Ratnayake v Greenwood Manor Pty Ltd (No.2)
[2012] FMCA 440
•31 May 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| RATNAYAKE v GREENWOOD MANOR PTY LTD (No.2) | [2012] FMCA 440 |
| INDUSTRIAL LAW – Penalties for failure to consult and failure to give pay in lieu of notice. |
| Crimes Act 1958 (Vic), s.4AA Fair Work Act 2009, ss.44, 50, 61, 117, 539, 545, 546, 547, 550 |
| Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) 246 ALR 35; [2008] FCAFC 8 CPSU v Telstra Corporation Limited (2001) 108 IR 228; [2001] FCA 1364 Fair Work Ombudsman v Tiger Telco Pty Ltd (in liq) [2012] FCA 479 Finance Sector Union v Commonwealth Bank of Australia (2005) 147 IR 462; (2005) 224 ALR 467; [2005] FCA 1847 Furlong v Maxim Electrical Services (Aust) Pty Ltd (No.3) [2006] FCA 1705 Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 Maswan v Escada [2011] FWA 4239 National Tertiary Education Industry Union v Central Queensland University[2008] FCA 481 Pine v Casello Constructions Pty Ltd [2005] FCA 1854 Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357; (2008) 177 IR 243; [2008] FCAFC 170 Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; (2007) 162 IR 444; [2007] FCAFC 65 QR Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2010) 204 IR 142; [2010] FCAFC 150 Ratnayake v Greenwood Manor Pty Ltd [2012] FMCA 350 |
| Applicant: | NISHAMAL RATNAYAKE |
| Respondent: | GREENWOOD MANOR PTY LTD (ACN 066 233 716) |
| File number: | MLG 1364 of 2011 |
| Judgment of: | Riley FM |
| Hearing date: | 17 May 2012 |
| Date of last submission: | 17 May 2012 |
| Delivered at: | Melbourne |
| Delivered on: | 31 May 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mark Champion |
| Solicitors for the Applicant: | Hymans Solicitors |
| Counsel for the Respondent: | R A Millar |
| Solicitors for the First Respondent: | McMahon Fearnley Lawyers Pty Ltd |
THE COURT DECLARES THAT:
The respondent contravened:
(a)s.117 of the Fair Work Act 2009, by failing to pay the applicant pay in lieu of notice when his employment was terminated; and
(b)s.50 of the Fair Work Act 2009, by failing to comply with a term of an enterprise agreement, namely, the obligation to consult about a proposed significant change to the applicant’s hours of employment.
AND THE COURT ORDERS THAT:
Pursuant to s.545(2)(b) of the Fair Work Act 2009, the respondent pay the applicant the sum of $3,898.80, being pay in lieu of notice under s.117 of the Fair Work Act 2009.
Pursuant to s.547 of the Fair Work Act 2009, the respondent pay the applicant interest in the sum of $287.30 on the pay in lieu of notice.
The respondent pay an aggregate penalty of $7,100 in respect of the contraventions referred to in declarations 1(a) and (b) above.
Pursuant to s.546(3)(c) of the Fair Work Act 2009, the respondent pay the said penalty to the applicant.
The payment of the sums payable under these orders be stayed for 30 days.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG 1364 of 2011
| NISHAMAL RATNAYAKE |
Applicant
And
| GREENWOOD MANOR PTY LTD (ACN 066 233 716) |
Respondent
REASONS FOR JUDGMENT
Introduction
These are the reasons for orders and declarations consequent upon the findings made in Ratnayake v Greenwood Manor Pty Ltd [2012] FMCA 350. In that case, the court found that the applicant had breached:
a)s.117 of the Fair Work Act 2009 (“the Act”), by failing to pay the applicant pay in lieu of notice when his employment was terminated; and
b)s.50 of the Act, by failing to comply with a term of an Enterprise Agreement, namely, the obligation to consult about a proposed significant change to the applicant’s hours of employment.
As a result, the respondent is liable to a penalty for each of those breaches. In addition, by reason of the respondent’s failure to pay the applicant pay in lieu of notice, the respondent owes the applicant pay for the notice period. The applicant submitted that the shortfall in his pay was $3,898.80, and the interest on that sum was $287.30. The respondent did not oppose orders being made in those sums. I accept the figures provided by the applicant. There will be orders accordingly.
In addition, there will be declarations in respect of the established breaches, and orders for the payment of penalties as discussed below.
Maximum penalty
The maximum penalty for the respondent’s failure to pay the applicant in lieu of giving him notice is $33,000. That is because:
a)s.117 of the Act falls in Division 11 of Part 2-2 of the Act;
b)s.61(3) of the Act provides that Divisions 3 to 12 of Part 2-2 of the Act constitute the National Employment Standards;
c)s.44(1) of the Act provides that an employer must not contravene a provision of the National Employment Standards;
d)s.539 of the Act provides that s.44(1) is a core provision, the contravention of which renders an employer liable to a maximum penalty of 60 penalty units;
e)s.4AA of the Crimes Act1958 (Vic) defines a “penalty unit” to be $110, so 60 penalty units is $6,600; and
f)s.546(2) of the Act prescribes a maximum penalty for a body corporate of five times the amount payable by a natural person.
Similarly, the maximum penalty for the respondent’s failure to consult is also $33,000. (See the table in s.539 of the Act.)
Approach to determining penalty
The proper approach to determining penalty in cases such as this is as follows. The first step for the court is to identify each separate contravention involved. Multiple breaches which occurred in a single course of conduct may be treated as a single breach.
The second step is for the court to consider an appropriate penalty to impose in respect of each breach.
The third step is for the court to take into account the extent, if any, to which two or more contraventions have common elements. A person should not be penalised more than once for the same conduct.
The penalty imposed by the court should be an appropriate response to the contravenor’s conduct.[1] This is a separate process from the application of the totality principle.[2]
[1] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) 246 ALR 35; [2008] FCAFC 8 at [46] (Graham J) (unreported, Full Court of the Federal Court of Australia, 20 February 2008, Gray, Graham and Buchanan JJ).
[2] Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; (2008) 247 ALR 714; (2008) 171 IR 455; [2008] FCAFC 70 at [41]-[46] (Stone and Buchanan JJ) (unreported, Full Court of the Federal Court of Australia, 7 May 2008, Gyles, Stone and Buchanan JJ)
The fourth step is for the court to apply the totality principle.
This requires the court to consider the aggregate penalty overall, and determine whether it is an appropriate response to the conduct which led to the breaches.[3] The court in this step makes an “instinctive synthesis”.[4]
[3] See Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [30] (Tracey J) (Kelly); Ophthalmic, supra at [23] (Gray J), [71] (Graham J) and [102] (Buchanan J).
[4] Ophthalmic, supra at [27] (Gray J) and [55] and [78] (Graham J).
A convenient checklist of the factors that the court might consider in determining penalty include the matters that were identified by Mowbray FM in Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7 at [26]-[59] and adopted by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [14]. That list is as follows:
·The nature and extent of the conduct which led to the breaches.
·The circumstances in which that conduct took place.
·The nature and extent of any loss or damage sustained as a result of the breaches.
·Whether there had been similar previous conduct by the respondent.
·Whether the breaches were properly distinct or arose out of the one course of conduct.
·The size of the business enterprise involved.
·Whether or not the breaches were deliberate.
·Whether senior management was involved in the breaches.
·Whether the party committing the breach had exhibited contrition.
·Whether the party committing the breach had taken corrective action.
·Whether the party committing the breach had cooperated with the enforcement authorities.
·The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
·The need for specific and general deterrence.
The court must of course be mindful of the caution expressed by Buchanan J in Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; (2008) 246 ALR 35; [2008] FCAFC 8 at [91] as follows:
Checklists of this kind can be useful providing they do not become transformed into a rigid catalogue of matters for attention. At the end of the day the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations. There is no suggestion in the present case that the learned magistrate made any relevant error in her identification of the matters which she should consider in fixing penalties.
Step 1: the breaches
As stated above, the respondent breached:
a)s.117 of the Act by failing to pay the applicant pay in lieu of notice when his employment was terminated; and
b)s.50 of the Act, by failing to comply with a term of an enterprise agreement, namely, the obligation to consult about a proposed significant change to the applicant’s hours of employment.
The parties were in agreement that the two breaches were separate and did not involve any overlapping conduct. That is undoubtedly correct. Consequently, each of the breaches will be considered separately, in the first instance.
The court will firstly consider the circumstances of the case under the various headings suggested by Mowbray FM, and then consider whether any other matters are relevant.
Step 2.a: the appropriate penalty for the failure to give notice
The nature and extent of the conduct which led to the breach
The failure to give the applicant notice occurred on one occasion only. The respondent terminated the applicant’s employment on the grounds of alleged serious misconduct. The court did not accept, on the evidence before it in relation to the termination, that the applicant had engaged in serious misconduct.
The breach followed an attempt by the respondent’s director,
Mr McMahon, to investigate various allegations against the applicant, including allegations of bullying. Mr McMahon, in writing, sought the applicant’s response to the allegations against him. The applicant declined to assist with the investigation.
The circumstances in which the conduct took place
The respondent refused to give the applicant pay in lieu of notice in circumstances where the respondent, or, at least, its director,
Mr McMahon, believed that there were proper grounds to dismiss the applicant summarily for serious misconduct. The court did not share Mr McMahon’s view. That was largely because Mr McMahon took into account certain allegations that the applicant had bullied various staff members and the court did not give those allegations significant weight.
The bullying allegations were hearsay in relation to the serious misconduct issue. The respondent chose not to adduce first hand evidence in relation to the bullying allegations because to do so would have required various staff members to be called to give evidence, and Mr McMahon had told them that he would protect their confidentiality.
Nevertheless, the court is satisfied that Mr McMahon genuinely believed in the truth of the bullying allegations made by various members of his staff against the applicant.
If the bullying allegations against the applicant had been proved by first hand evidence, it is likely that the court would have found that the applicant had engaged in serious misconduct and was therefore not entitled to pay in lieu of notice. However, as the matter stands, the bullying allegations against the applicant were not proved. Indeed, the respondent expressly chose not to rely on them in relation to the issue of the termination without pay.
The nature and extent of any loss or damage sustained as a result of the breaches
The applicant lost three weeks pay as a result of the breach. This amounted to $3,898.80.
Whether there had been similar previous conduct by the respondent
It was not suggested that the respondent had previously engaged in similar conduct.
Whether the breaches were properly distinct or arose out of the one course of conduct
The breaches were distinct.
The size of the business enterprise involved
In Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [28], Tracey J said:
No less than large corporate employers, small businesses have an obligation to meet minimum employment standards and their employees, rightly, have an expectation that this will occur. When it does not it will, normally, be necessary to mark the failure by imposing an appropriate monetary sanction. Such a sanction “must be imposed at a meaningful level”: see Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd [2001] ATPR 41-815 at [13].
The respondent conducts a 46 bed aged care facility. It is probably fair to call it a small to medium sized business. It does not have a dedicated human resources section.
Whether or not the breaches were deliberate
The breach was deliberate, in that Mr McMahon took a conscious and apparently carefully considered decision to dismiss the applicant without pay. Having said that, I accept that Mr McMahon genuinely believed that he had proper grounds to dismiss the applicant without notice.
Whether senior management was involved in the breach
The decision to terminate the applicant’s employment without notice was taken by Mr McMahon, one of the two directors of the respondent.
Whether the party committing the breach has exhibited contrition, corrective action and co-operation with the authorities
Mr McMahon genuinely believed that his actions were justified. Consistently with that belief, he has not demonstrated any contrition and has not taken any corrective action. There has been no investigation by the industrial relations authorities in relation to this matter.
The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements
It was not suggested that this factor is presently relevant.
The need for specific and general deterrence
In relation to specific deterrence, Gray J observed in Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union 171 FCR 357; (2008) 177 IR 243; [2008] FCAFC 170 at [37] that:
Specific deterrence focuses on the party on whom the penalty is to be imposed and the likelihood of that party being involved in a similar breach in the future. Much will depend on the attitude expressed by that party as to things like remorse and steps taken to ensure that no future breach will occur.
In relation to general deterrence, Lander J noted in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; (2007) 162 IR 444; [2007] FCAFC 65 at [93]:
In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217.
Similarly, in CPSU v Telstra Corporation Limited (2001) 108 IR 228; [2001] FCA 1364 at 230-231, Finkelstein J said:
[9]… even if there be no need for specific deterrence, there will be occasions when general deterrence must take priority, and in that case a penalty should be imposed to mark the law's disapproval of the conduct in question, and to act as a warning to others not to engage in similar conduct … .
The need for specific deterrence in relation to the failure to pay the applicant in lieu of notice is negligible. It is difficult to imagine the respondent being in a similar situation in the future, where it believed it had proper grounds for summarily dismissing an employee, but the evidentiary basis for that view was not actually put before the court.
In relation to general deterrence, it is unlikely that there would be many similar cases arising in the future. However, as a general proposition, it is fundamental that, in appropriate cases, employees be given pay in lieu of notice. Consequently, some measure of general deterrence is required.
Other issues
The respondent submitted that, in assessing the amount of the penalty, the court should take into account the fact that the respondent had incurred legal costs in defending the claim against it.
In determining penalty, it may be appropriate to take into account the amount that has been paid in legal costs in relation to the proceeding. That was done in Pine v Casello Constructions Pty Ltd [2005] FCA 1854 where North J noted that the respondent had spent $8,000 in legal costs and in Furlong v Maxim Electrical Services (Aust) Pty Ltd (No 3) [2006] FCA 1705 where Marshall J noted that the respondent union had expended $80,000 in legal costs.
In the present case, there was no evidence about how much the respondent had spent on legal costs. It may be that the applicant has also incurred legal costs. I do not consider in the absence of any indication of how much has been spent by either party in legal costs, that this is a factor to which significant weight should be given.
The amount of the penalty for the failure to give notice
The applicant submitted that the appropriate penalty for the failure to give notice would be at the lower end of the range, somewhere between $2,500 and $7,500. The respondent submitted that there should be no penalty at all for the failure to give notice.
In my view, the appropriate penalty for the failure to give notice is $500. There was a breach, but it arose in circumstances that place it very much at the lower end of the scale. There is not a need, given the unusual circumstances of the failure to give notice, for significant levels of specific deterrence. I consider that the requirements of general deterrence require only a small penalty. Consequently, a modest penalty is appropriate.
Step 2.b: the appropriate penalty for the failure to consult
The nature and extent of the conduct which led to the breach
The failure to consult in this case had an adverse impact on only one employee, namely, the applicant. The matter on which the respondent should have consulted with the applicant was a proposed reduction in his working hours from 40 per week to 25.
The circumstances in which that conduct took place
The failure to consult occurred in the context of a business decision to reduce the working hours of one employee “if practicable”[5].
[5] Exhibit 6, the minutes of the Management Meeting on 21 July 2011.
The nature and extent of any loss or damage sustained as a result of the breaches
In one sense, the failure to consult did not lead to any loss or damage, because the applicant eventually accepted the reduction in his working hours, albeit under protest.
However, in another sense, the failure to consult as required by the applicable enterprise agreement led indirectly to the applicant losing his job. That is because Mr Chapman, instead of consulting with the applicant about a severe reduction in his working hours, presented him with a fait accompli. Unsurprisingly, the applicant reacted badly to the news. That triggered a chain of events that resulted in the applicant being dismissed.
Having said that, the applicant was able to find alternative employment relatively quickly.
Whether there had been similar previous conduct by the respondent
It was not suggested that there had been any similar previous conduct by the employer.
Whether the breaches were properly distinct or arose out of the one course of conduct
Notwithstanding that, as discussed above, the failure to consult led indirectly to the applicant’s dismissal, the parties did not suggest, and I do not consider, that the breaches relevantly arose out of a single course of conduct.
The size of the business enterprise involved
As mentioned above, the respondent’s business was small to medium sized.
Whether or not the breaches were deliberate
It was not clear on the evidence whether Mr Chapman knew that presenting the applicant with a fait accompli was contrary to the applicable enterprise agreement and consequently in breach of the Act.
In the principal reasons for decision, the court found that Mr Chapman did in fact present the applicant with a fait accompli, notwithstanding Mr Chapman’s claims to the contrary.
Whether senior management was involved in the breach
The senior management of the respondent was involved in the failure to consult. Mr Chapman was one of the respondent’s two directors.
Whether the party committing the breach has exhibited contrition, corrective action and co-operation with the authorities
There has been no investigation by the industrial relations authorities in relation to this matter. Neither Mr Chapman, nor the respondent, has demonstrated any contrition or taken any corrective action. On the contrary, for reasons canvassed in detail in the principal reasons for decision, the court found that Mr Chapman lied about the alleged consultation.
The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements
It was not suggested that this factor was presently relevant.
The need for specific and general deterrence
I consider that there is a need for a penalty in this case that provides a level of general deterrence. The obligation to consult before making a substantial change to an employee’s conditions of employment is an important one. The circumstances of this case demonstrate the problems that can arise where that obligation is not met.
I also consider that there is a need for a penalty that provides a level of specific deterrence in this case. The respondent has still not acknowledged that it breached the applicable enterprise agreement. On the contrary, Mr Chapman lied about it.
Other issues
Counsel for the respondent submitted that the respondent’s legal costs should be taken into account in assessing penalty. However, there was no evidence before the court about the amount of the respondent’s legal costs. Presumably, the applicant also incurred legal costs. I do not consider that legal costs weigh significantly in this case, especially in the absence of any indication of the actual amounts incurred.
Counsel for the respondent also submitted that the respondent had been punished enough, by having to endure the trial and the “unpalatable” findings made by the court. The applicant was also put to the stress and inconvenience of a trial and had to deal with some adverse findings against him. The applicant succeeded on two points and the respondent on one. I do not consider that this factor warrants any significant weight being given to it.
Counsel for the respondent said that the respondent had been brought to court on an adverse action claim, on which it succeeded, and the failure to consult issue was just an add-on. I do not consider that this submission leads to any reduction in the penalty that would otherwise be appropriate. Clearly, the respondent could have conceded the failure to consult point at an early stage, and pressed ahead with its defence of the adverse action claim.
The amount of the penalty for the failure to consult
Counsel for the applicant submitted that the failure to consult warranted a penalty of 50% or more of the maximum penalty, that is, a penalty of $16,500 or more. Counsel for the respondent submitted that the penalty should be under $1,000.
Counsel for the applicant referred to two cases in which penalties had been ordered for a failure to consult. In QR Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2010) 204 IR 142; [2010] FCAFC 150, Keane CJ and Marshall J said that, in relation to that case:
59.The principal mitigating factors are:
o the absence of dishonesty or deliberate breach on the part of the appellants;
o the circumstance that this was the first offence for each of the appellants.
60.The principal aggravating factors are that:
o the breach was heedless of the rights of employees;
o the breach involved the contravention of twenty (20) agreements affecting the industrial rights of 10,300 employees.
61.In relation to the penalty appropriate to each contravention, we consider that a figure of $20,000 appropriately reflects a balance of the principal mitigating and aggravating factors.
In the QR case, Queensland Rail had breached its obligation to consult in 20 separate agreements. In broad terms, the trial judge had ordered the maximum penalty of $33,000 for each of the 20 breaches, and the Full Court reduced the penalty to $20,000 for each of the breaches.
The applicant also referred to the decision of Logan J in National Tertiary Education Industry Union v Central Queensland University[2008] FCA 481. In that case, the University did not renew the contracts of 200 staff. In doing so, the University conflated some of the required steps in the consultation process, but did engage in some level of consultation: see [33]. Moreover, unlike the present case, the University acknowledged its error “at the earliest possible opportunity following the institution of the present proceedings”: see [27].
At [45], Logan J noted:
… That means that the cumulative total of the maximum applicable penalties in respect of the University is $99,000.
This is hardly a case which calls for the imposition of a maximum penalty in respect of any breach, especially having regard to the very timely acknowledgment of the commission of those breaches by the University in these proceedings.
Ultimately, the court ordered total penalties of $7,000.
The present case is very different. It involved only one employee, there was no consultation at all and the respondent has still not acknowledged any error.
The respondent referred to the decision of Vice President Watson of Fair Work Australia, in Maswan v Escada [2011] FWA 4239. In that case, there had been a failure to consult prior to an employee being made redundant. The employee claimed that his dismissal was unfair. Fair Work Australia decided that, notwithstanding the failure to consult, the dismissal was not unfair. Maswan v Escada did not concern the assessment of penalty for a failure to consult. Consequently, I do not find it particularly helpful in the present circumstances.
The respondent also referred to the decision of Bromberg J in Fair Work Ombudsman v Tiger Telco Pty Ltd (in liq) [2012] FCA 479. In that case, the employer breached the Act in four ways in connection with its failure to return an employee to her pre-parental leave position and its failure to consult with the employee in relation to the matter. As a consequence, the employee suffered economic loss amounting to $12,750.
In Tiger Telco, the respondent cooperated with the authorities in their investigation. The parties agreed on a statement of facts and a penalty to put before the court. Consequently, no one was put to the stress, cost and inconvenience of a trial. The respondent expressed contrition by apologising to the relevant employee. Bromberg J accepted that the $5,940 penalty proposed by the parties was within the permissible range and made orders accordingly.
The present case was quite different, because there was a trial and there has been no expression of contrition.
No two cases are identical. Each case must be considered in the light of its own particular circumstances. The decided cases are therefore interesting examples but afford limited guidance.
In the present case, I consider that a penalty of $6,600 is appropriate for the failure to consult. That is 20% of the maximum. The particular factors that weigh most heavily in reaching that conclusion are:
a)there was no suggestion that the respondent has been involved in any previous breaches of its obligations towards its employees;
b)the breach affected only one employee;
c)one of the respondent’s two directors was personally involved in the breach and subsequently, lied to the court about it;
d)the respondent has expressed no contrition and there has been no indication of an apology, even after receiving the reasons for decision in the principal proceedings; and
e)the case calls for both general and specific deterrence.
Step 3: the aggregate penalty
I note that the proper approach in determining penalty is to impose a penalty for each contravention, and then, as a check, to consider whether the aggregate penalty is appropriate for all of the contraventions as a whole: Ponzio v B & P Caelli Constructions Pty Ltd and Ors (2007) 158 FCR 543. This step is most important where there have been a multiplicity of similar breaches, whereas the present case involves only two distinct breaches.
In any event, taking into account all of the material before me, I consider that an aggregate penalty of $7,100 is a reasonable and proportionate response to the respondent’s conduct.
Step 4: the totality principle
In relation to the check that is required by the totality principle, I consider that the aggregate penalties indicated above are appropriate for the whole of the contravening conduct engaged in by the respondent.
Payment of the penalty
The applicant submitted that it would be appropriate in this case to order the penalty to be paid to the applicant personally rather than into Consolidated Revenue. That course is permitted by s.546(3)(c) of the Act.
In Finance Sector Union v Commonwealth Bank of Australia (2005) 147 IR 462; (2005) 224 ALR 467; [2005] FCA 1847, Merkel J said:
68 Similarly, in Seven Network (Operations) Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Ors (No.2) (2001) 110 IR 372, I stated, at 375:
where the conduct in question targets a particular organisation or person and that person is authorised to commence and commences a proceeding for the imposition of a penalty, in the usual course it is appropriate to order that the penalty be paid to the organisation or person.
69 In Gibbs v Altona City Corporation (1992) 37 FCR 216 at 223; 42 IR 255 at [261]-[262] Gray J stated:
[t]he usual order, when [a] proceeding is not brought by an inspector appointed under the Act, is for payment to the person or organisation applying for the penalty.
The respondent did not oppose that course. It seems to me to be appropriate in the circumstances of this case. The respondent sought a stay of 30 days on the payment of the amounts the respondent is required to pay pursuant to these reasons for decision. The applicant did not oppose that course. There will be orders accordingly.
I certify that the preceding seventy-six (76) paragraphs are a true copy of the reasons for judgment of Riley FM
Date: 31 May 2012
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