Harper v Tingmak Pty Ltd

[2020] FCCA 626

FEDERAL CIRCUIT COURT OF AUSTRALIA

HARPER v TINGMAK PTY LTD & ORS [2020] FCCA 626

Catchwords:
INDUSTRIAL LAW – Fair Work Proceedings – contravention of s 340 of the Fair Work Act 2009 (Cth) – where the applicant was employed as an Administrative Support Worker for the respondents – where the applicant exercised her workplace right pursuant to s 341 of the Fair Work Act 2009 (Cth) – failure to pay wages and superannuation entitlements – whether respondents breached relevant acts and Awards in regards to those underpayments – whether a penalty should be imposed for alleged contraventions – penalty payable to the applicant – application for summary judgment granted.

Legislation:

Fair Work Act 2009 (Cth), ss.45, 340, 341, 546, 547, 550, 570

Federal Circuit Court Rules 2001 (Cth), r.13.03

Cases cited:

Calderbank v Calderbank [1975] 3 All ER 333

Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown

[2017] FCA 1301

Fair Work Ombudsman v NorBrace Centre Pty Ltd (In Liq) (ACN 121 556 447)

(No 2) [2019] FCCA 2970

Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221

Ryan v Primesafe (ABN 39 877 327 401) and Others (2015) 323 ALR 107

Applicant: LEONIE JOYCE HARPER

First Respondent: TINGMAK PTY LTD

Second Respondent: KATHRYN ANN TRIMING

Third Respondent: AARON KAIN TRIMING

File Number: SYG 868 of 2018

Judgment of: Judge Humphreys

Hearing date: 13 March 2020

Date of Last Submission: 13 March 2020

Delivered at: Parramatta

Delivered on: 17 April 2020

REPRESENTATION

Counsel for the Applicant: Mr Latham

Solicitors for the Applicant: KMC Legal

Solicitors for the Respondents: No appearance

ORDERS

1. Leave is granted to discontinue proceedings against the First Respondent.

2. Pursuant to 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth), the Court gives summary judgment against the Second and Third Respondents as follows.

3. A declaration that the Second Respondent was an accessory to the contravention of s 340 of the Fair Work Act 2009 (Cth) by the First Respondent.

4. A declaration that the Third Respondent was an accessory to the contravention of s 340 of the Fair Work Act 2009 (Cth) by the First Respondent.

5. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $75,392.00 for economic loss that she has suffered and $10,000.00 for non-economic loss because of the contravention of s 340 of the Fair Work Act 20019 (Cth).

6. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying for a minimum of 4 hours’ work in accordance with clause 11.5 of the Airline Operations – Ground Staff Award 2010.

7. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying for a minimum of 4 hours’ work in accordance with clause 11.5 of the Airline Operations – Ground Staff Award 2010.

8. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $5,006.00 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying for a minimum of 4 hours’ work in accordance with clause 11.5 of the Airline Operations – Ground Staff Award 2010.

9. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 by the First Respondent in never paying penalty rates in accordance with clause 11 of the Airline Operations - Ground Staff Award 2010.

10. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying penalty rates in accordance with clause 11 of the Airline Operations - Ground Staff Award 2010.

11. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $37.48 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying penalty rates in accordance with clause 11 of the Airline Operations – Ground Staff Award 2010.

12. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth)n by the First Respondent in never paying the correct amount of superannuation into a superannuation fund of the Applicant in accordance with clause 27.1 of the Airline Operations – Ground Staff Award 2010.

13. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying the correct amount of superannuation into a superannuation fund of the Applicant in accordance with clause 27.1 of the Airline Operations – Ground Staff Award 2010.

14. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $3,350.45 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying the correct amount of superannuation into a superannuation fund of the Applicant in accordance with clause 27.1 of the Airline Operations – Ground Staff Award 2010.

15. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a laundry allowance in accordance with clause 21.13 of the Airline Operations – Ground Staff Award 2010.

16. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a laundry allowance in accordance with clause 21.13 of the Airline Operations – Ground Staff Award 2010.

17. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $29.52 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a laundry allowance in accordance with clause 21.13 of the Airline Operations – Ground Staff Award 2010.

18. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a full time wage in accordance with clause 28 of the Airline Operations – Ground Staff Award 2010.

19. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a full time wage in accordance with clause 28 of the Airline Operations – Ground Staff Award 2010.

20. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $10,585.26 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a full time wage in accordance with clause 28 of Airline Operations – Ground Staff Award 2010.

21. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never reimbursing the Applicant for the costs of her Aviation Security Identification Card in accordance with clause 21.5 of the Airline Operations – Ground Staff Award 2010.

22. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never reimbursing the Applicant for the costs of her Aviation Security Identification Card in accordance with clause 21.5 of the Airline Operations – Ground Staff Award 2010.

23. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $222.00 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never reimbursing the Applicant for the costs of her Aviation Security Identification Card in accordance with clause 21.5 of the Airline Operations – Ground Staff Award 2010.

24. An order that the Second and Third Respondents pay civil penalties pursuant to s 546 of the Fair Work Act 2009 (Cth) for each contravention of the Fair Work Act 2009 (Cth), in the sum of $25,000.00 in respect of the first respondent and $15,000.00 in respect of the second respondent.

25. An order that the civil penalty be paid to the Applicant pursuant to

    
    

    s 546(3) of the Fair Work Act 2009 (Cth).

26. An order that the Second and Third Respondents pay interest from the date of the filing of the Statement of Claim to 13 March 2020 pursuant to s 547 of the Fair Work Act 2009 (Cth).

27. An order that the first and second respondents jointly and severally pay the applicant’s costs as agreed or assessed from 4 July 2018.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

SYG 868 of 2018

LEONIE JOYCE HARPER

Applicant

And

TINGMAK PTY LTD

First Respondent

KATHRYN ANN TRIMING

Second Respondent

AARON KAIN TRIMING

Third Respondent

REASONS FOR JUDGMENT

Introduction

1. Bathurst is a regional town in New South Wales, located approximately 200 km west of Sydney. Travel options to and from Bathurst include road, rail and air. Because of the relatively short distance from Sydney, air travel tends to be expensive and does not necessarily involve significant time saving, as compared to road and rail.

2. Accordingly, Bathurst has, what is a relatively small regional airport, as compared to other inland country towns in New South Wales.

3. The applicant commenced employment with Tingmak Pty Ltd, the first respondent as an administrative support worker located at Bathurst regional airport. The second and third respondents, Kathryn Ann Trimming and Aaron Kain Trimming, were at all material times, employees and/or officers and/or agents of the first respondent.

4. The applicant’s employment was covered by the Airline Operations – Ground Staff Award 2010 (“the Award”). On or about 10 August 2017, the applicant questioned the second respondent in relation to the payment of her proper wage entitlements. In so doing, the applicant exercised a workplace right to make a complaint or enquiry in relation to her employment within the meaning of s 341(c)(ii) of the Fair Work Act 2009 (Cth) (“the Act”). Over the course of the next few months, the applicant contacted the Australian Tax Office, as the first respondent had failed to pay to the applicant her superannuation entitlements. The applicant made further enquiries with the second respondent regarding her correct wage entitlements on two separate occasions.

5. On or about 3 January 2018, the first respondent informed the applicant that they had resigned from the contract with Regional Express, an airline operating to and from Bathurst Regional Airport. The applicant was informed she could continue to work with the first respondent for the next two weeks. The applicant again questioned the second respondent, as to whether she had been receiving her proper wage entitlements.

6. On or about 4 January 2018, the applicant arrived to work as scheduled but was informed by the third respondent, that her employment had been terminated and she was to leave the premises immediately. It is alleged that the first respondent terminated the applicant’s employment for reasons that included the exercise of her workplace right, in making complaints regarding her correct wage entitlements. In so terminating the applicant’s employment, she alleges the respondent’s contravened

   
   

   s 340 of the Act.

7. It is alleged that the second and third respondents were involved in the contravention of s 340 of the Act, pursuant to s 550 of the Act, as the second and third respondents had knowledge of the essential facts constituting the contravention of s 340 of the Act. They were knowingly concerned in the contravention and were an intentional participant in the contravention based on actual knowledge of the essential facts constituting the contraventions

8. The applicant sought orders by way of declarations, in relation to various contraventions of s 340 of the Act, together with declarations that the respondents jointly and severally pay compensation to the applicant, in relation to the loss she has suffered because of the contravention of s 340 of the Act. These orders included compensation for loss of wages and entitlements, as set out in the application and evidenced in the affidavit of the applicant, together with general compensation for hurt and loss due to the actions of the respondents.

9. Further orders were sought that the respondents pay civil penalties pursuant to s 546 of the Act for each contravention of the Act. Such penalties to be paid to the applicant pursuant to s 546(3) of the Act. Orders were also sought that the respondents pay interest, pursuant to

   
   

   s 547 of the Act and that respondents jointly and severally pay costs pursuant to s 570 of the Act.

10. Despite Court orders for the filing of documents by each of the respondents, other than a response filed on 15 January 2019, no evidence has been filed by the respondents in defence of the applicant’s claim. This includes no response to a notice to admit facts filed by the applicant on 17 June 2019. When the matter was called on for hearing on 13 March 2020, there was no appearance of the respondent’s. A notice of Ceasing to Act had previously been filed by the respondent’s lawyers.

11. At the hearing, evidence was provided that indicated that the first respondent, Tingmak Pty Ltd, had been deregistered by the Australian Securities and Investments (“ASIC”). Accordingly, leave was granted for the application against the first respondent to be discontinued.

12. Having read all the material provided to the Court, including an affidavit of the applicant dated 4 July 2018, various wage slips that were provided in Exhibit 3, together with a copy of the Award, the Court was satisfied that there was sufficient evidence to support the various claims made of adverse action, contrary to s 340 of the Act and failing to pay various entitlements in breach of s 45 of the Act.

13. Accordingly, pursuant to r 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth), the Court made the following orders:

    1.   Leave is granted to discontinue proceedings against the First Respondent.

    2.   Pursuant to 13.03B(2)(c) of the Federal Circuit Court Rules 2001 (Cth), the Court gives summary judgment against the Second and Third Respondents as follows.

    3. A declaration that the Second Respondent was an accessory to the contravention of s 340 of the Fair Work Act 2009 (Cth) by the First Respondent.

    4. A declaration that the Third Respondent was an accessory to the contravention of s 340 of the Fair Work Act 2009 (Cth) by the First Respondent.

    5. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $75,392.00 for economic loss that she has suffered and $10,000.00 for non-economic loss because of the contravention of s 340 of the Fair Work Act 2009 (Cth).

    6. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying for a minimum of 4 hours’ work in accordance with clause 11.5 of the Airline Operations – Ground Staff Award 2010.

    7. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying for a minimum of 4 hours’ work in accordance with clause 11.5 of the Airline Operations – Ground Staff Award 2010.

    8. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $5,006.00 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying for a minimum of 4 hours’ work in accordance with clause 11.5 of the Airline Operations – Ground Staff Award 2010.

    9. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 by the First Respondent in never paying penalty rates in accordance with clause 11 of the Airline Operations - Ground Staff Award 2010.

    10. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying penalty rates in accordance with clause 11 of the Airline Operations - Ground Staff Award 2010.

    11. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $37.48 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying penalty rates in accordance with clause 11 of the Airline Operations – Ground Staff Award 2010.

    12. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying the correct amount of superannuation into a superannuation fund of the Applicant in accordance with clause 27.1 of the Airline Operations – Ground Staff Award 2010.

    13. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying the correct amount of superannuation into a superannuation fund of the Applicant in accordance with clause 27.1 of the Airline Operations – Ground Staff Award 2010.

    14. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $3,350.45 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying the correct amount of superannuation into a superannuation fund of the Applicant in accordance with clause 27.1 of the Airline Operations – Ground Staff Award 2010.

    15. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a laundry allowance in accordance with clause 21.13 of the Airline Operations – Ground Staff Award 2010.

    16. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a laundry allowance in accordance with clause 21.13 of the Airline Operations – Ground Staff Award 2010.

    17. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $29.52 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a laundry allowance in accordance with clause 21.13 of the Airline Operations – Ground Staff Award 2010.

    18. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a full time wage in accordance with clause 28 of the Airline Operations – Ground Staff Award 2010.

    19. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a full time wage in accordance with clause 28 of the Airline Operations – Ground Staff Award 2010.

    20. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $10,585.26 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never paying a full time wage in accordance with clause 28 of Airline Operations – Ground Staff Award 2010.

    21. A declaration that the Second Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never reimbursing the Applicant for the costs of her Aviation Security Identification Card in accordance with clause 21.5 of the Airline Operations – Ground Staff Award 2010.

    22. A declaration that the Third Respondent was an accessory to the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never reimbursing the Applicant for the costs of her Aviation Security Identification Card in accordance with clause 21.5 of the Airline Operations – Ground Staff Award 2010.

    23. An order that the Second and Third Respondents jointly or severally pay compensation to the Applicant in the sum of $222.00 for loss that she has suffered because of the contravention of s 45 of the Fair Work Act 2009 (Cth) by the First Respondent in never reimbursing the Applicant for the costs of her Aviation Security Identification Card in accordance with clause 21.5 of the Airline Operations – Ground Staff Award 2010.

    24. An order that the Second and Third Respondents pay interest from the date of the filing of the Statement of Claim to 13 March 2020 pursuant to s 547 of the Fair Work Act 2009 (Cth).

1. This left two aspects of the claim to be determined by the Court, being the amount of any penalty to be imposed on the Second and Third respondents and whether or not costs should be awarded against them.

The amount of civil penalty to be imposed

1. The orders that the Court has made, which are set out above, include declarations that the second and third respondents were accessories to the adverse action, taken against the applicant by the first respondent in contravention of s 340 of the Act. Further, there were multiple contraventions of s 45 of the Act, in relation to particular provisions of the Award.

2. The Court has a broad discretion as to penalty. Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301 at [36], summarised how the discretion is to be approached as follows:

   1.   Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.

   2.   Consider whether each separate contravention should be dealt with independently or with some degree of aggravation for those contraventions arising out of the course of conduct…

   3.   Consider whether there should be a further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and the penalty is an appropriate response to what each respondent did.

   4.   Consider the appropriate penalty in respect of each final individual group of contraventions taken in isolation.

   5.   Consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO… and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary

3. The Court will now consider each of those five steps below.

Step one

1. The following are the contraventions identified:

   a) Adverse action in contravention of s 340 of the Act, in taking adverse action against the applicant.

   b) Contravention of s 45 of the Act, in never paying for a minimum of four hours work, in accordance with clause 11.5 of the Award.

   c) A contravention of s 45 of the Act, in never paying penalty rates in accordance with clause 11 of the Award.

   d) A contravention of s 45 of the Act, in never paying the correct amount of superannuation into a superannuation fund in accordance with clause 27.1 of the Award.

   e) A contravention of s 45 of the Act, in never paying a laundry allowance in accordance with clause 21.13 of the Award.

   f) A contravention of s 45 of the Act, in never paying a full-time wage in accordance with clause 28 of the Award.

   g) A contravention of s 45 of the Act, in never reimbursing the applicant for the costs of the aviation security identification card in accordance with clause 21.5 of the Award.

Step two and three

1. As at the time period of the contraventions, covered between the period from 31 July 2015 to after 1 July 2017, the amount of the applicable penalty unit increased from $180.00 to $210.00, with effect 1 July 2017.

2. Accordingly, the maximum penalty of 60 penalty units that can be imposed on an individual, is between $10,800.00 and $12,600.00 per contravention.

3. Counsel for the applicant submitted that, in respect of the contravention of s 340 of the Act in taking adverse action, a penalty of $8,000.00 -10,000.00 should be imposed on each respondent. In respect of contravention related to not paying for a minimum of four hours work, Counsel for the applicant submitted that the appropriate penalty in respect of the second respondent, was $6,000.00 - $8,000.00 and a lesser amount for the third respondent.

4. In relation to the non-payment of superannuation, Counsel for the applicant submitted that this was a serious breach of the Award and each applicant should pay a penalty in the range of $6,000.00 - $8,000.00.

5. In respect of the contravention in never paying a full-time wage, Counsel for the applicant submitted that this was a serious breach and that the actions of the first respondent, in particular, where in circumstances where she knew that they were in breach of the Award.

6. Accordingly, a penalty of $6,000.00 - $8,000.00 should be imposed on the first respondent.

7. In relation to the other breaches, being the non-payment of penalty rates, the non-payment of a laundry allowance and the non-reimbursement of the cost of the aviation security identification card, Counsel for the applicant submitted that these breaches were minor and should not attract any separate penalty.

Step four

1. The purpose of a civil penalty is primarily, if not wholly, in promoting the public interest in compliance with the laws that have been contravened and it does not engage principles of retribution or rehabilitation (see Fair Work Ombudsman v NorBrace Centre Pty Ltd (In Liq) (ACN 121 556 447) (No 2) [2019] FCCA 2970 (“NorBrace”) per Kelly J at [65]). As the principles of retribution or rehabilitation are not involved:

   … in the determination of a civil penalty, this intensifies the focus of a civil penalty determination upon issues of specific and general deterrence (see NorBrace at [66]).

2. In Mason v Harrington Corporation Pty Ltd [2007] FMCA 7, Mowbray FM set out what is a now a well settled set of factors, relevant in assessing a pecuniary penalty. They are as follows:

   a)   The nature and extent of the conduct which led to the breaches.

   b)   The circumstances in which the conduct took place.

   c)   The nature and extent of any loss or damage sustained as a result of the breaches.

   d)   Whether there has been similar previous conduct by the respondent.

   e)   Whether the breaches were properly distinct or arose out of 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.

   j)    Whether the party committing the breach had taken corrective action.

   k)   Whether the party committing the breach had cooperated with enforcement authorities.

   l)    The need to ensure compliance with minimum standards by provision of an effective means for the investigation and enforcement of fully entitlements.

   m) The need for specific and general deterrence.

3. In relation to the nature and extent of the conduct which led to the breaches, Counsel for the applicant submitted that the respondents, and in particular the second respondent, was well aware that they were in breach of the Award. When questioned about the applicant’s entitlements and in particular in relation to the payment of her superannuation, the second respondent told untruths and/or sought to fob off the applicant by saying she was seeking advice.

4. In relation to the circumstances in which the conduct took place, the applicant was part of a small team who provided ground services at a regional airport. The applicant was dependent upon the respondents for the payment of proper entitlements and did not have easy access to either the Award and or advice in relation to what she was entitled to.

5. The nature and extent of the loss or damage, as a result of the contraventions, has resulted in economic loss which the Court has assessed at $75,392.00. This is a considerable amount of money for an individual and a small company, who employ a limited number of staff.

6. Whether they had been similar previous conduct by the respondents. The Court is unaware of any previous similar conduct by the respondents and they are entitled to be treated accordingly.

7. The Court considers that the adverse action in terminating the applicant’s employment was separate from the non-payment of various entitlements under the Award. The Court considers the non-payment of superannuation to be a significantly serious matter and that it should be treated separately from the other breaches. The non-payment of various entitlements can be considered as a single course of action.

8. The Court has been advised that the business enterprise involved, was a small company involving a limited number of staff.

9. The second and third respondents were the effective managers of the first respondent and accordingly were the senior managers of the enterprise.

10. The Court is not satisfied that there has been any contrition by the respondent’s and indeed, their behaviour, in not participating in the hearings and ignoring Court orders and reasonable offers of settlement, is in fact an aggravating circumstance.

11. There is no evidence before the Court that the respondents have taken any corrective action.

12. There is no evidence before the Court that the respondents cooperated in enforcement action in this court, and indeed by their actions, sought to frustrate and delay it.

13. The Court is satisfied that there is a significant need to ensure compliance with minimum standards, by the provision of an effective means, for the enforcement of employee entitlements, where they may have not been paid.

14. There is a need for general deterrence in relation to the non-payment of entitlements. Given the actions of the respondents, the Court is satisfied that there is a need for significant specific deterrence to ensure the respondents understand that the cost of breaching the Award for their employees, is well outweighed by the penalty that this Court will impose.

Step five

1. The last step is to consider the overall penalties and the totality principle. Based on the penalty ranges suggested by Counsel for the applicant, a penalty of $32,000.00 would be appropriate for the second respondent and for the third respondent, $20,000.00. Counsel for the applicant submitted that a discount, in the range of 10% to 20% should be applied on the basis of totality. This would provide a penalty range for the first respondent in the amount of $25,600.00 - $28,800.00. For the second respondent this would amount to a penalty range of $16,000.00 to $18,000.00.

2. It was conceded to the Court that each of the respondents are not high wealth individuals. As the first respondent has been deregistered by ASIC, any penalty that is payable must rest solely with the second and third respondents.

3. The Court is satisfied that the conduct of the second respondent, in particular, was more egregious than that of the third respondent. The Court places great significance on the vulnerability of employees in regional country areas, in finding work and being paid their correct entitlements.

4. The Court is of the view that it needs to send a clear message of general deterrence to employers, who fail to pay superannuation entitlements to their employees. The Court is satisfied that there is a need for specific deterrence in relation to each of the second and third respondents. While the Court has taken account of the submissions of the applicant, the Court is of the view that some moderation in the penalty ranges discussed above, is called for, given this was a small company, the respondents are presumably of limited means.

5. Accordingly, the Court imposes a penalty of $25,000.00 on the first respondent and $15,000.00 on the second respondent.

6. These amounts are to be paid to the applicant pursuant to s 546 of the Act.

Costs

1. Orders for the payment of costs are subject to s 570 of the Act, which is relevantly sets out as follows:

   Section 570(2)

   The party may be ordered to pay costs only if:

   a)   the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

   b)   the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or

   c)   the court is satisfied of both of the following:

   i) the party unreasonably refused to participate in a matter before the FWC;

   ii) the matter arose from the same facts as the proceedings.

2. Counsel for the applicant submitted to the Court that the actions of the respondents had been unreasonable, in that they failed to participate in the proceedings, failed on multiple occasions to comply with orders of the Court, offered no real defence and failed to attend when the matter was listed for hearing.

3. Further, evidence was provided in an affidavit of Kristi Leah McCuster, sworn 12 March 2020, that on 6 June 2018, an offer to settle the matter was sent to the respondents. That offer was not replied to. That offer made specific reference to the principles of Calderbank v Calderbank [1975] 3 All ER 333.

4. On 20 December 2018, a formal Notice of Offer to Compromise, in the same terms as the previous settlement offer, was served on the respondents. That Notice of Offer of Compromise was in the sum of $70,000.00 inclusive of costs, which is significantly less than the total amounts that have been ordered by the Court, as set out above.

5. In Ryan v Primesafe (ABN 39 877 327 401) and Others (2015) 323 ALR 107, Mortimer J stated at [64]:

   The discretion conferred by the confined terms of s 570(2) should the exercise cautiously, and the case for its exercise should be clear: see Saxena v PPF Management Ltd [2011] FCA 395 at [6] per Bromberg J.

6. In Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221, the Full Federal Court stated at [166]:

   It is well established that a failure to accept a reasonable offer of compromise may constitute an unreasonable act for the purposes of s 570(2) and its predecessors: see, for example, McDonald v Parnell Laboratories (Aust) (No 2) (2007) 164 FCR 591 at 598-9 per Buchanan J.

7. The Court is satisfied that an order for costs should be made. The applicant has been put through a considerable amount of legal expenses due to the failure of the respondents to comply with Court orders and actively participate in the proceedings.

8. Further, the failure to respond to the offers of settlement and compromise is a matter, which in my view, tips the balance in favour of the applicant in that the Court is satisfied that the actions of the respondents were unreasonable and caused the applicant to incur additional costs.

9. Costs are ordered as agreed or assessed as and from 4 July 2018, being the date of expiration of the first offer to settle.

I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of Judge Humphreys

Deputy Associate:

Date: 17 April 2020