penalty Submissions, as follows:
(a)First Respondent – $108,000; and
(b)Second Respondent – $270,000.
The amounts at [32] above are further broken down in Table 1 and Table 2 of Annexure A to the Applicant’s Penalty Submissions for each contravention as follows:
Contravention Description of contravention Maximum penalty s 45 FW Act Failing to pay minimum hourly rates First Respondent: $10,800
Second Respondent: $54,000s 45 FW Act Failing to pay casual loading First Respondent: $10,800
Second Respondent: $54,000s 45 FW Act Failing to pay Night Shift Penalty First Respondent: $10,800
Second Respondent: $54,000s 45 FW Act Failing to pay Saturday Penalty First Respondent: $10,800
Second Respondent: $54,000s 45 FW Act Failing to pay Sunday Penalty First Respondent: $10,800
Second Respondent: $54,000s 45 FW Act Failing to pay Public Holiday Penalty First Respondent: $10,800
Second Respondent: $54,000s 45 FW Act Failing to pay Overtime Rates First Respondent: $10,800
Second Respondent: $54,000s 45 FW Act Failing to pay Sunday Overtime First Respondent: $10,800
Second Respondent: $54,000s 45 FW Act Failing to pay Public Holiday Overtime First Respondent: $10,800
Second Respondent: $54,000s 45 FW Act Failing to pay employees either weekly or fortnightly First Respondent: $10,800
Second Respondent: $54,000
The Second Respondent submitted that the maximum penalties which would be imposed on the Respondents are reserved only for the worst category of contravention, and that this is not such a case.[15] Such reasoning was rejected by the majority of the High Court in Pattinson, commenting that reserving the statutory maximum for imagined ‘worst cases’ is apt to divert the court from determining an appropriate penalty which it considers will adequately deter future contraventions.[16] Further, their Honours in Pattinson, citing Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25 at [156], noted that what it required is that there be ‘some reasonable relationship between the theoretical maximum and the final penalty imposed’.[17]
[15] Outline of Penalty Submissions, filed by the Second Respondent, 5 July 2021 (Second Respondent’s Penalty Submissions), [9].
[16] Pattinson, [10] and [71].
[17] Pattinson, [10].
Grouping of Contraventions
Section 557(1) of the FW Act allows for the grouping of multiple contraventions into a single contravention where they arise from the same ‘course of conduct’, such that there is an overlap of the factual and legal elements of the contraventions: Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39 at [39]. However, where the contraventions concern differing obligations under the FW Act, the contraventions cannot be grouped: Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62 at [17]-[19].
The Court notes the Applicant and Second Respondent’s agreement as to the approach to grouping the Second Respondent’s Contraventions.[18] Upon this agreed approach, the Second Respondent’s Contraventions are to be treated as five (5) distinct contraventions.
[18] Transcript P7:L14.
The Applicant submitted that the First Respondent’s Contraventions should be grouped such that each contravention of an award provision is grouped separately, so that each award provision, irrespective of how many employees or how many times it was contravened during the Relevant Period, is just one (1) contravention.[19] This would have the result that the First Respondent’s Contraventions are 10 in total.
[19] Transcript P7:L6-9.
The First Respondent, however, submitted that the First Respondent’s Contraventions should be grouped as one (1) contravention, ‘being underpayment of monies to employees’.[20] In support of this submission, the First Respondent refers to Judge Manousaridis’ consideration of s 556 of the FW Act in Fair Work Ombudsman v A to Z Catering Solution Pty Ltd (No 3) [2018] FCCA 3574 (A to Z Catering), where His Honour said, at [26]:
[…] Given that s 556, like 557(1) of the FW Act, appears to have been enacted to further the policy that the same conduct should not be penalised more than once, and that s 557(1) of the FW Act applies to contraventions of s 45 of the FW Act, there is every reason to expect that s 556 is also intended to apply to the contravention of all civil remedy provisions, including s 45 of the FW Act.
[20] First Respondent’s Penalty Submissions, [13].
At the Penalty Hearing, the Applicant referred to the First Respondent’s submissions with respect to grouping and noted that in A to Z Catering Judge Manousaridis ultimately adopted the proposal of the Applicant in this matter, such that every contravention of an award provision is a separate contravention: Fair Work Ombudsman v A to Z Catering Solution Pty Ltd (No 3) [2018] FCCA 3574 at [43], [49]-[50].
I am satisfied that the grouping of the contraventions as proposed by the Applicant is appropriate in the circumstances and consider the First Respondent’s submissions in this respect to represent an oversimplification of the conduct comprising the admitted contraventions.
RELEVANT FACTORS
As I have indicated in the discussion above, there is no exhaustive list of factors to consider in determining the appropriate penalty. I will consider therefore the submissions of each party and the factors to which they have addressed.
Nature, extent and circumstances of the contravening conduct
First Respondent
The First Respondent was the director of Lionheart, a company subcontracted by the Second Respondent to undertake cleaning work. Lionheart employed 11 employees, all of whom were paid by Lionheart from amounts received by the Second Respondent based upon the hours recorded in the Employees’ timesheets.
The Second Respondent has agreed that during the Relevant Period, it paid $20 per hour worked by each employee to Lionheart, and later increased to the amount of $23 per hour.[21]
[21] Statement of Agreed Facts, [45(f)].
As can be seen in the second column of the table produced at [10] above, Lionheart paid its employees a minimum hourly rate varying between $0 and $22.82 per hour and paid the casual loading to one (1) employee only in the sum of $960.85.
In the Applicant’s Penalty Submissions, the Applicant submitted as follows:
39. […] the underpayments occurred because the amounts paid by Lionheart […] to their employees were insufficient to meet their minimum entitlements during the five-month assessment period.
40. The amounts underpaid by Lionheart […] during the Assessment Period were not insignificant and resulted in a financial loss (in some instances, significant financial loss) being suffered by their respective employees, low-income earners reliant upon the minimum entitlements in the Cleaning Award.[22]
(Footnotes omitted)
[22] Applicant’s Penalty Submissions, [39] and [40].
The First Respondent submitted that during the Relevant Period, he was heavily guided by senior management of the Second Respondent, who would advise him ‘how many workers would be required for each job, the time limit to complete each job, and the amount to be paid to employees’.[23] Further, the First Respondent claims to have raised issues with the Second Respondent on multiple occasions in respect of insufficient funds to pay employee entitlements, but was dismissed each time.[24]
[23] First Respondent’s Penalty Submissions, [16].
[24] First Respondent’s Penalty Submissions, [17].
The First Respondent does not dispute that the Employees suffered loss by virtue of the underpayments.[25]
[25] First Respondent’s Penalty Submissions, [19].
The total loss incurred by the Employees was significant in the context of the casual and shift nature of their employment, including night shift, and the relatively small period for which the underpayment was assessed.
Second Respondent
The Second Respondent is a commercial cleaning business that obtained a contract to provide cleaning services at the Stadium in December 2015.[26]
[26] Second Respondent’s Penalty Submissions, [10].
The Second Respondent subcontracted Lionheart to perform cleaning duties at the Stadium during the Relevant Period. As stated above, the Second Respondent initially paid Lionheart $20 per hour worked by each employee, later increasing this to $23 per hour. The Second Respondent agreed that it knew Lionheart paid their employees using the funds it provided.[27]
[27] Statement of Agreed Facts, [45(g)].
At the beginning of the Relevant Period, the Second Respondent employed 159 people, increasing to 169 people at the end of the Relevant Period.[28] The Second Respondent submitted, in response to the Applicant, that it had ‘no formal arrangements’ with the Employees, but rather only ‘some familiarity’ with many of them by virtue of seeing them at the Stadium from time to time.[29]
[28] Second Respondent’s Penalty Submissions, [12].
[29] Second Respondent’s Penalty Submissions, [13].
The total loss incurred by the Employees was significant in the circumstances of their casual employment and the relatively short assessment period. The apparent lack of formal arrangement between the Second Respondent and the Employees must be countered by the Employees’ payment being derived directly from the Second Respondent, albeit through Lionheart.
Deliberateness
In Fair Work Ombudsman v Priority Matters Pty Ltd (No 5) [2020] FCCA 901, Judge Driver commented on deliberateness as follows, at [131]:
131. […] There is a spectrum of possibilities available to the Court when considering whether the conduct was deliberate, and they should not be limited to characterisation as merely knowing, reckless or innocent. The absence of a positive intention to contravene, or any other state of mind such as reckless or wilful blindness, is not mitigatory, but simply means that the neutral state of mind required for liability has not been disturbed for the purposes of penalty.
(Footnotes omitted)
It is plain, therefore, that an active intention to contravene the FW Act is not required for contravening conduct to be considered ‘deliberate’.
First Respondent
The First Respondent submitted that his contravening conduct was not deliberate by virtue of the fact that he acted under the Second Respondent’s ‘strict direction’ and did not have the financial means to pay the Employees beyond the funds allocated by the Second Respondent.[30]
[30] First Respondent’s Penalty Submissions, [28].
The First Respondent further submitted that the amount to be paid to the Employees was dictated wholly by the Second Respondent and that his attempts to bring the Second Respondent’s attention to the insufficient funds was ‘repeatedly dismissed’.[31]
[31] First Respondent’s Penalty Submissions, [25]-[27].
The First Respondent deposed in the First Singh Affidavit that:
14. The contraventions occurred beyond my control. I paid my workers as advised by [the Second Respondent] and was limited by the amount I was paid by [the Second Respondent].
[…]
18. […] I did not act deliberately and did not have any intention to underpay my workers and deprive them of entitlements.[32]
[32] Affidavit of Harjot Singh, affirmed 7 February 2020 and filed 10 February 2020 (First Singh Affidavit), [14] and [18].
The First Respondent deposed in the Third Singh Affidavit that:
17. […] I have never had any bad intentions. I was directed by [the Second Respondent] as to the conduct and operation of Lionheart, and so the allocation of funds to the employees was out of my control.[33]
[33] Affidavit of Harjot Singh, sworn and filed 11 June 2021 (Third Singh Affidavit), [17].
In response, the Applicant submitted that although the First Respondent did not set out to contravene the FW Act, it follows from the admissions made by the First Respondent in respect of the contraventions, that the Court can be satisfied that the First Respondent knew what he was doing.[34]
[34] Applicant’s Penalty Submissions, [42].
Further, the Applicant contended that the First Respondent, as the controlling mind of Lionheart, made conscious choices as to the amounts to be paid to the Employees through his choice to accept the Second Respondent’s subcontract terms. The First Respondent’s contraventions necessarily resulted from those choices and as such were an ‘inevitable consequence’ of them.[35]
[35] Applicant’s Penalty Submissions, [43]; citing Fair Work Ombudsman v Priority Matters Pty Ltd (No 5) [2020] FCCA 901, at [131]-[132] and [205].
I agree with the submissions of the Applicant and consider that the First Respondent’s Contraventions were deliberate.
Second Respondent
The Second Respondent submitted that it did not intend for the Employees to be receiving less than their entitlements under the Cleaning Award, and that there is no evidence that it had such an intention.[36] The Second Respondent urged the Court to be cautious about ‘making wholesale findings of deliberate wrongdoing’.[37]
[36] Second Respondent’s Penalty Submissions, [16].
[37] Second Respondent’s Penalty Submissions, [15].
The Applicant submitted that the Second Respondent’s contravening conduct was deliberate, primarily on the basis of its knowledge regarding the Employees pay and entitlements under the Cleaning Award.[38] Despite the purported lack of intention to contravene the FW Act, the Applicant pointed to the fact that the Second Respondent made a conscious choice in setting the rates to be paid to Lionheart.[39]
[38] Applicant’s Penalty Submissions, [44].
[39] Applicant’s Penalty Submissions, [45].
The Court notes that the admissions made by the Second Respondent in this matter demonstrate that it held knowledge that the funds paid to Lionheart were insufficient to comply with the Employees entitlements under the Cleaning Award. This is a significant persuasive factor that the Second Respondent’s contravening conduct was deliberate. Further, the Second Respondent’s status as a cleaning company necessarily indicates its awareness of or familiarity with the legal entitlements of its workers, and the application of the Cleaning Award to its employees.
I am therefore satisfied that the Second Respondent deliberately engaged in the contravening conduct.
Cooperation, Contrition and Corrective Action
The threshold requirement for a discount on penalty for cooperation is set out by the Full Court of the Federal Court in Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70, at [76]:
76. […] the benefit of such a discount should be reserved for cases where it can be fairly said that an admission of liability: (a) has indicated an acceptance of wrongdoing and a suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate the course of justice.
First Respondent
Upon investigation by the Fair Work Commissioner commencing October 2017, the First Respondent learned that he had contravened the FW Act and was requested to pay all outstanding amounts to the Employees. He submits he cooperated with the investigation, providing all records and documentation, and paid the Employees ‘immediately’.[40]
[40] First Singh Affidavit, [11]-[12]; Third Singh Affidavit, [12].
Upon commencement of the proceedings in this Court, the First Respondent admitted to all contraventions and consented to the making of declarations against him and orders that he pay penalties. As such, there was no need for a liability hearing against the First Respondent, saving the Court time and resources.
The First Respondent has also expressed remorse for his conduct resulting in the contraventions on a number of occasions.[41]
[41] First Singh Affidavit, [18]; Third Singh Affidavit, [16] and [17].
In light of the First Respondent’s cooperation and contrition, in particular his rectification of the underpayments to the Employees within the timeframe requested, I consider that a penalty discount of 20% for the First Respondent is appropriate.
Second Respondent
The investigation into the Second Respondent began in September 2017 with a site visit to the Stadium. In the Piwkowski Affidavit, Mr Piwkowski, CEO of the Second Respondent during the Relevant Period, states that the site visit was conducted without prior warning and ‘surprised’ him and the staff.[42] He recalls a phone conversation with Fair Work Inspector Ms Jonceski, after which he advised a staff member on-site that the site visit should proceed whilst regular cleaning duties were being completed.[43]
[42] Affidavit of Mark Piwkowski, affirmed and filed 7 June 2021 (Piwkowski Affidavit), [27]-[28].
[43] Piwkowski Affidavit, [29]-[31].
Ms Jonceski disputed Mr Piwkowski’s recollection of the phone conversation and produced a file note of the site inspection, including the relevant conversation with Mr Piwkowski.[44] On 14 September 2017, Ms Jonceski sent an email to Mr Piwkowski regarding the site inspection.[45] A letter was attached to this email that was not produced to the Court, which contained an expression of concern that representatives of the Second Respondent obstructed the site inspection,[46] a claim denied by Mr Piwkowski in his subsequent emails to Ms Jonceski.[47]
[44] Affidavit of Vera Jonceski, affirmed and filed 21 June 2021, [9]-[13], Annexure “VJ-03”.
[45] Affidavit of Anna Arnold, affirmed and filed 24 May 2021 (Arnold Affidavit), [6].
[46] Arnold Affidavit, Annexure AA-2.
[47] Arnold Affidavit, Annexure AA-2.
Following this initial alleged obstruction, the Second Respondent submits that it cooperated with the investigation fully, going beyond its legal requirements.[48]
[48] Second Respondent’s Penalty Submissions, [18]; Piwkowski Affidavit, [34]-[35].
The Second Respondent, through its CEO, has apologised and expressed remorse for the impact that its contraventions had on the Employees, and set out a number of steps taken by it to ensure that no further contraventions occur in the future.[49] Further, Mr Piwkowski has communicated with employees regarding the underpayments and has acknowledged them publicly.[50] However, the Applicant submitted the public statements made by the Second Respondent in respect of underpayments did not acknowledge their role in the contraventions, instead referring to a ‘service partner’.[51]
[49] Piwkowski Affidavit, [36]-[74].
[50] Second Respondent’s Penalty Submissions, [23]-[24]; Piwkowski Affidavit, [75]-[78].
[51] Applicant’s Penalty Submissions, [52].
The Applicant contends that the Second Respondent admitted involvement in contraventions by Lionheart ‘only after the FWO was put to the expense of filing its evidence on liability (a cost ultimately born by the Australian public)’.[52] In response, the Second Respondent stated that admissions of liability were made after consideration of the evidence and appropriate advice was obtained, and that to penalise it for this would be to ‘discriminate against [the Second Respondent] for exercising its right to know the case against it’.[53]
[52] Applicant’s Penalty Submissions, [53].
[53] Second Respondent’s Penalty Submissions, [20].
While the Court notes that there was some expense imposed on the public by the belated admissions of liability by the Second Respondent, it should not be inferred that this constituted non-cooperative conduct, particularly where the Second Respondent does appear to have cooperated in ways helpful to this proceeding thereafter.
I consider that an appropriate penalty discount for the Second Respondent is 5% in the circumstances.
Size of the business and financial resources
The size and financial resources of a business, where based on evidence, may be relevant to the assessment of an appropriate penalty for contravention of the FW Act: Fair Work Ombudsman v Commercial and Residential Cleaning Group Pty Ltd [2017] FCCA 2838 at [61].
First Respondent
The First Respondent has provided the following evidence of his financial position:
(a)Lionheart went into liquidation in 2019 as a result of losing all cleaning contracts;[54]
(b)He has been a partner and director of Lumi Group Pty Ltd (Lumi Group) since September 2017;[55]
(c)He is the sole income earner in his family, which comprises himself, his wife and two (2) children;[56]
(d)Lumi Group’s income was significantly affected by COVID-19, and he made contributions to Lumi Group’s ongoing expenses from his family trust savings;[57]
(e)He received JobKeeper payments until the cessation of that program in March 2021 and is not eligible for Centrelink due to his citizenship status;[58] and
(f)He owns his family home and an investment property, both of which are subject to monthly mortgage repayments.[59]
[54] First Singh Affidavit, [10]; Third Singh Affidavit, [15], [18].
[55] First Singh Affidavit, [17]; Third Singh Affidavit, [19].
[56] First Singh Affidavit, [4], [19]; Third Singh Affidavit, [4], [26] and [28].
[57] Third Singh Affidavit, [20] and [23].
[58] Third Singh Affidavit, [21].
[59] Third Singh Affidavit, [24].
The Applicant noted that Lumi Group, at the time of the Penalty Hearing, was a going concern with a meaningful turnover,[60] as evidenced by the business’ total sales in the amount of $140,858 between January and March 2021.[61] The Applicant also submitted that, as at May 2021, the First Respondent held shares in several companies and was a director of three (3) companies, not including Lumi Group.[62] As no evidence was provided by the First Respondent about these shareholdings, directorships, or the income they generate, the Court considers that a full picture of the First Respondent’s financial circumstances has not been provided to the Court.
[60] Applicant’s Penalty Submissions, [59].
[61] Third Singh Affidavit, Annexure HS-1.
[62] Applicant’s Penalty Submissions, [60]; Arnold Affidavit, Annexure AA-32.
The Applicant submitted, and the Court agrees, that the ‘incomplete’ evidence of financial hardship provided by the First Respondent is insufficient to establish whether a particular penalty would be crushing or oppressive if imposed upon it.
Second Respondent
Mr Piwkowski provided the following evidence of the Second Respondent’s financial position:
(a)In 2007, it employed approximately 40 employees and had an annual turnover of $6m;[63]
(b)In the 2012 financial year, it had an annual turnover of $11m and a profit margin of $670,000; [64]
(c)In the 2016 financial year, it had an annual turnover of $25.3m and a net profit of $1.2m;[65]
(d)As at February 2017, it employed 159 people, 126 of whom were cleaning staff;[66]
(e)By June 2017, it employed 169 people, 134 of whom were cleaning staff;[67]
(f)In the 2017 financial year, it had an annual turnover of approximately $30.8m and a profit of $1.4m;[68]
(g)In the 2018 financial year, it had an annual turnover of $39.6m and a profit of $1.4m;[69]
(h)In the 2020 financial year, it had an annual turnover of $49.8m and a profit of $3.5m;[70] and
(i)As at June 2021, it employed 2098 people, 2049 of whom were cleaning staff.[71]
[63] Piwkowski Affidavit, [8].
[64] Piwkowski Affidavit, [9].
[65] Piwkowski Affidavit, [10], Annexure MP-1.
[66] Piwkowski Affidavit, [11].
[67] Piwkowski Affidavit, [12].
[68] Piwkowski Affidavit, [13], Annexure MP-2.
[69] Piwkowski Affidavit, [15], Annexure MP-3.
[70] Piwkowski Affidavit, [16], Annexure MP-4.
[71] Piwkowski Affidavit, [17].
It is plain from the evidence in the previous paragraph that the Second Respondent has grown significantly as a company since its establishment. As such, I agree with the submission of the Applicant that there is no basis upon which to mitigate the penalty imposed on the Second Respondent on the basis of its size and financial position.[72]
Involvement of senior management in the breaches
[72] Applicant’s Penalty Submissions, [68].
First Respondent
The First Respondent was at all material times the sole director of Lionheart and the person principally in control of the overall direction, management and supervision of Lionheart and its employees. This is not disputed by the First Respondent.[73]
[73] First Respondent’s Penalty Submissions, [30].
The fact that the First Respondent has admitted involvement in the contraventions demonstrate that the contraventions were derived from the top of Lionheart.
Second Respondent
Mr Petrevski was at all material times the director and secretary of the Second Respondent, and the Second Respondent’s admissions to involvement in contraventions are based, in part, upon the knowledge and conduct of Mr Petrevski.[74]
[74] Statement of Agreed Facts, [43] and [63].
Similarly as to the First Respondent, Mr Petrevski’s involvement in the contraventions demonstrate that the contraventions were derived from the top of the Second Respondent.
Deterrence
In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, the Full Court of the Federal Court said, at [98]:
98. Whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty is primarily, if not wholly, protective in promoting the public interest in compliance […]. The principal object of a pecuniary penalty is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene; both specific and general deterrence are important. […] A pecuniary penalty for a contravention of the law must be fixed with a view to ensuring that the penalty is not to be regarded by the offender or others as an acceptable cost of doing business […] In relation to general deterrence, it is important to send a message that contraventions of the sort under consideration are serious and not acceptable […]
[Citations omitted]
General deterrence
In this case there is a need for general deterrence within the cleaning services industry (Cleaning Industry), particularly in respect of the contractual arrangements that gave rise to the Respondents’ contraventions. Although it is noted that the Second Respondent has moved away from this business model,[75] both the evidence in the Piwkowski Affidavit at [76] and the findings of Judge Jones in Fair Work Ombudsman v First Group of Companies Pty Ltd [2018] FCCA 1228 at [155], demonstrate the prevalence of subcontracting arrangements in the Cleaning Industry generally.
[75] Piwkowski Affidavit, [71].
The Court is therefore conscious of the need to ensure that other businesses in the Cleaning Industry are deterred from engaging in similar conduct as the Respondents.
Specific deterrence
Specific deterrence is directed at ensuring that a contravener is not prepared to embark upon the risk of engaging in the same contravening conduct again: Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128 at [50].
As Lionheart no longer exists, this may mean ensuring that no other companies operated by the First Respondent, such as Lumi Group, contravene the FW Act. In respect of the Second Respondent, specific deterrence relates to its future conduct and dealings with employees.
The First Respondent stated that he has been ‘consciously vigilant in record keeping and Fair Work pay awards and entitlements for all workers’ at Lumi Group, and also confirmed his employment of a Business Manager ‘to ensure the business complies with all Fair Work Australia standards’.[76] The First Respondent invited the Court to consider these steps taken as evidence of his understanding of the seriousness of the contraventions and his commitment not to repeat them.[77]
[76] First Singh Affidavit, [17].
[77] First Respondent’s Penalty Submissions, [49].
With respect to the First Respondent’s claims referred to in the previous paragraph, the Applicant submitted that no details about the apparent ‘vigilance’ of the First Respondent were provided, nor were any details about the First Respondent’s role in decisions regarding employees.[78]
[78] Applicant’s Penalty Submissions, [73].
The Applicant also submitted that the Lumi Group is a business that falls within the safety net of awards made under the FW Act and may employ staff that are covered by an award.[79] As such, there is a need for specific deterrence upon the First Respondent to ensure that there is no future non-compliance with respect to his engagement in other companies such as Lumi Group.
[79] Applicant’s Penalty Submissions, [76].
In respect of the Second Respondent, there is also a need for specific deterrence in circumstances where it continues to operate within the Cleaning Industry. Although this need for specific deterrence is accepted by the Second Respondent, they submitted that corrective actions undertaken ‘removed any need for further penalties’ beyond those to which they have agreed.[80]
[80] Second Respondent’s Penalty Submissions, [26]-[28].
The Court therefore concludes that there is a need to impose penalties that will aim to specifically deter the Respondents from engaging in the same contravening conduct in the future.
DETERMINING THE QUANTUM OF THE PENALTY
The Applicant submitted in the Applicant’s Penalty Submissions, Annexure A: Lionheart Proceeding, Table 1 and Table 2, that the appropriate penalty for each contravention for the Respondents should be as follows:
Contravention Description of contravention Proposed penalty s 45 FW Act Failing to pay minimum hourly rates First Respondent: $4,320
s 45 FW Act Failing to pay casual loading First Respondent: $4,320
Second Respondent: $21,600s 45 FW Act Failing to pay Night Shift Penalty First Respondent: $4,320
Second Respondent: $21,600s 45 FW Act Failing to pay Saturday Penalty First Respondent: $4,320
Second Respondent: $21,600s 45 FW Act Failing to pay Sunday Penalty First Respondent: $4,320
Second Respondent: $21,600s 45 FW Act Failing to pay Public Holiday Penalty First Respondent: $4,320
Second Respondent: $21,600s 45 FW Act Failing to pay Overtime Rates First Respondent: $4,320
s 45 FW Act Failing to pay Sunday Overtime First Respondent: $2,160
s 45 FW Act Failing to pay Public Holiday Overtime First Respondent: $2,160
s 45 FW Act Failing to pay employees either weekly or fortnightly First Respondent: $1,080
Total
First Respondent: $35,640
Second Respondent: $108,000Total proposed penalty after discount
First Respondent: $28,512 (20% discount)
Second Respondent: $102,600 (5% discount)
The Court considers that the penalties proposed by the Applicant for the contraventions as set out in the table in the preceding paragraph are appropriate. Therefore, the penalty to be imposed against the First Respondent amounts to $28,512 and against the Second Respondent amounts to $102,600.
Totality
After undertaking the assessment of a penalty for each contravention, the final step for the Court is to look at the aggregate penalty to determine whether it is appropriate and proportionate to the Respondents’ contravening conduct.
While the penalty imposed must not be crushing or oppressive, it must nevertheless bear relativity to the seriousness of the conduct engaged in, and not have the effect that the conduct is effectively exonerated: Kelly v Fitzpatrick [2007] FCA 1080 at [30]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [23], [71] and [102]; Fair Work Ombudsman v First Group of Companies Pty Ltd [2018] FCCA 1228 at [77].
Further, the High Court in Pattinson stated, at [46]:
…an “appropriate” penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case.
The Applicant submitted that their proposed penalties were appropriate and that no further discount for totality was appropriate or necessary.[81] The First Respondent submitted that the penalty imposed upon him ought not to be ‘overly oppressive or crushing’ due to his personal circumstances and the indirect effect this would have upon his family.[82] The Second Respondent submitted that the penalties agreed to between the Applicant and the Second Respondent should be accepted.[83]
[81] Applicant’s Penalty Submissions, [84].
[82] Transcript P16:L13-14, L42-47 and P17:L26-27.
[83] Second Respondent’s Penalty Submissions, [30]; Transcript P22:L37-39.
The Court accepts the submissions made by the Applicant, as agreed to by the Second Respondent, and considers that in all the circumstances the final penalties are proportionate to the seriousness of the Respondents’ contravening conduct. No further discount should be imposed other than that as allowed for the Respondents’ cooperation discussed earlier in these Reasons for Judgment.
The Court finds that a penalty of $28,512 is to be paid by the First Respondent to the Commonwealth of Australia. The Court also finds that a penalty of $102,600 is to be paid by the Second Respondent to the Commonwealth of Australia.
TIMEFRAME FOR PAYMENT
The Applicant sought orders that the penalties be paid by the Respondents within 90 days of the Court’s orders.[84] It does not appear that the Respondents have challenged this position, nor was it addressed at the Penalty Hearing.
[84] Applicant’s Penalty Submissions, p 24.
In these circumstances, I am satisfied that a period of 90 days from the date of the Court’s order is appropriate for the Respondents to pay the penalties imposed, noting that there has been substantial time between the conclusion of the Penalty Hearing for the Respondents to make appropriate financial arrangements for their payment.
Accordingly, an order will be made that the Respondents pay the penalties to the Commonwealth of Australia within 90 days of the Court’s orders.
CONCLUSION
The Court finds that a penalty of $28,512 is to be paid by the First Respondent to the Commonwealth of Australia for the First Respondent’s Contraventions within 90 days of the date of the Court’s Orders.
The Court also finds that a penalty of $102,600 is to be paid by the Second Respondent to the Commonwealth of Australia for the Second Respondent’s Contraventions within 90 days of the date of the Court’s Orders.
Declarations and Orders will be made accordingly.
I certify that the preceding one hundred and eleven (111) numbered paragraphs are a true copy of the Reasons for Judgment of Judge C. E. Kirton KC. Associate:
Dated: 3 August 2023
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