Fair Work Ombudsman v Xia Jing Qi Pty Ltd
[2019] FCCA 84
•18 January 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIR WORK OMBUDSMAN v XIA JING QI PTY LTD & ANOR | [2019] FCCA 84 |
| Catchwords: INDUSTRIAL LAW – Penalty – contraventions of the Fair Work Act 2009 (Cth) – failure to pay minimum hourly rate – failure to pay casual loading – failure to pay penalty rates – failure to keep records – failure to issue pay slips – agreed statement of facts – consideration of matters relevant to penalty – pecuniary penalties imposed. |
| Legislation: Evidence Act 1995 (Cth), s.191 Fair Work Act 2009 (Cth), ss.3, 23, 45, 535, 536, 546, 550, 557 |
| Cases cited: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 326 ALR 476 Cousins v Merringtons Pty Ltd (No.2) [2008] VSC 340 Fair Work Ombudsman v Dosanjh [2016] FCCA 923 Fair Work Ombudsman v Food Republic Pty Ltd [2017] FCCA 263 Fair Work Ombudsman v Hiyi Pty Ltd & Ors [2016] FCCA 1634 Fair Work Ombudsman v Koojedda Carpentry Pty Ltd as Trustee For The Gumley Trust & Ors (No.2) [2017] FCCA 2577 Fair Work Ombudsman v Lohr [2018] FCA 5 Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 Fair Work Ombudsman v Samurais Paradise Pty Ltd [2017] FCA 2013 Fair Work Ombudsman v Siner Enterprises Pty Ltd (No.2) [2018] FCCA 589 Fair Work Ombudsman v South Jin Pty Ltd (No.2) [2016] FCA 832 Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290 Hansen v Mt Martha Community Learning Centre Inc (No.2) [2015] FCA 1283 Kelly v Fitzpatrick [2007] FCA 1080 Mason v Harrington Corp Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 Mornington Inn Pty Ltd v Jordan (2008) 68 FCR 367 Pearce v the Queen (1998) 194 CLR 610 Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | XIA JING QI PTY LTD |
| Second Respondent: | JING QI XIA |
| File Number: | MLG 2686 of 2017 |
| Judgment of: | Judge Hartnett |
| Hearing date: | 5 October 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 18 January 2019 |
REPRESENTATION
| Counsel for the Applicant: | Ms Knowles |
| Solicitors for the Applicant: | Office of the Fair Work Ombudsman |
| Counsel for the First Respondent: | Mr D’Abaco |
| Solicitors for the First Respondent: | Accuro Legal |
| Counsel for the Second Respondent: | Mr D’Abaco |
| Solicitors for the Second Respondent: | Accuro Legal |
DECLARATIONS
The First Respondent contravened the following civil remedy provisions:-
(a)section 45 of the Fair Work Act 2009 (Cth) (‘the FW Act’) by failing to pay Shuyun Chen (‘the employee’) the minimum hourly rate for ordinary hours of work as required by cl.20.1 of the Restaurant Industry Award 2010 (Cth) (‘the Award’);
(b)section 45 of the FW Act by failing to pay the employee casual loading for Monday to Friday work as required by cl.13.1 of the Award;
(c)section 45 of the FW Act by failing to pay the employee the Saturday pay rate as required by cl.34.1 of the Award;
(d)section 45 of the FW Act by failing to pay the employee the Sunday pay rate as required by cl.34.1 of the Award;
(e)section 45 of the FW Act by failing to pay the employee the public holiday pay rate as required by cl.34.1 of the Award;
(f)section 535(1) of the FW Act by failing to keep records required by reg.3.33(1)(a) of the Fair Work Regulations 2009 (‘the Regulations’) in relation to the employee; and
(g)section 536(1) of the FW Act by failing to issue pay slips to the employee within one working day of payment.
The Second Respondent was involved in each of the contraventions of the First Respondent set out in declaration 1(a) to (f) above, pursuant s.550(2) of the FW Act.
ORDERS
Pursuant to s.546(1) of the FW Act, the First Respondent pay pecuniary penalties in the amount of $145,800.00 in respect of the contraventions referred to in declaration 1 above.
Pursuant to s.546(1) of the FW Act, the Second Respondent pay pecuniary penalties in the amount of $26,049.52 in respect of the contraventions referred to in declaration 2 above.
Pursuant to s.546(3)(a) of the FW Act any pecuniary penalties ordered to be paid by the Respondents be paid to the Consolidated Revenue Fund of the Commonwealth within 60 days of the Court’s orders.
There is liberty for the Applicant to apply to the Court on seven days’ notice for the matter to be re-listed in the event that any of the preceding orders are not complied with.
Otherwise the proceedings are dismissed and removed from the list.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 2686 of 2017
| FAIR WORK OMBUDSMAN |
Applicant
And
| XIA JING QI PTY LTD |
First Respondent
| JING QI XIA |
Second Respondent
REASONS FOR JUDGMENT
These reasons go to the contravening conduct of, and imposition of penalties to be imposed on the First and Second Respondents in relation to an employee, Ms Shuyun Chen (also known as Shuyun Chan), of the First Respondent.
Background
The First Respondent operates a ramen noodle restaurant trading as “Ajisen Ramen” (‘the restaurant’) located at the Melbourne Central Shopping Centre in Melbourne in the State of Victoria. The Second Respondent, Ms Jing Qi Xia, is and was at all relevant times the sole director and shareholder of the First Respondent. The First Respondent’s business activities were within the coverage of the Restaurant Industry Award 2010 (‘the Award’).
Ms Chen is 32 years old and is from China. Ms Chen arrived in Australia in December 2015 on a (subclass 462) working holiday visa. The First Respondent employed Ms Chen from 31 May 2016 to 9 October 2016 (‘the employment period’). Ms Chen was classified as a “Food and Beverage Attendant Grade 2” pursuant to Schedule B of the Award.
During the employment period Ms Chen worked less than an average of 38 hours per week, and did not have reasonably predictable hours of work. As a result, pursuant to cl.12.6 of the Award, the First Respondent was required to pay Ms Chen as a casual employee.
During the employment period Ms Chen worked a variety of days and shifts including weekdays, weekends and public holidays. She was paid on average a flat hourly rate of $11.50 per hour, save for a few occasions where she was overpaid a total of $109.27 for additional hours which she did not work. For the final pay period, being 3 October 2016 to 9 October 2016, Ms Chen was paid a total of $179 for 45 hours worked, resulting in the paid hourly rate being $3.98.
Pursuant to cl.20.1 of the Award, during the employment period, the First Respondent was required to pay Ms Chen the following hourly rates for all ordinary hours of work on a Monday to Friday:-
a)$18.47 from 30 May 2016 to 3 July 2016; and
b)$18.91 from 4 July 2016 to 9 October 2016.
On 6 July 2017 the Applicant issued a “Findings of Contravention” letter to the Respondents and required payment of the amount of $9,616.95, (being the First Respondent’s non-payment of casual loading and Saturday, Sunday and public holiday penalty rates of pay to Ms Chen) by 21 July 2017.
On 21 July 2017 the Respondents rectified the underpayment to Ms Chen by paying the amount of $9,616.95 to her.
The proceedings
On 8 December 2017 the Applicant commenced proceedings against the Respondents alleging contraventions of the Fair Work Act 2009 (Cth) (‘the FW Act’) and the Fair Work Regulations 2009 (Cth) (‘the FW Regulations’).
On 20 February 2018 the Court ordered, relevantly, for the parties to file an agreed statement of facts, evidence and submissions on penalty and for this proceeding to be heard concurrently with related proceeding number MLG2687/2017.
On 22 March 2018, the Applicant and Respondents filed a statement of agreed facts and admissions for the purposes of s.191 of the Evidence Act 1995 (Cth). The Respondents agreed to the declarations of contravention which the Court shall make and orders that the Respondents pay pecuniary penalties in respect of the admitted contraventions.
The First Respondent admitted to contravening the following civil remedy provisions:-
a)section 45 of the FW Act by failing to pay Ms Chen the minimum hourly rate, the minimum casual adult rate for weekday work, Saturday rates, Sunday rates and the public holiday rates of pay as required by the Award;
b)section 535(1) of the FW Act by failing to keep records of the actual rate of remuneration paid to Ms Chen as required by reg.3.33(1)(a) of the FW Regulations; and
c)section 536(1) of the FW Act by failing to issue pay slips to Ms Chen within one working day of payment.
The Second Respondent admitted to being involved in each of the contraventions of the First Respondent (save for that which went to the issuing of pay slips, which is not a contravention alleged against the Second Respondent) pursuant to s.550(2) of the FW Act.
In the penalty hearing proceedings, the Applicant relied upon the following documents:-
a)application and statement of claim filed 8 December 2017;
b)statement of agreed facts filed 22 March 2018;
c)affidavit of Shuyen Chen affirmed 26 April 2018;
d)affidavit of Kim Nhu Chum affirmed 20 April 2018;
e)submissions on penalty filed 19 July 2018; and
f)reply submissions on penalty filed 30 August 2018.
In the penalty hearing proceedings, the Respondents relied upon the following documents:-
a)statement of agreed facts filed 22 March 2018;
b)affidavit of Jing Qi Xia affirmed 22 May 2018; and
c)submissions on penalty filed 16 August 2018.
Imposition of Penalty
The Applicant seeks that the Court impose pecuniary penalties on the First Respondent for contravening ss.45, 535 and 536 of the FW Act, and the Second Respondent for being involved in each of the contraventions admitted by the Second Respondent of the First Respondent, pursuant to s.550(2) of the FW Act.
The Court may impose penalties on the Respondents pursuant to sub-s.546(1) of the FW Act as a result of the contraventions declared by the Court. Section 557 of the FW Act provides that, for specified contraventions of the FW Act, two or more contraventions of the same civil remedy provision will be treated as a single contravention where that contravention was committed by the same person, and arose from the same course of conduct. Relevantly, each term of an Award that has been contravened, is a separate civil remedy provision for the purposes of s.557 of the FW Act.[1]
[1] Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153.
Course of Conduct and Grouping
The Applicant accepts that the Respondents are entitled to the benefit of s.557 of the FW Act in respect of the repeated underpayment contraventions which affected Ms Chen, such that there is a single contravention for each term of the Award that was contravened. Similarly, the Applicant accepts the repeat contraventions in respect of the failure to make and keep a record of the actual rate of remuneration paid to Ms Chen under s.535(1) of the FW Act and the pay slip contraventions under s.536(1) of the FW Act can be treated as a course of conduct (that is, then as two contraventions).
It is open to the Court to group separate contraventions where the contraventions can be said to overlap with each other or where, if they were treated separately, this would potentially penalise the Respondents twice for substantially the same conduct.[2]
[2] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560, 46; Pearce v the Queen (1998) 194 CLR 610, 40.
The Applicant submits that each course of conduct involves distinct and differing conduct and entitlements such that no grouping of the contraventions is warranted. The Applicant submits that there are seven contraventions for which the Court may impose penalties against the Respondents.
The Respondents submit that, to the contrary, there are only five contraventions because the contraventions involving the failure to pay the Saturday penalty rates, Sunday penalty rates and public holiday penalty rates all involve a failure to pay penalty rates when work was performed on specific days and as such the offending conduct is of the same nature. The Respondents submit that cl.34.3 of the Award sets out a single obligation to pay penalty rates, the amount of the penalty rate payable depending when the work is performed.
The Respondents proposed grouping of the contraventions is rejected by the Court. Each form of penalty rate arose in different circumstances, requiring a different wage rate to be paid. The contraventions could not be said to overlap with each other.[3] The Court finds that there are seven contraventions existing.
[3] Fair Work Ombudsman v Lohr [2018] FCA 5, 29-34; Fair Work Ombudsman v Siner Enterprises Pty Ltd (No.2) [2018] FCCA 589, 16-18; Fair Work Ombudsman v Koojedda Carpentry Pty Ltd as Trustee For The Gumley Trust & Ors (No.2) [2017] FCCA 2577.
Quantum of Penalty
The maximum penalties which the Court could impose are:-
a)$324,000 for the First Respondent; and
b)$64,800 for the Second Respondent.
For the different courses of conduct the Applicant recommends varied penalty ranges from mid to high range penalties depending on the nature and seriousness of the contraventions. The Applicant submits that a reduction on totality for the Respondents of no more than 10% would be appropriate. In monetary terms, the Applicant submits a penalty of:-
a)between $157,464 to $180,792 in respect of the First Respondent; and
b)between $31,492.80 to $36,158.40 in respect of the Second Respondent
is appropriate.
The Respondents assert that the penalties suggested by the Applicant are manifestly excessive and disproportionate to the contravening conduct. For example, imposing a penalty of $25,920 to $30,240 (for the First Respondent) and $5,184 to $6,048 (for the Second Respondent) for failure to pay Ms Chen the public holiday penalty rate is disproportionate in circumstances where Ms Chen only performed work on a public holiday on two occasions.
The Respondents submit that the Court should impose penalties at the very low to lower end of the range and that a reduction of 20% on totality is appropriate. In monetary terms, based on a grouping of seven contraventions, the Respondents submit that penalties, as set out below, are appropriate:-
a)between $16,848 to $34,992 in respect of the First Respondent. This represents a total of just 4% to 8% of the maximum penalties available in respect of the contraventions; and
b)between $2,851 to $6,739 in respect of the Second Respondent. This represents a total of just 3% to 7% of the maximum penalties available in respect of the contravention.
Principles relevant to the determination of penalty
In Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 326 ALR 476, the High Court of Australia explained the purpose for the imposition of civil penalties as follows:-
“The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.”
A non-exhaustive list of factors relevant to the imposition of a penalty was summarised by Mowbray FM (as he then was) in Mason v Harrington Corp Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7, 26-59. Those factors include:-
a)the nature and extent of the conduct which led to the breaches;
b)the circumstances in which that conduct took place;
c)the nature and extent of any loss or damage sustained as a result of the breaches;
d)whether there has been similar previous conduct by the respondent;
e)whether the breaches were properly distinct or arose out of the one course of action;
f)the size of the business enterprise involved;
g)whether or not the breaches were deliberate;
h)whether senior management was involved in the breaches;
i)whether the party committing the breach had exhibited contrition, taken corrective action and cooperated with the enforcement authorities;
j)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
k)the need for specific and general deterrence.
This summary was adopted by Tracey J in Kelly v Fitzpatrick [2007] FCA 1080 (‘Kelly’). While the summary is a convenient check list, it does not prescribe or restrict the matters which may be taken into account in the exercise of the Court’s discretion.[4]
[4] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560, 91.
Nature, extent and circumstances of the contravening conduct
As submitted by the Applicant, the flat hourly rate of $11.50 paid to Ms Chen was insufficient to meet even the base hourly rate under the Award, let alone any casual loading, weekend or public holiday penalty rates. This occurred in circumstances where the restaurant was open seven days a week, closing at 9.00pm on Sundays, 10.00pm on Saturdays and 10.30pm on Fridays and where Ms Chen worked a variety of days and shifts. Furthermore, in the final pay period, Ms Chen was only paid $179 despite working for 45 hours. This equated to a paid hourly wage of only $3.98.
The Applicant submits that the Respondents’ accountability is highlighted by the fact that the Second Respondent had knowledge of the Award yet set a flat rate of pay to be pay to Ms Chen regardless of the nature of her employment as described above.
These contraventions of the Award occurred in the context of the First Respondent operating (between 2008 and March 2017) a 7-Eleven franchise store (‘the 7-Eleven store’) wherein the Second Respondent had received training from the 7-Eleven head office in relation to payment of correct minimum wages and differential wage rates. The Second Respondent had therefore a general knowledge of award conditions, which included the requirement for payslips to be provided to employees. Whilst the Respondents submitted that the Respondents’ knowledge and conduct in respect of the operations of the 7-Eleven Store were irrelevant, and should be given no weight (as it concerned a different business covered by a different industrial award), the Court does not accept that argument. What that prior business experience gave to the Respondents was a working knowledge of the existence of industrial awards including the differing rates of pay to be paid to a) casuals; and b) for the performance of weekend and public holiday work.
Ms Chen was never provided with payslips, her evidence being she received her wages “always in a clear money bag with [her] name and the cash amount handwritten on paper”.[5] This, as the Applicant submits, not only frustrates the ability for employees to know and hold an employer to account for their minimum entitlements but also frustrates the ability of the regulator to investigate the employee’s entitlements, requiring significant public monies to be expended.
[5] Affidavit affirmed by Shuyun Chen dated 26 April 2018, 13.
During the Applicant’s investigation the Second Respondent stated to the Fair Work Inspector that Ms Chen was being paid $18.00 an hour, the rate displayed on the Fair Work Ombudsman’s website.[6] It was only in circumstances where the regulator had independently uncovered the truth, that the Respondents admitted to the underpayments.
[6] Affidavit affirmed by Kim Nhu Chum dated 20 April 2018, 15.
Ms Chen’s underpayment of $9,616.95 is significant particularly as this occurred in just over a period of four months. To put this amount in context, Ms Chen was paid just 45% of the minimum amounts she was entitled to under the Award.
Nature and extent of loss
The underpayments are viewed by the Court in the context of Ms Chen’s reliance on her minimum wage, unskilled work and the need to support herself while in Australia, supposedly on a working holiday.
Ms Chen’s evidence is that she could hardly support herself and pay her living expenses despite working four to six days a week. Further, to control her living expenses:-
a)she lived in a shared house, sharing a bedroom with three others;
b)she bought cut-price goods, including discounted food;
c)she had to borrow money from family and friends to support herself; and
d)she had planned to come to Australia, work and then travel around Australia but could not afford this because the wage she earned was not enough to pay for her living expenses and simultaneously save for her travels.[7]
[7] Affidavit affirmed by Shuyun Chen dated 26 April 2018, 16-18.
Size and financial circumstances of the business
The size of the business and financial circumstances of the Respondents do not excuse breaches of workplace laws.[8] Small businesses have the same obligation as larger employees to meet minimum employment standards.[9]
[8] Fair Work Ombudsman v Hiyi Pty Ltd & Ors [2016] FCCA 1634, 47.
[9] Kelly, 28.
During the period of the contravening conduct, the First Respondent employed approximately ten people at the restaurant and approximately ten people at the 7-Eleven Store which it operated and which is the subject of proceedings MLG2687/2017. At the time of the contravening conduct, the First Respondent could be characterised as a medium-sized business. However, the First Respondent is now a small business,[10] having sold the 7-Eleven Store in March 2017.
[10] Fair Work Act 2009 (Cth), s.23(1)
The current financial circumstances of the Respondents is a relevant consideration in determining the appropriate penalty and whether the size of the penalty is “meaningful”[11] and/ or “oppressive or crushing”.[12] It is not possible for the Court, however, to determine any discount in this regard as the Respondents have not placed before the Court evidence as to their financial circumstances.
[11] Hansen v Mt Martha Community Learning Centre Inc (No.2) [2015] FCA 1283, 5.
[12] Kelly, 30
Deliberateness of contraventions
There was a deliberate element to the contraventions. The Second Respondent’s misrepresentations to the Fair Work Inspector, and her prior training in relation to the First Respondent’s other franchise store, 7-Eleven, provided evidence as to the deliberateness of the Second Respondent’s actions, that being a necessary consideration by the Court. The Second Respondent’s earlier training included payroll, award conditions, employment legislation in 2008, and basic employment conditions and reading pay slips in 2015.
Contrition and Co-operation
The First Respondent rectified the underpayment to Ms Chen on 21 July 2017 following its receipt of the ‘Findings of Contravention’ letter from the Applicant. This action meant that the First Respondent complied, albeit late and enforced, with its legal obligations.[13] This payment represented corrective action and is taken into account by way of penalty discount.
[13] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560.
After the Fair Work Ombudsman completed its investigation into the employment conditions of Ms Chen and more generally the employment conditions of the restaurant, the Respondents arranged for an external accountant (JTC Accounting) to review the restaurant’s payroll systems and to advise about what the First Respondent’s employees were required to be paid. The external accountant recommended that the First Respondent put in place a Xero payroll management system, which the Company did. The Second Respondent asked the external accountant to review all the employees working in the business to make sure that they were properly classified under the relevant industrial award and to tell the company what pay rates they should be receiving. The Second Respondent accepted this advice. As far as the Respondents are aware, all employees currently working in the restaurant are being paid their correct employee entitlements and all proper payroll records are being kept.
The Respondents admitted liability at an early stage and cooperated to an extent, providing the relevant employment records during the Applicant’s investigation. Some of those records however were created for the purpose of the dealings between the Applicant and Respondents.
There are circumstances, which apply to the facts of this case, where admissions of contraventions will give rise to a discount on penalty. As stated by Gyles, Stone and Buchanan JJ in Mornington Inn Pty Ltd v Jordan (2008) 68 FCR 367 at paragraph 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.”
The Respondents’ admissions have obviated the need for a liability hearing and facilitated the course of justice.
Need to ensure compliance with minimum standards
A principle objective of the FW Act is the preservation of an effective safety net for employee entitlements and effective enforcement mechanisms.[14]
[14] Fair Work Act 2009 (Cth), s.3
Failure to provide accurate records adversely impacts the regulator’s ability to investigate employee claims,[15] and is the “bedrock of compliance” with the FW Act.[16]
Deterrence
[15] Fair Work Ombudsman v Samurais Paradise Pty Ltd [2017] FCA 2013, 47.
[16] Fair Work Ombudsman v Dosanjh [2016] FCCA 923, 46.
Specific
In assessing the relevance of specific deterrence to appropriate penalties, the Court is required to look at the attitude expressed by the Respondents, including by looking to any remorse or contrition expressed and any steps which the Respondents have taken to ensure that no future breaches will occur.[17]
[17] Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357, 37.
The Respondents’ apology to Ms Chen came about only as a result of the Applicant instituting proceedings. However the Court acknowledges that what preceded the proceedings was the Respondents’ much earlier in time rectification of the underpayments to Ms Chen.
The First Respondent still operates the restaurant and has installed a payroll management system as referred to in paragraph 43 above which assists the First Respondent in correctly paying employees their entitlements and ensuring proper payroll records are being kept. To this extent objectives of specific deterrence have been achieved for so long as the payroll management system is adequately maintained. The Applicant argues that the First Respondent’s “payroll system is only meeting a satisfactory level”.[18] That is a matter to be borne in mind by the Respondents to avoid a repetition of those actions that have precipitated these proceedings.
[18] Affidavit affirmed by Kim Nhu Chum dated 20 April 2018 pages [4]-[5].
The Respondents argue specific deterrence is not necessary as it was achieved following the Applicant’s press release about the proceeding, which caused the Second Respondent to be “deeply embarrassed and ashamed by what… occurred” and which continues to make her feel “very uncomfortable” when she visits the restaurant.[19] If that is so, and the Court accepts the evidence of the Second Respondent, then the use of an accurate and fair media release in the factual circumstances of this case has usefully deterred future misconduct.[20] Publicity and embarrassment resulting from a media release are not relevant to the assessment of the appropriate penalty, and are the “mere and foreseeable consequences of the conduct engaged in”.[21]
[19] Affidavit of Jing Qi Xia affirmed 22 May 2018, 17.
[20] Fair Work Ombudsman v South Jin Pty Ltd (No.2) [2016] FCA 832, 82.
[21] Cousins v Merringtons Pty Ltd (No.2) [2008] VSC 340, 59-65.
General
In order to be useful as a general deterrent, a penalty should be imposed at a level that is likely to act as a deterrent in preventing similar contraventions by like-minded individuals or organisations.[22] Like-minded organisations particularly relevant to these proceedings include employers in the restaurant industry and employers of workers on working holiday visas.
[22] Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20, 62-63.
The need for general deterrence in the present case remains of high importance although proceedings such as these have garnered recent media attention and facilitated greater general compliance. The need for general deterrence in the café and restaurant industry, specifically, and in relation to visa holders, has been canvassed in other Court decisions.[23] It remains an important consideration and heavily weighted.
[23]Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301, 128; Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290, 26; Fair Work Ombudsman v Food Republic Pty Ltd [2017] FCCA 263, 133 - 135.
Consideration
The penalty imposed must not be crushing or oppressive.[24] However, it must reflect the seriousness of the conduct engaged in by the Respondents.[25] The penalty imposed should be imposed on a meaningful level.[26]
[24] Kelly, 30.
[25] Fair Work Ombudsman v Promoting U Pty Ltd [2012] FMCA 58.
[26] Kelly, 28.
The Respondents’ recommended penalty ranges cannot be characterised as meaningful or appropriate and proportionate to the seriousness of the conduct. The conduct was deliberate and grave, and specific and general deterrence are significant matters here. The penalty ranges as proposed by the Applicant are more meaningful although need reduction on the basis of their crushing and oppressive nature in the context of these facts. In the exercise of its discretion the Court makes orders as set out herein.
I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of Judge Hartnett
Associate:
Date: 18 January 2019
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