Fairwork Ombudsman v Blue Impression Pty Ltd & Ors (No.2)
[2017] FCCA 2797
•16 November 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FAIRWORK OMBUDSMAN v BLUE IMPRESSION PTY LTD & ORS (No.2) | [2017] FCCA 2797 |
| Catchwords: INDUSTRIAL LAW – Application for imposition of pecuniary penalties – contraventions of Fair Work Act 2009 – admissions by first and second respondents – finding of accessorial liability in relation to third respondent – declaration of involvement in contraventions by first and second respondents no penalty sought against second respondent – whether parity an issue –appropriate penalty for first and third respondent – penalties ordered. |
| Legislation: Fair Work Act 2009 (Cth), ss.12, 45, 535, 536, 539, 545, 546, 550, 557, 682 Fair Work Regulations 2009 (Cth) r.3.44, |
| Cases cited: Fair Work Ombudsman v Blue Impression Pty Ltd & Ors [2017] FCCA 810 |
| Applicant: | FAIR WORK OMBUDSMAN |
| First Respondent: | BLUE IMPRESSION PTY LTD (CAN 151 494 763) |
| Second Respondent: | SZE TENG WONG |
| Third Respondent: | EZY ACCOUNTING 123 PTY LTD (CAN 105 317 691) |
| File Number: | MLG 2721 of 2015 |
| Judgment of: | Judge O'Sullivan |
| Hearing date: | 2 November 2017 |
| Date of Last Submission: | 2 November 2017 |
| Delivered at: | Melbourne |
| Delivered on: | 16 November 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr Tracey |
| Solicitors for the Applicant: | Fair Work Ombudsman |
| Counsel for the First Respondent: | Mr Galbraith |
| Solicitors for the First Respondent: | Jem Lawyers |
| Counsel for the Second Respondent | Mr Galbraith |
| Solicitors for the Second Respondent | Jem Lawyers |
| Counsel for the Third Respondent | Mr Champion |
| Solicitors for the Third Respondent | Canaan Lawyers |
ORDERS
THE COURT DECLARES THAT:
The First Respondent, Blue Impression Pty Ltd, has contravened:
(a)section 45 of the Fair Work Act 2009 (Cth) (FW Act), by failing to pay Jian Hong Zheng (Zheng) and Yun Chia Hsieh (Hsieh) the minimum hourly rate of pay in accordance with clauses 13.2 and 17 of the Fast Food Industry Award 2010 (Modern Award);
(b)section 45 of the FW Act, by failing to pay Zheng and Hsieh the casual loading in accordance with clause 13.2 of the Modern Award;
(c)section 45 of the FW Act, by failing to pay Zheng and Hsieh the evening loading in accordance with clause 25.5(a)(i) of the Modern Award;
(d)section 45 of the FW Act, by failing to pay Zheng and Hsieh the Saturday loading in accordance with clause 25.5(b) of the Modern Award;
(e)section 45 of the FW Act, by failing to pay Zheng and Hsieh the Sunday loading in accordance with clause 25.5(c)(ii) of the Modern Award;
(f)section 45 of the FW Act, by failing to pay Zheng and Hsieh the public holiday penalty rate in accordance with clause 30.3 of the Modern Award;
(g)section 45 of the FW Act, by failing to provide Zheng and Hsieh with rest breaks and meal breaks in accordance with clause 27.1 of the Modern Award;
(h)section 45 of the FW Act, by failing to pay Zheng and Hsieh the special clothing allowance in accordance with clause 19.2(b)(ii) of the Modern Award;
(i)section 535(1) of the FW Act, by failing to make and keep, for seven years, employee records for Zheng and Hsieh as prescribed by regulation 3.44(1) of the Fair Work Regulations 2009 (Cth) (FW Regulations);
(j)section 536(1) of the FW Act, by failing to issue pay slips to Yun Chia Hsieh, within one working day of paying an amount to her in respect of her performance of work; and
(k)section 536(2) of the FW Act, by failing to include prescribed information on the pay slips issued to Zheng and Hsieh.
The Second Respondent, Sze Teng Wong, was involved in each of the following contraventions by the First Respondent, pursuant to section 550(1) of the FW Act:
(a)section 45 of the FW Act, by failing to pay Zheng and Hsieh the minimum hourly rate of pay in accordance with clauses 13.2 and 17 of the Modern Award;
(b)section 45 of the FW Act, by failing to pay Zheng and Hsieh the casual loading in accordance with clause 13.2 of the Modern Award;
(c)section 45 of the FW Act, by failing to pay Zheng and Hsieh the evening loading in accordance with clause 25.5(a)(i) of the Modern Award;
(d)section 45 of the FW Act, by failing to pay Zheng and Hsieh the Saturday loading in accordance with clause 25.5(b) of the Modern Award;
(e)section 45 of the FW Act, by failing to pay Zheng and Hsieh the Sunday loading in accordance with clause 25.5(c)(ii) of the Modern Award;
(f)section 45 of the FW Act, by failing to pay Zheng and Hsieh the public holiday penalty rate in accordance with clause 30.3 of the Modern Award;
(g)section 45 of the FW Act, by failing to provide Zheng and Hsieh with rest breaks and meal breaks in accordance with clause 27.1 of the Modern Award; and
(h)section 45 of the FW Act, by failing to pay Zheng and Hsieh the special clothing allowance in accordance with clause 19.2(b)(ii) of the Modern Award.
THE COURT ORDERS THAT:
By reason of the declarations of contraventions set out in paragraph (1) above, the First Respondent is to pay pecuniary penalties of $115,706.25 pursuant to section 546(1) of the FW Act.
By reason of the declarations made for the reasons in Fair Work Ombudsman v Blue Impression Pty Ltd [2017] FCCA 810 on 28 April 2017 the Third Respondent EZY ACCOUNTING 123 PTY LTD (ACN 105 317 691) is to pay pecuniary penalties of $53,880 pursuant to section 546(1) of the FW Act.
Pursuant to section 546(3)(a) of the FW Act, the pecuniary penalties ordered to be paid in orders [3] and [4] be paid to the Commonwealth within [45] days.
The Applicant has liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT Melbourne |
MLG 2721 of 2015
| Fair Work Ombudsman |
Applicant
And
| Blue Impression Pty Ltd (acn 151494 763) |
First Respondent
| SZE TENG WONG |
Second Respondent
| EZY ACCOUNTING 123 PTY LTD (ACN 105 317 691) |
Third Respondent
REASONS FOR JUDGMENT
Introduction
The Fair Work Ombudsman (“the FWO”) commenced these proceedings against Blue Impression Pty Ltd ACN 151 494 763 (the “first respondent”) and two other respondents, Sze Teng Wong (the “second respondent”) and Ezy Accounting 123 Pty Ltd ACN 105 317 691 (“Ezy”) by application and statement of claim filed on 9 December 2015.
The first respondent, inter alia, operated a Japanese fast food restaurant with outlets located in Doncaster, Melbourne at the Queen Victoria Building, and Southland Shopping Centres in the State of Victoria.
These proceedings arise out of the FWO’s investigation into underpayments of Mr Jian Hong Zheng and Ms Yun Chia Hsieh (the “Employees”) in respect of their employment with the first respondent. The Employees were Taiwanese nationals on subclass 417 working holiday visas, employed by the first respondent on a casual basis and their employment with the first respondent was governed by the Fast Food Industry Award 2010 (the “Award”).
The second respondent, Ms Wong, was responsible for the day to day operation of the first respondent’s Melbourne Queen Victoria Building site where the Employees worked.
The first and second respondents made full admissions of contraventions of the FW Act and entered into Statements of Agreed Facts with the FWO on 17 May 2016 and 23 June 2016 respectively. The determination of any penalty to be imposed against those respondents was adjourned pending the resolution of the question whether Ezy was accessorially liable for its involvement in certain of those admitted contraventions.
On 18 April 2017 a further amended Statement of Agreed Facts (as between the FWO and the first respondent) and an amended Statement of Agreed Facts (as between the FWO and the second respondent) were filed and are Annexure A & B to these reasons respectively.
In relation to the remaining question on liability, the FWO alleged that Ezy, an accounting firm, was involved in and accessorially liable for several of the first respondent’s contraventions of the Fair Work Act 2009 (“FW Act”) in relation to one of the Employees (i.e. Mr Zheng).
On 28 April 2017 and for the reasons set out in Fair Work Ombudsman v Blue Impression Pty Ltd & Ors [2017] FCCA 810 the Court made various declarations in relation to Ezy’s involvement in certain of the admitted contraventions by the first respondent.
The Court made directions and listed the proceedings for a penalty hearing on 2 November 2017.
Contraventions
The Employees were employed in Mr Zheng’s case to prepare and cook food for, and in Ms Hsieh’s case to work as a cashier and serve customers, of the first respondent. It was agreed that during their employment the Employees were paid flat hourly rates and the contraventions by the first respondent, to which I will turn, resulted in the Employees being underpaid $9,549.47.
The first respondent has admitted it contravened the following:
“(a)Section 45 of the Fair Work Act 2009 (FW Act) by failing to pay Jian Hong Zheng and Yun Chia Hsieh (the Employees) the minimum hourly rate of pay in accordance with clauses 13.2 and 17 of the Fast Food Industry Award 2010 (Modern Award);
(b)Section 45 of the FW Act by failing to pay the Employees the casual loading in accordance with clause 13.2 of the Modern Award;
(c)Section 45 of the FW Act by failing to pay the Employees the evening loading in accordance with subclause 25.5(a)(i) of the Modern Award;
(d)Section 45 of the FW Act by failing to pay the Employees the Saturday loading in accordance with subclause 25.5(b) of the Modern Award;
(e)Section 45 of the FW Act by failing to pay the Employees the Sunday loading in accordance with subclause 25.5(c)(ii) of the Modern Award;
(f)Section 45 of the FW Act by failing to pay the Employees the public holiday penalty rate in accordance with clause 30.3 of Modern Award;
(g)Section 45 of the FW Act by failing to provide the Employees with rest breaks and meal breaks in accordance with clause 27.1 of the Modern Award;
(h)Section 45 of the FW Act by failing to pay the Employees the special clothing allowance in accordance with subclause 19.2(b)(ii) of the Modern Award;
(i)Subsection 536(1) of the FW Act by failing to give a pay slip to Yun Chia Hsieh within one working day of paying an amount to Yun Chia Hsieh in respect of her performance of work;
(j)Subsection 536(2) of the FW Act by failing to include prescribed information on the pay slips issued to the Employees; and
(k)Subsection 535(1) of the FW Act by failing to make and keep (for seven years) employee records as prescribed by Regulation 3.44(1) of the Fair Work Regulations 2009 (FW Regulations).”
The second respondent has admitted she was involved in the admitted contraventions by the first respondent at paragraphs 11 (a)-(h) above pursuant to s.550(1) of the FW Act, and is therefore taken as having herself contravened those provisions. The FWO has agreed with the second respondent that subject to the Court making declarations to record those contraventions no penalty will be sought against the second respondent.[1]
[1] See Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Ors [2015] HCA 46 at [60]
At the penalty hearing on 2 November 2017, and without objection, the FWO was granted leave to file a further amended statement of claim to reflect the relief now sought against the second respondent.
Finally, and for the reasons set out in Fair Work Ombudsman v Blue Impression Pty Ltd & Ors [2017] FCCA 810 on 28 April 2017 (“the liability decision”) it was declared that Ezy was involved in each of the following contraventions admitted by the first respondent in relation to Mr Zheng, pursuant to s.550 of the FW Act, and was therefore taken to itself to have contravened those provisions:
“(a)section 45 of the FW Act by failing to pay the minimum hourly rate of pay in accordance with clauses 13.2 and 17 of the Fast Food Industry Award 2010 (“Modern Award”);
(b)section 45 of the FW Act by failing to pay the evening loading in accordance with subclause 25.5(a)(i) of the Modern Award;
(c)section 45 of the FW Act by failing to pay the Saturday loading in accordance with subclause 25.5(b) of the Modern Award;
(d)section 45 of the FW Act by failing to pay the Sunday loading in accordance with subclause 25.5(c)(ii) of the Modern Award;
(e)section 45 of the FW Act by failing to pay the public holiday penalty rate in accordance with subclause 30.3 of the Modern Award;
(f)section 45 of the FW Act by failing to provide rest breaks and meal breaks in accordance with clause 27.1 of the Modern Award between 15 December 2014 and 31 December 2014; and
(g)section 45 of the FW Act by failing to pay the special clothing allowance in accordance with subclause 19.2(b)(ii) of the Modern Award.”
Unlike the first respondent the contraventions which it has been declared Ezy was involved in resulted in an underpayment of $750.00 and occurred over 2 fortnights between September and December 2014.
Penalty hearing
FWO’s evidence
At the hearing on 2 November 2017, Counsel for the FWO told the Court his client relied on the:
a)liability decision;
b)amended statement of agreed facts filed on 18 April 2017;
c)further amended statement of agreed facts filed on 18 April 2017;
d)submissions filed on 20 October 2017;
e)further amended statement of claim filed with leave on 2 November 2017; and
f)court book volumes 1-4.
First and second respondents
At the hearing on 2 November 2017, Counsel for the first and second respondents told the Court his clients relied on the:
a)amended statement of agreed facts filed on 18 April 2017;
b)further amended statement of agreed facts filed on 18 April 2017;
c)affidavits of Mr Charles Pai filed on 9 August 2017 and 6 October 2017;
d)affidavit of Sze Teng Wong filed on 3 August 2017;
e)outline of submissions filed on 6 October 2017;
f)further outline of submissions filed on 25 October 2017.
Ezy
At the hearing on 2 November 2017, Counsel for the third respondent told the Court his client relied on the:
a)affidavit of Eric Lau filed on 10 August 2017;
b)submissions filed on 6 October 2017;
c)reply submissions as to penalty filed on 26 October 2017.
Approach to penalty proceedings
The FWO’s standing to commence these proceedings was not in dispute. The power for the Court to order the imposition of a penalty for contraventions of the FW Act arises under s.546 FW Act.
Section 12 of the FW Act provides that “penalty unit” has the same meaning as in the Crimes Act 1914 (Cth) (“the Crimes Act”). The applicable rate has been held to be that in force at the time of the contravention (see Murrihy v Betezy.com.au Pty Ltd (No 2) [2013] FCA 1146 at [28] (Jessup J); Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 at [394]–[395] (Katzmann J). At all relevant times, section 4AA of the Crimes Act defined “penalty unit” to be $170.[2]
[2] This increased to $170 on and from 28 December 2012, and $180 from 31 July 2015.
The appropriate penalty for the contravening conduct by the respondents should be determined as follows. The first step for the Court is to identify the separate contraventions. Each contravention of each separate obligation of the FW Act is a separate contravention of a civil remedy provision for the purposes of section 539(2) of the FW Act[3]. At this stage the Court would consider in appropriate cases whether a number of contraventions constitute a single course of conduct, such that multiple contraventions should be treated as a single contravention.
[3] Gibbs v The Mayor, Councillors and Citizens of City of Altona [1992] FCA 374 at [24]; McIver v Healey [2008] FCA 425 at [16].
Second, to the extent that two or more contraventions have common elements, this should be taken into account in considering an appropriate penalty. The respondent should not be penalised more than once for the same conduct. The penalties imposed by the Court should be an appropriate response to what the respondent did.[4]
[4] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at 571 [46] (Graham J) (Merringtons).
Third, the Court will consider an appropriate penalty to impose in respect of each contravention, whether a single contravention, a course of conduct or group of contraventions, having regard to all the circumstances of the case.
Finally, having fixed an appropriate penalty for each contravention, the Court should take a final look at the aggregate penalty, to determine whether it is an appropriate response to the contravening conduct.[5] The Court should apply an “instinctive synthesis” in making this assessment.[6] This is known as the “totality principle”.
[5] See Kelly v Fitzpatrick (2007) 166 IR 14 at [30] (Tracey J) (Kelly); Merringtons, supra at [23] (Gray J), [71] (Graham J) and [102] (Buchanan J)
[6] Merringtons, supra at [27] (Gray J) and [55] and [78] (Graham J)
The factors which may be taken into account in the assessment of penalty are well established and weren’t controversial. The factors relevant to the imposition of a penalty were summarised by Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 [26]-[59], as follows:
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 had been similar previous conduct by the respondent;
e.whether the breaches were properly distinct or arose out of the one course of conduct;
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;
This summary was adopted by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14. In Australian Ophthalmic Supplies Pty Ltd v Mc Alary-Smith [2008] FCAFC 8 Buchanan J after referring to the decision in Kelly v Fitzpatrick (supra) said at [9]:
9.Checklists of this kind can be useful providing they do not become transformed into a rigid catalogue of matters for attention. At the end of the day the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations…
It is worth reiterating that the overarching purpose for the imposition of civil penalties 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.”[7]
[7] see Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 at [55]
Course of conduct and grouping of contraventions
The first and second respondents addressed this issue in submissions filed 6 October 2017 at paragraphs [34] to [40].
Ezy in submissions filed the same date addressed this issue at paragraphs [33] to [47].
The FWO took issue with the respondents approach to this issue in submissions filed 20 October 2017 at paragraphs [25] to [36].
The first respondent addressed this issue again in its further outline of submissions filed on 25 October 2017 at paragraphs [12] to [21]. Likewise Ezy’s reply submissions filed 26 October 2017 addressed the issue at paragraphs [5] to [17].
Where there are two or more contraventions of the FW Act they may, depending upon the particular circumstances of the case, attract the operation of s.557(1) of the FW Act. By that subsection the Court must treat multiple contraventions of the Act as a single contravention if the contraventions are committed by the same person and they arose out of a course of conduct by that person.
However, as the decision in Rocky Holdings Pty Ltd v Fair Work Ombudsman[8] directs, s.557(1) does not operate so as to consolidate into a single contravention, multiple contraventions of s.45 of the FW Act where those contraventions are based upon breaches of different terms or obligations in an Award. Section 557(1) of the Act will operate to consolidate multiple contraventions of the same term or obligation in an Award, but it will not operate across different terms or obligations.
[8] (2014) 221 FCR 153
Counsel for the FWO urged the Court to reject the submissions made by the first respondent and Ezy in relation to grouping.
Counsel for the first and second respondent and Counsel for Ezy referred to the position set out in the written submissions filed on behalf of their clients but acknowledged the decision of the Full Court in Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62
In this case each of the contraventions is a separate one. They are a contravention of a separate term either of the FW Act or the applicable award. Given the approach in the authorities referred to above, in the circumstances of this matter and given the separate legal character of the obligations that were the subject of the admitted or declared contraventions, they should be grouped as follows:
a)first respondent:
Contravention Maximum penalty failing to pay minimum hourly rate of pay $51,000 failing to pay casual loading $51,000 failing to pay evening loading $51,000 failing to pay Saturday loading $51,000 failing to pay Sunday loading $51,000 failing to pay public holiday penalty rate $51,000 failing to provide rest and meal breaks $51,000 failing to pay special clothing allowance $51,000 failing to issue pay slips $25,500 failing to include info on pay slips $25,500 failing to make and keep records $25,500 Total $484,500 b)Ezy:
Contravention Maximum penalty failing to pay minimum hourly rate of pay $51,000 failing to pay evening loading $51,000 failing to pay Saturday loading $51,000 failing to pay Sunday loading $51,000 failing to pay public holiday penalty rate $51,000 failing to provide rest and meal breaks $51,000 failing to pay special clothing allowance $51,000 Total $357,000
Relevant factors
Nature, extent and circumstances of the contravening conduct
The first and second respondent in submissions filed 6 October 2017 addressed this factor at paragraphs [43] to [52].
Ezy in submissions filed the same date addressed this factor at paragraphs [40] to [42].
The FWO in submissions filed 20 October 2017 addressed this factor at paragraphs [44] to [64].
In relying on the material filed on behalf of their clients, all Counsel addressed this factor in submissions before the Court. I accept the FWO’s submissions that the conduct involved contraventions of minimum standards of the most fundamental kind which whilst small in isolation was in the circumstances of this matter significant for award reliant workers on working holiday visas.
In relation to the contraventions by the first respondent the following table, extracted from the FWO’s submissions identifies the quantum involved and expresses it as a percentage of the total:
Entitlement
Underpayment amount
Percentage of total underpayment
Minimum rates of pay $2,031.42 21.3% Casual loading $4,721.63 49.4% Saturday loading $730.80 7.7% Sunday loading $733.11 7.7% Public holiday penalty rate $1,073.05 11.2% Evening loading $15.71 0.2% Clothing allowance $243.75 2.5%
In relation to both the first respondent and Ezy it is important to note record keeping and pay slip obligations play a vital role in the capability of the regulator to monitor and enforce compliance with minimum employment standards, one of the functions of the FWO under s.682 of the FW Act. The Courts have recognised that proper record keeping “is the bedrock of compliance” with workplace laws: Fair Work Ombudsman v ACN 052 182 180 Pty Ltd & Anor [2013] FCCA 688 at [20] and Fair Work Ombudsman v Soleimani & Anor [2014] FCCA 2380 at [55].
Further, it is well established that failing to provide proper pay slips can impede both employees and the FWO from determining and enforcing workplace entitlements. It effectively disempowers employees and undermines the ability of employees to identify and challenge underpayments: Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd & Anor [2012] FMCA 258 at [67]; Fair Work Ombudsman v South Jin Pty Limited (No.2) [2016] FCA 832 and Fair Work Ombudsman v Mamak Pty Ltd & Ors [2016] FCCA 2104.
The FWO submitted that the respondents had effectively taken advantage of the Employees who were described as “vulnerable”. However relevantly for present purposes in Fair Work Ombudsman v Devine Marine Group Pty Ltd [2015] FCA 370 White J said:
“However, I do not accept that exploitation of this kind should be regarded as an aggravating factor. It seems to be similar to the kinds of exploitation which the workplace laws are intended to prevent and which is present in the case of many contraventions of the present kind. It is necessary to exercise care before treating a commonplace circumstance, or a usual incident of a contravention, as an aggravating circumstance. The impact on affected workers may in some circumstances be an aggravating factor but that will usually be when that impact is greater by reason of a particular vulnerability of an employee or some other particular circumstance, so that the conduct of the contravening employer can be seen to be more egregious: Hanssen Pty Ltd v Jones [2009] FCA 192; (2009) 179 IR 87 at [61].”
It was the position of Counsel for the first respondent that the evidence did not permit a finding the Employees were vulnerable. Counsel for the first respondent contended that they were able to contact the FWO and make a complaint was indicative that they were not vulnerable. I am not sure that puts the matter to rest. As is clear from the above case, whereas as is the case here, the impact of the contraventions is greater on award reliant workers, this is a factor which will be taken into account.
The Employees did not receive their minimum entitlements under the FW Act. To that extent they were in a position of vulnerability as they were the victim of exploitation.[9]
[9] See Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301
Counsel for the FWO in submissions before the Court asked the Court to take account of not just the size of the underpayment but to have regard to the (short) record over which it occurred.
Whilst this is relevant as far as the first respondent is concerned the matter does not loom large in relation to Ezy.
The size of the business
The first and second respondents in submissions filed 6 October 2017 addressed this factor at paragraphs [56] to [67].
Ezy in submissions filed the same date addressed this factor at paragraph [49].
The FWO in submissions filed 20 October 2017 addressed this factor at paragraphs [75] to [78].
Relevantly for present purposes in Lynch v Buckley Sawmills Pty Ltd [1984] FCA 306; (1984) 3 FCR 503, 508 Keely J said:
“In this connexion it is important that the respondent - and other employers bound by the award or by other awards under the Act - understand the importance of complying with an award and it follows that any decision taken by them which is regarded as affecting their obligations to comply with particular provisions of an award or the award generally should only be taken after careful consideration. They must not be left under the impression that in times of financial difficulty they can breach an award made under the Act either with impunity or in the belief that no substantial penalty will be imposed in respect of a breach found by a court to have been committed.”
Similar previous conduct
The first and second respondents in submissions filed 6 October 2017 addressed this factor at paragraphs [53] to [54].
Ezy in submissions filed the same date addressed this factor at paragraph [43].
The FWO in submissions filed 20 October 2017 addressed this factor at paragraphs [65] to [74].
One other factor that was also contentious between the parties was the issue of the relevance and import (for the purposes of imposing an appropriate penalty) of previous conduct.
Counsel for the FWO urged the Court to adopt the approach set out in Fair Work Ombudsman v Cuts Only The Original Barber Pty Ltd & Ors [2014] FCCA 2381 at [158].
Counsel for the first respondent acknowledged the difficulties that evidence of the audit done by the FWO in 2014 presented for his client in relation to this factor, and submitted that whilst the conduct was unintentional, acknowledged it was certainly reckless. I am not convinced it was the former but it was certainly the latter.
Whilst the respondents’ submission that there is no evidence of any previous contraventions which have resulted in legal proceedings may be accepted, there is evidence of the conduct which is now admitted having occurred previously and the first respondent having notice of its obligations yet conduct in breach thereof continuing. This will be weighed in considering an appropriate penalty in relation to the first respondent.
Ensuring compliance with minimum standards
The first and second respondents in submissions filed 6 October 2017 addressed this factor at paragraphs [94] to [95].
Ezy in submissions filed the same date addressed this factor at paragraph [57].
The FWO in submissions filed 20 October 2017 addressed this factor at paragraphs [95] to [97].
Substantial penalties for non compliance with minimum standards reinforce the importance placed on such standards, and that employers who fail to comply with minimum obligations gain an unfair advantage over those employers who do the right thing.[10]
[10] See Fair Work Ombudsman v A Dalley Holdings Pty Ltd [2013] FCA 509
Whether contraventions deliberate
The first and second respondents in submissions filed 6 October 2017 addressed this factor at paragraphs [68] to [71].
Ezy in submissions filed the same date addressed this factor at paragraphs [50] to [52].
The FWO in submissions filed 20 October 2017 addressed this factor at paragraphs [79] to [83].
The submissions of the parties addressed this factor and in submissions before the Court the circumstances were variously described as a deliberate omission or a system that was “set and forget”. Whilst the situation of the first and second respondents are different to those of Ezy there was conduct by both that is relevant to this factor which will be taken into account.
Involvement of senior management
The first and second respondents in submissions filed 6 October 2017 addressed this factor at paragraphs [72] to [74].
Ezy in submissions filed the same date addressed this factor at paragraph [53].
The FWO in submissions filed 20 October 2017 addressed this factor at paragraphs [84] to [86].
There was involvement by the senior management of both the first respondent and Ezy in the contraventions.
The respondents’ co-operation, contrition and corrective action
The first and second respondents in submissions filed 6 October 2017 addressed this factor at paragraphs [75] to [93] and [112] to [114
Ezy in submissions filed the same date addressed this factor at paragraphs [37] to [38] and [54] to [56].
The FWO in submissions filed 20 October 2017 addressed this factor at paragraphs [87] to [94].
In Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70, the Full Court of the Federal Court of Australia held as follows:
“…a discount should not be available simply because a respondent has spared the community the cost of a contested trial. Rather, the benefit of such a discount should be reserved for cases where it can be fairly shown that an admission of liability: (a) has indicated an acceptance of wrongdoing and suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate that course of justice.”
In this case the first respondent is entitled to a discount for its cooperation and I accept its submissions that in this case it should be 25%.
Specific deterrence
The first and second respondents in submissions filed 6 October 2017 addressed this factor at paragraphs [96] to [103].
Ezy in submissions filed the same date addressed this factor at paragraphs [58] to [60].
The FWO in submissions filed 20 October 2017 addressed this factor at paragraphs [98] to [104].
In Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union [2008] FCAFC 170 the Full Court of the Federal Court of Australia held as follows in relation to specific deterrence:
“Much will depend on the attitude expressed by that party as to things like remorse and steps taken to ensure that no future breach will occur.”
Notwithstanding the position of the respondents, I accept the submissions of Counsel for the FWO that there is a need for a measure of specific deterrence at least so far as the first respondent is concerned.
General deterrence
The first and second respondents in submissions filed 6 October 2017 addressed this factor at paragraphs [104] to [110].
Ezy in submissions filed the same date addressed this factor at paragraphs [61] to [62].
The FWO in submissions filed 20 October 2017 addressed this factor at paragraphs [105] to [109].
Counsel for the FWO submitted, and I accept, this was a very significant factor in this case having regard to the very high number of complaints and cases involving the fast food industry.
The need for general and specific deterrence is an important factor as identified by Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65 at 93 where his Lander J said:
“93. There are three purposes at least for imposing a penalty: punishment; deterrence; and rehabilitation. The punishment must be proportionate to the offence and in accordance with the prevailing standards of punishment: R v Hunter (1984) 36 SASR 101 at 103. Therefore the circumstances of the offence or contravention are especially important. The penalty must recognise the need for deterrence, both personal and general. In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217. In some cases, although hardly in this type of contravention, rehabilitation is an important factor.”
In this case there does need to be some degree of general deterrence given the lack of compliance with award and the FW Act in the fast food industry.
Totality principle
The first and second respondents in submissions filed 6 October 2017 addressed this issue at paragraph [111].
Ezy in submissions filed the same date addressed this issue at paragraph [72] to [75].
The FWO in submissions filed 20 October 2017 addressed this issue at paragraphs [110] to [111].
Counsel for the FWO in submissions before the Court contended the range of possible penalties that could be imposed as set out in his client’s submissions reflected there was no evidence the penalty would be crushing and had been arrived at the low-mid and low range (for the first respondent and Ezy respectively) having balanced the relevant mitigating and aggravating factors.
The first respondent’s further outline of submissions returned to this issue at paragraphs [52] to [55] as did Ezy in reply submissions at paragraphs [22] to [25].
Whilst the penalty imposed must not be crushing or oppressive, it must nevertheless be proportionate to the seriousness of the conduct engaged in by the respondents. Essentially the totality principle requires the Court, once it has arrived, in light of the evaluation of the relevant factors, at an appropriate aggregate penalty to examine one final time the aggregate penalty to determine whether it is appropriate.[11]
[11] Australian Ophthalmic Supplies Pty Ltd v Mc Alary-Smith [2008] FCAFC 8 at [27]-[28] per Gray J and [78] per Graham J.
Consideration of appropriate penalty
The first and second respondents in submissions filed 6 October 2017 said: that:
“115.In summary, this is a case in respect of which regard must be had to a number of mitigating circumstances, including (but not limited to):
(a)the conduct was not deliberate and did not evince a genuine intention not to comply with minimum standards imposed by workplace laws;
(b)the Underpayment has been fully rectified prior to the commencement of these proceedings;
(c)there has been contrition on the part of the First Respondent and the implementation of corrective action;
(d)there was cooperation on the part of the First Respondent and an early admission of liability.
116.The First Respondent respectfully submits, taking into account the matters outlined above, that the penalty ranges and any penalties to be imposed on the First Respondent should be at the low or low to mid range, and allow for at least a 25% on account of its admissions, contrition and corrective action.”
Ezy in submissions filed the same date initially said that:
“76.In Annexure 1, Ezy has submitted that total penalties in the range $15,800.00 - $26,500.00 are appropriate before the application of totality principle. If the Court, in its discretion, imposes penalties in that range there is no further submission that there should be a reduction by application of the totality principle. Necessarily, a different result may ensue if the Court imposes substantially higher penalties.
77.This case has been attracted a certain level of public attention. In part, that attention is a function of the fact that a service provider – an accounting firm - has been found liable as an accessory. To that extent, the Court’s finding has broken new ground. Specific and general deterrence are central to the court’s discretion in imposing a penalty. It is, however, important that the penalties be objectively appropriate as to the contraventions in which Ezy has been involved. Ezy did not exploit Mr. Zheng in his work. It did not have a business built upon underpayment of employees. Mr. Zheng was not Ezy’s employee. As a service provider the Court has found it was involved in underpayments of $750.00. The impact upon Ezy’s business has been significant. In terms of specific deterrence, the Court can be confident that Ezy will not be a repeat contravenor. The declarations which have already been made serve as a very significant general deterrent to other service providers. For those reasons, it is submitted that the penalty range identified in these submissions is appropriate.”
The FWO in submissions filed 20 October 2017 said that:
“112.The resulting proposed aggregate penalty ranges sought by the Applicant in respect of the First Respondent’s contraventions and the Third Respondent’s contraventions, following the application of a discount of 20% for the First Respondent, are:
(a) $151,980 to $188,700 for the First Respondent; and
(b) $61,700 to $89,950 for the Third Respondent.
113.These ranges represent between 31.37% and 38.95% of the maximum penalty the Court is able to impose on the First Respondent, and between 17.28% and 25.20% of the maximum penalty in the case of the Third Respondent.”
In light of those submissions the first respondent’s further outline of submissions addressed “Proposed Penalty Ranges” at paragraph [22] to [51]. Likewise, Ezy’s reply submissions addressed the issue at paragraphs [18] to [21]. In those submissions the first respondent suggested an aggregate penalty of between $75,862.50 and $102,000.00 was appropriate. Likewise, Ezy in those reply submissions suggested aggregate penalties of between $37,020 to $62,650 (dependent upon the quantum of any percentage reduction).
In so far as the FWO and the second respondent have an agreed position that subject to the Court making the necessary declarations to record her involvement in the contraventions by the first respondent no penalty should be imposed on the second respondent I note:
(a)that the Court bears ultimate responsibility for penalty, is not bound by the parties agreement, and must consider for itself what constitutes an appropriate penalty;[12]
(b)determining penalty quantum is not an exact science, and within a permissible range a particular figure is not necessarily more appropriate than another figure;[13]
(c)promoting settlement of litigation (particularly lengthy litigation) is in the public interest, and where the parties agree on facts and penalty, they may present a statement of agreed facts, including a view as to the effect of those facts, and submissions on penalty;[14]
(d)the view of the regulatory body is relevant, particularly where the view concerns matters within the regulator’s expertise, but not determinative of penalty;[15]
(e)in determining appropriate penalty the Court will examine all the circumstances, including an agreed statement of facts, and, if appropriate, may act on that statement;[16] and
(f)a jointly proposed penalty will not be rejected simply because the court might have chosen a different figure: it is sufficient if the jointly proposed penalty is “within the permissible range”[17] or “broadly speaking” within that range.[18]
[12] Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at paras.53(i), 56 and 79 per Branson, Sackville and Gyles JJ (“Mobil Oil”); Furlong v Australian Workers Union & Ors (2007) 162 IR 171 at 173 per Burchardt FM; [2007] FMCA 443 at para.7 per Burchardt FM.
[13] Mobil Oil at para.53(ii) per Branson, Sackville and Gyles JJ.
[14] Mobil Oil at para.53(iii) per Branson, Sackville and Gyles JJ.
[15] Mobil Oil at para.53(iv) per Branson, Sackville and Gyles JJ.
[16] Mobil Oil at para.53(v) per Branson, Sackville and Gyles JJ.
[17] Mobil Oil at para.53(vi) per Branson, Sackville and Gyles JJ.
[18] Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd [2002] FCA 619 at para.24 per Weinberg J.
In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Werribee Shopping Centre Case) [2017] FCA 1235 at paragraph [20] it was said:
“The educative value of declarations in civil remedy proceedings under the Act has been remarked on by the Court on many occasions: see, eg, Cruse v Multiplex Ltd [2008] FCAFC 179; (2008) 172 FCR 279 at 298-299; [2008] FCAFC 179 at [53]- [59](Goldberg and Jessup JJ); Fair Work Ombudsman v Al Hilfi [2015] FCA 313 at [22] (Besanko J). See also, in analogous legislative contexts: Stuart v Construction, Forestry, Mining and Energy Union [2010] FCAFC 65; (2010) 185 FCR 308 at 333; [2010] FCAFC 65 at [89]- [92] (Besanko and Gordon JJ); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113 at [90]- [94] (Dowsett, Greenwood and Wigney JJ). The Commissioner submitted, and I agree, that the proposed declarations are appropriate in cases such as the present where admissions are made and agreed facts filed and where pecuniary penalties are not sought in relation to all admitted contraventions.”
Furthermore in determining penalty the Court has had regard to the penalty recommendations contained in Annexure A to the FWO’s submissions to the Court.[19]
[19] See Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Ors [2015] HCA 46 at [60]
Before determining the appropriate penalties it is timely to consider one issue raised by Ezy in submissions.
Consideration of parity
Ezy also made submissions on the importance of parity in arriving at an appropriate penalty. In submissions Ezy noted that in a criminal law context the parity principle requires that courts sentencing to co-offenders for the same offence should not impose sentences so different as to give rise to a justifiable sense of grievance.
Ezy submitted:
31.Nonetheless, so as to avoid a justifiable sense of grievance or the appearance that justice has not been done an appropriate penalty it must take account of the fact that there should be some assessment of relative responsibility in this case: the employer bore the primary responsibility as to the correct payment of employees. As is developed below, by reason of the findings in the liability hearing, Ezy accepts some penalty ought to be imposed. However, in circumstances in which the regulator seeks no penalty against the other accessory, a gross disparity between the penalties imposed upon the 2 accessories would give rise to a justifiable sense of grievance on Ezy’s part.
The principle of parity requires that as between co-offenders there should be no marked disparity between those sentences that would give rise to a justifiable sense of grievance.
The second respondent and Ezy were technically co-offenders. However in this case the circumstances of the contraventions were not directly comparable. The rationale for the difference in the penalties to be imposed was acknowledged in Ezy’s own submissions and as is clear from the evaluation of the relevant factors in this case explicable by reason of, inter alia, the differences in culpability. In this case for the reasons referred to in the liability decision Ezy participated in illegal activity.
Unlike the position of the second respondent Ezy was not subject to direction by the first respondent as an employee. Ezy was involved in a relationship with the first respondent where it provided payroll services. As such it must put compliance with the law ahead of business interests. Ezy had a responsibility to ensure there was compliance with, inter alia, the FW Act. Where, as here Ezy had been found, through Mr Lau, to be knowingly involved in conduct that constitutes illegality this is a circumstance of aggravation.[20]
[20] Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181
Other orders
The FWO also sought injunctions against the first respondent and Ezy on the basis that it was:
“necessary and justified in order to ensure future compliance…particularly given previous attempts…to educate and inform…failed to result in proper, corrective voluntary action.”
In Shizas v Commissioner of Police [2017] FCA 61 the power in s.545(2) of the FW Act was discussed and it was said:
205.The Commissioner also complained that Mr Shizas did not identify the source of the Court’s power to make the order. The source of power is s 545(2). The power is broad, although it must be exercised in accordance with the purposes for which it was conferred: Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2)[2016] FCA 436 at [176].
206.The purpose of the power can be inferred from the circumstances in which the power is enlivened (the contravention, or proposed contravention, of a civil remedy provision) and the particular, non-exhaustive examples of orders that the Court may make pursuant to it, which are provided in subs (2). These are:
(a)an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;
(b)an order awarding compensation for loss that a person has suffered because of the contravention;
(c)an order for reinstatement of a person.
207.These examples demonstrate that the purpose of the section is to make at least two kinds of order.
208.The first is an order designed to prevent a contravention. Orders of this kind include injunctions achieving that effect (s 545(2)(a)). As a matter of logic, an occasion for making such orders will be where, in the words of s 545(1), “a person ... proposes to contravene ... a civil remedy provision”.
209.The other kind of order is that which can be made where a civil remedy provision has already been contravened. In an appropriate case, the Court may grant an injunction to “stop” an ongoing contravention (s 545(2)(a)) and, in any case, an injunction to remedy its effects (s 545(2)(a)). The Court may also make orders compensating a person for the loss suffered because of the contravention (s 545(2)(b)) or an order reinstating the person (s 545(2)(c)). In each case, the focus is on the remediation of the consequences of the contravention; in a loose sense, the restoration of those affected by a contravention to the positions they would have occupied but for its occurrence.
210.An injunction may also be granted to prevent further contraventions of the same or a similar kind. Such an order may be made even in the absence of a finding that the respondent is likely to engage in such conduct in the immediate or distant future:United Group Resources Pty Ltd v Calabro (No 7) [2012] FCA 432; (2012) 203 FCR 247 at [48] (McKerracher J); Director of the Fair Work Building Industry Inspectorate v Cartledge[2014] FCA 1047 at [107]–[109] (Mansfield J). The injunction may have the benefit of deterring the respondent from engaging in further contravening conduct: Cartledge at [109].
211.It is apparent, therefore, that orders may be made under s 545 where they have a nexus with the contravention and are restorative in purpose. They may also be made for the purpose of deterrence, both specific and general: Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) at [178]–[189].
The first respondent and Ezy opposed the Court making the orders sought by the FWO for an injunction under s.545 of the FW Act.
Counsel for the FWO conceded this case was not analogous to the above case, or the cases cited therein, the form of orders sought was partially uncertain and accepted the circumstances of this case may militate against the need for such an order.
Such a concession was properly made and in the circumstances I am not satisfied it is appropriate to make such an order.
Appropriate penalties
It is important in a case such as this to take into account the totality of the circumstances. This is a task that involves some degree of synthesis of the above matters, some of which tell in favour of and some of which tell against the first respondent and Ezy respectively.
I accept there is some force in the submissions made on behalf of Ezy that the FWO’s proposed penalty range “suggests” that aggravating factors are present which given Ezy’s particular involvement in the contraventions are in fact absent.
Moreover, to recognise that there is commonality or overlap between some of the contraventions in relation to both the first respondent and Ezy, this will be taken into account in the substance of the matter “by imposing no penalty, or a nominal penalty, in respect of breaches of some terms, but a substantial penalty in respect of others.”
In light of the submissions referred to above and on the material before the Court the factors that are most relevant to the determination of an appropriate penalty for the first respondent and Ezy in this matter are:
a)the nature of the conduct, which included contraventions of and failure to comply with minimum conditions and basic obligations central to the enforcement of employee rights under the FW Act;
b)the quantum of the underpayments for the affected employees;
c)the level of co-operation; and
d)the need for specific and general deterrence.
Therefore the appropriate penalty is:
a)in relation to the first respondent it is appropriate to impose a total penalty for the contraventions of $115,706.25 (which is around 25% of the maximum) made up as follows:
Grouping Penalty failing to pay minimum hourly rate of pay $22,950.00 failing to pay casual loading $19,125.00 failing to pay evening loading $ 1,912.50 failing to pay Saturday loading $15,300.00 failing to pay Sunday loading $15,300.00 failing to pay public holiday penalty rate $15,300.00 failing to provide rest and meal breaks $11,475.00 failing to pay special clothing allowance $ 7,650.00 failing to issue pay slips $ 3,825.00 failing to include info on pay slips $ 1,912.50 failing to make and keep records $ 956.25 Total $115,706.25 b)in relation to Ezy, given the particular involvement of Ezy it is appropriate to impose a total penalty for the contraventions of $53,880 (which is 15% of the maximum) and around half that imposed on the first respondent made up as follows:
Grouping Penalty failing to pay minimum hourly rate of pay $15,300.00 failing to pay evening loading $ 1,000.00 failing to pay Saturday loading $12,750.00 failing to pay Sunday loading $12,750.00 failing to pay public holiday penalty rate $ 6,980.00 failing to provide rest and meal breaks $ 2,550.00 failing to pay special clothing allowance $ 2,550.00 Total $53,880.00
The application of the totality principle does not mean the penalties arrived at before its application must be reduced. Given the maximum possible penalty applicable to the contraventions for the first respondent and Ezy, and subject to the comments referred to above, the total penalties for each is, I am satisfied, a proper reflection of the totality of the wrong doing they each separately engaged in and is not oppressive or crushing.
The penalties are set at a meaningful level, cognisant of the mitigating and aggravating factors for each of the respondents (which do to an extent differ), and set at a level to make clear penalties for such conduct are not to be regarded as an acceptable cost of doing business.
Conclusion
Accordingly, as the Court:
·is directed by the relevant authorities to consider what is appropriate in all the circumstances of this case;[21] and
[21] See Construction Forestry Mining & Energy Union v Coal & Allied Operations Pty Ltd (No.2) (1999) 94 IR 231.
·in its discretion in relation to penalty is not fettered by a checklist of mandatory criteria;[22] and
[22] See Australian Ophthalmic Supplies Pty Limited v McAlary-Smith [2008] FCAFC 8.
·is satisfied the penalty for the first respondent and Ezy for the whole of the contravening conduct is appropriate.
I will make the declarations and orders set out at the beginning of these reasons.
I certify that the preceding one hundred and eighteen (118) paragraphs are a true copy of the reasons for judgment of Judge O'Sullivan
Date: 16 November 2017
ANNEXURE A
IN THE FEDERAL CIRCUIT COURT File number: MLG2721/2015
OF AUSTRALIA
REGISTRY: MELBOURNE
FAIR WORK DIVISION
fair work ombudsman
Applicant
Blue Impression PTY LTD (ACN 151 494 763)
First Respondent
Sze Teng Wong
Second Respondent
EZY Accounting 123 Pty Ltd (ACN 105 317 691)
Third Respondent
FURTHER AMENDED STATEMENT OF AGREED FACTS
This Statement of Agreed Facts is an agreed document of the Applicant and the First Respondent made in these proceedings for the purposes of section 191 of the Evidence Act 1995 (Cth).
ADMITTED CONTRAVENTIONS
The First Respondent admits that it contravened the following civil remedy provisions:
(a)Section 45 of the Fair Work Act 2009 (FW Act) by failing to pay Jian Hong Zheng and Yun Chia Hsieh (the Employees) the minimum hourly rate of pay in accordance with clauses 13.2 and 17 of the Fast Food Industry Award 2010 (Modern Award);
(b)Section 45 of the FW Act by failing to pay the Employees the casual loading in accordance with clause 13.2 of the Modern Award;
(c)Section 45 of the FW Act by failing to pay the Employees the evening loading in accordance with subclause 25.5(a)(i) of the Modern Award;
(d)Section 45 of the FW Act by failing to pay the Employees the Saturday loading in accordance with subclause 25.5(b) of the Modern Award;
(e)Section 45 of the FW Act by failing to pay the Employees the Sunday loading in accordance with subclause 25.5(c)(ii) of the Modern Award;
(f)Section 45 of the FW Act by failing to pay the Employees the public holiday penalty rate in accordance with clause 30.3 of Modern Award;
(g)Section 45 of the FW Act by failing to provide the Employees with rest breaks and meal breaks in accordance with clause 27.1 of the Modern Award;
(h)Section 45 of the FW Act by failing to pay the Employees the special clothing allowance in accordance with subclause 19.2(b)(ii) of the Modern Award;
(i)Subsection 536(1) of the FW Act by failing to give a pay slip to Yun Chia Hsieh within one working day of paying an amount to Yun Chia Hsieh in respect of her performance of work;
(j)Subsection 536(2) of the FW Act by failing to include prescribed information on the pay slips issued to the Employees; and
(k)Subsection 535(1) of the FW Act by failing to make and keep (for seven years) employee records as prescribed by Regulation 3.44(1) of the Fair Work Regulations 2009 (FW Regulations).
(collectively, the Admitted Contraventions).
The First Respondent admits that the Admitted Contraventions resulted in the Employees being underpaid a total of $9,549.47 (the Underpayment).
AGREED FACTS
The Applicant
The Applicant is and was at all times material to this proceeding:
(a)a statutory appointee of the Commonwealth appointed by the Governor-General by written instrument pursuant to subsection 687(1) of the FW Act;
(b)a Fair Work Inspector by force of section 701 of the FW Act; and
(c)a person with standing under subsection 539(2) of the FW Act to apply for orders in respect of contraventions of civil remedy provisions under the FW
Act.
The Inspector
Katherine Goonan (Inspector Goonan) is and was at all material times a Fair Work Inspector appointed by the Applicant under subsection 700(1)(a) of the FW Act.
The First Respondent
Blue Impression Pty Ltd (ACN 151 494 763) (First Respondent), is and was at all relevant times to this proceeding:
(a)since 15 June 2011, a corporation incorporated under the Corporations Act 2001 (Cth);
(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 subsection 14(1)(a) of the FW Act;
(e)the operator of a Japanese fast food chain restaurant located at QV Square in Melbourne, in the State of Victoria trading as Hanaichi QV (Business); and
(f)the employer of:
(i)Jian Hong Zheng, also known as Ares (Ares), who performed work at the Business from 15 September 2014 to 15 March 2015; and
(ii)Yun Chia Hsieh, also known as Agnes (Agnes), who performed work at the Business from 25 January 2015 to 26 April 2015,
(collectively, the Employees).
The Employees
Neither of the Employees is an Australian citizen; Ares and Agnes are Taiwanese nationals.
During his employment period, Ares was the holder of and subject to a subclass 417 working holiday visa.
During her employment period, Agnes was the holder of and subject to a subclass 417 working holiday visa.
The First Respondent employed the Employees at the Business on a casual basis during their respective employment periods.
The First Respondent employed Ares to work in its kitchen to prepare food, which included the cutting of ingredients, as well as to cook food.
The First Respondent employed Agnes as a cashier and required her to serve customers which included the receipt of orders and money; she also undertook general cleaning duties, including the cleaning of tables.
The First Respondent paid the following flat rates during the Employees’ respective employment periods:
(a)Agnes was paid $16.50 per hour; and
(b)Ares was paid:
(i)$16.50 per hour from 15 September 2014 to 11 January 2015; and
(ii)$17.00 per hour from 12 January 2015 to 13 March 2015.
Applicable Legislative Instruments
At all relevant times to this proceeding, the First Respondent was bound by the FW Act and the Fair Work Regulations 2009 (FW Regulations) in respect of the employment of the Employees.
At all relevant times to this proceeding:
(a)the First Respondent was covered by the Modern Award; and
(b)the Modern Award applied to the First Respondent and the Employees.
When the Employees performed work for the First Respondent, they fell within the scope of the classification structure provided at clause 17 and Schedule B of the Modern Award, and were properly classified as Fast Food Employees Level 1 under the Modern Award.
ADMITTED CONTRAVENTIONS – Section 45 – contravening the modern award
Contravention 1: Minimum wages – Clauses 13.2 and 17
Clause 13.2 of the Modern Award provides that a casual employee will be paid both the ordinary hourly rate paid to a full-time employee and an additional 25% of the ordinary hourly rate for a full-time employee.
By reason of the matters admitted at paragraphs 17 to 20 above, the First Respondent was required to pay to the Employees the minimum hourly rate in accordance with clause 17 of the Modern Award.
The minimum hourly rate payable to the Employees pursuant to clause 17 of the Modern Award was $18.52 per hour.
During their respective employment periods, the Employees were paid the rates specified in paragraph 16 above, for all hours worked.
During their respective employment periods, the Employees worked the following number of ordinary hours for the First Respondent and were entitled to be paid the following amounts by the First Respondent for ordinary hours worked:
Employee Ordinary hours worked (excluding public holidays) Entitlement Ares 789.93 $14,629.50 Agnes 282.64 $5,234.49 $19,863.99
During their respective employment periods, the First Respondent paid the Employees the following amounts for ordinary hours worked:
Employee Total amount paid Ares $13,169.32 Agnes $4,663.25 $17,832.57
By reason of the matters admitted in paragraphs 20 to 25 above, the First Respondent admits that it underpaid the Employees $2,031.42 in respect of their entitlement to the minimum hourly rate as follows:
(a)Ares was underpaid $1,460.18; and
(b)Agnes was underpaid $571.24.
By reason of the matters admitted in paragraphs 20 to 26 above, the First Respondent admits that it contravened section 45 of the FW Act by contravening clauses 13.2 and 17 of the Modern Award.
Contravention 2: Casual loading – Clause 13.2
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to pay the Employees an additional casual loading of 25% of the ordinary hourly rate in accordance with clause 13.2 of the Modern Award.
The casual loading payable to the Employees was an additional $4.63 per hour, on top of the minimum hourly rate.
The Employees worked the following total number of hours in respect of which the casual loading was required to be paid, and were entitled to be paid the following amounts by the First Respondent with respect to the casual loading:
Employee Hours in which casual loading applied Entitlement Ares 769.49 $3,562.74 Agnes 250.30 $1,158.89 $4,721.63
During the Employees’ respective employment periods, the First Respondent did not pay the Employees any additional amount with respect to the casual loading.
By reason of the matters admitted in paragraphs 29 to 32 above, the First Respondent admits that it underpaid the Employees $4,721.63 in respect of their entitlement to casual loading payable under clause 13.2 of the Modern Award as follows:
(a)Ares was underpaid $3,562.74; and
(b)Agnes was underpaid $1,158.89.
By reason of the matters admitted in paragraphs 29 to 33 above, the First Respondent admits that it contravened section 45 of the FW Act by contravening clause 13.2 of the Modern Award.
Contravention 3: Saturday loading – Subclause 25.5(b)
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to pay the Employees an additional Saturday loading of 25% (in addition to the 25% casual loading) for ordinary hours worked on a Saturday in accordance with subclause 25.5(b) of the Modern Award.
The Saturday loading payable to the Employees was an additional $4.63 per hour.
The Employees worked the following total number of hours on a Saturday and were entitled to be paid the following amounts by the First Respondent with respect to the Saturday loading:
Employee Hours in which Saturday loading applied Entitlement Ares 126.41 $585.28 Agnes 31.43 $145.52 $730.80
The First Respondent did not pay the Employees any additional amount with respect to the Saturday loading.
By reason of the matters admitted in paragraphs 36 to 39 above, the First Respondent admits that it underpaid the Employees $730.80 in respect of their entitlement to Saturday loading payments as follows:
(a)Ares was underpaid $585.28; and
(b)Agnes was underpaid $145.52.
By reason of the matters admitted in paragraphs 36 to 40 above, the First Respondent admits that it contravened section 45 of the FW Act by contravening subclause 25.5(b) of the Modern Award.
Contravention 4: Sunday loading – Subclause 25.5(c)(ii)
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to pay the Employees an additional Sunday loading of 75% (inclusive of the 25% casual loading) when they worked ordinary hours on a Sunday in accordance with subclause 25.5(c)(ii) of the Modern Award.
The Sunday loading payable to the Employees was an additional $13.89 per hour.
The Employees worked the following total number of hours on a Sunday and were entitled to be paid the following amounts by the First Respondent with respect to the Sunday loading:
Employee Hours in which Sunday loading applied Entitlement Ares 20.44 $283.91 Agnes 32.34 $449.20 $733.11
The First Respondent did not pay the Employees any additional amount with respect to the Sunday loading.
By reason of the matters admitted in paragraphs 43 to 46 above, the First Respondent admits that it underpaid the Employees $733.11 in respect of their entitlement to Sunday loading payments as follows:
(a)Ares was underpaid $238.91; and
(b)Agnes was underpaid $449.20.
By reason of the matters admitted in paragraphs 43 to 47 above, the First Respondent admits that it contravened section 45 of the FW Act by contravening subclause 25.5(c)(ii) of the Modern Award.
Contravention 5: Public holiday rate – Clause 30.3
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to pay the Employees at the rate of 275% (inclusive of the ordinary hourly rate and casual loading) for ordinary hours worked on a public holiday in accordance with clause 30.3 of the Modern Award.
The public holiday loading rate payable to the Employees was $50.93 per hour.
The Employees worked the following total number of hours on a public holiday and were entitled to be paid the following amounts by the First Respondent with respect to work on a public holiday:
Employee Hours worked on a public holiday Entitlement Ares 19.87 $1,011.98 Agnes 11.45 $583.15 $1,595.13
During their respective employment periods, the Employees were paid the rates specified in paragraph 16 above in relation to the hours worked on a public holiday, and were therefore not paid the applicable public holiday rate.
The Employees were paid the following amounts by the First Respondent with respect to work on a public holiday during their respective employment periods:
Employee Total amount paid Ares $333.15
Agnes $188.93 $522.08
By reason of the matters admitted in paragraphs 50 to 54 above, the First Respondent admits that it underpaid the Employees $1,073.05 in respect of their entitlement to public holiday loading payments as follows:
(a)Ares was underpaid $678.83; and
(b)Agnes was underpaid $394.22.
By reason of the matters admitted in paragraphs 50 to 55 above, the First Respondent admits that it contravened section 45 of the FW Act by contravening clause 30.3 of the Modern Award.
Contravention 6: Evening loading – Subclause 25.5(a)(i)
48A.By reason of the matters admitted at paragraphs 13 to 15 above, the First Respondent was required to pay the Employees an additional evening loading of 10% (in addition to the 25% casual loading) for ordinary hours of work within the span of hours between 9.00 pm and midnight in accordance with subclause 25.5(a)(i) of the Modern Award.
48B. The evening loading rate payable to the Employees was an additional $1.85 per hour.
48C. The Employees worked the following total number of hours within the span of hours between 9.00 pm and midnight and were entitled to be paid the following amounts by the First Respondent with respect to the evening loading:
Employee Hours in which evening loading applied Entitlement Ares 2.94 $5.44 Agnes 5.55 $10.27 $15.71
48D. The First Respondent did not pay the Employees any additional amount with respect to the evening loading.
48E. By reason of the matters admitted in paragraphs 48A to 48D above, the First Respondent admits that it underpaid the Employees $15.71 in respect of their entitlement to evening loading payments as follows:
(a)Ares was underpaid $5.44; and
(b)Agnes was underpaid $10.27.
48F. By reason of the matters admitted in paragraph 48E above, the First Respondent contravened section 45 of the FW Act by contravening subclause 25.5(a)(i) of the Modern Award.
Contravention 6 7: Special clothing allowance – Subclause 19.2(b)(ii)
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to pay a special clothing allowance in the amount of $1.25 per shift to the Employees if they were required to launder any special uniform, dress or other clothing, in accordance with subclause 19.2(b)(ii) of the Modern Award.
During their respective employment periods, the Employees:
(a)were required to wear a uniform;
(b)laundered their own uniform; and
(c)were not paid a special clothing allowance.
The Employees worked the following total number of shifts in respect of which they were entitled to be paid the following amounts of special clothing allowance by the First Respondent:
Employee Total shifts Entitlement Ares 143 $178.75 Agnes 52 $65.00 $243.75
By reason of the matters admitted in paragraphs 65 to 67 above, the First Respondent admits that it underpaid the Employees $243.75 in respect of their entitlement to special clothing allowance as follows:
(a)Ares was underpaid $178.75; and
(b)Agnes was underpaid $65.00.
By reason of the matters admitted in paragraphs 65 to 68 above, the First Respondent admits that it contravened section 45 of the FW Act by contravening
subclause 19.2(b)(ii) of the Modern Award.
Contravention 7 8: Rest breaks and meal breaks – Subclause 27.1(a)
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to give the Employees rest breaks and meal breaks in accordance with subclause 27.1(a) of the Modern Award.
The required rest breaks and meal breaks were as follows:
Hours worked
Rest breaks
Meal breaks
Less than 4 hours
No rest break
No meal break
4 hours but less than 5 hours
One 10 minute rest break
No meal break
5 hours but less than 9 hours
One 10 minute rest break
One meal break of at least 30 minutes but not more than 60 minutes
9 hours or more
One or two 10 minute rest breaks, with one taken in the first half of the work hours and the second taken in the second half of the work hours, two rest breaks will be given unless a second meal break is provided
One or two meal breaks of at least 30 minutes but not more than 60 minutes
During the Employees’ respective employment periods, the First Respondent did not give the Employees the required rest breaks and meal breaks in accordance with the times particularised in paragraph 72 above as follows:
(a)On 84 occasions during his employment period, Ares worked at least 5 hours and did not receive a meal break.
Ares did not receive any meal or rest breaks during his employment period.(b)On 16 occasions during her employment period, Agnes worked at least 5 hours and did not receive a meal break.
By reason of the matters admitted in paragraphs 71 to 73 above, the First Respondent admits that it contravened section 45 of the FW Act by contravening
subclause 27.1(a) of the Modern Award.
ADMITTED CONTRAVENTIONS – Section 535 – record keeping
Contravention 8 9: Record Keeping –Subsection 535(1)
FW Regulation 3.44(1)
By reason of the matters admitted at paragraph 17 above, the First Respondent was required to ensure that a record which the employer is required to keep under the FW Act or FW Regulations is not false or misleading to the employer's knowledge, pursuant to section 535 of the FW Act and FW Regulation 3.44(1).
On 5 October 2014 at 2:00 am, daylight savings commenced in the State of Victoria and the time in Victoria was adjusted one hour forward.
Notwithstanding the commencement of daylight savings described in paragraph 59 above, the First Respondent did not amend the time on the clock card system used to record employee hours.
By reason of the matters admitted in paragraphs 59 to 60 above, the time records held by the First Respondent in relation to the Employees’ hours of work were not accurate.
By reason of the matters admitted in paragraphs 58 to 61 above, the First Respondent admits that it contravened subsection 535(1) of the FW Act by contravening FW Regulation 3.44(1).
ADMITTED CONTRAVENTION – Section 536 – pay slips
Contravention 9 10: Issuing pay slips –Subsection 536(1)
By reason of the matters admitted at paragraph 17 above, the First Respondent was required to give a pay slip to each of the Employees, within one working day of paying an amount to the Employees in relation to the performance of work in accordance with subsection 536(1) of the FW Act.
The First Respondent did not give Agnes her pay slips within one working day of being paid, as follows:
| Pay period | Date paid | Date the pay slip was provided to Agnes | Number of days between the date payment was made and the date the pay slip was provided |
| 01/02/15 – 08/02/15 | 12/02/15 | 11/03/15 | 27 |
| 23/02/15 – 28/02/15 | 05/03/15 | 11/03/15 | 6 |
| 01/03/15 – 08/03/15 | 12/03/15 | 23/04/15 | 42 |
| 09/03/15 – 22/03/15 | 26/03/15 | 23/04/15 | 28 |
| 01/04/15 – 05/04/15 | 07/04/15 | 23/04/15 | 16 |
By reason of the matters admitted in paragraphs 63 and 64 above, the First Respondent admits that it contravened subsection 536(1) of the FW Act.
Contravention 10 11: Prescribed content on pay slips –Subsection 536(2)
Pursuant to subsection 536(2) of the FW Act pay slips must:
(a)be in a form which is prescribed by the regulations; and
(b)include any information prescribed by the regulations.
FW Regulation 3.46 provides that for subsection 536(2)(b) of the Act, a pay slip must specify:
(a)the employer's name; and
(b)the employee's name; and
(c)the period to which the pay slip relates; and
(d)the date on which the payment to which the pay slip relates was made; and
(e)the gross amount of the payment; and
(f)the net amount of the payment; and
(g)any amount paid to the employee that is a bonus, loading, allowance, penalty rate, incentive-based payment or other separately identifiable entitlement; and
(h)on and after 1 January 2010, the Australian Business Number (if any) of the employer.
During the Employees’ respective employment periods, the First Respondent did not accurately record the date payment was actually made to the Employees, as follows:
Pay period Date paid (as recorded on pay slip) Date the payment was actually made Ares: 01/10/14 – 05/10/14 05/10/14 09/10/14 06/10/14 – 12/10/14 12/10/14 16/10/14 01/11/14 – 16/11/14 16/11/14 20/11/14 01/12/14 – 14/12/14 14/12/14 19/12/14 01/01/15 – 11/01/15 11/01/15 12/01/15 12/01/15 – 25/01/15 25/01/15 29/01/15 01/02/15 – 08/02/15 08/02/15 12/02/15 23/02/15 – 28/02/15 28/02/15 05/03/15 01/03/15 – 08/03/15 08/03/15 12/03/15 09/03/15 – 22/03/15 22/03/15 26/03/15 Agnes: 01/02/15 – 08/02/15 08/02/15 12/02/15 23/02/15 – 28/02/15 28/02/15 05/03/15 01/03/15 – 08/03/15 08/03/15 12/03/15 09/03/15 – 22/03/15 22/03/15 26/03/15 01/04/15 – 05/04/15 05/04/15 07/04/15 06/04/14 – 19/04/15 19/04/15 23/04/15 20/04/15 – 30/04/15 30/04/15 07/05/15
By reason of the matters in paragraph 68 above, the pay slips issued did not contain the prescribed information, namely the date on which the payment to which the pay slip relates was made.
By reason of the matters admitted in paragraphs 66 to 69 above, the First Respondent admits that it contravened subsection 536(2) of the FW Act.
Total Underpayment
By reason of the contraventions admitted in paragraphs 27, 34, 41, 48, 56, 48F and 69
57, 62, 65 and 70above, the First Respondent caused the Employee to be underpaid a total of $9,549.47 (as set out at Schedule 1 below) as follows:(a)$6,755.13 to Ares; and
(b)$2,794.34 to Agnes.
The First Respondent has rectified the entire amount underpaid to Agnes and Ares totalling $9,549.47.
INVESTIGATION AND PROCEEDINGS
Employee complaints
On 26 March 2015, the Applicant received a complaint from Ares in which he alleged that he worked for the First Respondent as a kitchen hand and was paid a flat rate of $16.50 per hour. Ares further alleged that he was not permitted to take any breaks.
On 6 July 2015, the Applicant received a complaint from Agnes in which he alleged that he worked for the First Respondent as a cashier and was paid a flat rate of $16.50 per hour.
In the period from March 2015 until November 2015 the Applicant conducted an investigation into the Employee’s complaints. During the course of the investigation, Inspector Goonan corresponded with Employsure, representatives for the First Respondent, Stamford Lawyers, legal representatives for the First Respondent, as well as the Third Respondent, Accountants acting for the First Respondent.
On 25 November 2015, the Applicant sent by post to the First Respondent’s legal representative, Stamford Lawyers, a contravention letter which advised:
(a)that the First Respondent had contravened the Modern Award and the FW Act in respect of the Employee;
(b)that the contraventions resulted in an underpayment of wages to
the Employees totalling $9,549.47;
(c)the classifications and employment status of the Employees;
(d)the information and evidence considered during the course of the investigation;
(e)that the First Respondent has already paid $6,500.00 (gross) to Ares and $2,806.98 (gross) to Agnes;
(f)that the First Respondent was required to rectify the remaining identified underpayment of $255.13 to Ares by 2 December 2015; and
(g)the potential consequences of the identified contraventions, including commencing litigation against the First Respondent and/or any individual involved in the contraventions.
On 7 December 2015 the Applicant sent by post and by email to the First Respondent’s legal representative, Stamford Lawyers, a letter which advised that:
(a)the First Respondent had contravened the following terms of the Modern Award and the FW Act in respect of the Employee:
(i)section 45 of the FW Act by failing to pay the Employees the minimum hourly rate of pay in accordance with clauses 13.2 and 17 of the Modern Award;
(ii)section 45 of the FW Act by failing to pay the Employees the casual loading in accordance with clause 13.2 of the Modern Award;
(iii)section 45 of the FW Act by failing to pay the Employees the evening loading in accordance with subclause 25.5(a)(i) of the Modern Award;
(iv)section 45 of the FW Act by failing to pay the Employees the Saturday loading in accordance with subclause 25.5(b) of the Modern Award;
(v)section 45 of the FW Act by failing to pay the Sunday loading in accordance with subclause 25.5(c)(ii) of the Modern Award;
(vi)section 45 of the FW Act by failing to pay the public holiday penalty rate in accordance with clause 30.3 of Modern Award;
(vii)section 45 of the FW Act by failing to provide rest breaks and meal breaks in accordance with clause 27.1 of the Modern Award;
(viii)section 45 of the FW Act by failing to pay the special clothing allowance in accordance with subclause 19.2(b)(ii) of the Modern Award;
(ix)subsection 536(1) of the FW Act by failing to give a pay slip to the Employee within one working day of paying an amount to the Employee in respect of his performance of work;
(x)subsection 536(2) of the FW Act by failing to include prescribed information on the pay slips issued; and
(xi)subsection 535(1) of the FW Act by failing to make and keep for seven years employee records as prescribed by FW Regulation 3.44(1).
(b)the Second and Third Respondents were accessories to some of the First Respondent’s contraventions pursuant to section 550 of the FW Act:
(c)the Applicant intended to commence proceedings against the First, Second and Third Respondents in the Federal Circuit Court of Australia;
(d)if the First Respondent was prepared to formally admit the allegations, in consideration for this the FWO will:
(i)work with the First Respondent to prepare a mutually agreed Statement of Agreed Facts;
(ii)seek an order that the matter proceed directly to a penalty hearing; and
(iii)ask that in imposing a penalty, the Court take into account the admission of liability and cooperation of the First Respondent in determining any penalty.
On 9 December 2015 the Applicant commenced proceedings in this Court against the First Respondent seeking declarations and penalties in respect of the Admitted Contraventions.
On 29 April 2016 the First Respondent agreed to admit liability and enter into a Statement of Agreed Facts.
The First Respondent has not previously had legal proceedings commenced against it by the Applicant or its predecessor agencies for contraventions of Commonwealth workplace laws.
Filed by the Applicant and the First Respondent
ANNEXURE B
IN THE FEDERAL CIRCUIT COURT File number: MLG2721/2015
OF AUSTRALIA
REGISTRY: MELBOURNE
FAIR WORK DIVISION
fair work ombudsman
Applicant
Blue Impression PTY LTD (ACN 151 494 763)
First Respondent
Sze Teng Wong
Second Respondent
EZY Accounting 123 Pty Ltd (ACN 105 317 691)
Third Respondent
AMENDED STATEMENT OF AGREED FACTS
This Statement of Agreed Facts is an agreed document of the Applicant and the Second Respondent made in these proceedings for the purposes of section 191 of the Evidence Act 1995 (Cth).
ADMITTED CONTRAVENTIONS
On 29 April 2016, the First Respondent entered into a Statement of Agreed Facts in which the First Respondent admitted that it contravened the following civil remedy provisions:
(a)Section 45 of the Fair Work Act 2009 (FW Act) by failing to pay Jian Hong Zheng and Yun Chia Hsieh (the Employees) the minimum hourly rate of pay in accordance with clauses 13.2 and 17 of the Fast Food Industry Award 2010 (Modern Award);
(b)Section 45 of the FW Act by failing to pay the Employees the casual loading in accordance with clause 13.2 of the Modern Award;
(c)Section 45 of the FW Act by failing to pay the Employees the evening loading in accordance with subclause 25.5(a)(i) of the Modern Award;
(d)Section 45 of the FW Act by failing to pay the Employees the Saturday loading in accordance with subclause 25.5(b) of the Modern Award;
(e)Section 45 of the FW Act by failing to pay the Employees the Sunday loading in accordance with subclause 25.5(c)(ii) of the Modern Award;
(f)Section 45 of the FW Act by failing to pay the Employees the public holiday penalty rate in accordance with clause 30.3 of Modern Award;
(g)Section 45 of the FW Act by failing to provide the Employees with rest breaks and meal breaks in accordance with clause 27.1 of the Modern Award;
(h)Section 45 of the FW Act by failing to pay the Employees the special clothing allowance in accordance with subclause 19.2(b)(ii) of the Modern Award;
(i)Subsection 536(1) of the FW Act by failing to give a pay slip to Yun Chia Hsieh within one working day of paying an amount to Yun Chia Hsieh in respect of her performance of work;
(j)Subsection 536(2) of the FW Act by failing to include prescribed information on the pay slips issued to the Employees; and
(k)Subsection 535(1) of the FW Act by failing to make and keep (for seven years) employee records as prescribed by Regulation 3.44(1) of the Fair Work Regulations 2009 (FW Regulations).
(collectively, the First Respondent’s Admitted Contraventions).
The First Respondent also admitted that the First Respondent’s Admitted Contraventions resulted in the Employees being underpaid a total of $9,549.47 (the Underpayment).
The Second Respondent admits that she was involved in the contraventions admitted by the First Respondent of the following provisions, pursuant to subsection 550(1) of the FW Act, and is therefore taken as having herself contravened the following provisions:
(a)Section 45 of the FW Act by failing to pay the Employees the minimum hourly rate of pay in accordance with clauses 13.2 and 17 of the Modern Award;
(b)Section 45 of the FW Act by failing to pay the Employees the casual loading in accordance with clause 13.2 of the Modern Award;
(c)Section 45 of the FW Act by failing to pay the Employees the evening loading in accordance with subclause 25.5(a)(i) of the Modern Award;
(d)Section 45 of the FW Act by failing to pay the Employees the Saturday loading in accordance with subclause 25.5(b) of the Modern Award;
(e)Section 45 of the FW Act by failing to pay the Sunday loading in accordance with subclause 25.5(c)(ii) of the Modern Award;
(f)Section 45 of the FW Act by failing to pay the public holiday penalty rate in accordance with clause 30.3 of Modern Award;
(g)Section 45 of the FW Act by failing to provide rest breaks and meal breaks in accordance with clause 27.1 of the Modern Award; and
(h)Section 45 of the FW Act by failing to pay the special clothing allowance in accordance with subclause 19.2(b)(ii) of the Modern Award.
(Second Respondent’s Admitted Contraventions)
AGREED FACTS
The Applicant
The Applicant is and was at all times material to this proceeding:
(a)a statutory appointee of the Commonwealth appointed by the Governor-General by written instrument pursuant to subsection 687(1) of the FW Act;
(b)a Fair Work Inspector by force of section 701 of the FW Act; and
(c)a person with standing under subsection 539(2) of the FW Act to apply for orders in respect of contraventions of civil remedy provisions under the FW Act.
The Inspector
Katherine Goonan (Inspector Goonan) is and was at all material times a Fair Work Inspector appointed by the Applicant under subsection 700(1)(a) of the FW Act.
The First Respondent
Blue Impression Pty Ltd (ACN 151 494 763) (First Respondent), is and was at all relevant times to this proceeding:
(a)since 15 June 2011, a corporation incorporated under the Corporations Act 2001 (Cth);
(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 subsection 14(1)(a) of the FW Act;
(e)the operator of a Japanese fast food chain restaurant located at QV Square in Melbourne, in the State of Victoria trading as Hanaichi QV (Business); and
(f)the employer of:
(i)Jian Hong Zheng, also known as Ares (Ares), who performed work at the Business from 15 September 2014 to 15 March 2015; and
(ii)Yun Chia Hsieh, also known as Agnes (Agnes), who performed work at the Business from 25 January 2015 to 26 April 2015,
(collectively, the Employees).
The Second Respondent
Sze Teng Wong, also known as Alice Wong (Second Respondent), admits that she was at all relevant times:
(a)a natural person capable of being sued;
(b)the operations manager of the Business;
(c)responsible for the day-to-day operation of the Business;
(d)responsible for interviewing the Employees on behalf of the First Respondent;
(e)aware of the duties performed by the Employees for the First Respondent;
(f)aware that the Employees:
(i)worked less than 38 hours per week; and
(ii)did not have reasonably predicable hours of work;
(g)aware that:
(i)the Employees were required to wear a uniform;
(ii)the Employees were required to launder their own uniforms;
(h)aware that:
(i)the Employees were paid the flat rates of pay specified in paragraph 16 below for all hours worked;
(ii)the Employees were not paid any additional amount with respect to any of the applicable penalty rates, loadings or allowances;
(i)aware of the hours worked by the Employees for the First Respondent, including:
(i)the particular days the Employees worked, which included Saturdays, Sundays and public holidays;
(ii)the start and finish times for each day the Employees worked, and that the Employees worked between the hours of 9:00 pm to midnight;
(iii)any meal breaks taken by the Employees; and
(iv)the total number of hours worked by the Employees;
(j)aware that industrial award minimum wage entitlements applied to employees of the First Respondent employed at the Business; and
(k)aware that the Fast Food Industry Award 2010 applied to the First Respondent’s employment of its employees.
The Second Respondent admits that she was at all relevant times, by reason of subsection 793(1) of the FW Act, a person whose conduct engaged in within the scope of her actual or apparent authority was conduct engaged in by the First Respondent.
By reason of subsection 793(2) of the FW Act, the Second Respondent admits that her state of mind was the state of mind of the First Respondent, in respect of conduct engaged in within the scope of her actual or apparent authority.
The Employees
Neither of the Employees is an Australian citizen. Ares and Agnes are Taiwanese nationals.
During his employment period, Ares was the holder of and subject to a subclass 417 working holiday visa.
During her employment period, Agnes was the holder of and subject to a subclass 417 working holiday visa.
The First Respondent employed the Employees at the Business on a casual basis during their respective employment periods.
The First Respondent employed Ares to work in its kitchen to prepare food, which included the cutting of ingredients, as well as to cook food.
The First Respondent employed Agnes as a cashier and required her to serve customers which included the receipt of orders and money; she also undertook general cleaning duties, including the cleaning of tables.
The First Respondent paid the following flat rates during the Employees’ respective employment periods:
(a)Agnes was paid $16.50 per hour; and
(b)Ares was paid:
(i)$16.50 per hour from 15 September 2014 to 11 January 2015; and
(ii)$17.00 per hour from 12 January 2015 to 13 March 2015.
Applicable Legislative Instruments
At all relevant times to this proceeding, the First Respondent was bound by the FW Act and the Fair Work Regulations 2009 (FW Regulations) in respect of the employment of the Employees.
At all relevant times to this proceeding:
(a)the First Respondent was covered by the Modern Award; and
(b)the Modern Award applied to the First Respondent and the Employees.
When the Employees performed work for the First Respondent, they fell within the scope of the classification structure provided at clause 17 and Schedule B of the Modern Award, and were properly classified as Fast Food Employees Level 1 under the Modern Award.
ADMITTED CONTRAVENTIONS – Section 45 – contravening the modern award
Contravention 1: Minimum wages – Clauses 13.2 and 17
Clause 13.2 of the Modern Award provides that a casual employee will be paid both the ordinary hourly rate paid to a full-time employee and an additional 25% of the ordinary hourly rate for a full-time employee.
By reason of the matters admitted at paragraphs 17 to 20 above, the First Respondent was required to pay to the Employees the minimum hourly rate in accordance with clause 17 of the Modern Award.
The minimum hourly rate payable to the Employees pursuant to clause 17 of the Modern Award was $18.52 per hour.
During their respective employment periods, the Employees were paid the rates specified in paragraph 16 above, for all hours worked.
During their respective employment periods, the Employees worked the following number of ordinary hours for the First Respondent and were entitled to be paid the following amounts by the First Respondent for ordinary hours worked:
Employee Ordinary hours worked (excluding public holidays) Entitlement Ares 789.93 $14,629.50 Agnes 282.64 $5,234.49 $19,863.99
During their respective employment periods, the First Respondent paid the Employees the following amounts for ordinary hours worked:
Employee Total amount paid Ares $13,169.32 Agnes $4,663.25 $17,832.57
By reason of the matters admitted in paragraphs 20 to 25 above, the First Respondent underpaid the Employees $2,031.42 in respect of their entitlement to the minimum hourly rate as follows:
(a)Ares was underpaid $1,460.18; and
(b)Agnes was underpaid $571.24.
By reason of the matters admitted in paragraphs 20 to 26 above, the First Respondent contravened section 45 of the FW Act by contravening clauses 13.2 and 17 of the Modern Award.
By reason of the matters admitted in paragraphs 7 and 20 to 27 above, the Second Respondent admits that she was involved in (within the meaning of subsection 550(2) of the FW Act) the First Respondent’s contravention of section 45 of the FW Act by contravening clauses 13.2 and 17 of the Modern Award.
Contravention 2: Casual loading – Clause 13.2
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to pay the Employees an additional casual loading of 25% of the ordinary hourly rate in accordance with clause 13.2 of the Modern Award.
The casual loading payable to the Employees was an additional $4.63 per hour, on top of the minimum hourly rate.
The Employees worked the following total number of hours in respect of which the casual loading was required to be paid, and were entitled to be paid the following amounts by the First Respondent with respect to the casual loading:
Employee Hours in which casual loading applied Entitlement Ares 769.49 $3,562.74 Agnes 250.30 $1,158.89 $4,721.63
During the Employees’ respective employment periods, the First Respondent did not pay the Employees any additional amount with respect to the casual loading.
By reason of the matters admitted in paragraphs 29 to 32 above, the First Respondent underpaid the Employees $4,721.63 in respect of their entitlement to casual loading payable under clause 13.2 of the Modern Award as follows:
(a)Ares was underpaid $3,562.74; and
(b)Agnes was underpaid $1,158.89.
By reason of the matters admitted in paragraphs 29 to 33 above, the First Respondent contravened section 45 of the FW Act by contravening clause 13.2 of the Modern Award.
By reason of the matters admitted in paragraphs 7 and 29 to 34 above, the Second Respondent admits that she was involved in (within the meaning of subsection 550(2) of the FW Act) the First Respondent’s contravention of section 45 of the FW Act by contravening clause 13.2.
Contravention 3: Saturday loading – Subclause 25.5(b)
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to pay the Employees an additional Saturday loading of 25% (in addition to the 25% casual loading) for ordinary hours worked on a Saturday in accordance with subclause 25.5(b) of the Modern Award.
The Saturday loading payable to the Employees was an additional $4.63 per hour.
The Employees worked the following total number of hours on a Saturday and were entitled to be paid the following amounts by the First Respondent with respect to the Saturday loading:
Employee Hours in which Saturday loading applied Entitlement Ares 126.41 $585.28 Agnes 31.43 $145.52 $730.80
The First Respondent did not pay the Employees any additional amount with respect to the Saturday loading.
By reason of the matters admitted in paragraphs 36 to 39 above, the First Respondent underpaid the Employees $730.80 in respect of their entitlement to Saturday loading payments as follows:
(a)Ares was underpaid $585.28; and
(b)Agnes was underpaid $145.52.
By reason of the matters admitted in paragraphs 36 to 40 above, the First Respondent contravened section 45 of the FW Act by contravening subclause 25.5(b) of the Modern Award.
By reason of the matters admitted in paragraphs 7 and 36 to 41 above, the Second Respondent admits that she was involved in (within the meaning of subsection 550(2) of the FW Act) the First Respondent’s contravention of section 45 of the FW Act by contravening subclause 25.5(b) of the Modern Award.
Contravention 4: Sunday loading – Subclause 25.5(c)(ii)
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to pay the Employees an additional Sunday loading of 75% (inclusive of the 25% casual loading) when they worked ordinary hours on a Sunday in accordance with subclause 25.5(c)(ii) of the Modern Award.
The Sunday loading payable to the Employees was an additional $13.89 per hour.
The Employees worked the following total number of hours on a Sunday and were entitled to be paid the following amounts by the First Respondent with respect to the Sunday loading:
Employee Hours in which Sunday loading applied Entitlement Ares 20.44 $283.91 Agnes 32.34 $449.20 $733.11
The First Respondent did not pay the Employees any additional amount with respect to the Sunday loading.
By reason of the matters admitted in paragraphs 43 to 46 above, the First Respondent underpaid the Employees $733.11 in respect of their entitlement to Sunday loading payments as follows:
(a)Ares was underpaid $238.91; and
(b)Agnes was underpaid $449.20.
By reason of the matters admitted in paragraphs 43 to 47 above, the First Respondent contravened section 45 of the FW Act by contravening subclause 25.5(c)(ii) of the Modern Award.
By reason of the matters admitted in paragraphs 7 and 43 to 48 above, the Second Respondent admits that she was involved in (within the meaning of subsection 550(2) of the FW Act) the First Respondent’s contravention of section 45 of the FW Act by contravening subclause 25.5(c)(ii) of the Modern Award.
Contravention 5: Public holiday rate – Clause 30.3
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to pay the Employees at the rate of 275% (inclusive of the ordinary hourly rate and casual loading) for ordinary hours worked on a public holiday in accordance with clause 30.3 of the Modern Award.
The public holiday loading rate payable to the Employees was $50.93 per hour.
The Employees worked the following total number of hours on a public holiday and were entitled to be paid the following amounts by the First Respondent with respect to work on a public holiday:
Employee Hours worked on a public holiday Entitlement Ares 19.87 $1,011.98 Agnes 11.45 $583.15 $1,595.13
During their respective employment periods, the Employees were paid the rates specified in paragraph 16 above in relation to the hours worked on a public holiday, and were therefore not paid the applicable public holiday rate.
The Employees were paid the following amounts by the First Respondent with respect to work on a public holiday during their respective employment periods:
Employee Total amount paid Ares $333.15 Agnes $188.93 $522.08
By reason of the matters admitted in paragraphs 50 to 54 above, the First Respondent underpaid the Employees $1,073.05 in respect of their entitlement to public holiday loading payments as follows:
(a)Ares was underpaid $678.83; and
(b)Agnes was underpaid $394.22.
By reason of the matters admitted in paragraphs 50 to 55 above, the First Respondent contravened section 45 of the FW Act by contravening clause 30.3 of the Modern Award.
By reason of the matters admitted in paragraphs 7 and 54 to 56 above, the Second Respondent admits that she was involved in (within the meaning of subsection 550(2) of the FW Act) the First Respondent’s contravention of section 45 of the FW Act by contravening clause 30.3 of the Modern Award.
Contravention 6: Evening loading – Subclause 25.5(a)(i)
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to pay the Employees an additional evening loading of 10% (in addition to the 25% casual loading) for ordinary hours of work within the span of hours between 9.00 pm and midnight in accordance with subclause 25.5(a)(i) of the Modern Award.
The evening loading rate payable to the Employees was an additional $1.85 per hour.
The Employees worked the following total number of hours within the span of hours between 9.00 pm and midnight and were entitled to be paid the following amounts by the First Respondent with respect to the evening loading:
Employee Hours in which evening loading applied Entitlement Ares 2.94 $5.44 Agnes 5.55 $10.27 $15.71
The First Respondent did not pay the Employees any additional amount with respect to the evening loading.
By reason of the matters admitted in paragraphs 58 to 61 above, the First Respondent underpaid the Employees $15.71 in respect of their entitlement to evening loading payments as follows:
(a)Ares was underpaid $5.44; and
(b)Agnes was underpaid $10.27.
By reason of the matters admitted in paragraph 62 above, the First Respondent contravened section 45 of the FW Act by contravening subclause 25.5(a)(i) of the Modern Award.
By reason of the matters admitted in paragraphs 7 and 58 to 63 above, the Second Respondent admits that she was involved in (within the meaning of subsection 550(2) of the FW Act) the First Respondent’s contravention of section 45 of the FW Act by contravening subclause 19.2(b)(ii) of the Modern Award.
Contravention 7: Special clothing allowance – Subclause 19.2(b)(ii)
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to pay a special clothing allowance in the amount of $1.25 per shift to the Employees if they were required to launder any special uniform, dress or other clothing, in accordance with subclause 19.2(b)(ii) of the Modern Award.
During their respective employment periods, the Employees:
(a)were required to wear a uniform;
(b)laundered their own uniform; and
(c)were not paid a special clothing allowance.
The Employees worked the following total number of shifts in respect of which they were entitled to be paid the following amounts of special clothing allowance by the First Respondent:
Employee Total shifts Entitlement Ares 143 $178.75 Agnes 52 $65.00 $243.75
By reason of the matters admitted in paragraphs 65 to 67 above, the First Respondent underpaid the Employees $243.75 in respect of their entitlement to special clothing allowance as follows:
(a)Ares was underpaid $178.75; and
(b)Agnes was underpaid $65.00.
By reason of the matters admitted in paragraphs 65 to 68 above, the First Respondent contravened section 45 of the FW Act by contravening subclause 19.2(b)(ii) of the Modern Award.
By reason of the matters admitted in paragraphs 7 and 65 to 69 above, the Second Respondent admits that she was involved in (within the meaning of subsection 550(2) of the FW Act) the First Respondent’s contravention of section 45 of the FW Act by contravening subclause 19.2(b)(ii) of the Modern Award.
Contravention 8: Rest breaks and meal breaks – Subclause 27.1(a)
By reason of the matters admitted at paragraphs 17 to 19 above, the First Respondent was required to give the Employees rest breaks and meal breaks in accordance with subclause 27.1(a) of the Modern Award.
The required rest breaks and meal breaks were as follows:
Hours worked
Rest breaks
Meal breaks
Less than 4 hours
No rest break
No meal break
4 hours but less than 5 hours
One 10 minute rest break
No meal break
5 hours but less than 9 hours
One 10 minute rest break
One meal break of at least 30 minutes but not more than 60 minutes
9 hours or more
One or two 10 minute rest breaks, with one taken in the first half of the work hours and the second taken in the second half of the work hours, two rest breaks will be given unless a second meal break is provided
One or two meal breaks of at least 30 minutes but not more than 60 minutes
During the Employees’ respective employment periods, the First Respondent did not give the Employees the required rest breaks and meal breaks in accordance with the times particularised in paragraph 72 above as follows:
(a)On 84 occasions during his employment period, Ares worked at least 5 hours and did not receive a meal break.
Ares did not receive any meal or rest breaks during his employment period.(b)On 16 occasions during her employment period, Agnes worked at least 5 hours and did not receive a meal break.
By reason of the matters admitted in paragraphs 71 to 73 above, the First Respondent contravened section 45 of the FW Act by contravening subclause 27.1(a) of the Modern Award.
By reason of the matters admitted in paragraphs 7 and 71 to 74 above, the Second Respondent admits that she was involved in (within the meaning of subsection 550(2) of the FW Act) the First Respondent’s contravention of section 45 of the FW Act by contravening subclause 27.1(a) of the Modern Award.
Accessorial liability- Second Respondent
By reason of the matters alleged in paragraph 7 above, the Second Respondent:
(a)had actual knowledge of the factual matters which comprise each of the First Respondent’s contraventions set out in paragraphs 27, 34, 41, 48, 56, 63, 69 and 74 above;
(b)was an intentional participant in the factual matters which comprise the First Respondent’s contraventions set out in paragraphs 27, 34, 41, 48, 56, 63, 69 and 74 above.
By reason of the matters admitted in paragraph 76 above, the Second Respondent
(a)aided, abetted, counselled or procured; and/or
(b)was, by her acts or omissions, directly or indirectly, knowingly concerned in or a party to the First Respondent’s contraventions set out in paragraphs 27, 34, 41, 48, 56, 63, 69 and 74 above.
By reason of the matters admitted in paragraphs 76 and 77 above and pursuant to subsection 550(1) of the FW Act, the Second Respondent was involved in, and is therefore to be treated as having herself contravened, First Respondent’s contraventions set out in paragraphs 27, 34, 41, 48, 56, 63, 69 and 74 above.
The Second Respondent has not previously had legal proceedings commenced against her by the Applicant or its predecessor agencies for contraventions of Commonwealth workplace laws.
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