Shop, Distributive and Allied Employees Association v Haridemos (No 2)

[2021] FCCA 857

FEDERAL CIRCUIT COURT OF AUSTRALIA

Shop, Distributive and Allied Employees Association v Haridemos (No 2) [2021] FCCA 857

File number(s):

SYG 1960 of 2020

Judgment of:

JUDGE MANOUSARIDIS

Date of judgment:

30 April 2021

Catchwords:

INDUSTRIAL LAW – application for order for the payment of pecuniary penalties for contraventions of item 2(2) of Schedule 16 to the Fair Work (Transitional provisions and Consequential Amendments) Act 2009 (Cth) and s 323(1), s 345(1), s 535(4), and s 536(3) of the Fair Work Act 2009 (Cth) – pecuniary penalties ordered

Legislation:

Crimes Act 1914 (Cth) s 4AA
Fair Work Act 2009 (Cth) ss 12, 323(1), 345, 472(2), 535(4), 536(3), 546, 547(2), 556, 557, Div 3, Pt 4-1
Fair Work (Transitional Provisions and Consequential Amendments) Act (Cth) Sch 16, Items 2(2), 16
Federal Circuit Court Rules 2001 (Cth) rr 3.05(3), 13.03C(1)(e)

Trade Practices Act 1974 (Cth)

Cases cited:

ABCC v CFMEU [2017] FCAFC 113

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3

Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73

Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97

Contin v The Queen [2012] VSCA 247

Fair Work Ombudsman v Lohr [2018] FCA 5

Fair Work Ombudsman v Northcoast Security Services Group Pty Ltd & Ors (No.3) [2020] FCCA 521

Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301

Flight Centre Ltd v Australian Competition and Consumer Commission (No.2) [2018] FCAFC 53

Kelly v Fitzpatrick [2007] FCA 1080

Mason v Harrington Corporation Pty Ltd [2007] FMCA 7

Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70

R v Holder & Johnston [1983] 3 NSWLR 245

Royer v Western Australia [2009] WASCA 139

Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4

Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd [1980] FCA 47

Number of paragraphs:

57

Date of hearing:

27 April 2021

Place:

Sydney

Counsel for the Applicant:

Mr D O’Sullivan, by telephone

Solicitor for the Applicant:

Taylor & Scott Lawyers

The Respondent:

No appearance by or on behalf of the respondent

ORDERS

SYG 1960 of 2020

BETWEEN:

SHOP, DISTRIBUTIVE AND ALLIED EMPLOYEES ASSOCIATION

Applicant

AND:

ANDREW HARIDEMOS

Respondent

ORDER MADE BY:	JUDGE MANOUSARIDIS
DATE OF ORDER:	30 APRIL 2021

THE COURT ORDERS THAT:

1.Pursuant to r 3.05(3) of the Federal Circuit Court Rules 2001 (Cth) the time for compliance with order 10 of the orders made on 24 February 2021 be extended up to and including 16 March 2021.

2.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) the respondent pay pecuniary penalties in the sum of $44,000 for his contraventions of the provisions of the Fair Work Act 2009 (Cth) identified in the declarations made on 24 February 2021.

3.Pursuant to s 546(3)(b) of the Fair Work Act 2009 (Cth) the respondent pay the pecuniary penalties referred to in order 2 to the applicant within 28 days after the day on which these orders are pronounced.

REASONS FOR JUDGMENT

INTRODUCTION

1. On 24 February 2021 I made declarations that the respondent, Mr Haridemos, contravened a number of provisions of the Fair Work Act 2009 (Cth) (FW Act).[1] On that day I also ordered that the proceeding be set down for hearing on 27 April 2021 for the determination of penalties, the parties file and serve evidence and submissions, and that the applicant (the Association) serve the orders I made on 24 February 2021 (Orders) on Mr Haridemos within 7 days.

   [1] Shop, Distributive and Allied Employees Association v Haridemos [2021] FCCA 283

2. The Association served the Orders on Mr Haridemos by email on 16 March 2021 together with the reasons for judgment I delivered on 24 February 2021. This occurred outside the time required by the Orders. Mr Haridemos has not filed any notice of appearance, and he has not filed any evidence or submissions on the question of penalties.

3. On 27 April 2021 the proceeding came before me for the hearing on penalties. Mr Haridemos did not appear, either in person or through a lawyer. In those circumstances Mr O’Sullivan, who appeared for the Association by telephone, applied pursuant to r 13.03C(1)(e) of the Federal Circuit Court Rules 2001 (Cth) (FCC Rules) that I proceed with the Association’s application that Mr Haridemos pay penalties in relation to his contraventions of the FW Act. I agreed to that course, and proceeded to hear the Association’s application for such orders.

4. Mr O’Sullivan also applied for an order that I extend the time by which the Association was required to serve the Orders. Under r 3.05(3) of the FCC Rules the Court may extend the time for compliance with an order even after the time for complying with that order has passed. Given Mr Haridemos’ total non-engagement with this proceeding, I am satisfied he will not suffer any prejudice if I were to extend the time up to and including 16 March 2021. I therefore propose to make an order extending time up to and including 16 March 2021.

5. In these reasons for judgment, I consider what order for penalties I should make in relation to Mr Haridemos’ contraventions of the FW Act.

   STATUTORY PROVISIONS AND PRINCIPLES[2]

   [2] In this section of my reasons I repeat much of what I said in Fair Work Ombudsman v Northcoast Security Services Group Pty Ltd & Ors (No.3) [2020] FCCA 521, at [8]-[25]

   Power

6. Subsection 546(1) of the FW Act empowers this Court, on application, to order a person to pay a pecuniary penalty the Court considers is appropriate if the Court is satisfied the person has contravened a civil remedy provision. Subsection 546(2) of the FW Act provides that the pecuniary penalty the Court may impose must not, where the person is an individual, be more than “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).”

7. Under s 12 of the FW Act, “penalty unit” has the meaning given by s 4AA of the Crimes Act 1914 (Cth) (Crimes Act). During the period over which the contraventions identified in the Orders occurred – 31 August 2015 to April 2016 - $180 was the penalty unit provided for by s 4AA of the Crimes Act. Thus $10,800 is the maximum penalty that can be imposed for each contravention identified in the Orders.

   Approach to assessing penalties for multiple contraventions

8. The approach to assessing penalties for contraventions of provisions of the FW Act was outlined by Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown (New Shanghai) as follows (emphasis in original):[3]

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

   (2)Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.

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

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

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

   [3] Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301, at [36].

9. I have noted on another occasion that the third step contained in the passage from the judgment of Bromwich J in New Shanghai requires the Court to consider whether there is any overlap “between groups of separate aggregated contraventions” to ensure the same conduct is not penalised twice and, if there is an overlap, whether there should be “further adjustment”. Bromwich J did not expressly describe the nature of the adjustment that may need to be made to avoid a double penalty; but the passage suggests that the adjustment is to be made by further aggregation. That is apparent from the fourth step the passage identifies, namely, the consideration of “the appropriate penalty in respect of each final individual group of contraventions, taken in isolation” (emphasis added).

10. Given s 557(1) of the FW Act, there would appear to be no room for the operation of the “one transaction principle” to treat two or more contraventions of the FW Act as one contravention. That is what Bromwich J concluded in Fair Work Ombudsman v Lohr, where his Honour accepted the FWO’s submission that s 557 of the FW Act “is the express statutory manifestation of the one transaction or course of conduct principle”; that by “enacting s.557 Parliament has determined how multiple contraventions arising from a course of conduct are to be treated”; and that, once s 557 has been applied it is not open to “further consolidate the … contraventions into one contravention by applying that principle, in effect, again”.[4] The correct approach, therefore, appears to be that the one transaction principle is to be applied after penalties have been (provisionally) assessed for two or more contraventions (including contraventions which, under s 557(1) of the FW Act, are to be treated as a single contravention); and it is to be applied by adjusting the penalties so assessed, having regard to the degree of commonality between the conduct that constitutes each contravention. This point was made by the Full Federal Court in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union:[5]

    The important point to emphasise is that the course of conduct principle, in the criminal context at least, does not operate to permit a sentencing judge to impose a single sentence in respect of multiple offences on the basis that the offences formed part of a course of conduct. Absent a statutory provision that provides otherwise, a sentencing judge is to impose a separate sentence, albeit with the option of concurrency, for each offence.

    . . . .

    The important point to emphasise is that, contrary to the Commissioner’s submissions, neither the course of conduct principle nor the totality principle, properly considered and applied, permit, let alone require, the Court to impose a single penalty in respect of multiple contraventions of a pecuniary penalty provision. . . . That is not to say that the Court can impose a single penalty in respect of each course of conduct. Likewise, there is no doubt that in an appropriate case involving multiple contraventions, the Court should, after fixing separate penalties for the contraventions, consider whether the aggregate penalty is excessive. If the aggregate is found to be excessive, the penalties should be adjusted so as to avoid that outcome. That is not to say that the Court can fix a single penalty for the multiple contraventions.

    [4] Fair Work Ombudsman v Lohr [2018] FCA 5, at [33]

    [5] [2017] FCAFC 113, at [114], [148] (Dowsett, Greenwood, and Wigney JJ)

    Assessing penalty for single contravention – object of assessment

11. When assessing the amount of the pecuniary penalty that the Court should order be paid, it is useful to distinguish between the purpose or purposes for which pecuniary penalties are to be imposed and, given that purpose or purposes, the matters that may be relevant to assessing the penalty. As for the purpose of imposing pecuniary penalties, the Full Federal Court in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union said:[6]

    Whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty is primarily, if not wholly, protective in promoting the public interest in compliance. The principal object of a pecuniary penalty is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene; both specific and general deterrence are important. A pecuniary penalty for a contravention of the law must be fixed with a view to ensuring that the penalty is not to be regarded by the offender or others as an acceptable cost of doing business. In relation to general deterrence, it is important to send a message that contraventions of the sort under consideration are serious and not acceptable.

    The question whether a pecuniary penalty involves an element of punishment remains somewhat controversial. To a certain extent, that debate appears to be more semantic or philosophical than real. It is sufficient to say that, accepting that the primary purpose of imposing a pecuniary penalty is to protect and deter, that purpose is achieved by imposing a punishment in the form of a pecuniary penalty.

    [6] [2017] FCAFC 113, [98], [99] (citations omitted)

12. That the principal purpose of making an order for the payment of a pecuniary penalty is deterrence was confirmed by the plurality in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (references omitted):[7]

    [T]he principal object of an order that a person pay a pecuniary penalty under s 546 is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners.

    Specific deterrence “aims to dissuade the particular individual from committing further offences by imposing sanctions which demonstrate the adverse consequences of criminal activity”, whereas general deterrence “aims to deter the general population from committing similar offences by instilling the fear of incurring similar sanctions”. Specific and general deterrence both “involve behavioural responses”. Specific deterrence “refers to the reduction in reoffending that is presumed to follow from the experience of actually being punished”, whereas general deterrence relies on the threat of punishment to “discourage potential and actual criminals in the general public from committing crime”.

    [7] [2018] HCA 3, at [116] (Keane, Nettle and Gordon JJ) (citation omitted)

    Assessing penalty for single contravention – factors

13. In Kelly v Fitzpatrick,[8] Tracey J adopted what Mowbray FM in Mason v Harrington Corporation Pty Ltd identified as “a non-exhaustive range of considerations to which regard may be had in determining whether particular conduct calls for the imposition of a penalty, and if it does the amount of the penalty”.[9] The Full Federal Court identified those factors in The Non-Indemnification Personal Payment Case as follows:[10]

    Relevant factors in the overall assessment of penalty were helpfully listed by French J in CSR. They have been adopted in many cases. For present purposes, they can be restated as follows: 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.

    [8] [2007] FCA 1080, [14]

    [9] [2007] FMCA 7, [24]

    [10] Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97, at [20]

14. In ABCC v CFMEU the Full Federal Court provided the following guidance to assessing penalties:[11]

    The fixing of a pecuniary penalty involves the identification and balancing of all the factors relevant to the contravention and the circumstances of the defendant, and making a value judgment as to what is the appropriate penalty in light of the protective and deterrent purpose of a pecuniary penalty.

    In general terms, the factors that may be relevant when fixing a pecuniary penalty may conveniently be categorised according to whether they relate to the objective nature and seriousness of the offending conduct, or concern the particular circumstances of the defendant in question.

    The factors relating to the objective seriousness of the contravention include: the extent to which the contravention was the result of deliberate, covert or reckless conduct, as opposed to negligence or carelessness; whether the contravention comprised isolated conduct, or was systematic or occurred over a period of time; if the defendant is a corporation, the seniority of the officers responsible for the contravention; the existence, within the corporation, of compliance systems and whether there was a culture of compliance at the corporation; the impact or consequences of the contravention on the market or innocent third parties; and the extent of any profit or benefit derived as a result of the contravention.

    The factors that concern the particular circumstances of the defendant, particularly where the defendant is a corporation, generally include: the size and financial position of the contravening company; whether the company has been found to have engaged in similar conduct in the past; whether the company has improved or modified its compliance systems since the contravention; whether the company (through its senior officers) has demonstrated contrition and remorse; whether the company had disgorged any profit or benefit received as a result of the contravention, or made reparation; whether the company has cooperated with and assisted the relevant regulatory authority in the investigation and prosecution of the contravention; and whether the company has suffered any extra-curial punishment or detriment arising from the finding that it had contravened the law.

    [11] [2017] FCAFC 113, [100], [102]-[104] (citations omitted)

15. It would also be useful to refer to what the Full Federal Court said in the context of assessing pecuniary penalties for contraventions of the Trade Practices Act 1974 (Cth) in Flight Centre Ltd v Australian Competition and Consumer Commission (No.2):[12]

    [T]he task is one that is evaluative, taking into account all the circumstances of the case, not to be reached mechanically or by some illusory process of exactitude, but rather by evaluation that is articulated to a point (but no further) that is useful and meaningful. One starts the process by giving proper weight to the statutory maximum as referable to the most serious kind of contravention.

    [12] [2018] FCAFC 53, at [55]

    Assessing penalty for multiple contraventions – “one transaction principle”

16. Subsection 557(1) of the FW Act deals with the multiple contraventions of a single civil remedy provision, and s 556 deals with the contravention of two or more civil remedy provisions. Quite apart from s 557(1) and s 556 of the FW Act, however, the courts apply what is commonly referred to as the “one transaction principle” to determine whether adjustments should be made to penalties that have been assessed for multiple contraventions of a provision of the FW Act. Owen JA gave a useful statement of the principle in Royer v Western Australia:[13]

    At its heart, the one transaction principle recognises that, where there is an interrelationship between the legal and factual elements of two or more offences with which an offender has been charged, care needs to be taken so that the offender is not punished twice (or more often) for what is essentially the same criminality. The interrelationship may be legal, in the sense that it arises from the elements of the crimes. It may also be factual, because of a temporal or geographical link or the presence of other circumstances compelling the conclusion that the crimes arise out of substantially the same act, omission or occurrences.

    [13] [2009] WASCA 139, at [22]

1. Lockhart J stated the principle in the context of the imposition of penalties for contraventions of provisions of the Trade Practices Act 1974 (Cth) in Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd:[14]

   Guidance is given in the field of sentencing for criminal offences by the well-known principle that where several offences are heard together and arise out of the same transaction it is a sound working rule that the sentences imposed for those offences should be made concurrent; it is inappropriate to sentence consecutively when the offences were all really involved in the same episode . . .

   [14] [1980] FCA 47; (1980) 44 FLR 149; (1980) ATPR 40-161, at 42, 277

2. The Full Federal Court recently confirmed the relevance of the “one transaction principle” in the assessment of multiple contraventions of a single civil remedy provision in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union:[15]

   There is no doubt that, in an appropriate case involving multiple contraventions, the Court should consider whether the multiple contraventions arose from a course or separate courses of conduct. If the contraventions arose out of a course of conduct, the penalties imposed in relation to the contraventions should generally reflect that fact, otherwise there is a risk that the respondent will be doubly punished in respect of the relevant acts or omissions that make up the multiple contraventions. 

   [15] [2017] FCAFC 113, at [148] (Dowsett, Greenwood, and Wigney JJ)

3. There are two matters to note about the application of the “one transaction principle”. First, the principle does not relieve the Court from assessing a penalty for each contravention, even if the contravention arose out of a course of conduct. The Full Federal Court said this in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union in the passage I have already set out.[16] Second, “even if the contraventions are properly characterised as arising from a single course of conduct, a judge is not obliged to apply the principle if the resulting penalty fails to reflect the seriousness of the contraventions”.[17]

   [16] [2017] FCAFC 113, at [114], [148] (Dowsett, Greenwood, and Wigney JJ)

   [17] Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73, at [235] (Allsop CJ, Middleton and Robertson JJ)

   Assessing penalty for multiple contraventions – “totality principle”

4. Finally, there is a related, but distinct,[18] principle known as the “totality principle”. Under that principle a sentencing judge is required “to impose a sentence or sentences which reflect the overall criminality of the offending for which the offender has been convicted”.[19] In R v Holder & Johnston Street CJ described the principle as follows:[20]

   The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently a straight-forward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences.

   [18] Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70, at [42], Stone and Buchanan JJ said: “For the purpose of the present discussion the general principle which appears to be relied upon by the appellant [i.e., the “one transaction” principle] may be accepted, although it is important to distinguish it from the application of the totality principle which is a final check to be applied to ensure that a final, total or aggregate, penalty is not unjust or out of proportion to the circumstances of the case.”

   [19] Contin v The Queen [2012] VSCA 247, at [38]

   [20] R v Holder& Johnston [1983] 3 NSWLR 245, at 260

5. The totality principle has been held to apply to the assessment of pecuniary penalties.[21] The application of the totality principle to the assessment of pecuniary penalties was recently confirmed by the Full Federal Court in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union:[22]

   The totality principle, like the course of conduct principle, has its origins in criminal sentencing. . . .

   The totality principle is sometimes confused or conflated with the course of conduct principle. That is perhaps not surprising because application of the totality principle may again result in a court adjusting what would otherwise have been consecutive or cumulative sentences to sentences that are wholly or partially concurrent.  The proper approach, however, is to first consider the course of conduct principle and determine whether the sentences should be consecutive, or wholly or partly concurrent. Once that is done, the Court should then review the aggregate sentence to ensure that it is just and appropriate. That may require a further adjustment of the sentences: either by ordering further concurrency or, if appropriate, lowering the individual sentences below what would otherwise be appropriate.

   While, in the criminal sentencing context, the totality principle is generally applied in cases involving sentences of imprisonment, it has been held to apply to the fixing of fines . . . .  In the case of fines, the Court must fix a fine for each offence and then review the aggregate to ensure that it is just and appropriate.  If the result of the aggregation of multiple fines is that the penalty is excessive, that may lead to the moderation of the fine imposed in respect of each offence . . . . 

   Once again, the important point to emphasise is that, in the criminal sentencing context, application of the totality principle does not authorise or permit the sentencing court to impose a single sentence for multiple offences.

   [21] Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59, at [41]

   [22] [2017] FCAFC 113, at [116]-[120] (Dowsett, Greenwood, and Wigney JJ) (citations omitted)

   THE CONTRAVENTIONS AND APPLICATION OF s 557 OF THE FW ACT

6. The declarations I made on 24 February 2021 identify the provisions of the Franklins National Enterprise Agreement 2008 (Franklins Agreement) and, therefore, of item 2(2) of schedule 16 to the Fair Work (Transitional Provisions and Consequential Amendments) Act (Cth) (FW Transition Act), and also the provisions of FW Act Mr Haridemos contravened, and the conduct constituting each contravention. It is apparent that the declarations group the contravening conduct according to the provisions the conduct contravened. That implies that s 557(1) of the FW Act has already been applied to the multiple contraventions of each of those provisions.

7. In its written submissions the Association assumes a further grouping, these being the grouping of the conduct which the declarations separately declare constitute contraventions of both the Franklins Agreement and, therefore, of item 2(2) of schedule 16 to the FW Transition Act. Save for one exception, I agree that s 557(1) of the FW Act applies to group the contravening conduct in the manner the Association submits s 557(1) applies to group those contraventions.

8. The exception relates to the conduct identified in the declaration made in paragraph 5 of the Orders. The Association treats this conduct as a contravention of both s 535(4) and s 536(3) of the FW Act. In my view, however, s 557(1) cannot apply to that conduct because the conduct constitutes separate provisions of the FW Act. That means that separate penalties must be assessed for the contraventions of s 535(4) and s 536(3) of the FW Act. As will appear later, however, this makes no practical difference because an adjustment will need to be made under the “one transaction principle” to the penalties that I will separately assess for the contraventions of s 535(4) and s 536(3).

9. It follows, then, that penalties are to be assessed for the following contraventions:

   (a)Contraventions of cl 3.10 of the Franklins Agreement and, therefore, of item 2(2) of schedule 16 to the FW Transition Act.[23]

   (b)Contraventions of cl 6.11 of the Franklins Agreement and, therefore, of item 2(2) of schedule 16 to the FW Transition Act.[24]

   (c)Contraventions of cl 6.1(g) of the Franklins Agreement and, therefore, of item 2(2) of schedule 16 to the FW Transition Act.[25]

   (d)Contraventions of cl 7.1 of the Franklins Agreement and, therefore, of item 2(2) of schedule 16 to the FW Transition Act.[26]

   (e)Contravention of cl 3.9 of the Franklins Agreement and, therefore, of item 2(2) of schedule 16 to the FW Transition Act.[27]

   (f)Contraventions of s 323(1) of the FW Act.[28]

   (g)Contraventions of s 345(1) of the FW Act.[29]

   (h)Contraventions of s 535(4) of the FW Act.[30]

   (i)Contraventions of s 536(3) of the FW Act.[31]

   [23] Declarations 1(a) and (2)(a). Item 16(1) of Schedule 16 to the FW Transition Act provides that Part 4-1 of the FW Act (which deals with enforcement and compliance) applies as if, among other things, Item 2 of Schedule 16 to the FW Transitional Act were a provision of the FW Act, and the table in s 539(2) of the FW Act included the table that is specified in Item 16(1) of Schedule 16 to the FW Transitional Act.

   [24] Declaration 1(b)

   [25] Declarations 1(c) and 6

   [26] Declaration 1(d)

   [27] Declarations 1(e) and 2(c)

   [28] Declaration 2(b)

   [29] Declaration 3

   [30] Declaration 4

   [31] Declaration 5

   CONTRAVENTIONS OF cl 3.10 OF FRANKLINS AGREEMENT

10. The contravening conduct consisted in the failure on 47 occasions to make superannuation contributions. The conduct involved seven employees, it occurred over a period of almost seven months, and was deliberate. The amounts involved for each individual employee is significant. These are matters that weigh in favour of assessing the penalty at the higher end of the scale.

11. There is no evidence about Mr Haridemos’ current employment or intentions. Specific deterrence, therefore, is not a factor that ought to be given any significant weight in the assessment of penalty. General deterrence, however, is another matter. It should form a significant element in the assessment of penalty. The penalty should be set at a level that signals to employers, and to persons involved in the management of companies that employ persons, that there will be a significant penalty to pay if they deliberately fail to comply with their obligation under the FW Act and instruments protected by the FW Act.

12. Mr Haridemos has not participated in the hearing. There is therefore no evidence of any contrition by Mr Haridemos, or of any cooperation by him, or of any willingness by him to make good the losses his conduct has caused to the seven employees.

13. The maximum penalty units for a contravention of item 2(2) of Schedule 16 to the FW Transition Act is 60 penalty units, being the penalty units specified in item 38 of the table that is in item 16(1) of Schedule 16 to the FW Transition Act. The maximum penalty for a contravention of item 2(2), therefore, is $10,800. Taking into account the matters to which I have referred, I find that $8,500 is an appropriate penalty for Mr Haridemos’ contraventions of cl 3.10 of the Franklins Agreement, and therefore of item 2(2) of the FW Transition Act.

    CONTRAVENTIONS OF cl 6.11(a) OF FRANKLINS AGREEMENT

14. The contravening conduct consisted in the failure to pay employees accrued but untaken long service leave. The conduct involved five employees, and it was deliberate. The amounts involved for each individual employee are significant, ranging from $4,547.49 to $10,035.40. These are matters that weigh in favour of assessing the penalty at the higher end of the scale.

15. For reasons I have already given, specific deterrence is not a factor that weighs heavily in the assessment of penalty. General deterrence, on the other hand, should form a significant element in the assessment of penalty. The penalty should be set at the level that signals to employers, and to persons involved in the management of companies that employ persons, that there will be a significant penalty to pay if they deliberately fail to comply with their obligations under the FW Act and instruments protected by the FW Act.

16. Mr Haridemos has not participated in the hearing. There is therefore no evidence of any contrition by Mr Haridemos, or of any cooperation by him, or of any willingness by him to make good the losses his conduct has caused to the five employees.

17. Taking into account all of the matters to which I have referred, I find that $8,500 is an appropriate penalty for Mr Haridemos’ contraventions of cl 6.11(a) of the Franklins Agreement, and therefore of item 2(2) of the FW Transition Act.

    CONTRAVENTIONS OF cl 6.1(g) OF FRANKLINS AGREEMENT

18. The contravening conduct consisted in the failure to pay two employees accrued but untaken annual leave, and annual loading, on termination of their employment. The amounts not paid are significant, being $1,157.70 for one and $2,275.16 for the other.

19. For reasons I have already given specific deterrence is not a factor that weighs heavily in the assessment of penalty. General deterrence, on the other hand, should form a significant element in the assessment of penalty. The penalty should be set at the level that signals to employers, and to persons involved in the management of companies that employ persons, that there will be a significant penalty to pay if they fail to comply with their obligations under the FW Act and instruments protected by the FW Act.

20. Mr Haridemos has not participated in the hearing. There is therefore no evidence of any contrition by Mr Haridemos, or of any cooperation by him, or of any willingness by him to make good the losses his conduct has caused to the five employees.

21. Taking into account all of the matters to which I have referred, I find that $5,000 is an appropriate penalty for Mr Haridemos’ contraventions of cl 6.1(g) of the Franklins Agreement, and therefore of item 2(2) of the FW Transition Act.

    CONTRAVENTIONS OF cl 7.1 OF FRANKLINS AGREEMENT

22. The contravening conduct consisted in the failure to give one employee four weeks’ notice or payment of $2,787.52 in lieu.

23. General deterrence, although not specific deterrence, should form a significant element in the assessment of penalty. The penalty should be set at the level that signals to employers, and to persons involved in the management of companies that employ persons, that there will be a significant penalty to pay if they fail to comply with their obligations under the FW Act and instruments protected by the FW Act.

24. Mr Haridemos has not participated in the hearing. There is therefore no evidence of any contrition by Mr Haridemos, or of any cooperation by him, or of any willingness by him to make good the losses his conduct has caused to the five employees.

25. Taking into account all these matters I find that $4,500 is an appropriate penalty for Mr Haridemos’ contraventions of cl 7.1 of the Franklins Agreement, and therefore of item 2(2) of the FW Transition Act.

    CONTRAVENTIONS OF cl 3.9 OF FRANKLINS AGREEMENT

26. The contravening conduct consisted in the failure to pay one employee $337.81, being 14 hours wages. This is a relatively modest, but not an insubstantial amount. Taking into account general deterrence, and Mr Haridemos’ lack of contrition, cooperation, or willingness to make good the consequences of his contravention, I find that $2,000 is an appropriate penalty for Mr Haridemos’ contraventions of cl 3.9 of the Franklins Agreement, and therefore of item 2(2) of the FW Transition Act.

    CONTRAVENTIONS OF s 323(1) OF FW ACT

27. The contravening conduct consisted in the failure on 47 occasions to apply deductions made from the wages of employees for the purpose for which the employees had authorised such deductions to be made, namely to pay membership due to the Association. The conduct involved seven employees, it occurred over a period of almost seven months, and was deliberate. These are matters that weigh in favour of assessing penalty at the higher end of the scale.

28. General, although not specific, deterrence should form a significant element in the assessment of penalty. The penalty should be set at a level that signals to employers, and to persons involved in the management of companies that employ persons, that there will be a significant penalty to pay if they deliberately fail to comply with their obligations under the FW Act and instruments protected by the FW Act. There is no evidence of any contrition by Mr Haridemos, or of any cooperation by him, or of any willingness by him to make good the losses his conduct has caused to the seven employees.

29. The maximum penalty units for a contravention of is 323(1) of the FW Act being 60 penalty units, I find that $7,000 is an appropriate penalty for Mr Haridemos’ contraventions of s 323(1) of the FW Act.

    CONTRAVENTIONS OF s 345(1) OF FW ACT

30. The contravening conduct consisted in falsely recording on payslips on 219 occasion that amounts on account of union fees had been deducted. The conduct involved seven employees, it occurred over a period of almost seven months, and was deliberate. These are matters that weigh in favour of assessing penalty at the upper end of the scale.

31. General, although not specific, deterrence should form a significant element in the assessment of penalty. The penalty should be set at a level that signals to employers, and to persons involved in the management of companies that employ persons, that there will be a significant penalty to pay if they deliberately fail to comply with their obligation under the FW Act and instruments protected by the FW Act. There is no evidence of any contrition by Mr Haridemos, or of any cooperation by him, or of any willingness by him to make good the losses his conduct has caused to the seven employees.

32. The maximum penalty units for a contravention of is 345(1) of the FW Act being 60 penalty units, I find that $8,500 is an appropriate penalty for Mr Haridemos’ contraventions of s 345(1) of the FW Act.

    CONTRAVENTIONS OF s 535(4) OF FW ACT

33. The contravening conduct consisted in falsely recording on payslips on 219 occasion that amounts on account of union fees had been deducted. The conduct involved seven employees, it occurred over a period of almost seven months, and was deliberate. These are matters that weigh in favour of assessing penalty at the higher end of the scale.

34. General, although not specific, deterrence should form a significant element in the assessment of penalty. The penalty should be set at a level that signals to employers, and to persons involved in the management of companies that employ persons, that there will be a significant penalty to pay if they deliberately fail to comply with their obligation under the FW Act and instruments protected by the FW Act. There is no evidence of any contrition by Mr Haridemos, or of any cooperation by him, or of any willingness by him to make good the losses his conduct has caused to the seven employees.

35. The maximum penalty units for a contravention of s 535(1) of the FW Act at the relevant time was 30 penalty units, which means that $5,400 is the maximum penalty. I find that $4,500 is an appropriate penalty for Mr Haridemos’ contraventions of s 535(1) of the FW Act.

    CONTRAVENTIONS OF s 536(3) OF FW ACT

36. The contravening conduct consisted of the same conduct as constituted the contravention of s 535(4) of the FW Act. The maximum penalty of contravention of s 536(3) of the FW Act is the same as that for a contravention of s 535(4) I therefore find that $4,500 is an appropriate penalty for Mr Haridemos’ contraventions of s 536(3) of the FW Act.

    ADJUSTMENTS

1. My assessment of penalties before any adjustment may now be summarised as follows:

54          Contravening conduct	55          Contravention	56          Penalty
57          Failure to make superannuation payments	58          cl 3.10 Franklins Agreement	59          $8,500
60          Failure to pay accrued but untaken long service leave	61          cl 6.11(a) Franklins Agreement	62          $8,500
63          Failure to pay accrued by untaken annual leave on termination of employment	64          cl 6.1(g) Franklins Agreement	65          $5,000
66          Failure to give notice or make payment in lieu of notice	67          cl 7.1 Franklins Agreement	68          $4,500
69          Failure to pay 14 hours’ worth of wages	70          cl 3.9 Franklins Agreement	71          $2,000
72          Failure to pay amounts deducted for union fees to Association	73 s 323(1) FW Act	74          $7,000
75          Recording on payslips knowingly false information	76 s 345(1) FW Act	77          $8,500
78          Maintaining payslips knowing them to contain false information	79 s 535(4) FW Act	80          $4,500
81          Giving payslips knowing to contain false information	82 s 536(3) FW Act	83          $4,500
84          TOTAL	85	86          $53,000

1. The contraventions of s 345(1), s 535(4) and s 536(3) are constituted by the same conduct. That conduct should only be the subject of one penalty. An appropriate adjustment would be to remove the penalties for contraventions of s 535(4) and 536(3). That would result in the following penalties:

53          Contravening conduct	54          Contravention	55          Penalty
56          Failure to make superannuation payments	57          cl 3.10 Franklins Agreement	58          $8,500
59          Failure to pay accrued but untaken long service leave	60          cl 6.11 Franklins Agreement	61          $8,500
62          Failure to pay accrued by untaken annual leave on termination of employment	63          cl 6.1(g) Franklins Agreement	64          $5,000
65          Failure to give notice or make payment in lieu of notice	66          cl 7.1 Franklins Agreement	67          $4,500
68          Failure to pay 14 hours’ worth of wages	69          cl 3.9 Franklins Agreement	70          $2,000
71          Failure to pay amounts deducted for union fees to Association	72 s 323(1) FW Act	73          $7,000
74          Recording on payslips knowingly false information	75 s 345(1) FW Act	76          $8,500
77          Maintaining payslips knowing them to contain false information	78 s 535(4) FW Act	79
80          Giving payslips knowing to contain false information	81 s 536(3) FW Act	82
83          TOTAL	84	85          $44,000

1. The last matter to consider is whether the payment of penalties totalling $44,000 is a just and appropriate response to Mr Haridemos’ contravening conduct viewed as a whole. I am satisfied it is and, for that reason, there is no need to make any further adjustment by application of the totality principle.

   OTHER MATTERS

2. The Association also claims an order under s 547 of the FW Act for interest. Subsection 547(1), however, provides that an order for interest that may be made under s 472(2) applies to an order under Div 3 of Part 4-1 of the FW Act “other than a pecuniary penalty order”. Thus s 547(2) of the Act does not apply to orders for the payment of pecuniary penalties. I therefore do not propose to make an order for the payment of interest.

3. The Association also submits that I should make an order under s 546(3)(b) that the pecuniary penalty I will order be paid to the Association. The Association relies on the following passage from the judgment of the Full Federal Court in Sayed v Construction, Forestry, Mining and Energy Union:[32]

   [32] Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4, at [121]

   Furthermore, it is not apparent to us why the receipt of a penalty should not operate as an incentive to an affected person to bring a prosecution like this under the FW Act. After all, as Wilcox J noted in Finance Sector Union, it ensures the enforcement of the legislative scheme.  Moreover, as Jessup J put it in Murrihy, this incentive to bring and maintain such a proceeding makes it more likely that the applicable provisions of the FW Act “will be more than mere words on the statute book”. As Gray J said in Plancor, the question of “profit” does not arise on a proper construction of the power.

4. This passage applies to an individual affected by contravening conduct applying for an order that the pecuniary penalties be paid to that person. Paragraph (b) of s 546(3) of the FW Act provides that the Court may order that a pecuniary penalty be paid to an organisation. Ordering a pecuniary penalty to be paid to an organisation like the Association serves the same purposes as ordering the payment of pecuniary penalties to an individual affected by the contravening conduct. It acts as an incentive to organisations to enforce the provisions of the FW Act and make it more likely that the provisions of the FW Act “will be more than mere words on the statute book”. I am therefore satisfied that the pecuniary penalties that I will order Mr Haridemos pay be paid to the Association.

   DISPOSITION

5. In addition to making an order under r 3.05(3) of the FCC Rules, I will order that Mr Haridemos pay pecuniary penalties in the sum of $44,000, and that he pay that amount to the Association within 28 days after I pronounce my orders.

I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis.

Associate:

Dated:       30 April 2021