Liquor, Hospitality and Miscellaneous Union v Cuddles Management Pty Ltd (No. 2)
[2009] FMCA 746
•11 August 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LHMU & ANOR v CUDDLES MANAGEMENT PTY LTD (No.2) | [2009] FMCA 746 |
| INDUSTRIAL LAW – Penalty – consideration of factors relevant to penalty – deliberate refusal to deal with inquiries or complaints by persons seeking compliance with an industrial law – ongoing course of conduct – path of deliberate resistance – prior contravention – no contrition – no co-operation – need for general and specific deterrence. |
| Building and Construction Industry Improvement Act 2005 (Cth), ss.3 & 38 Workplace Relations Act 1996 (Cth), ss.3, 280, 792(1), 793(1)(i) & (j)(i), 807(2), 809 |
| ACCC v IPM Operation and Maintenance Loy Yang Pty Ltd (No. 2) [2007] FCA 11 Workplace Ombudsman v Golden Maple Pty Ltd & Ors [2009] FMCA 664 |
| First Applicant: | LIQUOR HOSPITALITY AND MISCELLANEOUS UNION |
| Second Applicant: | NICOLE POPPAS |
| Respondent: | CUDDLES MANAGEMENT PTY LTD |
| File Number: | PEG 93 of 2008 |
| Judgment of: | Lucev FM |
| Hearing date: | 8 July 2009 |
| Date of Last Submission: | 8 July 2009 |
| Delivered at: | Perth |
| Delivered on: | 11 August 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr M J Aulfrey |
| Solicitors for the Applicant: | Mr M J Aulfrey |
| Respondent: | No appearance |
ORDERS
The respondent pay a penalty of $29,700 for breach of s.792(1) of the Workplace Relations Act 1996 (Cth).
The penalty be paid by the respondent to the first applicant by 4.00pm on 24 August 2009.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 93 of 2008
| LIQUOR HOSPITALITY AND MISCELLANEOUS UNION |
First Applicant
| NICOLE POPPAS |
Second Applicant
And
| CUDDLES MANAGEMENT PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
On 26 May 2009 the Court declared that the conduct of the respondent, Cuddles Management Pty Ltd,[1] in relation to the second applicant, Ms Nicole Poppas,[2] that is, her dismissal and threats to injure her in her employment and alter her position to her prejudice, was conduct for a prohibited reason under s.793(1)(i) and (j)(i) of the Workplace Relations Act 1996 (Cth)[3] and conduct in breach of s.792(l) of the WR Act.[4]
[1] “Cuddles Management”.
[2] “Ms Poppas”.
[3] “WR Act”.
[4] Liquor Hospitality and Miscellaneous Union & Anor v Cuddles Management Pty Ltd [2009] FMCA 463 (“Cuddles Management (No. 1)”).
The Court ordered that in relation to penalty for the breach of s.792(1) of the WR Act the matter be adjourned to a directions hearing at 9.45am on 15 June 2009. At that directions hearing an order was made for the filing of any further affidavits and submissions by the parties in relation to the issue of penalty, and a penalty hearing listed for 8 July 2009.
Penalty hearing
Two further affidavits (sworn by Mr Aulfrey on 5 and 24 June 2009) and submissions in relation to the penalty hearing were filed on behalf of Ms Poppas.
Cuddles Management did not file any affidavits or submissions and did not attend the penalty hearing. The Court has evidence and information before it which indicates that a copy of the order of 15 June 2009 and a written advice of the date and time of the penalty hearing were sent to Cuddles Management. Further, officers of the Court sought to make contact with officers of Cuddles Management following the failure to file affidavits and submissions, but those efforts, which included leaving telephone messages as to the date of the penalty hearing, were unsuccessful. In the circumstances, the Court considered it appropriate to proceed with the penalty hearing on 8 July 2009.
Assessment of penalty – general considerations
Based on a series of decided cases in the Federal Court and this Court the relevant considerations for assessment of penalty relevant to this case are as follows:
a)the circumstances of the conduct (including deliberate defiance or disregard of the WR Act);
b)relevant record of civil penalty contraventions;
c)the consequences of the contravening conduct;
d)deterrence, both general and specific;
e)the objects of the WR Act;
f)the size and financial resources of the contravener;
g)co-operation with regulatory authorities;
h)the contravener’s contrition; and
i)the size of the prescribed penalty, and any recent increases to that prescription.[5]
[5] Workplace Ombudsman v Golden Maple Pty Ltd & Ors [2009] FMCA 664 at para.10 per Lucev FM and cases there cited (“Golden Maple”); Kelly v Fitzpatrick (2007) 166 IR 14 at 18 per Tracey J; [2007] FCA 1080 at para.14 per Tracey J (“Fitzpatrick”), citing Mason v Harrington Corporation Pty Ltd [2007] FMCA 7.
The considerations identified above are not exclusive.[6]
[6] Golden Maple at para.11 per Lucev FM; Australian Ophthalmic Supplies v McAlary-Smith (2008) 165 FCR 560 at 580 per Buchanan J; [2008] FCAFC 8 at para.91 per Buchanan J (“Australian Ophthalmic Supplies”). For example, the totality principle is not relevant here because there is a single contravention by a single respondent: Workplace Ombudsman v Securit-E Holdings Pty Ltd & Ors [2009] FMCA 700 at para.24 per Raphael FM.
Circumstances of the conduct
For the purposes of the penalty hearing Ms Poppas provided a helpful chronology, which the Court sets out as follows and adopts:
| 27 February 2008 | Ms Poppas gives notice of her intent to return to work to her employer as a manager. Original date of return was 28 April 2008. |
| 4 March 2008 | First refusal by Mr Carver |
| 13 March 2008 | Ms Poppas asked for clarification, asked if employment being terminated. |
| 14 March 2008 | Second refusal by Mr Carver |
| 18 March 2008 | Telephone conversation with Mr Carver; attempt by Mr Carver to exclude Union from Ms Poppas’s decision. |
| 20 March 2008 | First letter from Union to Mr Carver. No response. |
| 7 April 2008 | Second letter from Union to Mr Carver. No response. |
| 14 April 2008 | Third letter from Union to Mr Carver. No response. |
| 16 April 2008 | Ms Poppas again advises return to work on 28 April 2008 as a manager. |
| 16 April 2008 | Third refusal by Mr Carver. |
| 17 April 2008 | Ms Poppas advises intent to return. |
| 17 April 2008 | Mr Carver again refuses to return Ms Poppas to role as Manager. The e-mail contains the threat of dismissal “at the very 1st sign of any negativity or disturbance within my centre or staff.” |
| 18 April 2008 | Mr Poppas seeks clarification of this e-mail. No response. |
| 18 April 2008 | Union seeks Mr Carver’s agreement to mediation of issue. No response. |
| 22 April 2008 | Ms Poppas seeks clarification of the e-mail again. No response. |
| 23 April 2008 | Union writes to Mr Carver withdrawing intent to return. No response. |
| 28 April 2008 | AIRC writes to Mr Carver seeking consent for conference. No response. |
| 22 May 2008 | Conciliation conference convened by AIRC. Mr Carver refuses to attend. |
| 22 May 2008 | Ms Poppas consents to return to Cuddles as manager. |
| 22 May 2008 | Fourth refusal by Mr Carver. |
| 22 May 2008 | Ms Poppas asserts her right to return as manager. |
| 22 May 2008 | Mr Carver dismisses Ms Poppas.[7] |
[7] Mr Carver is the Chief Executive Officer of Cuddles Management. He appeared (pursuant to s.854(10)(a) of the WR Act) for Cuddles Management at hearing, and was cross-examined on an affidavit sworn by him on 19 September 2008. For a detailed exposition of the facts see Cuddles Management (No. 1) at paras.5-71 per Lucev FM.
In Cuddles Management (No. 1) the Court made the following findings with respect to whether the conduct was for a prohibited reason by virtue of Ms Poppas making an inquiry or complaint to the first applicant, the Liquor Hospitality and Miscellaneous Union,[8] or participating in a proceeding:
[8] “the Union”.
110. For reasons set out above the inquiry or complaint to the Union by Ms Poppas cannot be considered to be an inquiry or complaint in relation to the observance of her rights under an industrial instrument, namely the Award, for the purposes of s.793(1)(j)(ii) of the WR Act, because the Award did not apply to her employment. However, it can be considered to be an inquiry or complaint with respect to compliance with an industrial law, and in particular the statutory guarantee of return to work following maternity leave under s.280 of the WR Act. Furthermore, it is clear that the conciliation conference proceedings in the AIRC were proceedings under an industrial law.
111. In the absence of a proven non-prohibited reason for the conduct the Court considers (or, at the very least considers it can be inferred) that the conduct, namely the dismissal, injury in employment and prejudicial alteration to position in employment, was conduct for a prohibited reason, namely an inquiry or complaint to a person having capacity under an industrial law to seek compliance with that law, namely s.280 of the WR Act, because:
a) the email of 8.12pm on 22 May 2008, which dismissed Ms Poppas from employment, refers to the circumstances, which clearly included the complaint that had been made to the Union, and “the conditions you insist on” which included a return to work at the Ballajura Centre in Ms Poppas’ previous position;
b) the express reference to seeing Ms Poppas at “the Commission hearing” in the email of 8.12pm on 22 May 2008, which indicates a clear awareness of a complaint made to the Union and which might result in participation in a proceeding under an industrial law;
c) Cuddles Management’s refusal to participate in the conference before the AIRC being a proceeding under an industrial law, and being a proceeding as a consequence of a complaint by Ms Poppas to the Union which sought compliance with the law, namely s.280 of the WR Act;
d) Cuddles Management’s refusal to deal with the Union in relation to the complaint concerning return to work following maternity leave made to it by Ms Poppas; and
e) Cuddles Management’s advice to Ms Poppas that she did not need to deal with the Union in relation to the complaint concerning return to work following maternity leave.
112. The conduct of Cuddles Management, including the above conduct, is sufficient to infer that the conduct was for prohibited reasons, namely the prohibited reasons in s.793(1)(i) and (j)(i) of the WR Act, and therefore in breach of s.792(1) of the WR Act [9]
[9] Cuddles Management (No. 1) at paras.110-112 per Lucev FM (footnote omitted).
Cuddles Management’s conduct involved a deliberate refusal to deal with inquiries or complaints by persons or bodies seeking compliance with an industrial law, particularly as it related to the statutory guarantee of a return to work following maternity leave under s.280 of the WR Act, or participation in a proceeding under an industrial law. Cuddles Management’s conduct was also marked by the fact that it responded selectively to communications, sometimes responding directly to Ms Poppas, but refusing to respond or acknowledge communications from the Union or the Australian Industrial Relations Commission.[10] Eventually it also ignored Ms Poppas’ correspondence when she sought clarification of issues associated with her return to work. Cuddles Management’s conduct sought to avoid any process that involved the Union or the AIRC, and it is fair to say that when Ms Poppas continued to seek to pursue her right to return to work after maternity leave and it became apparent that she was not prepared to compromise that right, that she was terminated. Prior to termination, Cuddles Management had sought to pressure Ms Poppas, a child care worker with parental and financial responsibilities which made her vulnerable to the type of pressure which was being exerted.[11]
[10] “AIRC”.
[11] Cuddles Management (No. 1) at paras.44 and 46(b) per Lucev FM.
This was not a case of a single error of judgment, or a rash decision momentarily made resulting in a lack of judgment by Cuddles Management. Rather, Cuddles Management’s conduct entailed an ongoing course of conduct, which worsened the longer the dispute lasted, going from:
a)insistence that Ms Poppas return to a lower position than that of a manager, contrary to her rights under s.280 of the WR Act;
b)encouraging her not to speak to the Union of which she was a member and which was seeking to take industrial law proceedings in relation to her rights under s.280 of the WR Act;
c)ignoring both the Union and the AIRC in relation to industrial law proceedings; and
d)threatening to ultimately dismiss, and then dismissing, Ms Poppas in relation to her insistence on her rights under s.280 of the WR Act and because there were industrial law proceedings taken in connection with that right.
This was not a case where ignorance of the law might justify a plea that whilst the conduct was deliberate, it was not deliberately defiant.[12] In this case Cuddles Management was well aware of Ms Poppas’ right to return to work as a manager after her maternity leave. It was made well aware of that right by the Union. It was also made aware of her right to take industrial law proceedings in connection with that right.[13] Senior management of Cuddles Management were intimately involved and had control and conduct of Cuddles Management’s course of conduct giving rise to the contravention.[14] Cuddles Management chose a path of deliberate resistance, and of pressuring Ms Poppas. The deliberate path that it chose was the wrong one. In the context of setting penalty, that chosen path makes a difference.
[12] Compare Golden Maple at paras.21-22 and 23(f) per Lucev FM.
[13] Cuddles Management (No. 1) at paras.33-34, 40-46 and 111 per Lucev FM.
[14] Cuddles Management (No. 1) at paras.40-46 and 111 per Lucev FM.
The circumstances of Cuddles Management’s conduct, whilst not in the most serious imaginable category, are toward the more serious end of the scale in terms of contravention.
Consequences of contravening conduct
The consequences of Cuddles Management’s conduct in this case included:
a)dismissing Ms Poppas from employment to which she was entitled to return following maternity leave;
b)by dismissing Ms Poppas from employment, adversely affecting her financial wellbeing;[15]
c)because of the nature of the termination, that is a dismissal, adversely affecting Ms Poppas’ prospects of obtaining future employment;[16]
d)worsening Mr Poppas’ financial position because of a reduction in the amount of remuneration paid to her when she did obtain future employment;[17] and
e)an undermining of the utility and effectiveness of fundamental objects and purposes of the WR Act.[18]
[15] Cuddles Management (No. 1) at para.48 per Lucev FM.
[16] Cuddles Management (No. 1) at para.47 per Lucev FM.
[17] Cuddles Management (No. 1) at para.48 per Lucev FM.
[18] Golden Maple at para.54 per Lucev FM, and cases there cited.
The consequences of the contravening conduct are not such as to warrant any penalty discount.
Prior contravention
Cuddles Management has a prior history of breach of the WR Act. In Liquor, Hospitality and Miscellaneous Union, Western Australian Branch v Cuddles Management Pty Ltd[19] the Western Australian Industrial Magistrates Court found that Cuddles Management had failed to pay superannuation to 40 members of the Union in breach of the provisions of the Award. The total of underpayments was in the sum of $71,855.49. A penalty of $13,000 was imposed, with favourable consideration being given to:
a)the fact that Cuddles Management was a first time contravener;[20] and
b)financial difficulties that Cuddles Management then allegedly had,[21]
in mitigation of penalty.
[19] [2008] WAIRC 01311 (“Cuddles Management – Superannuation Contravention”).
[20] Cuddles Management – Superannuation Contravention at para.5 per Cicchini IM.
[21] Cuddles Management – Superannuation Contravention at para.6 per Cicchini IM.
In this case, Cuddles Management can no longer rely upon it being a first time contravener. In this case, there is no evidence of financial difficulties. The evidence presently before the Court indicates that Cuddles Management runs 10 child care centres in and around the suburbs of Perth, and that a further child care centre is opening soon.[22] There is no evidence that Cuddles Management has financial difficulties.
[22] Mr Aulfrey’s Affidavit, sworn 5 June 2009, para.5 and annexure A.
A discount of 20%-30% on penalty is appropriate for a first time contravener. For a second contravention it would be appropriate, in general terms, that there be a penalty discount of less than 20%-30%, and dependent upon all of the facts, it may be that there will be no discount upon a second contravention. Absent consideration of other issues, it would be appropriate for a second time contravener to receive a penalty reduction in the order of 10%-15%. This, however is a case where other issues are likely to affect whether Cuddles Management, as a second time contravener, receives a penalty discount of that amount.
Size and financial resources
The evidence before the Court as to the size and financial resources of Cuddles Management is not substantial, but indicates that:
a)Cuddles Management had “been made to spend a lot of time and money defending this matter”;[23] and
b)Cuddles Management has the conduct of some 10, and soon to be eleven, child care centres around the Perth suburbs.[24] That would indicate that it is not a small business, but rather a small medium size business.
[23] Mr Carver’s affidavit, sworn 19 September 2008, para.13.
[24] See para.16 above.
There is no evidence that Cuddles Management does not have the capacity to pay any penalty imposed at an appropriate level.[25] There is therefore no reason based on Cuddles Management’s size and financial resources to adopt other than a normal approach to the assessment of penalty.
[25] Olsen v Sterling Crown (2008) 177 IR 337 at 356 per Lucev FM; [2008] FMCA 1392 at para.75 per Lucev FM (“Sterling Crown”); Golden Maple at para.71 per Lucev FM.
Contrition
There is no evidence of contrition by Cuddles Management. Indeed, Cuddles Management has adopted a course which is inconsistent with contrition and more consistent with a bullying approach. At hearing, to try to justify Ms Poppas’ dismissal, Cuddles Management endeavoured to cast blame upon her in relation to matters that the Court found were not her responsibility.[26] Furthermore, in an affidavit filed in these proceedings Cuddles Management’s Chief Executive Officer purported to “reserve the right to sue Ms Poppas for damages for this matter and the money spent by Cuddles [Management] to redress the matters at our Ballajura centre.”[27]
[26] Cuddles Management (No. 1) at paras.100-101 per Lucev FM, and especially at para.102 per Lucev FM: “Ms Poppas’ evidence constituted a comprehensive rebuttal of the criticisms levelled at her by Cuddles Management. Having regard to the findings made by the Court above, the Court considers that the reasons advanced by Cuddles Management for its treatment of Ms Poppas (that is the injury in employment, prejudicial alteration of position and dismissal) were entirely spurious, and were not the reason for Cuddles Management’s conduct in relation to Ms Poppas. Therefore, Cuddles Management has not established that the conduct was for a non-prohibited reason, and has failed to satisfy the Court that it has fulfilled the evidentiary onus imposed on it by s.809 of the WR Act.”
[27] Mr Carver’s Affidavit sworn 19 September 2008, para.13.
The fact that Cuddles Management has not bothered to file affidavits or submissions in relation to penalty, or to attend the penalty hearing, is further evidence of a lack of contrition.
In the circumstances, there can be no penalty discount on account of contrition, because there is none.
Co-operation with regulatory authorities
There has been no co-operation by Cuddles Management with anybody that might be said to have any authority, or any regulatory authority, in relation to this matter, be it the Union or the AIRC.
The role of the Union can be said to be regulatory insofar as in bringing proceedings on behalf of an aggrieved employee it has a role, not the same as, but akin to that of, a workplace inspector. In determining that a penalty ought to be paid to an applicant union, this Court has observed:
Many cases in which penalties are ordered to be paid to the consolidated revenue involve government officials (for example workplace inspectors) bringing the proceedings on behalf of aggrieved employees. Here the Commonwealth government is not involved in the proceedings. This is a proceeding brought by a recognised industrial union against an employer on behalf of its members, and not only those directly affected by the employer’s action; but for the wider benefit of deterring potentially like-minded employers from acting in breach of the legislation that may effect other members of the applicant.[28]
[28] CFMEU v Austral Bricks (Qld) Pty Ltd (2009) 178 IR 470 at 480 per Wilson FM; (2009) 224 FLR 178 at 188 per Wilson FM; [2009] FMCA 143 at para.42 per Wilson FM (“Austral Bricks”).
The role of the AIRC is not in the nature of enforcement, but is quasi regulatory in the sense that it can assist in the resolution of disputes, which it was asked to do in this case. Any possible resolution was frustrated by the non-attendance of Cuddles Management at the conciliation conference proceedings before the AIRC.
In the circumstances there has been no co-operation by Cuddles Management with any regulatory authority which warrants any penalty discount.
Objects of the WR Act
In assessing penalty in relation to contraventions of a civil penalty provision regard must be had to the objects of the relevant legislation.[29] This principle has been particularly applied both before this Court and the Federal Court in relation to workplace relations legislation where civil penalty provisions have been contravened.[30]
[29] Secretary, Department of Health and Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545 at para.56 per Flick J.
[30] Jones v Hanssen Pty Ltd [2008] FMCA 291 at paras.28-29 per Lucev FM; Fitzpatrick IR at 20-21 per Tracey J; FCA at para.27 per Tracey J; Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61 at 72 per Tracey J; [2008] FCA 1426 at para.56 per Tracey J (although a contravention application in relation to s.38 of the Building and Construction Industry Improvement Act 2005 (Cth) (“BCCI Act”) one of the objects of the BCCI Act is “to provide an improved workplace relations framework for building work”: BCCI Act, s.3)
The objects of the WR Act relevant to this matter include:
(f)ensuring compliance with minimum standards, industrial instruments and bargaining processes by providing effective means for the investigation and enforcement of:
(i)employee entitlements; and
(ii)the rights and obligations of employers and employees, and their organisations; and
…
(l)assisting employees to balance their work and family responsibilities effectively through the development of mutually beneficial work practices with employers; and
(m)respecting and valuing the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin; and
(n)assisting in giving effect to Australia’s international obligations in relation to labour standards.[31]
[31] WR Act, s.3.
It suffices to say that in this case the conduct constituting the contravention by Cuddles Management is inconsistent with those objects of the WR Act set out above.
Deterrence
A primary objective of penalties is deterrence.[32] Therefore, in imposing civil penalties, deterrence is a significant consideration.[33] It is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend.[34] Therefore a penalty must be of a kind that demonstrates an appropriate assessment of the seriousness of the offending conduct.[35]
[32] Fitzpatrick IR 14 at 21 per Tracey J; FCA at para.28 per Tracey J; Leighton Contractors Pty Ltd v CFMEU (2006) 164 IR 375 at 391 per Le Miere J; [2006] WASC 317 at para.74 per Le Miere J; Sterling Crown IR at 351 per Lucev FM; FMCA at para.53 per Lucev FM.
[33] Ponzio v B&P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at 577 per Jessup J; [2007] FCAFC 65 at para.164 per Jessup J (“Ponzio”).
[34] Ponzio 158 FCR 543 at 559 per Lander J; [2007] FCAFC 65 at para.93 per Lander J, citing Yardley v Betts (1979) 22 SASR 108; Kelly IR at 21 per Tracey J; FCA at para.28 per Tracey J.
[35] Ponzio 158 FCR 543 at 559 per Lander J; [2007] FCAFC 65 at para.93 per Lander J.
Civil penalties imposed in industrial law proceedings must be meaningful and consistent in light of other considerations to be taken into account when determining appropriate penalty.[36]
[36] ACCC v IPM Operation and Maintenance Loy Yang Pty Ltd (No. 2) [2007] FCA 11 at para.66 per Young J; Sterling Crown IR at 351 per Lucev FM; FMCA at para.54 per Lucev FM.
There is a need for general deterrence in determining penalty in this case, it being a case in which the penalty to be imposed ought to reflect disapproval of the conduct in question, and act as a general warning to others, both within and without the child care industry, not to engage in similar conduct.[37]
[37] Fitzpatrick IR at 21 per Tracey J; FCA at para.28 per Tracey J; Community and Public Sector Union v Telstra Corporation Ltd (2001) 108 IR 228 at 231 per Finkelstein J; [2001] FCA 1364 at para.9 per Finkelstein J.
In this case, there is clearly a need for specific deterrence. There was no contrition. There was no co-operation with regulatory authorities. The conduct was serious and deliberate with adverse consequences to Ms Poppas. Cuddles Management continues to be engaged in the industry, and the evidence establishes that the vast majority of Cuddles Management staff are, like Ms Poppas, young, female and of child-bearing age,[38] and therefore susceptible to any future repetition of this kind of conduct by Cuddles Management. Those matters are compounded by the fact that in relation to the prior contravention for which a penalty of $13,000 was imposed in Cuddles Management – Superannuation Contravention, that sum, ordered to be paid to the Union on 20 August 2008 by the Western Australian Industrial Magistrates Court, remains unpaid. Specific deterrence must therefore loom large in consideration of penalty in this case.[39]
[38] Mr Aulfrey’s Affidavit sworn 5 June 2009 at para.7.
[39] Contrast Fitzpatrick IR 14 at 21 per Tracey J; FCA at para.28 per Tracey J, where the Federal Court stated that specific deterrence did not loom large as a consideration in determining penalty in that case because the respondents had expressed contrition and had put in place mechanisms designed to ensure that there would be no repetition of the contraventions which had lead to the proceedings.
Size of prescribed penalty
Under s.807(2) of the WR Act the maximum penalty for contravention of s.792(1) of the WR Act for a body corporate is $33,000. The quantum of this penalty is the result of a marked increase in penalties following legislative reforms in 2005. Where, as here, a contravention of a civil penalty provision under the WR Act has been found the penalty must take account of the increase in penalties provided by the federal parliament. As a consequence of the 2005 amendments the determination of the amount of penalty in workplace relations proceedings is no longer to be approached with a “light hand”.[40]
[40] Finance Sector Union v Commonwealth Bank of Australia (2005) 147 IR 462 at 483 per Merkel J; (2005) 224 ALR 467 at 487 per Merkel J; [2005] FCA 1847 at para.72 per Merkel J; Commonwealth Bank of Australia & Anor v Finance Sector Union (2007) 157 FCR 329 at 364 per Branson J; (2007) 161 IR 262 at 298 per Branson J; [2007] FCAFC 18 at para.192 per Branson J; Golden Maple at paras.57, 65 and 86 per Lucev FM.
Consideration and assessment of penalty
Consideration of the factors set out above generally indicates that a penalty discount of no more than 15% is likely to apply to Cuddles Management’s contravention of s.792(1) of the WR Act.
In circumstances where there is:
a)a serious and deliberate contravention, with consequences adverse to the employee affected by the contravention, and no evidence of contrition or of co-operation with regulatory authorities;
b)a prior contravention for which a relatively substantial penalty was imposed and remains unpaid;
c)conduct contrary to several objects of the WR Act, and
d)a need for general and specific deterrence,
the Court does not consider it appropriate that there be a penalty imposed at the minimum of the generally indicated range, that is 85% of the maximum available penalty. It is however nevertheless the case that, although serious, this is not the worst imaginable type of case,[41] and although there is a prior contravention record, this is only a second contravention. Having regard to all the factors set out above, and on an overall consideration of the circumstances, the Court considers that the penalty ought to be 90% of the maximum, that is $29,700.
[41] Fox v St Barbara Mines Ltd (1998) 44 AILR 3-818 per French J, applied in Sterling Commerce (Australia) Pty Ltd v Iliff (2008) 173 IR 378 at 386-387 per Gordon J; [2008] FCA 702 at para.14 per Gordon J.
In circumstances where the Union has effectively run the contravention proceedings on behalf of Ms Poppas the penalty can be paid to the Union,[42] and in this case, ought to be paid to the Union.[43] There being no evidence of Cuddles Management having any financial difficulty, there will be an order that the penalty be paid by 4.00pm on 24 August 2009.
[42] Rojas v Esselte Australia Pty Ltd (No. 2) (2008) 177 IR 306 at 326 per Moore J; [2008] FCA 1585 at para.68 per Moore J.
[43] Austral Bricks IR at 480 per Wilson FM; FLR at 188 per Wilson FM; FMCA at paras.42-43 per Wilson FM.
I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: S. Gough
Date: 11 August 2009
Key Legal Topics
Areas of Law
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Employment & Labour Law
Legal Concepts
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Breach of Contract
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Civil Penalty
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Jurisdiction
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