Fair Work Ombudsman v Yeon Beauty Salon Pty Ltd
[2023] FedCFamC2G 258
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Yeon Beauty Salon Pty Ltd [2023] FedCFamC2G 258
File number(s): SYG 830 of 2021 Judgment of: JUDGE CAMERON Date of judgment: 5 April 2023 Catchwords: INDUSTRIAL LAW – breaches of civil remedy provisions of the Fair Work Act 2009 (Cth) – declarations of breach – imposition of pecuniary penalties – relevant considerations. Legislation: Fair Work Act 2009 (Cth) ss 12, 14, 44, 45, 61, 87, 90, 96, 99, 116, 117, 325, 535, 536, 539, 546, 550, 556, 557, 687, 701, 793
Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Cth) s 2, sch 1
Crimes Act 1914 (Cth) s 4AA
Fair Work Regulations 2009 (Cth) regs 3.33, 3.34, 3.36, 3.40
Evidence Act 1995 (Cth) s 191
Corporations Act 2001 (Cth)
Cases cited: Kelly v Fitzpatrick (2007) 166 IR 14
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Division: Fair Work Number of paragraphs: 80 Date of hearing: 10 May 2022 Place: Sydney Counsel for the Applicant: Ms V. Bulut For the Respondents: Ms Ha appeared in person ORDERS
SYG 830 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: YEON BEAUTY SALON PTY LTD ACN 603 278 020
First Respondent
MIYEON HA
Second Respondent
order made by:
JUDGE CAMERON
DATE OF ORDER:
5 April 2023
THE COURT DECLARES THAT:
1.The first respondent contravened:
(a)section 325(1) of the Fair Work Act 2009 (Cth) by unreasonably requiring its employee, Jahye Kim, to repay to it and/or the second respondent leave payments and therefore to spend or pay the whole or part of an amount payable to her in relation to the performance of work;
(b)section 325(1) of the Fair Work Act 2009 (Cth) by unreasonably requiring its employee, Jahye Kim, to repay to it and/or the second respondent part of her wage to pay amounts for tax and superannuation and therefore spend or pay the whole or part of an amount payable to her in relation to the performance of work;
(c)section 45 of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, the minimum rate of pay for full time work as prescribed by clause 17 of the Hair and Beauty Industry Award 2010;
(d)section 45 of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, the minimum rate of pay for part-time work as prescribed by clauses 12.7 and 17 of the Hair and Beauty Industry Award 2010;
(e)section 45 of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, amounts sufficient to satisfy her entitlement to the Saturday loading prescribed by clauses 31.2(b) and 31.2(c) of the Hair and Beauty Industry Award 2010;
(f)section 45 of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, amounts sufficient to satisfy her entitlement to the Sunday loading prescribed by clauses 31.2(c) and 31.2(d) of the Hair and Beauty Industry Award 2010;
(g)section 45 of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, amounts sufficient to satisfy her entitlement to the public holiday penalty rates prescribed by clauses 35.3 and 35.4 of the Hair and Beauty Industry Award 2010;
(h)section 45 of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, amounts sufficient to satisfy her entitlement to the overtime rates prescribed by clause 31.2(a) of the Hair and Beauty Industry Award 2010;
(i)section 45 of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, amounts sufficient to satisfy her entitlement the tool allowance prescribed by clause 21.10 of the Hair and Beauty Industry Award 2010;
(j)section 44(1) of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, amounts sufficient to satisfy her entitlement to be paid her base rate of pay while on annual leave, as prescribed by section 90(1) of the Fair Work Act 2009 (Cth);
(k)section 45 of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, amounts sufficient to satisfy her entitlements to annual leave loading while on annual leave prescribed by clause 33.3 of the Hair and Beauty Industry Award 2010;
(l)section 44(1) of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, upon termination of employment, any amounts in respect of untaken paid annual leave, as prescribed by section 90(2) of the Fair Work Act 2009 (Cth);
(m)section 44(1) of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, the minimum base rate of pay for periods of paid personal leave, as prescribed by section 96(1) of the Fair Work Act 2009 (Cth);
(n)section 44(1) of the Fair Work Act 2009 (Cth) by failing to pay its employee, Jahye Kim, at her base rate of pay while absent on a public holiday, as prescribed by section 116 of the Fair Work Act 2009 (Cth);
(o)section 44(1) of the Fair Work Act 2009 (Cth) by failing to provide its employee, Jahye Kim, with the minimum period of notice of termination, or payment in lieu thereof, as prescribed by section 117(2) of the Fair Work Act 2009 (Cth);
(p)section 535(1) of the Fair Work Act 2009 (Cth) by failing to make and keep employment records for its employee, Jahye Kim, of the kind prescribed by regulations 3.33(3), 3.34, 3.36 and 3.40 of the Fair Work Regulations 2009 (Cth);
(q)section 536(1) of the Fair Work Act 2009 (Cth) by failing to provide its employee, Jahye Kim, with a pay slip within one working day of each occasion that the first respondent paid Ms Kim an amount in relation to the performance of work;
(r)section 536(3) of the Fair Work Act 2009 (Cth) by, on eight occasions, providing its employee, Jahye Kim, pay slips that were false and misleading; and
(s)section 45 of the Fair Work Act 2009 (Cth) by failing to enter into a part-time employment agreement with its employee, Jahye Kim, in contravention of clause 12.2 of the Hair and Beauty Industry Award 2010.
2.The second respondent was involved in the first respondent’s contraventions of:
(a)section 325(1) of the Fair Work Act 2009 (Cth) by unreasonably requiring the first respondent’s employee, Jahye Kim, to repay to the first respondent and/or to her, leave payments and therefore to spend or pay the whole or part of an amount payable to her in relation to the performance of work;
(b)section 325(1) of the Fair Work Act 2009 (Cth) by unreasonably requiring the first respondent’s employee, Jahye Kim, to repay to the first respondent and/or to her, from her wages, amounts in respect of tax and superannuation and therefore to spend or pay the whole or part of an amount payable to her in relation to the performance of work;
(c)section 44(1) of the Fair Work Act 2009 (Cth) by failing to pay the first respondent’s employee, Jahye Kim, amounts sufficient to satisfy her entitlement to be paid her base rate of pay while on annual leave, as prescribed by section 90(1) of the Fair Work Act 2009 (Cth);
(d)section 44(1) of the Fair Work Act 2009 (Cth) by failing to pay the first respondent’s employee, Jahye Kim, upon termination of employment, any amounts in respect of untaken paid annual leave, as prescribed by section 90(2) of the Fair Work Act 2009 (Cth);
(e)section 44(1) of the Fair Work Act 2009 (Cth) by failing to pay the first respondent’s employee, Jahye Kim, the minimum base rate of pay for periods of paid personal leave, as prescribed by section 96(1) of the Fair Work Act 2009 (Cth);
(f)section 44(1) of the Fair Work Act 2009 (Cth) by failing to pay the first respondent’s employee, Jahye Kim, at her base rate of pay while absent on a public holiday, as prescribed by section 116 of the Fair Work Act 2009 (Cth);
(g)section 44(1) of the Fair Work Act 2009 (Cth) by failing to provide the first respondent’s employee, Jahye Kim, with the minimum period of notice of termination, or payment in lieu thereof, as prescribed by section 117(2) of the Fair Work Act 2009 (Cth);
(h)section 535(1) of the Fair Work Act 2009 (Cth) by failing to make and keep employment records for the first respondent’s employee, Jahye Kim, of the kind prescribed by regulations 3.33(3), 3.34, 3.36 and 3.40 of the Fair Work Regulations 2009 (Cth);
(i)section 536(1) of the Fair Work Act 2009 (Cth) by failing to provide the first respondent’s employee, Jahye Kim, with a pay slip within one working day of each occasion that the first respondent paid Ms Kim an amount in relation to the performance of work; and
(j)section 536(3) of the Fair Work Act 2009 (Cth) by, on eight occasions, providing the first respondent’s employee, Jahye Kim, pay slips that were false and misleading.
THE COURT ORDERS THAT:
1.Within 28 days the respondents pay to the applicant the amount of $103,036.25, being compensation due to Jahye Kim.
2.Within 28 days the first respondent pay to the applicant the amount of $49,577.17, being compensation due to Jahye Kim.
3.Within 28 days the respondents pay to the applicant interest on the $103,036.25 compensation amount ordered in order 1, calculated in accordance with paragraph 2.2 of the Federal Court of Australia practice note “Interest on Judgments Practice Note (GPN-INT)”.
4.Within 28 days the first respondent pay to the applicant interest on the $49,577.17 compensation amount ordered in order 2, calculated in accordance with paragraph 2.2 of the Federal Court of Australia practice note “Interest on Judgments Practice Note (GPN-INT)”.
5.The first respondent pay pecuniary penalties totalling $100,000.
6.The second respondent pay pecuniary penalties totalling $39,091.50.
7.The pecuniary penalties ordered in orders 5 and 6 be paid to the applicant within 28 days.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE CAMERON
INTRODUCTION
This proceeding was brought by the Fair Work Ombudsman (“Ombudsman”) under the Fair Work Act 2009 (Cth) (“FW Act”). It principally concerns contraventions of the Hair and Beauty Industry Award 2010 (“Award”) and the National Employment Standards (“NES”) arising from alleged underpayment of the first respondent’s employee, Ms Jahye Kim, over the course of the latter’s employment between 12 May 2015 and 9 October 2019.
The first respondent, Yeon Beauty Salon Pty Ltd (“Yeon Beauty”), was the operator of a hairdressing salon trading as Yeon Art Hair located in Eastwood, a suburb of Sydney. The second respondent, Ms Miyeon Ha, was Yeon Beauty’s sole director and was responsible for its day-to-day management, direction and operations. Ms Kim was permitted to work in Australia pursuant to a Temporary Work (Skilled) (Subclass 457) visa sponsored by Yeon Beauty.
In a statement of claim filed 11 May 2021, the Ombudsman sought declarations that the respondents had contravened the FW Act and the Award. The Ombudsman also sought the imposition of pecuniary penalties.
In a statement of agreed of facts filed 8 December 2021, Yeon Beauty admitted 19 contraventions of the FW Act and Ms Ha admitted her involvement, within the meaning of s.550 of the FW Act, in 10 of those contraventions.
Statement of agreed facts
The terms of the statement of agreed facts are set out in attachment A to these reasons. In summary, it was agreed that:
(a)pursuant to employment agreements dated 30 April 2015 and 23 March 2017, Ms Kim had been employed as a hairdresser by Yeon Beauty between 12 May 2015 and 9 October 2019 (“Employment Period”), had been classified under the Award as a level 5 employee and was permitted to work in Australia under a Temporary Work (Skilled) (Subclass 457) visa sponsored by Yeon Beauty (“457 visa”);
(b)from 12 May 2015 to 21 June 2019 (“Full-Time Employment Period”) Ms Kim generally worked 8.5 hours per day, Tuesday to Sunday, totalling 51 hours per week while from 22 June 2019 to 9 October 2019 (“Part-Time Employment Period”) she generally worked 8.5 hours per day, totalling between 17 and 34 hours per week;
(c)during the Full-Time Employment Period, although Ms Kim was paid a wage in accordance with the employment agreements, together with ad hoc additional payments, Yeon Beauty required her to repay:
(i)$11,979.80 that had been paid to her for personal leave and annual leave, (“Leave Repayments”); and
(ii)$93,629.23, an amount associated with her visa, with training fees, with accountants’ fees and with Yeon Beauty’s taxation and superannuation obligations related to her employment (“Cash Back Payments”);
(d)Yeon Beauty underpaid Ms Kim the following amounts in relation to the following remuneration obligations it owed under the FW Act:
(i)her Award entitlements to:
(A)ordinary full-time hours ($485.52);
(B)ordinary part time hours ($6,919.96);
(C)Saturday loadings ($5,254.22);
(D)Sunday loadings ($2,309.22);
(E)public holiday penalty rates ($3,128.82);
(F)overtime rates ($28,146.88);
(G)tool allowance ($1,538.79);
(H)annual leave loading ($1,793.76);
(ii)her NES entitlements to:
(A)paid annual leave ($5,339.60);
(B)paid accrued annual leave and leave loading accruals commuted upon termination ($948.52);
(C)paid personal leave ($580.96);
(D)paid absences on public holidays ($729.17); and
(E)notice of termination or payment in lieu ($1,808.77);
(e)those underpayments included the value of the $11,979.80 Leave Repayments and totalled $58,984.19;
(f)Yeon Beauty also owed Ms Kim compensation of $93,629.23 for the Cash Back Payments;
(g)in addition to the underpayment and (re)payment contraventions, Yeon Beauty, also:
(i)failed to keep records as required by the FW Act and the Fair Work Regulations 2009 (Cth);
(ii)failed to provide Ms Kim on all occasions with a payslip as required by the FW Act;
(iii)provided Ms Kim with payslips that it knew were false and misleading; and
(iv)entered into a part-time employment agreement with Ms Kim that was not in writing;
(h)that conduct variously contravened ss.44(1) (i.e. the NES), 45 (i.e. the Award), 325(1), 535(1), 536(1) and 536(3) of the FW Act;
(i)Ms Ha was involved in Yeon Beauty’s breaches of ss.325(1), 90(1), 90(2), 96(1), 116, 117(2), 535(1), 536(1) and 536(3) and, by virtue of s.550 of the FW Act, is to be treated as having contravened each of the applicable provisions herself;
(j)the respondents were jointly and severally liable to compensate Ms Kim $103,036.25 for underpayments and (re)payments; and
(k)Yeon Beauty was solely liable to compensate Ms Kim $49,577.17 for those contraventions for which Ms Ha was not also liable as accessory.
RELIEF SOUGHT
The Ombudsman sought declarations that the respondents had contravened ss.44(1), 45, 325(1), 535(1), 536(1) and 536(3) of the FW Act and orders for:
a)compensation of Ms Kim for:
(i)the Cash Back Payments;
(ii)the contraventions of the NES; and
(iii)the contraventions of the Award;
b)interest; and
c)pecuniary penalties.
RELEVANT LEGISLATION
The NES are found in ss.62 to 125B of the FW Act: s.61(1) of the FW Act.
The FW Act otherwise relevantly provides that:
(a)an employer must not contravene a provision of the NES: s.44(1);
(b)an employer must not contravene a term of a modern award: s.45;
(c)employees are entitled to be paid at their base rate of pay when on annual leave: s.90(1);
(d)employees are entitled to be paid at their base rate of pay when on personal/carer’s leave: s.99;
(e)employees are entitled to be paid at their base rate of pay when absent on public holidays: s.116;
(f)an employer must give an employee a period of notice of termination or make a payment in lieu of such notice: s.117(2);
(g)an employer is not unreasonably to require an employee to spend or pay an amount of the employees’ money or part of their wages: s.325(1)
(h)an employer must keep prescribed employee records for 7 years: s.535(1);
(i)an employer must give a pay slip to an employee within one working day of paying an amount to the employee in relation to the performance of work: s.536(1); and
(j)an employer must not give a payslip which is known to be false or misleading: s.536(3).
Sections 44(1), 45, 325(1), 535(1) and 536(1) of the FW Act are civil remedy provisions: s.539(2) of the FW Act. Two or more contraventions of each of ss.44(1), 45, 325(1), 535(1) and 536(1) respectively, are to be taken to constitute a single contravention: s.557 of the FW Act.
Section 550 of the FW Act provides:
550Involvement in contravention treated in same way as actual contravention
(1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.
…
Section 556 of the FW Act provides:
556 Civil double jeopardy
If a person is ordered to pay a pecuniary penalty under a civil remedy provision in relation to particular conduct, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of a law of the Commonwealth in relation to that conduct.
Section 557 of the FW Act relevantly provides:
557 Course of conduct
(1)For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a)the contraventions are committed by the same person; and
(b)the contraventions arose out of a course of conduct by the person.
…
Sections 44(1), 45, 325(1), 535(1), 536(1) and 536(3) are referred to in s.557(2).
Pursuant to ss.539(2) and 546(2) of the FW Act, the maximum pecuniary penalty that can be imposed for an individual’s contravention of ss.44(1), 45 or 325(1) of the FW Act that is not a serious contravention as defined, is 60 penalty units per contravention.
From 1 July 2009 until 14 September 2017, the maximum pecuniary penalty that could be imposed pursuant to ss.539(2) and 546(2) of the FW Act for an individual’s contravention of ss.44(1), 45, 325(1) 535(1) or 536(1) of the FW Act was 60 penalty units per contravention. For conduct occurring after 14 September 2017, it has been 60 penalty units for a contravention that is not a serious contravention and 600 units for a serious contravention: s.2 of and sch.1 to the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Cth). The Ombudsman did not contend that the respondents’ contraventions were serious contraventions.
The maximum pecuniary penalty that can be imposed for contravention by a body corporate of the same civil penalty provisions is 5 times the maximum penalty units applicable to an individual: s.546(2) of the FW Act.
A penalty unit was worth:
(a)$170 until 30 July 2015;
(b)$180 on and from 31 July 2015 until 30 June 2017; and
(c)$210 on and from 1 July 2017: s.4AA of the Crimes Act 1914 (Cth).
APPLICANT’S EVIDENCE
Ms Kim
In her affidavit in chief affirmed 21 January 2022, Ms Kim deposed that she was born in the Republic of Korea (“South Korea”) and had worked there as a qualified hairdresser for about 5 years. She deposed that her native language is Korean and that she speaks and reads English at a moderate level.
She deposed that she arrived in Australia in December 2008 and held a student visa until mid-2012 while she undertook English language and hairdressing courses.
She deposed that on 13 June 2013 she was granted a Temporary Work (Skilled) (subclass 457) visa which was valid until 13 June 2017. This visa was sponsored by a company named Haircom where she worked from 2012 or 2013 until mid-April 2015.
Employment arrangement with Yeon Beauty
Ms Kim deposed that in early 2015 she decided to pursue permanent residency in Australia but Haircom could not assist her. In April 2015 she met with Ms Ha with whom she was already acquainted through a mutual friend, and Ms Ha said that she would employ Ms Kim on a full-time basis and would also sponsor her. Ms Kim deposed that Ms Ha said words to the effect of: “if you are working for me, I can support you” and “you will be responsible for your own expenses and I will be responsible for mine. So your expenses could include your income tax and your lawyers fee”. Ms Kim deposed she agreed with this proposal because she felt that she had to show Ms Ha her loyalty.
Ms Kim deposed that she was given an employment contract on 30 April 2015 and then worked for Yeon Beauty Salon from 12 May 2015 until 9 October 2019. Ms Kim deposed that Yeon Beauty Salon took over the sponsorship of her first subclass 457 visa and later sponsored her second subclass 457 visa which was granted in March 2017.
Ms Kim deposed that Ms Ha was her boss at the salon and that they communicated in Korean, in particular sending text messages on a mobile messaging application called Kakao. Her evidence was that her employment contract and the occasional pay slips she received showed that she was paid $1076.92 gross each week. Her evidence was that she received a (net) weekly wage of $855.70, deposited into her bank account.
Leave repayments
Ms Kim deposed that during her employment Ms Ha had said to her “If you take leave, I can’t pay you because no work, no money” and that on occasions when she did take leave, she was required to pay back her weekly wage of $855.70. She deposed that, for example, after a text exchange in Korean on the Kakao app on 2 January 2017 where she wrote to Ms Ha: “My Boss, what about the wages which have come in. I wonder whether we have to return it” and Ms Ha replied “yes”, Ms Kim then transferred the full amount of her wage to Ms Ha’s personal bank account.
Translations of the Kakao messages regarding these leave repayments and records of leave repayments made by Ms Kim to Ms Ha on 2 January 2017, 21 August 2017, 28 August 2017, 4 September 2017, 11 September 2017, 18 September 2017, 1 January 2018, 10 July 2018, 10 September 2018 and 18 September 2018 were annexure JK-2 to Ms Kim’s affidavit in chief.
Cash back payments
Ms Kim deposed that during her employment, Ms Ha told her that she had to pay her a part of her wage for tax on her (net) wage of $855.70 and for superannuation (the “Cash Back Payments”). She subsequently did this about every three months. Ms Kim deposed that, for example, on 27 October 2016, she had the following text exchange with Ms Ha in Korean on the Kakao app:
Ms Ha:Here [is] a tax bill: Super $1330, tax $2583.93 Total $3913.93. This time we have got increased tax due to recent rise. My GST is also big.
Ms Kim: I will transfer money tomorrow into personal account, Boss.
Ms Ha: Please do so. I am dying.
Translations of the Kakao messages regarding the Cash Back Payments were annexure JK-5 to Ms Kim’s affidavit in chief. Ms Kim deposed that on a number of occasions, she did not have enough money to pay Ms Ha and so borrowed money from her husband, her mother-in-law, her mother and her friends in order to make the payments.
Ms Kim deposed that Ms Ha required her to pay additional amounts for other reasons including accountants’ fees, visa fees and training fees which Ms Kim understood to be necessary for her visa application. She deposed that at first she did not ask any questions about these payments because she did not want to made issues for her visa, or harm her working opportunities in Australia. Ms Kim deposed that when, some months later, she noticed that the tax proportion of her weekly wage was increasing, she asked Ms Ha to provide her with payslips. She deposed that Ms Ha replied words to the effect of “… If you are willing to pay my accountant, you can get a payslip” and “I am doing so much for you, as your working visa sponsor, you will get permanent residency, if you are asking me all these questions and being difficult, it’s not good.” Her evidence was that she had a number of such conversations with Ms Ha.
Pay slips
Ms Kim deposed that she did not receive payslips from Yeon Beauty or Ms Ha unless she asked for them. Her evidence was that when she did ask, Ms Ha replied to the effect of “If you need the pay slip, I have to ask my accountant, but the accountant charges me $50 per paper”, “I don’t want to spend $50 every week” and “If you need the pay slip, you will have to pay for it yourself.”
Ms Kim deposed that during her employment she received nine pay slips all of which stated that she worked 40 hours per week, despite the fact that she normally worked over 50 hours per week. Her evidence was that Ms Ha had told her that some of these pay slips were created by Ms Ha’s accountant while others were created by Ms Ha herself. The payslips Ms Kim received were annexure JK-3 to her affidavit in chief.
Part-time employment
Ms Kim deposed that, after taking a period of unpaid maternity leave, she returned to Yeon Beauty Salon from 22 June 2019 until 22 September 2019, working part-time. Ms Kim deposed that during this period of part-time work she did not receive any wages. Ms Kim deposed that she understood she did not receive her wages because Ms Ha was deducting from them the amount that Ms Kim “owed” her due to the fact that during her unpaid maternity leave, Ms Kim could not afford to make the cashback payments to Ms Ha for her tax and superannuation. She deposed, for example, that on 10 July 2019 Ms Ha wrote to her on Kakao saying:
Ms Ha:I have got the reminder of unpaid tax and send you a summary.
Total amount unpaid: $12,463.65.
Wages for 4 weeks: $2000.
Current balance of unpaid amount $10,463.65
Translations of the Kakao messages regarding her part time employment were annexure JK-7 to her affidavit in chief.
Ms Kim deposed that on two occasions in July and August 2019 she needed to ask Ms Ha to give her some money so she could buy milk formula and nappies for her baby, and on those occasions Ms Ha transferred her $500 and $1000 of her wages respectively.
Termination
Ms Kim deposed that the last day she worked at Yeon Beauty Salon was 22 September 2019, although she did not know at the time that it would be her last day. Her evidence was that whilst on a trip to South Korea from 23 September 2019 to see her family, she discovered that she had a tumour for which she had to undergo emergency surgery. Ms Kim deposed that on 1 October 2019 she sent Ms Ha a Kakao message advising she would arrive in Australia and return to work on Thursday 10 October 2019. However, according to the reproduction of various Kakao messages that passed between her and Ms Ha, as annexed to her affidavit, on Wednesday 9 October 2019, Ms Kim and Ms Ha had the following exchange:
Date : 09. 10. 2019
Time : 3: 21 pm : Kim: Boss, are you busy? The signal is going, but it is not answered. I had last test in the morning and now I'm going to the airport. You must have much troubles. Sorry about it. See you on Friday.
4: 19 pm:Ha: Come to the shop by 6 o'clock on Thursday.
4:28 pm: Kim: Yes, then, Boss, do you mean that I can work no longer?
5:14 pm:Ha: Come on Thursday and return the key.
5:14 pm:Ha: And settle rest of money quickly.
5:15 pm: Kim: Then do I have to bring something to pack up my things in?
5:15 pm:Ha: Please settle the money by this month. If you have paid it off, then you can take away your belongings.
5:16 pm:Kim: I'm looking for money, but it is unlikely that I can get it in a few days.
5:17 pm:Kim: We can live only if I earn for myself. If you refuse to give me my things, how can I manage to eat and live, Boss?
This conversation referred to Ms Ha’s prior message sent on 26 September 2019 which stated that the outstanding amount that Ms Kim “owed” Ms Ha was $7,540.
Ms Kim deposed that she did not receive any payment after her employment ended.
Financial and personal issues arising from employment at Yeon Beauty
Ms Kim’s evidence was that while she was working for Yeon Beauty, she had no other job or income and needed to borrow money from her family, friends and banks, used her credit card to pay living expenses and had needed to borrow to make payments to Ms Ha. She deposed that while working for Yeon Beauty Salon she accumulated debt of about $50,000. She deposed that she did not have any savings and was still paying off her credit card debt and debts to her friends.
Ms Kim’s evidence was that for a period of time, she was depressed about her money situation and felt stupid because she was trying to do everything she could to stay in Australia. She deposed that she was still stressed about her financial and housing situation and was being contacted regularly by her property manager regarding outstanding rent.
Ms Kim’s evidence was that, as at the time she affirmed her affidavit in chief, Ms Ha had not apologised to her. In her affidavit in reply affirmed 8 April 2022, Ms Kim deposed that as at that point, she had not received any further payments from Yeon Beauty or Ms Ha.
In response to an assertion in Ms Ha’s affidavit, Ms Kim denied having asked Ms Ha in 2017 to continue her business or stating that she would pay all required amounts including her income and superannuation in order to maintain the business. Ms Kim denied having directly asked Ms Ha to be her employer and deposed that Ms Ha said words to the effect of “I need an employee and you need a sponsor, I think I can help you.” Ms Kim deposed that Ms Ha had asked her to pay tax and did not discuss superannuation.
FWI McKendry
The Ombudsman relied on the affidavits of Fair Work Inspector (“FWI”) Elizabeth McKendry affirmed 31 January 2022 and 7 April 2022.
Respondent’s co-operation during the investigation
In her first affidavit, FWI McKendry deposed that on 11 October 2019 Ms Kim complained to the Ombudsman about underpayment by Yeon Beauty and that the investigation of the complaint was assigned to her. In November 2019 she commenced an extended email correspondence with Ms Ha and Yeon Beauty’s then-legal representatives. She deposed in that regard that she telephoned or wrote by email to the respondents or their legal representatives on 8 November 2019, 6 December 2019, 18 December 2019, 19 December 2019, 30 January 2020, 24 February 2020, 25 February 2020 and 15 April 2020, variously seeking responses to the allegations that Ms Kim had made to the Ombudsman, documents and records relevant to the inquiry into Ms Kim’s allegations and documents and records relevant to Yeon Beauty’s financial status. The respondents provided documents and attended an interview with FWI McKendry on 20 April 2020.
On 23 July 2020, FWI McKendry emailed the respondents’ legal representatives a Contravention Letter of the same date which required Yeon Beauty to pay by 7 August 2020 amounts totalling $161,996.94 found to be owing to Ms Kim and to advise FWI McKendry of the steps taken to do so. Further correspondence then ensured and a revised contravention letter issued on 11 August 2020 citing an adjusted total amount owed of $160,396.94. The letter warned that the Ombudsman might take enforcement action and that:
Efforts by Yeon Beauty to correct the contraventions set out above will be considered in deciding whether or not to start enforcement action.
FWI McKendry’s evidence was that Ms Ha had not rectified the amounts owing, either by 7 August 2020 or by the time of the first of her affidavits.
In her second affidavit, FWI Ms McKendry deposed that on 24 March 2022 she conducted a company name search for Yeon Beauty, at which time Ms Ha remained the sole director of Yeon Beauty. She also deposed that on 6 April 2022 she received a copy of a contract for sale by Yeon Beauty of the business “Yeon Art Hair” dated 2 March 2021 specifying a sale price of $30,000.
RESPONDENTS’ EVIDENCE
Ms Ha filed an affidavit dated 14 March 2022 in which she deposed that she started her own hair salon business in June 2010 known as “Yeon Art Hair” and although she had worked in other salons from October 2007 to May 2009, that she had had no previous experience of managing a business. She deposed that in April 2014 she met Ms Kim, who was seeking a position where she could work on an employer-sponsored visa, and agreed to hire her on the basis that Ms Kim had offered to pay all of her own tax and superannuation.
Her evidence was that as Ms Kim “would fully support Yeon Beauty Salon”, Ms Ha proceeded to set up the company “Yeon Beauty Salon Pty Ltd” as advised by Ms Kim’s migration agent who contacted her in December 2014. The company was necessary for Ms Kim to obtain a sponsored working visa. In 2017 she had planned to sell or discontinue the business but Ms Kim’s visa application had not been finalised and Ms Kim asked her to continue the business, stating that in order to keep it going she would meet all “required payments”, including her income (tax) and superannuation. Ms Ha’s evidence was that despite her limited understanding of the company’s legal obligations, that she had attempted to comply with her obligations in relation to Ms Kim by seeking advice from the latter’s migration agent.
Ms Ha deposed that Ms Kim took a deal of time off to prepare for the visa’s English test and to care for her young brother, who was resident on a student visa.
On 22 September 2019 Ms Kim advised Ms Ha that she was leaving the next day for a visit to Korea and upon her return on 9 October 2019 advised that she would be going back to work the next day. Ms Ha deposed:
Her sudden leave impacted the operation of the business and my ability to care for my son.
Ms Kim did not return to work on 10 October 2019 and Ms Ha deposed in that regard:
… one of my customers … informed me that Kim was working at a hair salon in Chatswood after seeing her there. I was then informed by a friend, Sara, that Kim was searching for another employer to sponsor her. Upon being notified of this, I formally issued a letter to state that Kim's employment with Yeon Beauty Salon Pty Ltd had ended.
Ms Ha deposed that the Ombudsman’s investigation had led to her developing severe depression with suicidal ideation. Annexed to her affidavit was a psychiatrist’s report broadly supportive of those allegations. Ms Ha closed the business and transferred it to an unnamed third party for no consideration.
Ms Ha also deposed:
I, as an authorised person of the first respondent, express my sincere remorse for my irresponsible actions and admit my failure to take steps in understanding and thus complying with the company's legal obligations. I recognise that my actions have impacted Kim and accept all responsibilities to rectify my actions. In saying this, I accept and admit the contraventions as follows:
(a) Properly paid Leave Repayment to Kim;
(b) Properly paid full-time minimum rate of pay;
(c) Properly paid part-time minimum rate of pay;
(d) Properly paid Saturday loading;
(e) Properly paid Sunday loading;
(f) Properly paid Public Holiday penalty rates;
(g) Properly paid overtime rates;
(h) Properly paid tool allowance;
(i) Properly paid base rate of pay for annual leave;
(j) Properly paid annual leave loading for annual leave;
(k) Properly paid annual leave upon termination;
(1) Properly paid minimum base rate of pay for periods of paid personal leave;
(m) Properly paid ordinary hours of work for absence on a public holiday;
(n)Provided with the minimum period of notice of termination or payment in lieu of notice;
(o) Provided with a pay slip;
(p) Provided false and misleading pay slip;
(q) Provided a part-time employment agreement.
Ms Ha deposed that she no longer works, has no income and relies on what her husband earned as a removalist.
DISCUSSION
Declarations
The facts agreed by the parties satisfy me that it is appropriate to make the declarations sought.
Considerations
When determining the penalties appropriate to impose for contraventions, regard should be had to all of the circumstances of the case, guided by the various discretionary considerations discussed in authorities such as Kelly v Fitzpatrick (2007) 166 IR 14, in order to arrive at a single result that is an instinctive synthesis of those various factors. In circumstances such as the present, where the period during which the contraventions occurred saw the value of a penalty unit change, it would be appropriate, when setting the penalties to be imposed, to have regard to the value of a penalty unit at the end of the period of contravention, although regard may also be had to the fact that lower amounts applied for part of the period: Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 per Katzmann J at [396]–[401].
The nature and extent of the conduct which led to the breaches
Ms Kim worked for Yeon Beauty, operated by Ms Ha, for a period of years and it sponsored her visa to stay in Australia. Although Ms Kim was paid wages, she was underpaid and was also required to subsidise Ms Ha and her business by making payments to her which were prohibited by the FW Act. Those payments totalled $105,609.03.
On 23 September 2019 Ms Kim returned, apparently at short notice, to South Korea for a period, which appears to have been inconvenient to Ms Ha. Although Ms Kim had told Ms Ha in a Kakao message on 1 October 2019 that she would be returning to work on 10 October 2019, on 9 October 2019, when she was leaving South Korea, she sent a further message saying that she would be back at work on “Friday”, i.e. 11 October 2019. Ms Ha dismissed her in the course of the 9 October 2019 exchange, after she was told of the one day delay in Ms Kim’s return to work.
The respondents owed Ms Kim $152,613.42 in respect of underpayments and (re)payments, a not inconsiderable sum given Ms Kim’s gross annual wage of $54,000.
The circumstances in which that conduct took place
The following evidence raised material issues:
(a)Ms Kim said that at their first meeting Ms Ha required her to agree to cover, from her notional net pay, her income tax obligations, whereas Ms Ha said that Ms Kim had offered to do so, together with her superannuation entitlements, in order to persuade her to sponsor her visa;
(b)Ms Kim deposed that Yeon Beauty had a number of employee hairdressers which suggests a business that was quite busy and successful;
(c)Ms Ha’s evidence that Ms Kim failed to present herself for work on her return to Australia is contradicted by the Kakao messages annexed to Ms Kim’s affidavit which record that Ms Kim was told, before the day she said she was returning to work, that she was instead to return her key to the salon; and
(d)Ms Ha said that she had been motivated to dismiss Ms Kim by information she had received to the effect that Ms Kim was (already) working in another salon but the messages the two women had been exchanging in the preceding days, annexed to Ms Kim’s affidavit tends to contradict that evidence.
Although Ms Kim may have been absent from work from time to time to take courses to help her to qualify for a permanent visa, Ms Ha did not seek to contradict in any substantive way Ms Kim’s claims to have worked long hours. I accept that Ms Kim was working the hours that she said she was working, which also suggests a busy and successful business and makes it implausible that Ms Ha’s business could not have afforded to pay Ms Kim what she should have been paid. No reason was demonstrated why Ms Kim could not be paid her full entitlements to ordinary time rates, at the very least, or the overtime and penalty rates that were her due.
Given those findings, I do not accept the respondents’ contention that Ms Kim offered to cover the on-costs associated with her employment. I prefer Ms Kim’s evidence that Ms Ha told her that covering those costs was, in essence, the price of the trouble to which Ms Ha would be put in sponsoring her visa.
Whether there had been similar previous conduct by the respondents
It was not suggested that the respondents had committed similar contraventions in the past.
Whether the breaches were properly distinct or arose out of the one course of conduct
The Ombudsman conceded that the respondents were entitled to the benefit of the course of conduct provisions of s.557 of the FW Act and submitted that that section applied to the various occasions when the respondents required, contrary to s.325(1), Ms Kim to make the Leave Repayments and the Cash Back Payments. As each of those two classes of payment arose out of separate conduct in that they arose at different times, involved different amounts and different justifications, the courses of conduct associated with, respectively, the Leave Repayments and the Cash Back Payments are to be regarded as separate courses of conduct contraventions of s.325(1) of the FW Act.
The Ombudsman submitted that the requirement to make the Leave Repayments not only contravened s.325(1) of the FW Act but other provisions of the Act too, in that it led to the underpayment of particular entitlements. Specifically, it was said that the requirement to make the Leave Repayments was also the basis of:
(a)the contraventions of s.44(1) of the FW Act represented by:
(i)the failure to pay Ms Kim her base rate of pay for annual leave she took, as prescribed by s.90(1) of the FW Act;
(ii)the failure to pay Ms Kim her minimum base rate of pay for periods of paid personal leave she took, as prescribed by s.96(1) of the FW Act;
(iii)the failure to pay Ms Kim at her base rate of pay for her ordinary hours of work when absent on a public holiday, as prescribed by s.116 of the FW Act; and
(b)the contraventions of s.45 of the FW Act represented by:
(i)the failure to pay Ms Kim the full-time minimum rate of pay as prescribed from time to time by clause 17 of the Award; and
(ii)the failure to pay Ms Kim annual leave loading in connection with annual leave taken, as prescribed by cl.33.3 of the Award.
To the extent that that is so, I accept the Ombudsman’s further submission that notwithstanding that the requirement to make the Leave Repayments led to a number of contraventions of the FW Act, it was conduct that ought to be penalised only once by reason of s.556 of the Act, the double civil jeopardy provision.
The Ombudsman also conceded that s.557(2) of the FW Act applied to the respondents’ repeated breaches of several other discrete obligations under the FW Act and the Award. That would see only one penalty being imposed in respect each of the following separate contraventions of the Award and the FW Act although each was underpinned by more than one instance of failure:
(a)failing to pay Ms Kim the minimum rate of pay for part-time work as prescribed by cls.12.7 and 17 of the Award;
(b)failing to pay Ms Kim amounts sufficient to satisfy her entitlement to the Saturday loading prescribed by cls.31.2(b) and 31.2(c) of the Award;
(c)failing to pay Ms Kim amounts sufficient to satisfy her entitlement to the Sunday loading prescribed by cls.31.2(c) and 31.2(d) of the Award;
(d)failing to pay Ms Kim amounts sufficient to satisfy her entitlement to the public holiday penalty rates prescribed by cls.35.3 and 35.4 of the Award;
(e)failing to pay Ms Kim amounts sufficient to satisfy her entitlement to the overtime rates prescribed by cl.31.2(a) of the Award; and
(f)failing to pay Ms Kim amounts sufficient to satisfy her tool allowance entitlement prescribed by cl.21.10 of the Award.
The contraventions of each of:
(a)s.535(1) (making and keeping employee records);
(b)s.536(1) (giving pay slips timeously); and
(c)s.536(3) (giving false and misleading pay slips)
also involved discrete courses of conduct which attract the operation of s.557 of the FW Act.
The remaining contraventions, namely of:
(a)s.44, represented by the breach of s.90(2) (payment of accrued leave on termination);
(b)s.44, represented by the breach of s.117(2) (notice of termination or pay in lieu); and
(c)s.45, represented by the failure to enter into a part-time employment agreement with Ms Kim pursuant to cl.12.2 of the Award
involved single omissions and so do not attract the operation of s.557 of the FW Act.
Whether or not the breaches were deliberate
The conduct making up the contraventions was deliberate. Although I am prepared to accept that Ms Ha probably did not know in any particular detail the requirements of the FW Act or the regulations made under it, nonetheless, she had operated the business since 2010 and had been employed in other salons for a year and a half before that. It is not credible that she was unaware of the existence of industrial laws or instruments regulating individuals’ employment, particularly as Ms Kim’s employment contract made specific reference to matters such as annual leave, superannuation contributions, paid personal leave and compassionate leave and Ms Ha admitted awareness of some of those rights at para.125 of the statement of agreed facts. The additional fact that Ms Ha provided Ms Kim with pay slips which misstated her hours of work indicates that Ms Ha knew what Ms Kim’s ordinary working week should have been, when in the actuality it was something quite different, and that Ms Kim was not being paid for the difference. There can be no doubt that Ms Ha was aware of the repayments because she pressed Ms Kim for them.
Overall, I am satisfied that Ms Ha knew that she was not paying Ms Kim for all the work she did and was getting her to pay for expenses that were properly those of the business.
Whether the party committing the breach had exhibited contrition and taken corrective action
Ms Ha’s affidavit recounted a version of events which sought to explain the repayments and failed to address the underpayments more generally or the record keeping contraventions. I accept that Ms Ha is regretful that things have come to this but I am not persuaded by her affidavit that she feels any remorse in relation to her treatment of Ms Kim. In particular, notwithstanding that a contravention letter dated 11 August 2020 had been sent to her by the Ombudsman requiring payment of the sums paid by, and withheld from, Ms Kim and that the matter had been on foot for a year before the trial, she did not seek to show that any of the repayments or underpayments had been made good to Ms Kim and I infer from that that none had been. In that regard, FWI Kendrick’s second affidavit recorded that the business of Yeon Beauty was sold for $30,000 in March 2021, which contradicts Ms Ha’s evidence that it was transferred for no consideration and indicates the existence of a fund that could have been applied in part discharge of the respondents’ obligations to Ms Kim. The fact that it was not, indicates an absence of contrition.
Whether the party committing the breach had cooperated with the enforcement authorities
FWI McKendry’s evidence was that during the majority of the investigation, notwithstanding instances of delay, Yeon Beauty’s legal representatives corresponded with her in a co-operative and generally timely manner, providing further information, documents and financial evidence from the respondents’ accountant.
The statement of agreed facts is also to be noted as a significant step in the efficient and cost-effective progress of the matter in this Court. The Ombudsman submitted that a 15% discount on penalty would be appropriate recognition of the respondents’ admissions of liability and I accept that it would be.
The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements
The object of the FW Act is to set or support and to apply minimum employment standards. The respondents’ failures to observe the requirements of the Act and of the Award, and their failure to provide Ms Kim with accurate and truthful pay slips, cut to the heart of an important part of the system of compliance erected by the FW Act. An employee is significantly hampered in their understanding of how their employment is administered and whether industrial obligations are being met if their employer tells them untruths, as was the case here. The very thing that the documentation of wages payments and the basis of their calculation was designed to deter occurred in this case, assisted by the provision of misleading pay slips. That is a matter of some gravity.
The need for specific and general deterrence
Ms Ha’s sale of the Yeon Beauty business was subject to a 2 year restraint which has now expired and she is free to resume trading if she wishes. Given her lack of real remorse the penalties to be imposed should include an element for specific deterrence to discourage her from repeating the conduct considered in this case.
FWI McKendry annexed a 2020 Ombudsman’s report into the hair and beauty industry which stated that 45% of those businesses breached workplace laws and that pay slip contraventions and underpayment breaches were amongst the most common contraventions. I accept that it is important that penalties be set at a level such that they are not an acceptable cost of doing business, and so tend to discourage repetition or emulation of the contraventions considered in these reasons. The penalties to be set in this case should consequently include an element for general deterrence.
PENALTIES
First respondent
Having regard to the matters referred to earlier, I find that the following penalties are appropriate to impose on the first respondent:
No.
Civil remedy provision
Description and underlying contravention
Penalty
1
section 325(1)
Unreasonable requirement to spend an amount - Leave Repayments
$47,250
2
section 325(1)
Unreasonable requirement to spend an amount - Cash Back Payments
$47,250
3
section 45
Failure to pay Ms Kim part-time minimum wage
$40,950
4
section 45
Failure to pay Ms Kim Saturday loading
$28,350
5
section 45
Failure to pay Ms Kim Sunday loading
$15,750
6
section 45
Failure to pay Ms Kim public holiday loading
$15,750
7
section 45
Failure to pay Ms Kim overtime
$40,950
8
section 45
Failure to pay Ms Kim tool allowance
$9,450
9
section 44(1)
Failure to pay Ms Kim annual leave on termination
$9,450
10
section 117(2)
Failure to give Ms Kim notice of termination or pay in lieu of notice
$15,750
11
section 535(1)
Failure to make and keep employee records for Ms Kim
$34,650
12
section 536(1)
Failure to give Ms Kim pay slips
$47,250
13
section 536(3)
Providing Ms Kim with false and misleading payslips
$34,650
14
section 45
Failure to enter into part-time employment agreement with Ms Kim
$6,300
Subtotal
$393,750.00
Less 15%
$59,062.50
TOTAL
$334,687.50
However, I do not believe that such a total is just and appropriate. Notwithstanding the gravity of the individual contraventions, when their related penalties are aggregated a very large total results. Yeon Beauty was a small business and the aggregate penalty just cited would, if the company were to trade again, be likely to be crushing. I consider a more appropriate penalty to be $100,000 which is still a significant sum.
Second respondent
Having regard to the matters referred to earlier, I find that the following penalties are appropriate to impose on the second respondent:
No.
Civil remedy provision
Description and underlying contravention
Maximum penalty
1
section 325(1)
Unreasonable requirement to spend an amount - Leave Repayments
$9,459
2
section 325(1)
Unreasonable requirement to spend an amount - Cash Back Payments
$9,459
3
section 44(1)
Failure to pay Ms Kim annual leave on termination
$1,890
4
section 117(2)
Failure to give Ms Kim notice of termination or pay in lieu of notice
$3,150
5
section 535(1)
Failure to make and keep employee records for Ms Kim
$6,930
6
section 536(1)
Failure to give Ms Kim pay slips
$8,190
7
section 536(3)
Providing Ms Kim with false and misleading payslips
$6,930
Subtotal
$45,990
Less 15%
$6,898.50
TOTAL
$39,091.50
I believe that such a total is just and appropriate.
CONCLUSION
Within 28 days the respondents are to pay to the Ombudsman the amount of $103,036.25, being the compensation owing to Jahye Kim.
Within 28 days the first respondent is to pay to the Ombudsman the amount of $49,577.17, being the compensation owing to Jahye Kim.
Within 28 days the respondents also pay to the Ombudsman interest on the $103,306.25 compensation amount, calculated in accordance with paragraph 2.2 of the Federal Court of Australia practice note “Interest on Judgments Practice Note (GPN-INT)”.
Within 28 days the respondents also pay to the Ombudsman interest on the $49,577.17 compensation amount, calculated in accordance with paragraph 2.2 of the Federal Court of Australia practice note "Interest on Judgments Practice Note (GPN-INT)".
Yeon Beauty pay pecuniary penalties totalling $100,000.
Ms Ha pay pecuniary penalties totalling $39,091.50.
The pecuniary penalties are be paid to the Ombudsman within 28 days.
I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Cameron. Associate:
Dated: 5 April 2023
ATTACHMENT A: STATEMENT OF AGREED FACTS
(1)This Statement of Agreed Facts is made by the parties in these proceedings for the purposes of section 191 of the Evidence Act 1995 (Cth).
B. ADMITTED CONTRAVENTIONS
(2)On the basis of the facts set out below, Yeon Beauty Salon Pty Ltd (ACN 603 278 020) (Yeon Beauty) admits to contravening the following civil remedy provisions of the Fair Work Act 2009 (Cth) (FW Act) with respect to the employment of Jahye Kim (Ms Kim) in the period from 2 May 2015 to 9 October 2019 (Employment Period):
(a)section 325(1) of the FW Act by unreasonably requiring Ms Kim to make the Leave Repayments (defined in paragraph [13] below) to Yeon Beauty and therefore to pay part of an amount payable to her in relation to the performance of work;
(b)section 325(1) of the FW Act by unreasonably requiring Ms Kim to make the Cash Back Payments (defined in paragraph [22] below) to Yeon Beauty and therefore pay part of an amount payable to her in relation to the performance of work;
(c)section 45 of the FW Act by failing to pay Ms Kim the full-time minimum rate of pay as prescribed by clause 17 of the Hair and Beauty Industry Award 2010 (Award);
(d)section 45 of the FW Act by failing to pay Ms Kim the part-time minimum rate of pay as prescribed by clauses 12.7 and 17 of the Award;
(e)section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to meet her entitlement to the Saturday loading prescribed by clauses 31.2(b) and 31.2(c) of the Award;
(f)section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to meet her entitlement to the Sunday loading prescribed by clauses 31.2(c) and 31.2(d) of the Award;
(g)section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to meet her entitlement to the Public Holiday penalty rates prescribed by clauses 35.3 and 35.4 of the Award;
(h)section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to meet her entitlement to the overtime rates prescribed by clause 31.2(a) of the Award;
(i)section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to meet her entitlement the tool allowance prescribed by clause 21.10 of the Award;
(j)section 44(1) of the FW Act by failing to pay Ms Kim amounts sufficient to meet her entitlement to her base rate of pay for annual leave taken during the Employment Period as prescribed by section 90(1) of the FW Act;
(k)section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to meet her entitlements to annual leave loading for annual leave taken during the Employment Period as prescribed by clause 33.3 of the Award;
(l)section 44(1) of the FW Act by failing to pay Ms Kim any amounts in respect of untaken paid annual leave upon termination of employment to Ms Kim as prescribed by section 90(2) of the FW Act;
(m)section 44(1) of the FW Act by failing to pay Ms Kim her amounts sufficient to satisfy the minimum base rate of pay for periods of paid personal leave taken during the Employment Period as prescribed by section 96(1) of the FW Act;
(n)section 44(1) of the FW Act by failing to pay Ms Kim at her base rate of pay for her ordinary hours of work for absence on a public holiday as prescribed by section 116 of the FW Act;
(o)section 44(1) of the FW Act by failing to either provide Ms Kim with the minimum period of notice of termination, or payment in lieu of notice, as prescribed by section 117(2) of the FW Act;
(p)section 535(1) of the FW Act by failing to make and keep employment records for Ms Kim of the kind prescribed by regulations 3.33(3), 3.34, 3.36 and 3.40 of the Fair Work Regulations 2009 (Cth) (FW Regulations);
(q)section 536(1) by failing to provide Ms Kim with a pay slip within one working day of each occasion that Yeon Beauty paid Ms Kim an amount in relation to the performance of work;
(r)section 536(3) by providing Ms Kim pay slips that were false and misleading on eight occasions; and
(s)section 45 of the FW Act by failing to enter into a part-time employment agreement with Ms Kim in contravention of clause 12.2 of the Award,
(Admitted Contraventions).
(3)Ms Ha admits that she was involved in the Admitted Contraventions set out in paragraphs 2(a), (b), (j) and (l) to (r) above pursuant to section 550(1) of the FW Act.
C. ADMITTED FACTS
Applicant
(4)The Applicant, the Fair Work Ombudsman, is and was at all relevant times:
(a)a statutory appointee of the Commonwealth appointed by the Governor-General by written instrument pursuant to section 687(1) of the FW Act;
(b)a Fair Work Inspector (FWI) pursuant to section 701 of the FW Act; and
(c)a person with standing to bring these proceedings and to apply for orders for contraventions of civil remedy provisions pursuant to section 539(2) of the FW Act.
First Respondent
(5)Yeon Beauty is and was at all relevant times:
(a)a corporation incorporated under the Corporations Act 2001 (Cth) and registered since 9 December 2014;
(b)capable of being sued in its corporate name;
(c)a “constitutional corporation” within the meaning of section 12 of the FW Act;
(d)a “national system employer” within the meaning of section 14 of the FW Act;
(e)an entity operating a business as a hairdressing salon trading as "Yeon Art Hair" and located at ... Eastwood 2122 New South Wales;
(f)the employer of Ms Kim during the Employment Period; and
(g)bound by the FW Act and the FW Regulations in respect of the employment of Ms Kim.
Second Respondent
(6)Ms Ha is and was at all relevant times:
(a)a natural person capable of being sued;
(b)the sole director and manager of Yeon Beauty;
(c)responsible for the day to day management, direction and control of Yeon Beauty's operations;
(d)a person who authorised decisions regarding Yeon Beauty's employment practices;
(e)by reason of section 793(1) of the FW Act, a person whose conduct within the scope of her actual or apparent authority was conduct engaged in or on behalf of Yeon Beauty; and
(f)by reason of section 793(2) of the FW Act, a person whose state of mind is taken to be that of Yeon Beauty.
Employee
(7)At all relevant times during the Employment Period, Ms Kim was:
(a)a national system employee within the meaning of section 13 of the FW Act;
(b)permitted to work in Australia pursuant to a Temporary Work (Skilled) (subclass 457) visa sponsored by Yeon Beauty;
(c)engaged by Yeon Beauty to work as a hairdresser pursuant to written agreements dated 30 April 2015 and 23 March 2017 (together, Employment Agreements);
(d)employed on a full-time basis from 12 May 2015 until 21 June 2019 (Full-Time Employment Period);
(e)on unpaid parental leave from 11 March 2019 until 21 June 2019;
(f)employed on a part-time basis from 22 June 2019 until 9 October 2019 (Part-Time Employment Period);
(g)performed duties for Yeon Beauty that included:
(i)performing hair styling to customers;
(ii)dying hair;
(iii)trimming moustaches and beards;
(iv)conditioning, bleaching, straightening hair;
(v)cleaning;
(vi)preparing and maintaining a cash register and answering phone calls;
(vii)maintaining client records and appointments; and
(h)held a Certificate IV in Hairdressing issued on 30 March 2011 a Diploma in Hairdressing and Salon Management issued on 2 December 2011.
Industrial instrument
(8)At all relevant times:
(a)the Award covered and applied to Yeon Beauty in respect of the employment of Ms Kim; and
(b)Ms Kim was classified as a Level 5 employee under Schedule B of the Award.
Hours of work and amounts paid to Ms Kim
(9)During the Full-Time Employment Period, save for periods of leave Ms Kim generally worked 51 hours per week, from 9:00 am to 6:00pm (less a 30 minute break), Tuesday to Sunday.
(10)During the Part-Time Employment Period, Ms Kim:
(a)generally worked the opening hours of the salon, being 9:00am until 6:00pm (less a 30 minute break), on her days of work, save for on and after 23 September 2019, during which time Ms Kim did not attend for work; and
(b)worked between 17 and 34 hours per week.
(11)The Employment Agreements stated that Yeon Beauty would pay Ms Kim an annual salary of $54,000 (plus superannuation). The annual salary equated to a weekly wage of $1,076.92 (gross) and $855.70 (net).
(12)During the Employment Period Yeon Beauty paid Ms Kim:
(a)weekly payments of:
(i)$1076.92 gross ($885.70 net) per week from 12 May 2015 until 18 October 2015;
(ii)$1076.92 gross ($855.70 net) per week from 19 October 2015 until 10 March 2019,
(Weekly Payments);
(b)additional amounts of between $50 and $300 per week, on an ad hoc basis, during her Full-Time Employment Period as set out in Table 1 of Annexure A, totalling $24,450 gross;
(c)$500 on 31 July 2019;
(d)$1,000 on 19 August 2019; and
(e)save for the two payments specified at (c) and (d) above, no other amounts during the Part-Time Employment Period.
D. REPAYMENT OF WAGES
Contraventions of section 325(1) of the FW Act – unreasonable requirement to pay or spend an amount
Leave Repayments
(13)During her Full-Time Employment Period, Yeon Beauty required Ms Kim to pay, and Ms Kim did pay to Yeon Beauty, the Weekly Payments paid to her during or after periods of approved or personal annual leave, on the dates and in the amounts set out in Table 2 of Annexure A (Leave Repayments).
(14)The Leave Repayments were made by way of electronic transfer from Ms Kim to a Commonwealth Bank of Australia account held in the name of Ms Ha and her husband, Jan Han Kim.
(15)The requests for Ms Kim to make the Leave Repayments were made by Ms Ha to Ms Kim in Korean by way of the Kakao messaging application.
(16)The Leave Repayments paid by Ms Kim during her Employment Period totalled $11,979.80.
(17)The requirement imposed by Yeon Beauty on Ms Kim to pay each of the Leave Repayments was unreasonable in the circumstances because the Leave Repayments were made from payments Ms Kim was entitled to be paid for accrued and approved annual or personal leave.
(18)By reason of the matters admitted at paragraphs 13 to 15 and 17 above:
(a)Yeon Beauty unreasonably required Ms Kim to pay to Yeon Beauty an amount payable to her in relation to the performance of work; and
(b)the Leave Repayments were directly or indirectly for the benefit of Yeon Beauty.
(19)By reasons of the matters admitted at paragraphs 13 to 18 above Yeon Beauty contravened section 325(1) of the FW Act.
(20)Pursuant to section 327 of the FW Act:
(a)at all relevant times on or before 14 September 2017, the Leave Repayments that Ms Kim was required to spend contrary to subsection 325(1) of the FW Act are taken never to have been paid to Ms Kim; and
(b)at all relevant times on or after 15 September 2017 to, the Leave Repayments are taken to be an unlawful deduction from amounts payable to Ms Kim.
(21)By reason of the matters admitted at paragraph 20 above, in each of the following pay periods, Ms Kim was paid only the additional amounts admitted at paragraph 11 (b) and any taxation amounts withheld from Ms Kim's wages: 29 February 2016; 26 December 2016; 14 August 2017; 21 August 2017; 28 August 2017; 4 September 2017; 11 September 2017; 25 December 2017; 2 July 2018; 3 September 2018; 10 September 2018; 15 October 2018; 24 December 2018; and 18 February 2019.
Cash Back Payments
(22)During her Full-Time Employment Period, Yeon Beauty required Ms Kim to make various payments to Yeon Beauty or Ms Ha, and Ms Kim did in fact make these payments, on the dates and in the amounts set out in Table 3 of Annexure A (Cash Back Payments).
(23)The Cash Back Payments were made by way of electronic transfer from Ms Kim to a Commonwealth Bank of Australia account held in the name of Ms Ha and her husband, Jan Han Kim.
(24)Yeon Beauty requested the Cash Back Payments be made for reasons including to meet costs associated with Ms Kim's visa, training fees, accountant fees and Yeon Beauty's taxation and superannuation obligations in respect of Ms Kim.
(25)The requests for Ms Kim to make Cash Back Payments were made by Ms Ha to Ms Kim in Korean by way of the Kakao messaging application.
(26)The Cash Back Payments made by Ms Kim to Yeon Beauty during her Employment Period totalled $93,629.23.
(27)The requirement imposed by Yeon Beauty on Ms Kim to pay the Cash Back Payments was unreasonable in the circumstances, because:
(a)it had the effect of Ms Kim receiving rates of pay below her Award entitlements for the performance of work; and/or
(b)some of the Cash Back Payments were stated to be required to meet Yeon Beauty's liabilities and obligations.
(28)By reason of the matters admitted at paragraphs 22 to 25 and 27 above:
(a)Yeon Beauty unreasonably required Ms Kim to pay to Yeon Beauty an amount payable her in relation to the performance of work; and
(b)the Cash Back Payments were directly or indirectly for the benefit of Yeon Beauty.
(29)By reason of the matters admitted at paragraphs 22 to 28 above:
(a)Yeon Beauty contravened section 325(1) of the FW Act; and
(b)Ms Kim is entitled to compensation for the Cash Back Payments in the amount of $93,629.23.
E. UNDERPAYMENT CONTRAVENTIONS
Contravention of clause 17 of the Award – Failure to pay minimum weekly wages – Full-Time Employment Period
(30)During the Full-Time Employment Period Yeon Beauty was required to pay Ms Kim the minimum weekly wages for ordinary hours worked pursuant to clause 17 of the Award.
(31)The minimum hourly rate of pay (based on a 38 hour week) that applied to Ms Kim from 2 July 2018 to 30 June 2019 was $23.12.
(32)In the week commencing 10 September 2018, Ms Kim:
(a)worked 21 ordinary hours; and
(b)was entitled to be paid a total of $485.52 for the ordinary hours worked.
(33)By reason of the matters admitted at paragraphs 20 and 21, in the week commencing 10 September 2018 Ms Kim:
(a)was not paid any amount in respect of the ordinary hours worked; and
(b)was underpaid a total of $485.52.
(34)By reason of the matters admitted at paragraphs 32 to 33 above Yeon Beauty contravened section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to satisfy the minimum weekly wage in contravention of clause 17 of the Award.
Contravention of clause 12.7 and clause 17 of the Award – Failure to pay minimum weekly wages – Part-Time Employment Period
(35)During the Part-Time Employment Period Yeon Beauty was required to pay Ms Kim for 1/38th of the weekly rate in respect of all ordinary hours worked pursuant to clause 12.7 and clause 17 of the Award as follows:
From 2 July 2018
$23.12
From 1 July 2019
$23.81
(36)During the Part-Time Employment Period Ms Kim:
(a)worked a total of 354.5 ordinary hours;
(b)was entitled to be paid a total of $8,419.96 for the ordinary hours worked; and
(c)was paid $1,500.00 in respect of the ordinary hours above.
(37)By reasons of the matters admitted at paragraphs 35 and 36 above Yeon Beauty contravened section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to satisfy the minimum ordinary hourly rate for each hour worked during the Part-Time Employment Period in contravention of clause 12.7 and clause 17 of the Award.
(38)By reasons of the contravention admitted at paragraph 37 above, Ms Kim was underpaid a total of $6,919.96 in respect of the minimum hourly rate for the Part-Time Employment Period.
Contravention of clause 31.2 of the Award – Failure to pay Saturday loading
(39)During the Employment Period, pursuant to clause 31.2(b) until 31 December 2017 and clause 31.2(c) thereafter, Yeon Beauty was required to pay Ms Kim a loading of 33% of the minimum hourly rate of pay for ordinary hours of work on a Saturday as follows:
From 22 May 2015
$6.80
From 6 July 2015
$6.97
From 4 July 2016
$7.13
From 3 July 2017
$7.37
From 2 July 2018
$7.63
From 1 July 2019
$7.86
(40)During the Employment Period Ms Kim:
(a)worked 826.67 hours on a Saturday;
(b)was entitled to be paid Saturday loading amounts of $6042.24; and
(c)was paid $788.02 in respect of Saturday loading.
(41)By reasons of the matters admitted at paragraphs 39 and 40 above Yeon Beauty contravened section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to satisfy the Saturday loading in contravention of:
(a)clause 31.2(b) of the Award until 31 December 2017; and
(b)clause 31.2(c) of the Award from 1 January 2018 onwards.
(42)By reason of the contravention admitted at paragraph 41 above, Yeon Beauty underpaid Ms Kim $5,254.22 in respect of hours worked on a Saturday.
Contravention of Clause 31.2 of the Award – Failure to pay Sunday loading
(43)During the Employment Period, pursuant to clause 31.2(c) of the Award until 31 December 2017 and clause 31.2(d) thereafter, Yeon Beauty was required to pay Ms Kim a loading of 100% for all hours of work on a Sunday as follows:
From 22 May 2015
$20.60
From 6 July 2015
$21.11
From 4 July 2016
$21.62
From 3 July 2017
$22.23
From 2 July 2018
$23.12
From 1 July 2019
$23.81
(44)During the Employment Period Ms Kim:
(a)worked 143.5 hours on a Sunday;
(b)was entitled to be paid Sunday loading amounts of $3,275.82; and
(c)was paid $966.60 in respect of Sunday loading.
(45)By reason of the matters admitted at paragraphs 43 and 44 above Yeon Beauty contravened section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to satisfy the Sunday loading in contravention of:
(a)clause 31.2(c) of the Award until 31 December 2017; and
(b)clause 31.2(d) of the Award from 1 January 2018 onwards.
(46)By reasons of the contravention admitted at paragraph 45 above Yeon Beauty underpaid Ms Kim $2,309.22 in respect of hours worked on a Sunday.
Contravention of clause 35.3 of the Award – Failure to pay public holiday penalty
(47)During the Employment Period, pursuant to clause 35.3 of the Award until 31 December 2017 and clause 35.4 thereafter, Yeon Beauty was required to pay Ms Kim double time and a half per hour in respect of all hours worked on a public holiday, as follows:
From 22 May 2015
$51.50
From 6 July 2015
$52.78
From 4 July 2016
$54.05
From 3 July 2017
$55.83
From 2 July 2018
$57.80
From 1 July 2019
$59.53
(48)Ms Kim performed work on the following 13 public holidays 25 March 2016, 26 March 2016, 27 March 2016, 26 January 2017, 14 April 2017, 15 April 2017, 16 April 2017, 25 April 2017, 26 January 2018, 30 March 2018, 31 March 2018, 1 April 2018 and 25 April 2018.
(49)During the Employment Period Ms Kim;
(a)worked 110.5 hours on public holidays;
(b)was entitled to be paid $6,015.82 for all hours worked on a public holiday; and
(c)was paid $2,887.00 for all hours worked on a public holiday.
(50)By reason of the matters admitted at paragraphs 47 and 0 [sic] above. Yeon Beauty contravened section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to satisfy the public holiday rate of pay in contravention of:
(a)clause 35.3 of the Award until 31 December 2017; and
(b)clause 35.4 of the Award from 1 January 2018 onwards.
(51)By reason of the contravention admitted at paragraph 50 above Yeon Beauty underpaid Ms Kim $3,128.82 in respect of hours worked on a public holiday.
Contravention of clause 31.2(a) of the Award – Failure to pay overtime
(52)During the Employment Period Yeon Beauty was required to pay Ms Kim overtime rates of time and a half for the first three hours and double time thereafter in respect of all hours worked:
(a)in excess of an average or 38 hours per week; or
(b)outside the span of hours as specified in clause 28.2(a) of the Award,
pursuant to clause 31.2(a) of the Award, as follows:
First Three Hours
Thereafter
From 22 May 2015
$30.90
$41.20
From 6 July 2015
$31.67
$42.22
From 4 July 2016
$32.43
$43.24
From 3 July 2017
$33.50
$44.66
From 2 July 2018
$34.68
$46.24
From 1 July 2019
$35.72
$47.62
(53)During the Employment Period Ms Kim:
(a)worked a total of 2,145.5 overtime hours;
(b)was entitled to be paid $88,900.74 in respect of those overtime hours worked; and
(c)was paid $60,753.86 in respect of those hours.
(54)By reasons of the matters admitted at paragraphs 52 to 53 above Yeon Beauty contravened section 45 of the FW Act by failing to pay Ms Kim amounts sufficient to satisfy the overtime rates in contravention of clause 31.2(a) of the Award.
(55)By reasons of the contravention admitted at paragraph 54 above, Yeon Beauty underpaid Ms Kim $28,146.88 in respect of overtime hours worked.
Contravention of clause 21.10 of the Award – Failure to pay tool allowance
(56)During the Employment Period, pursuant to clause 21.10(b) of the Award, where Ms Kim was required to use her own tools, Yeon Beauty was required to pay Ms Kim a tool allowance each week, as follows:
From 12 May 2015
$8.64
From 4 July 2016
$8.80
From 3 July 2017
$8.99
(57)During the Employment Period Ms Kim was:
(a)required to use her own tools for the performance of work for Yeon Beauty;
(b)entitled to the tool allowance on 195 occasions;
(c)entitled to be paid a total of $1,724.81 in respect of the tool allowance; and
(d)paid $186.02 in respect of the tool allowance.
(58)By reasons of the matters admitted at paragraphs 56 to 57 above Yeon Beauty contravened section 45 of the FW Act by failing to pay Ms Kim a tool allowance in contravention of clause 21.10(b) of the Award.
(59)By reason of the contravention admitted at paragraph 58 above, Yeon Beauty underpaid Ms Kim $1,538.79 in respect of the tool allowance.
Section 90(1) of the FW Act – Failure to pay annual leave during employment
(60)During the Employment Period:
(a)Ms Kim was entitled to four weeks of annual leave for each year of service with Yeon Beauty, which accrued progressively throughout the year according to Ms Kim's ordinary hours of work, pursuant to section 87 of the FW Act; and
(b)Yeon Beauty was required to pay Ms Kim at her base rate of pay for her ordinary hours of work during periods of annual leave pursuant to section 90(1) of the FW Act.
(61)Ms Kim was absent from work on approved annual leave for the following periods:
(a)19 to 31 December 2015;
(b)1 to 31 January 2016;
(c)25 to 31 December 2016;
(d)15 to 31 August 2017;
(e)1 to 18 September 2017;
(f)1 November 2017;
(g)26 to 31 December 2017;
(h)15 May 2018;
(i)3 to 8 July 2018;
(j)4 to 13 September 2018;
(k)15 to 21 October 2018
(l)22 to 25 October 2018;
(m)24 to 31 December 2018; and
(n)19 to 24 February 2019.
(62)In each of the following periods of approved annual leave, Ms Kim was required to make a Leave Repayment to Yeon Beauty:
(a)25 to 31 December 2016;
(b)15 to 31 August 2017;
(c)1 to 18 September 2017;
(d)26 to 31 December 2017;
(e)3 to 8 July 2018;
(f)4 to 13 September 2018;
(g)15 to 21 October 2018;
(h)24 to 31 December 2018; and
(i)19 to 24 February 2019,
(Annual Leave Repayment Periods).
(63)During the Annual Leave Repayment Periods Ms Kim:
(a)took 409.5 hours of approved annual leave;
(b)by reason of the matters admitted at paragraphs 20 and 21 above, was paid $3,954.64 in respect of annual leave; and
(c)was entitled to be paid $9,294.14 in respect of annual leave.
(64)During all other periods of approved annual leave Ms Kim:
(a)took 139.25 hours of approved annual leave;
(b)was paid $3,011.58 in respect of annual leave; and
(c)was entitled to be paid $3,011.68 in respect of annual leave.
(65)By reason of the matters admitted at paragraphs 60 to 64 above, Yeon Beauty contravened section 44(1) of the FW Act by failing to pay to Ms Kim her base rate of pay for periods of approved annual leave as required by section 90(1) of the FW Act.
(66)By reason of the matters admitted at paragraph 63 to 65 above, Yeon Beauty underpaid Ms Kim $5,339.60 in respect of her annual leave.
Clause 33.3 of the Award – Failure to pay annual leave loading during employment
(67)During the Employment Period, Yeon Beauty was required to pay Ms Kim an annual leave loading of 17.5% for periods of annual leave pursuant to clause 33.3(a) and 33.3(b)(i) of the Award.
(68)The Applicant refers to and repeats paragraphs 61 and 62 above.
(69)During the Annual Leave Repayment Periods Ms Kim:
(a)took 409.5 hours of approved annual leave;
(b)by reason of the matters admitted at paragraphs 20 and 21 above, was not paid any amount in respect of annual leave loading; and
(c)was entitled to be paid $1,627.75 in respect of annual leave loading.
(70)During all other periods of approved annual leave Ms Kim:
(a)took 139.25 hours of approved annual leave;
(b)was paid $360.89 in respect of annual leave loading; and
(c)was entitled to be paid $526.90 in respect of annual leave loading.
(71)By reason of the matters admitted at paragraphs 67 to 67 above, Yeon Beauty contravened section 45 of the FW Act by failing to pay to Ms Kim her applicable annual leave loading during periods of approved annual leave in contravention of clause 33.3(b)(i) of the Award.
(72)By reason of the matters admitted at paragraphs 69 to 71 above, Yeon Beauty underpaid Ms Kim $1,793.76 in respect of her leave loading.
Section 90(2) of the FW Act – Failure to pay annual leave and leave loading on termination
(73)On termination of Ms Kim's employment, Yeon Beauty was required to pay Ms Kim amounts equivalent to any untaken accrued annual leave pursuant to section 90(2) of the FW Act.
(74)Ms Kim was also entitled to be paid annual leave loading on termination at the rate of 17.5% pursuant to clause 33.3(b)(i) of the Award.
(75)At the end of the Employment Period Ms Kim:
(a)had 33.9 hours of untaken annual leave;
(b)was entitled to be paid $948.52 in respect of her untaken accrued annual leave and leave loading; and
(c)was not paid an amount for annual leave and leave loading upon termination of employment.
(76)By reason of the matters admitted at paragraphs 73 to 75 above, Yeon Beauty contravened section 44(1) of the FW Act by failing to pay Ms Kim her unused accrued annual leave and leave loading pursuant to section 90(2) of the FW Act.
(77)By reason of the contravention admitted at paragraph 76 above, Yeon Beauty underpaid Ms Kim $948.52 in respect of her unused accrued annual leave and leave loading on termination.
Section 99 of the FW Act – Failure to pay personal leave
(78)During the Employment Period:
(a)Yeon Beauty was required to pay Ms Kim her base rate of pay for ordinary hours of work during periods of approved personal leave pursuant to section 99 of the FW Act; and
(b)pursuant to section 96 of the FW Act, Ms Kim was entitled to 10 days of paid personal leave for each year of service, which accrued progressively.
(79)As at 29 February 2016, Ms Kim had accrued in excess of 61 hours on paid personal leave.
(80)During the Employment Period Ms Kim took approved personal leave from 29 February 2016 to 9 March 2016 and on 17 March 2016.
(81)In the period from 29 February 2016 to 6 March 2016, Ms Kim was required to make a Leave Repayment to Yeon Beauty (Personal Leave Repayment Period).
(82)During the Personal Leave Repayment Period Ms Kim:
(a)took 38 hours of approved personal leave;
(b)by reason of the matters admitted at paragraphs 20 and 21 above, was paid $221.22; and
(c)was entitled to be paid $802.18.
(83)During all other periods of personal leave Ms Kim was paid a sufficient amount to meet her entitlements to paid personal leave.
(84)By reasons of the matters admitted at paragraphs 78 to 82 above, Yeon Beauty contravened section 44(1) of the FW Act by failing to pay her an amount sufficient to satisfy the minimum base rate of pay for periods of paid personal leave pursuant to section 99 of the FW Act.
(85)By reason of the matters admitted at paragraph 84 above Ms Kim was underpaid a total of $580.96 in respect of the minimum base rate of pay for the Personal Leave Repayment Period.
Section 116 of the FW Act – Failure to pay for absence on public holiday
(86)Yeon Beauty was required by section 116 of the FW Act to pay Ms Kim at her base rate of pay for her ordinary hours of work when she was absent from work on a public holiday.
(87)During the Employment Period Ms Kim was absent from work and entitled to be paid at her base rate of pay on the following public holidays, totalling 76.5 hours:
(a)25 December 2015;
(b)28 December 2015;
(c)1 January 2016;
(d)27 December 2016;
(e)1 January 2017;
(f)26 December 2017;
(g)25 December 2018;
(h)26 December 2018; and
(i)1 January 2019.
(88)The following public holidays fell during the Annual Leave Repayment Periods: 27 December 2016; 1 January 2017; 26 December 2017; 25 December 2018 and 26 December 2018.
(89)In respect of the public holidays during the Annual Leave Repayment Periods Ms Kim:
(a)by reason of the matters admitted at paragraphs 20 and 21 above, was paid $221.22;
(b)was entitled to be paid $950.39.
(90)In respect of all other public holidays Ms Kim was paid a sufficient amount to meet her entitlements to payment for absence on a public holiday.
(91)By reason of the matters admitted at paragraphs 86 to 89 above, Yeon Beauty contravened section 44(1) of the FW Act by failing to pay Ms Kim at her base rate of pay for her ordinary hours of work for absence on a public holiday as required by section 116 of the FW Act.
(92)By reason of the matters admitted at paragraph 91 above Ms Kim was underpaid a total of $729.17 in respect of absence from work on a public holiday.
Section 117(2) of the FW Act – Failure to provide notice of termination or payment in lieu
(93)Pursuant to section 117 of the FW Act, Yeon Beauty was required to:
(a)give Ms Kim written notice of termination, the date of termination being after the applicable period set out in subsection 117(3) of the FW Act; or
(b)pay Ms Kim payment in lieu of the notice of termination. at the full rate of pay that Ms Kim would have worked, had her employment continued until the end of the minimum notice period, pursuant to section 117(2) of the FW Act.
(94)Ms Kim's last day of work for Yeon Beauty was 22 September 2019.
(95)On or around 23 September 2019, Ms Kim travelled to Korea for a holiday.
(96)On 9 October 2019, after Ms Kim returned to Australia, Yeon Beauty terminated Ms Kim's employment.
(97)As at 9 October 2019, Ms Kim's period of continuous service with Yeon Beauty was more than 3 years but not more than 5 years.
(98)By reason of the matters admitted at paragraph 97 above, and pursuant to the table in section 117(3) of the FW Act, the required period of notice for Ms Kim as at 9 October 2019 was 3 weeks.
(99)Ms Kim:
(a)was not provided with either a minimum 3 weeks' notice or payment in lieu of that notice;
(b)was entitled to be paid a total of $1,808.77 in respect of payment in lieu of the minimum notice of termination; and
(c)was not paid any amount in respect of payment in lieu of the minimum notice of termination.
(100)By reason of the matters admitted at paragraphs 98 and 99 above, Yeon Beauty contravened section 44(1) of the FW Act by failing to either provide Ms Kim with the minimum period of notice of termination, or payment in lieu of notice, as required by section 117(2) of the FW Act.
(101)By reason of the matters admitted at paragraphs 99 and 100 above, Ms Kim was underpaid a total of $1,808.77 in respect of the payment in lieu of the minimum notice of termination.
F. TOTAL UNDERPAYMENT
(102)By reasons of the matters admitted at paragraphs 33, 38, 42, 46, 51, 55, 59 E.59, 66, 72, 77, 85, 92 and 101 above, Yeon Beauty underpaid Ms Kim a total of $58,984.19 (gross) during the Employment Period.
G. RECORD KEEPING CONTRAVENTIONS
Contravention of section 535(1) of the FW Act – Employer obligations in relation to employee records
(103)Pursuant to subsection 535 of the FW Act and Division 3 of Part 3-6 of the FW Regulations, Yeon Beauty was required to keep:
(a)pay records that specified details of any incentive-based payment or bonus (pursuant to sub-regulation 3.33(3) of the FW Regulations);
(b)records of the number of overtime hours worked by Ms Kim during each day, or when Ms Kim started and ceased working overtime hours, if a penalty rate or loading was required to be paid for overtime hours actually worked by Ms Kim (pursuant to regulation 3.34 of the FW Regulations);
(c)records of personal leave that Ms Kim took and the balance (if any) of Ms Kim's entitlement to personal and annual leave from time to time (pursuant to regulation 3.36 of the FW Regulations); and
(d)records of termination of Ms Kim's employment (pursuant to regulation 3.40 of the FW Regulations).
(104)During the Employment Period, Yeon Beauty failed to make and keep for seven years, records of the kinds set out in paragraph 103 above.
(105)By reason of the matters admitted at paragraphs 103 and 104 above, Yeon Beauty contravened section 535(1) of the FW Act.
Contravention of section 536(1) of the FW Act – Employer obligations in relation to pay slips
(106)Pursuant to subsection 536(1) of the FW Act, Yeon Beauty was required to give a pay slip to Ms Kim within one working day of paying an amount to Ms Kim in relation to the performance of work.
(107)During her Employment Period, Ms Kim was only provided with pay slips in response to specific requests from Ms Kim.
(108)
During her Employment Period, Ms Kim was provided with nine pay slips for each of the pay periods commencing 22 August 2016, 29 August 2016, 8 January 2018,
15 January 2018, 22 January 2018, 29 January 2018, 5 February 2018, 12 February 2018 and 2 July 2018 (Pay Slips).
(109)Except for the periods admitted at paragraph 108 above, during her Employment Period Ms Kim was not provided a payslip within one day of paying her an amount in relation to the performance of work.
(110)By reason of the matters admitted at paragraphs 106 to 109 above, Yeon Beauty contravened section 536(1) of the FW Act.
Contravention of section 536(3) of the FW Act – Knowingly providing an employee with a false or misleading payslip
(111)Pursuant to section 536(3) of the FW Act. Yeon Beauty was prohibited from giving a pay slip to Ms Kim that it knew is false or misleading.
(112)Each of the Pay Slips, except for the pay slip for pay period commencing 2 July 2018, showed that Ms Kim worked 40 hours in the week, when in fact she worked more than 40 hours a week (False Pay Slips).
(113)At the time that Yeon Beauty gave each of the False Pay Slips to Ms Kim, Ms Ha knew the approximate hours worked by Ms Kim in the relevant week.
(114)Ms Ha was responsible for creating the False Pay Slips and giving the False Pay Slips to Ms Kim.
(115)By reason of the matters admitted at paragraph 112 above, the False Pay Slips were false or misleading in a material particular.
(116)By reason of the matters admitted at paragraphs 6(f) and 112 to 114 above, Yeon Beauty knew the False Pay Slips were false or misleading.
(117)By reason of the matters admitted at paragraphs 111 to 114 above, Yeon Beauty contravened section 536(3) of the FW Act.
Contravention of clause 12.2 of the Award – Part-time employment agreement
(118)Pursuant to clause 12.2 of the Award, at the commencement of the Part-Time Employment Period, Yeon Beauty was required to enter into a written agreement with Ms Kim specifying her regular pattern of work, including the hours, days and starting and finishing times of her work.
(119)At the commencement of the Part-Time Employment Agreement, Yeon Beauty did not enter into an agreement in writing with Ms Kim.
(120)By reason of the matters admitted at paragraphs 118 and 119 above, Yeon Beauty contravened section 45 of the FW Act by failing to enter into a part-time employment agreement with Ms Kim in contravention of clause 12.2 of the Award.
H. ACCESSORIAL LIABILITY
Liability of Ms Ha for contraventions section 325(1) of the FW Act
(121)During the Employment Period, Ms Ha;
(a)on behalf of Yeon Beauty, arranged for the payments of all wages to Ms Kim
(b)on behalf of Yeon Beauty, approved periods of leave taken by Ms Kim;
(c)directed Ms Kim to make the Leave Repayments and the Cash Back Payments, including by sending messages to Ms Kim using the Kakao messaging application; and
(d)received the Leave Repayments and Cash Back Payments into her personal bank account.
(122)During the Employment Period, Ms Ha knew:
(a)the amounts paid to Ms Kim, including the Weekly Payments and the additional payments made to Ms Kim, admitted at paragraph 12(b) above; and
(b)the amount of each of the Leave Repayment and Cash Back Payments.
(123)By reason of the matters admitted at paragraphs 6, 14, 15, 23, 25, 121 and 122 above, Ms Ha was involved in Yeon Beauty's contraventions of subsection 325(1) of the FW Act (as admitted at paragraphs 19 and 29 above).
Liability of Ms Ha for contraventions of the National Employment Standards
(124)At all relevant times Ms Ha directed Ms Kim to work:
(a)from 9:00am to 6:00pm each day;
(b)during the Full-Time Employment Period, 6 days a week from Tuesday to Sunday; and
(c)during Part-Time Employment Period, the days of the week Ms Kim performed work.
(125)At all relevant times Ms Ha was aware:
(a)that Ms Kim was entitled to receive annual leave and personal leave;
(b)that Ms Kim was entitled to be paid when absent from work on public holidays;
(c)that Ms Kim was not paid any amounts upon termination of employment;
(d)of when Ms Kim was attended work or was absent on a public holiday or periods of leave; and
(e)that Ms Kim was not provided with notice of termination or payment in lieu of notice.
(126)By reason of the matters admitted at paragraphs 6, 121, 122, 124 and 125 above, Ms Ha was involved in Yeon Beauty's contraventions of sections 44(1) of the FW Act (as admitted at paragraphs 65, 76, 84, 91 and 100 above).
Liability of Ms Ha for record keeping and payslip contraventions
(127)At all relevant times Ms Ha was:
(a)responsible for making and keeping employment records on behalf of Yeon Beauty;
(b)responsible for providing Ms Kim with pay slips;
(c)aware that Ms Kim was not provided with pay slips on a regular basis;
(d)aware that the hours worked by Ms Kim exceeded 40 hours per week; and
(e)aware that the False Pay Slips provided to Ms Kim showing that she worked 40 hours a week were false or misleading.
(128)By reason of the matters admitted at paragraphs 6 and 127 above, Ms Ha was involved in Yeon Beauty's contraventions of subsections 535(1), 536(1) and 536(3) of the FW Act (as admitted at paragraphs 105, 110 and 117 above).
Liability of Ms Ha under section 550(1) of the FW Act
(129)By reason of the matters admitted above, Ms Ha was:
(a)by way of her acts or omissions, directly or indirectly knowingly concerned in or a party to each of the contraventions admitted by Yeon Beauty at paragraphs 19, 29, 65, 76, 84, 91, 105, 110 and 117 above (Ha Contraventions); and
(b)pursuant to subsection 550(1) of the FW Act, is to be treated as having herself contravened each of the provisions which constitute the Ha Contraventions.
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