Lin v Max Bean Pty Ltd (No 2)
[2024] FedCFamC2G 431
•13 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Lin v Max Bean Pty Ltd (No 2) [2024] FedCFamC2G 431
File number(s): MLG 2956 of 2021 Judgment of: JUDGE MANSINI Date of judgment: 13 May 2024 Catchwords: INDUSTRIAL LAW – FAIR WORK – application for relief – where respondents respectively declared to have contravened a series of provisions of the Fair Work Act 2009 (Cth) – assessment of relevant considerations – pecuniary penalties and compensation ordered pursuant to s.546(1) – no order as to costs. Legislation: Fair Work Act 2009 (Cth) ss. 44, 45, 99, 117, 323, 340, 343, 539, 545, 546, 547, 550, 570.
Food, Beverage and Tobacco Manufacturing Award 2020
Cases cited: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Building and Construction Commissioner v Pattinson [2019] FCA 1654
Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
CFMMEU v ABCC [2018] FCAFC 97
Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482
Fair Work Ombudsman v IE Enterprises Pty Ltd [2020] FCA 848
Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; (2018) 260 FCR 68
Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357
PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15
Sellars v Adelaide Petroleum NL [1994] HCA 4
Tabet v Gett [2010] HCA 12; 240 CLR 537
Trade Practices Commission v CSR Ltd [1990] FCA 762
Veeraragoo v Goldbreak Holdings (No 2) [2018] FCA 1448
Wardley Australia Ltd v Western Australia [1992] HCA 55; 175 CLR 514
Wong v The Queen [2001] HCA 64; (2001) 207 CLR 582
Division: Division 2 General Federal Law Number of paragraphs: 75 Date of hearing: 5 February 2024 The Applicant: Appearing in person The First Respondent: No appearance The Second Respondent: Appearing in person The Third Respondent: Appearing in person ORDERS
MLG 2956 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: PAU SOON LIN
Applicant
AND: MAX BEAN PTY LTD
First Respondent
XIAO XIAO
Second Respondent
KIM WANG
Third Respondent
ORDER MADE BY:
JUDGE MANSINI
DATE OF ORDER:
13 MAY 2024
THE COURT ORDERS THAT:
1.The First Respondent pay $9,067.82 to the Applicant in compensation for loss suffered because of its contraventions of the Fair Work Act 2009 (Cth) (Act).
2.The Respondents pay pecuniary penalties to the Applicant as follows:
(a)The First Respondent pay pecuniary penalties totalling $20,000 for its contraventions of the Act;
(b)The Second Respondent pay pecuniary penalties totalling $4,000 for her contraventions of the Act; and
(c)The Third Respondent pay pecuniary penalties totalling $4,000 for her contraventions of the Act.
3.The compensation and pecuniary penalties at orders 1 and 2 are to be paid to the Applicant within 120 days.
4.There be no order as to costs.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
Judge Mansini
INTRODUCTION
Mr Pau Soon Lin seeks compensation and imposition of pecuniary penalties against the First, Second and Third Respondents for their respective contraventions of the Fair Work Act 2009 (Cth) (Act) as declared by the Court on 30 November 2023.
For the reasons delivered on 30 November 2023, it was declared that:
·The First and Third Respondents contravened s.340 of the Act by dismissing Mr Lin for reasons that included the proposed exercise of his workplace right to take paid personal leave (Declaration 1(a)) and also contravened s.343 of the Act by threatening to dismiss Mr Lin with the intent to coerce him not to so exercise that right (Declaration 1(b)). The Second Respondent was involved in those respective contraventions within the meaning of s.550 of the Act (Declaration 2).
·The First Respondent contravened ss.45 and 323 of the Act by not paying Mr Lin:
(a)the 25% casual loading to which he was entitled under cl.10.1 of the Food, Beverage and Tobacco Manufacturing Award 2020 (Award) for the period 27 July 2020 to 4 July 2021 (Declaration 3);
(b)for overtime worked per cl.23.2 of the Award and to which he was entitled in the period 5 July 2021 to 30 September 2021 (Declaration 4);
(c)the annual leave loading component for leave taken on 20 August 2021 to which he was entitled under cl.25.6 of the Award (Declaration 5);
(d)one weeks’ notice pay following his dismissal, pursuant to s.117(2)(b) of the National Employment Standards in the Act (Declaration 6);
(e)for personal/carer’s leave being for 30 September 2021 pursuant to s.99 of the Act (Declaration 7);
(f)for annual leave loading on his accrued but unused annual leave following his dismissal pursuant to cl.25.12 of the Award (Declaration 8),
and the Second Respondent was involved in each of the contraventions at (a) to (f) (Declaration 9).
These reasons address the remaining questions as to the appropriate relief (if any) to be ordered for the respective contraventions.
FACTUAL CONTEXT
The parties
Max Bean Pty Ltd is the First Respondent company, which operated (and operates) a food manufacturing business located at Fairfield, in the State of Victoria.
Ms Xiao Xiao is the Second Respondent, who is and was at all material times a director of the Company.
Ms Kim Wang is the Third Respondent, who is and was at all material times the factory manager of the First Respondent. The Third Respondent was a former director of the First Respondent company and was the day to day manager and decision maker on behalf of the First Respondent in relation to, at least, decisions about matters concerning the Applicant’s employment.
Mr Pau Soon Lin is the Applicant, who was employed by the First Respondent company as a factory worker for some 14 months prior to his dismissal.
The 30 November 2023 judgement
It is unnecessary to repeat the Court’s findings recorded in the judgement of 30 November 2023 in their entirety. For present purposes, the following are most pertinent.
The adverse action and coercion
Some weeks prior to cessation of the Applicant’s employment, the Third Respondent was becoming frustrated with the Applicant’s conduct. On 14 August 2021, the Third Respondent had initiated an exchange with the Applicant wherein she raised company expectations including in relation to taking of leave. On that occasion, the Third Respondent had proposed a chat to see whether they could continue working together happily and it was agreed that they would talk the following week but there was no evidence that such discussion took place.
The Third Respondent sent a text message at 8.14am on 30 September 2021 which threatened to dismiss the Applicant if he did not attend for work on that day. The Third Respondent applied illegitimate means with the intention to induce the Applicant to attend for work rather than to exercise his right to take personal/carer’s leave as proposed. Accordingly, the Third Respondent took action with the intent to coerce the Applicant not to exercise his workplace right to take paid personal/carer’s leave.
The Applicant’s employment with the First Respondent company came to an end when it was terminated at the initiative of the First Respondent. The reasons for the Applicant’s dismissal included his proposal to exercise his workplace right to take paid personal/carer’s leave on 30 September 2021. The Third Respondent communicated the decision to dismiss the Applicant by text message on 30 September 2021, which decision was reinforced by subsequent communications on 2 October 2021. The Third Respondent’s conduct was plainly motivated by, and taken in response to, the Applicant’s request to take personal leave.
The Third Respondent’s communications of 30 September 2021 were not retracted, corrected or sought to be withdrawn by the Second Respondent or any other person on behalf of the First Respondent. The Second Respondent was authorised to do so and, by their inaction, was involved in the Third Respondent’s contraventions.
The underpayments
At all relevant times, the Award covered and applied to the Applicant’s employment in both his casual and full-time roles.
Initially and until the pay period commencing 7 September 2020, the Applicant was classified as a Level 1 under the Award. For the remainder of his (casual and full time) employment, the Applicant was classified as a Level 2 under the Award.
In relation to his employment on a casual basis:
(a)For the period 27 July 2020 to 6 September 2020, the Applicant was entitled to be paid at the ordinary hourly rate of $20.33 per hour plus a 25% casual loading = $25.41 per hour but he was paid $24.66 per hour – leaving a shortfall, or underpayment, of $0.75c per hour;
(b)For the period 7 September 2020 to 4 July 2021, the Applicant was entitled to be paid at the ordinary hourly rate of $20.92 per hour plus a 25% casual loading = $26.15 per hour but he was paid $24.80 per hour – leaving a shortfall, or underpayment, of $1.35 per hour,
and accordingly was not paid the minimum ordinary hourly rates inclusive of the casual loading to which he was entitled under cl.10.1 of the Award and was not paid in full each month.
In relation to his employment on a full time basis:
(a)The Respondents admitted to have not paid any overtime at all during this period and accepted that overtime was, regularly, worked by the Applicant. By not paying the Applicant at the relevant overtime rates for hours worked in addition to 38 hours in each week during the period of his full time employment and as identified in the Third Respondent (Kim)’s record, the Applicant was not paid the overtime pay to which he was entitled pursuant to cl.23.2 of the Award;
(b)For a single day of annual leave taken on 20 August 2021, the Applicant was entitled to payment of annual leave loading which was not paid as entitled under cl.25.6 of the Award,
and was also not paid in full each month.
Upon termination of his employment, the Applicant was entitled to payment in lieu of one weeks’ notice and to wages for an ordinary days’ pay being for 30 September 2021.
The Second Respondent admitted and was found to be involved in the above underpayments pursuant to s.550. The evidence did not establish a knowing concern or involvement of the Third Respondent in these particular respects.
THE APPLICATION FOR RELIEF
Upon delivering the reasons of 30 November 2023, the parties were invited to make further submissions about the precise quantum of relief sought having regard to the findings that had been made.
On 5 February 2024, a further hearing was convened in relation to the question of what (if any) relief ought be granted for the declared contraventions of the Act. Each of the Applicant, the Second and Third Respondents appeared in person without the presence of a lawyer. There was no appearance entered by or on behalf of the First Respondent.
The Applicant relied on submissions filed on 22 December 2023 which outlined the amended relief sought following the judgement of 30 November 2023, as follows:
(a)Damages in the amounts of $25,000.00 for loss of earnings and $5,000.00 for hurt, loss and humiliation;
(b)Compensation in the total amount of $12,416.18 for the underpayment of wages and entitlements;
(c)Interest at the applicable pre-judgement rate in the total amount of $2,155.41;
(d)Pecuniary penalties to be paid to the Applicant within 28 days of the Court’s orders in the amounts of:
(i)For their contraventions of ss.340 and 343 subject of Declaration 1, $46,950 as against the First Respondent and $9,390 as against the Third Respondent;
(ii)For her contravention by involvement subject of Declaration 2, $9,390 as against the Second Respondent;
(iii)For the contravention of ss.44, 45 and 323 subject of Declarations 3 to 6, in the range of $30,000 to $50,000 as against the First Respondent;
(iv)For the contravention of s.44 subject of Declaration 7, in the range of $6,000 to $10,000 as against the First Respondent.
The Applicant also provided detailed amended calculations in what was described as an amended statement of claim (addressed further below). The Applicant gave an explanation of those calculations at the relief hearing, at which time some discrepancies were noted.
The Applicant further submitted that the three Respondents ought be ordered to pay his legal costs of and incidental to this proceeding in an estimated total amount of $42,500. He filed an affidavit in support of his legal costs incurred prior to withdrawal of his lawyer on the record (on 15 August 2022). The Applicant deposed that he could not afford their ongoing representation fee in these proceedings but, since the withdrawal, had continued to incur legal costs in preparing his case.
The Respondents relied on submissions and evidence of the Third Respondent filed on 17 January 2024. Relevant to the present questions before the Court, by those materials, the Respondents challenged some (but not all) of the Applicant’s calculations and his suggestion of economic loss on the basis of their belief that he was able to secure other employment as a driver/contractor for Uber Eats.
By their written submissions, the Respondents accepted responsibility for some of the findings as to their conduct (in the 30 November 2023 judgement) and described steps taken to study business management and to engage a third party employment advisor in an effort to ensure compliance with Australia’s workplace laws in the future. The Respondents also produced evidence to the Court that the First Respondent’s business had (as at January 2024) a $30,907.08 business overdraft which was explained as necessary to pay current wages and that the Second Respondent held two personal bank accounts with few funds and other credit facilities ($267.99 in credit, $48.39 in debit, a credit card with $10,062.41 in debit and a loan account with $24,998.49 in debit).
In oral submissions at the relief hearing, the Second and Third Respondents individually accepted responsibility for their conduct and expressed their contrition to the Applicant which were assessed as genuine. They accepted that the dismissal communication was issued in the heat of the moment and said that they never wanted to dismiss the Applicant. They also informed the Court that there were a total of three employees employed at the time of the relief hearing. The Third Respondent also described her limited financial means and her personal circumstances. The Second and Third Respondents also told the Court they would do their best but, depending on the amount the Court ordered, would likely need more time to pay on account of their respectively difficult financial circumstances.
It may be observed that, in their respective submissions, the Applicant and the Respondents sought to reagitate certain claims or positions which were subject of findings in the 30 November 2023 judgement. That is not an appropriate course and has not been indulged in the reasons as to relief that follow.
WHETHER TO ORDER COMPENSATION
Applicable principles
Section 545 confers a broad discretion on the Court to make any order that it considers appropriate if the Court is satisfied that a person has contravened a civil remedy provision.
Compensation is generally awarded for loss or damage actually caused or incurred, not potential or likely damage: Tabet v Gett [2010] HCA 12; 240 CLR 537; Sellars v Adelaide Petroleum NL [1994] HCA 4 at [348]; Wardley Australia Ltd v Western Australia [1992] HCA 55; 175 CLR 514 at [526]. It is necessary to first consider whether the Applicant has proved on the balance of probabilities that he has suffered loss because of the contraventions of the Act and to assess the extent of any such loss.
The Court may order that a person who was involved in a contravention pay compensation: Veeraragoo v Goldbreak Holdings (No 2) [2018] FCA 1448 at [42]-[52] per Colvin J.
The Court also has discretion to order interest payable to compensate for the loss attributable to the delay in payment of minimum entitlements and regularly does so: s.547, see for example Fair Work Ombudsman v IE Enterprises Pty Ltd [2020] FCA 848 at [28].
The underpayments
The Applicant sought to be properly compensated for the minimum entitlements to which he was found to be owed but was not paid.
As at the relief hearing, the key difference between the claimed and admitted quantum of the underpayment was the rate to be applied to the reasons of 30 November 2023. The Respondents’ approach to calculation of the underpayment amounts may be accepted as correct having regard to the earlier findings of the Court made on the state of the evidence that was before it. That is, the reasons of 30 November 2023 included findings that the Award covered and applied to the Applicant’s employment and as to the appropriate classifications during the course of his employment. By those reasons the Applicant’s primary position as to a contractual entitlement to certain hourly rates was rejected in favour of the Applicant’s alternative position that the Award was the relevant instrument which regulated his pay and conditions (albeit a different classification was determined as applicable in respect of part of his employment). Those findings were consistent with the Respondents’ position and made on the evidence before the Court including in the absence of any written contract of employment.
Accordingly, it has been established that the Applicant was underpaid in the total amount of $3,617.82.
The Applicant was understood to seek interest at the pre-judgement rate from the date of his dismissal calculated as at the date of the Court’s 30 November 2023 judgement.
The pre-judgement rate relates to the whole or any part of the period between the date when the cause of action arose and the date when judgement was entered: see the Federal Court of Australia’s Interest on judgments Practice Note.
Pursuant to ss.546 and 547 of the Act, I am satisfied that it is appropriate to order that the First Respondent pay compensation in the amount of $3,617.82 plus interest at the pre-judgement rate in order to compensate the Applicant for the loss he has suffered as a result of the First Respondent’s failure to pay his minimum entitlements, which arose as a direct result of the First Respondent’s conduct. The interest is to be calculated for the period that the Applicant sought, from 30 September 2021 to 30 November 2023, at the rates derived from the Federal Court of Australia’s Practice Note, being: 4.10% for the periods 30 September to 31 December 2021 and 1 January to 30 June 2022, 4.85% for the period 1 July to 31 December 2022, 7.10% for the period 1 January to 30 June 2023 and 8.10% for the period 1 July to 21 December 2023 – a total interest amount of $450.02.
The adverse action and coercion
The Applicant also sought damages for loss of earnings ($25,000) and for hurt, loss and humiliation ($5,000).
The question of compensation for these remaining contraventions would require consideration of what was likely to have occurred had the Applicant not been coerced in breach of s.343 and, separately, had the Applicant’s employment not been terminated in breach of s.340(1) of the Act. An assessment of what would or might have occurred in the absence of those contraventions must be judged upon the state of understanding and knowledge of the parties at the time the events occurred, and not with the certainty produced through hindsight by the findings of this Court: PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15.
Having regard to the evidence before the Court and the earlier findings of 30 November 2023, there was some evidence about an apparent breakdown of the relationship between the Applicant and the Third Respondent. Whilst the evidence of the 14 August 2021 exchange between them was not supportive of a finding of resignation, that same evidence is relevant to a consideration of the reasonable foreseeability that the Applicant would remain employed.
While the Respondents have since told the Court that they did not want him to leave his employment, at the time there was mounting frustration and for his part the Applicant had expressed an intention to leave in the future for a career in a different industry. Further, the Respondents suspected that the Applicant’s personal/carer’s leave request was essentially a fraud and not compliant with their workplace policies and the reasonable requirements of the National Employment Standards in the Act. Although the Respondents may have been entitled to do so were the Applicant not prematurely dismissed, the Applicant was not asked to substantiate his personal/carer’s leave request nor was there a subsequent disciplinary investigation or disciplinary consequences.
On the evidence of the state of the knowledge and understanding of the relevant parties at the time of the Applicant’s dismissal, it is not possible to conclude either that the Applicant would have been validly dismissed arising from the personal/carer’s leave request or that he would have had significant tenure of employment beyond 30 September 2021. In my assessment, the evidence casts sufficient doubt over any suggestion that the Applicant would have remained employed for any indefinite period or any duration of more than a matter of four weeks.
Immediately prior to his dismissal, the Applicant earned $70,000 plus superannuation per annum. In terms of any demonstration of actual loss occasioned by the dismissal, it was apparent that the parties disputed the Applicant’s loss of earnings but there was no probative evidence before the Court of his earnings post-dismissal. The Applicant’s claim to $30,000 represents almost five months’ pay which is excessive in the circumstances of this case. However, I consider it appropriate to exercise the discretion such that the First Respondent pay an additional $5,000 in compensation for the premature cessation of his employment which on balance would not reasonably be foreseen to have continued beyond a period of four weeks.
For completeness, the coercion was not understood to be claimed as directly having resulted in any particular loss on the part of the Applicant. Even if it were, I would find the coercion itself to have been inconsequential in terms of loss suffered because the Applicant did not cede the coercive lure and the threat of dismissal was enacted in any event.
I would not exercise the discretion for any compensation attributable to hurt or humiliation in the circumstances of the present case.
Resolution
Accordingly, the First and Second Respondents shall be ordered to pay to the Applicant the sum of $9,067.82. I consider it appropriate to allow the Respondents additional time of up to 120 days to make payment as ordered.
WHETHER TO ORDER PECUNIARY PENALTIES
Applicable principles and approach
The Court’s power to impose pecuniary penalties in respect of the established contraventions resides in s.546(1) of the Act.
Section 546(1) permits the Court to impose a pecuniary penalty “that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision”. By the declarations of 30 November 2023, that state of satisfaction exists.
The purpose of a civil penalty under the regime provided by the Act is primarily, if not wholly, protective in the promotion of the public interest in compliance with the provisions of the Act and in (general and specific) deterrence of further contraventions: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 at [15]-[16] (Pattinson) citing the plurality in Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 and French J in Trade Practices Commission v CSR Ltd [1990] FCA 762 (CSR Ltd). An “appropriate” penalty being one that “strikes a reasonable balance between oppressive severity and the need for deterrence in a particular case”: Pattinson at [41].
The task of assessing what amount to impose involves the selection of a figure taking into account all factors relevant to the particular case: Wong v The Queen [2001] HCA 64; (2001) 207 CLR 582 at [75] (Gaudron, Gummow and Hayne JJ); Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [37] (Gleeson CJ, Gummow, Hayne and Callinan JJ); Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; (2018) 260 FCR 68, at [55] (Allsop CJ, Davies and Wigney JJ); Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25 at [44] (Jagot, Yates and Bromwicgh JJ) as cited by Snaden J at [26] in Australian Building and Construction Commissioner v Pattinson [2019] FCA 1654. The oft cited decision of French J in CSR Ltd at [42] listed those factors relevant to an overall assessment of penalty, restated by the Full Court in CFMMEU v ABCC [2018] FCAFC 97 at [20]:
..the nature, character and seriousness of the conduct; the loss and damage caused; the circumstances in which the conduct took place; the size of the contravener and its degree of power; the deliberateness of the conduct and the time over which it occurred; the degree of involvement of senior officials or management; the culture of the organisation as to compliance or contravention; and, any co-operation with the regulator and contrition.
This is not an exhaustive list. Further, each case warrants an “idiosyncratic” approach and a careful analysis of all relevant circumstances - as was stated in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [12] (Graham J):
Penalties are not a matter of precedent. The choice of penalty must be dictated by the individual circumstances of a case, not by a line by line comparison with another case.[1]
I turn to consider the application for pecuniary penalties in light of those well-established principles.
Nature and deliberateness
The relevant conduct involves various non-compliance with the Respondents’ statutory obligations arising under Australia’s workplace laws, that may be described in essentially three categories:
(a)Underpayment of minimum entitlements arising during the course of employment;
(b)Threatened dismissal and dismissal of employment for reasons that included a prohibited reason; and
(c)Incorrect payment or underpayment of dismissal pay.
The quantum of the actual underpayments for which the First Respondent was responsible and the Second Respondent as director was involved are considered in detail above and amounts to a total underpayment of $3,617.82, accrued over a period of some 14 months. Also relevant to the assessment of penalty that the Applicant has been out of pocket for those amounts for almost three years which ought be regarded as too long.
The threat and actual dismissal of the Applicant for a prohibited reason are objectively serious contraventions occasioned by the conduct of the Third Respondent and, by operation of s.793, the First Respondent, and in which the Second Respondent was involved.
On the evidence before the Court, the Respondents have not previously been found to have contravened or been penalised for contravention of Australia’s workplace laws.
The Respondents have made some important admissions and accepted responsibility in respect of their response to the Applicant’s personal/carer’s leave request and approach to payment of his entitlements during employment and upon termination. It may be accepted that their underpayment contraventions arose from an arguable misunderstanding of the application of Australia’s workplace laws and construction of a complex industrial instrument. Further that the Respondents did not intend to underpay, miscalculate pay or otherwise contravene the Act. That said, ignorance of Australia’s workplace laws is not of itself sufficient excuse for an employer to not familiarise itself with and/or to disregard the operation of these basic conditions of employment.
Loss and damage
There is no dispute that the Applicant has suffered loss occasioned by the various, declared contraventions. Consideration of the loss and damage suffered by the Applicant is addressed earlier in these reasons (in relation to the separate relief sought in terms of compensation and damages).
These are all matters taken into account in assessing the penalty, including the conclusion that a separate award of compensation be made in the present case.
Cooperation and contrition
The Respondents at all times sought to cooperate with these proceedings. By the time of the hearing as to relief, the Second and Third Respondents appropriately accepted liability for certain of the Court’s findings and expressed their genuine contrition and apologised to the Applicant.
These factors are also relevant to an assessment of penalty.
Size and financial resources
It is not controversial that the First Respondent is a small business which does not have significant financial resources and indeed has some debt. The Second Respondent produced evidence that she held some bank accounts with limited positive funds and mostly debt. It was not challenged and may also be accepted that the Third Respondent is subject of some personal financial hardship.
Deterrence
There is a need in the present case for general deterrence, to emphasise the importance of the maintenance of effective minimum terms and conditions of employment and adherence to the provisions of industrial instruments.
There is a need for specific deterrence especially where the First Respondent company continues to operate and to employ persons to operate its business, the Second Respondent remains the director and the Third Respondent continues in her employment for the First Respondent.
Resolution – penalties
It falls to determine what level of pecuniary penalties (if any) is appropriate as against the First Respondent, the Second Respondent and the Third Respondent in light of their respectively established contraventions.
The present case involves multiple contraventions by the First Respondent. Being a corporation, the maximum penalty for each of its contraventions is $93,900: ss.539(2) and 546(2)(b).
The Second and Third Respondents, being individuals, are exposed to a maximum penalty for each of their contraventions in the amount of $18,780: ss.539(2) and 546(2)(a).
The Applicant sought a single penalty be imposed for the contraventions subject of Declarations 1(a) and (b) and expressly accepted that the First Respondent’s contraventions subject of Declarations 3 to 7 arose from a single course of conduct. Penalties for Declarations 8 and 9 were not sought.
To the extent that there are more than one contraventions, subject of each of Declarations 3 to 7, then they are properly characterised as a single course of conduct in each case. In weighing all of the relevant factors, I am satisfied that it is appropriate to impose pecuniary penalties as follows:
(a)On the First Respondent for its contraventions of ss.340 and 343 and subject of Declarations 1(a) and (b), in the total amount of $8,000;
(b)On the Third Respondent for her contraventions of ss.340 and 343 and subject of Declarations 1(a) and (b), in the total amount of $4,000;
(c)On the Second Respondent for her involvement in the contraventions of ss.340 and 343 and subject of Declaration 2, in the total amount of $2,000;
(d)On the First Respondent for its contraventions of ss.45 and 323 as a single course of conduct in the total amount of $12,000;
(e)On the Second Respondent for her involvement in the Third Respondent’s contraventions of ss.45 and 323 as a single course of conduct in the total amount of $2,000.
In my view, the total penalty arrived at in each case is a proportionate response to the respective contraventions and strikes a reasonable balance between oppressive severity and the need for deterrence in this particular case. It is appropriate that they be paid to the Applicant, within a longer timeframe of 120 days.
WHETHER TO ORDER LEGAL COSTS
The Fair Work jurisdiction of this Court is typically a “no costs” jurisdiction meaning each litigant bears their own legal expenses incurred in prosecuting or defending proceedings.
Relevantly, s.570 of the Act provides that a party to proceedings in relation to a matter arising under the Act may be ordered to pay costs incurred by another party only if the Court is satisfied that the other party’s unreasonable act or omission caused the party to incur the costs.
The Applicant’s submissions and evidence on the matter highlighted that the Applicant was initially represented by a lawyer who formally withdrew on the record on 15 August 2022. Since then, was assisted by a lawyer in preparation of his case but claimed that he could not afford their representation fee as to be of assistance to the Court. According to the Applicant, the Respondents rejected a “Calderbank offer” made during the course of the proceedings. The Respondents claimed that they had also tried to resolve the matter.
On what is before the Court in the present case, I am not persuaded that there was such an unreasonable act or omission as to engage s.570(2)(b) or otherwise am persuaded to exercise the discretion to order that the Applicant’s legal costs incurred in his pursuit of these proceedings be paid by the Respondents or any of them. There will be no order made as to costs.
DISPOSITION
For the above reasons, I will make orders for payment compensation and the imposition of pecuniary penalties.
I certify that the preceding seventy-six (75) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansini. Associate:
Dated: 13 May 2024
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