Sultan v Consulate General of the Republic of Iraq, Sydney (No 2)
[2022] FedCFamC2G 595
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Sultan v Consulate General of the Republic of Iraq, Sydney (No 2) [2022] FedCFamC2G 595
File number(s): SYG 1753 of 2019
SYG 1754 of 2019
SYG 1756 of 2019Judgment of: JUDGE MANOUSARIDIS Date of judgment: 29 July 2022 Catchwords: INDUSTRIAL LAW – assessment of appropriate pecuniary penalties for contraventions of s 340(1), s 44(1), and s 536(1) of the Fair Work Act 2009 (Cth). Legislation: Crimes Act 1914 (Cth) s 4AA
Fair Work Act 2009 (Cth) ss 12, 44(1), 90(2), 340(1), 341(1), 361(1), 536(1), 539(1), 539(2), 546(1), 546(2), 546(3)(c), 557(1), 557(2), 557A
Cases cited: Al-Attar v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 500
Al-Attar v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 334
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73
Berlyn v Brouskos (2002) 134 A Crim R 111
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97
Contin v The Queen [2012] VSCA 247
Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59
Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Fair Work Ombudsman v Lohr [2018] FCA 5
Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301
Patrick Stevedores Holdings Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union (No 4) [2021] FCA 1481
R v Holder (1983) 3 NSWLR 245
Royer v Western Australia [2009] WASCA 139
Sultan v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 498
Sultan v Consulate General of the Republic of Iraq, Sydney (No 2) [2021] FCCA 1610
Sultan v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 333
Sultan v Consulate General of the Republic of Iraq, Sydney (No 3) [2022] FedCFamC2G 597
The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46
Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd [1980] FCA 47; (1980) 44 FLR 149; (1980) ATPR 40-161
Trade Practices Commission v CSR Ltd [1991] ATPR 41-076
Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 499
Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 332
Division: Fair Work Number of paragraphs: 94 Date of hearing: 23 March 2022 Place: Sydney In SYG 1753 of 2019: The Applicant: Appeared in person, by telephone Counsel for the Respondent: Mr J Fernon SC, by telephone Solicitor for the Respondent: Macpherson Kelley In SYG 1754 of 2019: The Applicant: Appeared in person, by telephone Counsel for the Respondent: Mr J Fernon SC, by telephone Solicitor for the Respondent: Macpherson Kelley In SYG 1756 of 2019: The Applicant: Appeared in person, by telephone Counsel for the Respondent: Mr J Fernon SC, by telephone Solicitor for the Respondent: Macpherson Kelley ORDERS
SYG 1753 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: JALAL SULTAN
Applicant
AND: CONSULATE GENERAL OF THE REPUBLIC OF IRAQ, SYDNEY
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
29 JULY 2022
THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the respondent pay the following pecuniary penalties:
(a)$20,000 in relation to the respondent’s contravention of s 340(1) of the FW Act;
(b)$10,000 in relation to the respondent’s contravention of s 44(1) of the FW Act; and
(c)$5,000 in relation to the respondent’s contravention of s 536(1) of the FW Act.
2.Pursuant to s 546(3)(c) of the FW Act the respondent pay the pecuniary penalties referred to in order 1 to the applicant.
3.The respondent pay the pecuniary penalties referred to in order 1 within 28 days after the day on which these orders are pronounced.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
ORDERS
SYG 1754 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MARIAM YALDA
Applicant
AND: CONSULATE GENERAL OF THE REPUBLIC OF IRAQ, SYDNEY
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
29 JULY 2022
THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the respondent pay the following pecuniary penalties:
(a)$25,000 in relation to the respondent’s contravention of s 340(1) of the FW Act;
(b)$10,000 in relation to the respondent’s contravention of s 44(1) of the FW Act; and
(c)$5,000 in relation to the respondent’s contravention of s 536(1) of the FW Act.
2.Pursuant to s 546(3)(c) of the FW Act the respondent pay the pecuniary penalties referred to in order 1 to the applicant.
3.The respondent pay the pecuniary penalties referred to in order 1 within 28 days after the day on which these orders are pronounced.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
ORDERS
SYG 1756 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: ALI AL-ATTAR
Applicant
AND: CONSULATE GENERAL OF THE REPUBLIC OF IRAQ, SYDNEY
Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
29 JULY 2022
THE COURT ORDERS THAT:
1.Pursuant to s 546(1) of the Fair Work Act 2009 (Cth) (FW Act) the respondent pay the following pecuniary penalties:
(a)$25,000 in relation to the respondent’s contravention of s 340(1) of the FW Act;
(b)$10,000 in relation to the respondent’s contravention of s 44(1) of the FW Act; and
(c)$5,000 in relation to the respondent’s contravention of s 536(1) of the FW Act.
2.Pursuant to s 546(3)(c) of the FW Act the respondent pay the pecuniary penalties referred to in order 1 to the applicant.
3.The respondent pay the pecuniary penalties referred to in order 1 within 28 days after the day on which these orders are pronounced.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
On 19 March 2021 I published reasons for judgment in relation to claims Ms Yalda, Mr Al-Attar, and Mr Sultan made in separate proceedings they brought under the Fair Work Act 2009 (Cth) (FW Act) against the Consulate General of the Republic of Iraq, Sydney (Consulate).
On the basis of my reasons for judgment in relation to Ms Yalda’s claims,[1] I made a declaration that the Consulate contravened s 340(1) of the FW Act by notifying Ms Yalda by letter dated 27 November 2018 that it would not renew her contract of employment that was due to end on 31 December 2018; and on the basis of my reasons for judgment in relation to Mr Al-Attar’s claims,[2] I made a declaration that the Consulate contravened s 340(1) of the FW Act by notifying Mr Al-Attar by letter dated 27 November 2018 that it would not renew his contract of employment that was due to end on 31 December 2018.
[1] Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 499
[2] Al-Attar v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 500
I did not on 19 March 2021 make any declaration in relation to Mr Sultan’s claims.[3] I did, however, on 16 July 2021, on the basis of reasons for judgment I published on that day,[4] make a declaration that the Consulate contravened s 340(1) of the FW Act by notifying Mr Sultan by letter dated 30 November 2018 that it would not renew his contract of employment that was due to end on 31 December 2018.
[3] Sultan v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 498
[4] Sultan v Consulate General of the Republic of Iraq, Sydney (No 2) [2021] FCCA 1610
On 10 December 2021 I published further reasons for judgment in relation to additional claims each of Ms Yalda, Mr Al-Attar, and Mr Sultan made under the FW Act; and on the basis of those reasons for judgment I made the following additional declarations:
(a)In relation to Ms Yalda’s additional claims:[5]
[5] Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 332
1. During the period from 21 October 2011 to 31 December 2018 the respondent contravened s 536(1) of the Fair Work Act 2009 (Cth) (FW Act) by failing to provide to the applicant a pay slip within one working day of each occasion on which it paid an amount to the applicant in relation to the performance of work.
2. The respondent contravened s 44(1) of the FW Act by failing, contrary to s 90(2) of the FW Act, to pay to the applicant when her employment with the respondent ended an amount it would have had to pay to the applicant had the applicant taken 51 days of paid annual leave that had accrued by the time the applicant ended her employment with the respondent.
(b)In relation to Mr Al-Attar’s additional claims:[6]
1. During the period from 1 June 2016 to 31 December 2018 the respondent contravened s 536(1) of the Fair Work Act 2009 (Cth) (FW Act) by failing to provide to the applicant a pay slip within one working day of each occasion on which it paid an amount to the applicant in relation to the performance of work.
2. The respondent contravened s 44(1) of the FW Act by failing, contrary to s 90(2) of the FW Act, to pay to the applicant when his employment with the respondent ended an amount it would have had to pay to the applicant had the applicant taken 22.5 days of paid annual leave that had accrued by the time the applicant ended his employment with the respondent.
(c)In relation to Mr Sultan’s additional claims:[7]
1. During the period from October 2011 to 31 December 2018 the respondent contravened s 536(1) of the Fair Work Act 2009 (Cth) (FW Act) by failing to provide to the applicant a pay slip within one working day of each occasion on which it paid an amount to the applicant in relation to the performance of work.
2. The respondent contravened s 44(1) of the FW Act by failing, contrary to s 90(2) of the FW Act, to pay to the applicant when his employment with the respondent ended an amount it would have had to pay to the applicant had the applicant taken 63 days of paid annual leave that had accrued by the time the applicant ended his employment with the respondent.
[6] Al-Attar v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 334
[7] Sultan v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 333
In these reasons for judgment I consider the penalties I should order the Consulate to pay, pursuant to s 546(1) of the FW Act for its contraventions of the FW Act. I consider this question in one set of reasons because, as will appear later, it will be necessary to consider whether the Consulate’s contravening conduct occurred in circumstances that attract s 557(1) of the FW Act, or the one transaction principle, or the totality principle.[8]
[8] The hearing on penalty occurred on 23 March 2022. The Consulate was represented by senior counsel. Each of Ms Yalda, Mr Al-Attar, and Mr Sultan represented themselves. Ms Yalda and Mr Al-Attar said they did not wish to make any submissions. Mr Sultan relied on a letter he sent to the Registry on 14 December 2021 in which he stated that he had provided all material evidence proving that his holiday pay had not been paid; and he annexed a “Foreign Currency Account Transfer” recording the transfer from the Consulate of USD5,670 to Mr Sultan for his unpaid annual leave.
POWER
Subsection 546(1) of the FW Act provides that this Court may, on application, 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”. That expression is defined in s 539(1) of the FW Act to include the provisions identified in column 1 of the table to s 539(2) of the FW Act. Column 1 includes s 44(1), s 340(1), and s 536(1) of the FW Act.
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)” and, if the person is a “body corporate”, must not be more than five times “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)”.
The maximum penalty units, as provided for by s 539(1) of the FW Act, for contraventions of s 44(1) and s 340(1) of the FW Act at the time of the contraventions are 60 penalty units for an individual, and 300 for a “body corporate”; and the maximum penalty units for contraventions of s 536(1) of the FW Act from 21 October 2011 to 14 September 2017 was 30 penalty units for an individual and 150 penalty units for a body corporate, but from 15 September 2017 has been 60 penalty units for an individual and 300 penalty units for a body corporate.[9]
[9] Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Cth), Item 12, Schedule 1. I ignore “serious contravention” as defined in s 557A of the FW Act.
Section 12 of the FW Act provides that a “penalty unit” has the meaning given by s 4AA of the Crimes Act 1914 (Cth). The penalty unit provided for by s 4AA of that Act as at 31 December 2018 was $210, being the amount that came into effect on 1 July 2017.[10] From 31 July 2015 to 30 June 2017 the penalty unit was $180,[11] from 28 December 2012 to 30 July 2015 it was $170,[12] and from 17 April 1997 to 27 December 2012 the pecuniary penalty was $110.[13]
[10] Pursuant to Schedule 1, Item 1 of the Crimes Amendment (Penalty Unit) Act 2017 (Cth)
[11] Pursuant to Schedule 1, Item 1 of the Crimes Legislation Amendment (Penalty Unit) Act 2015 (Cth)
[12] Pursuant to Schedule 3, Item 7 of the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 (Cth)
[13] Pursuant to Schedule 1, Item 9 of the Crimes and Other Legislation Amendment Act 1997 (Cth)
Is the Consulate a “body corporate”
At this point two questions arise. The first is whether the Consulate is a “body corporate” or an “individual” for the purposes of s 546(1) of the FW Act. In the reasons for judgment I published on 19 March 2021 in relation to Ms Yalda and Mr Al-Attar, I found that the Consulate is a legal person, being a “consular post”; and I further found that “consular post”, as that expression is used in the Consular Privileges and Immunities Act 1972 (Cth), denotes a legal person, distinct from the officials who carry out consular functions.[14] In separate reasons which will be published with these reasons, I considered in greater detail whether the Consulate is a corporation, and concluded that it is.[15] In any event, the Consulate has made submissions on the basis that it is a body corporate.
[14] Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 499, at [120]
[15] Sultan v Consulate General of the Republic of Iraq, Sydney (No 3) [2022] FedCFamC2G 597
Change in value of penalty and in penalty units over period of contravening conduct
The second question relates to the Consulate’s contraventions of s 536(1) of the FW Act. As I conclude later in these reasons, s 557(1) of the FW Act applies to these contraventions with the effect that they are to be treated as a single contravention. During the period of the Consulate’s contravening conduct, however, the value of the penalty unit has been increased, and so too the number of penalty units for a contravention of s 536(1) of the FW Act. In Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2),[16] Katzmann J held that where a contravention comprises a course of conduct to which s 557(1) of the FW Act applies, and the conduct occurs before and after the day on which the value of a penalty unit has increased, the Court should apply the higher value for the purpose of determining the maximum penalty that may be imposed for a particular transaction; but, when assessing the penalty, the Court should take into account the contravening conduct’s having occurred during a period in which the value of the penalty unit was lower. The same principle should apply where the number penalty units for the contravention increases in the course of a single contravention that comprises a course of conduct.
[16] Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557, at [390]-[401]
Thus, $63,000 is the maximum penalty the Consulate may be ordered to pay for each of its contraventions of s 44(1), s 340(1), and s 536(1) of the FW Act, although, in the case of the Consulate’s contraventions of s 536(1), I must take into account that most of the contravening conduct occurred when both the number of penalty units and the value of the penalty unit for contraventions of s 536(1) were lower at the beginning of the period than they were at the end of the period.
PRINCIPLES OF ASSESSMENT
Object of making orders under s 546(1) of the FW Act
In Australian Building and Construction Commissioner v Pattinson the plurality observed that civil penalty provisions of the kind enacted in s 546(1) of the FW Act have a “statutory function of securing compliance with provisions of the [statutory] regime”;[17] that “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”;[18] that the “principal, and . . . probably the only, object of the penalties . . . is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act”;[19] and that “deterrence is the “principal and indeed the only object” of the imposition of a civil penalty: “[r]etribution, denunciation and rehabilitation have no part to play””.[20] In short, the task of assessing an appropriate penalty under s 546(1) of the FW Act is to assess a “penalty of appropriate deterrent value”.[21]
[17] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [14], quoting from the judgment of the plurality in The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, at [24]
[18] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [15], quoting from The Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46, at [55]
[19] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [15], quoting from Trade Practices Commission v CSR Ltd [1991] ATPR 41-076, at pages 52,152
[20] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [16], quoting from Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2018] FCAFC 97, at [19]
[21] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
The objective of deterrence, however, must be considered having regard to “the need for deterrence in respect of the particular case”.[22] The purpose of s 546(1) of the FW Act is “the deterrence of future contraventions of a like kind by the contravenor and by others”;[23] and an “appropriate” penalty “is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case”.[24]
[22] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [46]
[23] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [10] (my emphasis)
[24] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [46] (my emphasis)
Assessing penalty for single contravention – factors
The plurality in Pattinson recognised that, when assessing an appropriate penalty under s 546(1) of the FW Act, the Court may have regard to a number of factors that are relevant to assessing what is necessary for deterrence in respect of the particular contravention in question. That is apparent from the plurality referring,[25] with approval, to the following passage from the judgment of French J in Trade Practices Commission v CSR Ltd:[26]
[25] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
[26] Trade Practices Commission v CSR Ltd [1991] ATPR 41-076, at pages 52,152‑52,153
The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:
1.The nature and extent of the contravening conduct.
2.The amount of loss or damage caused.
3.The circumstances in which the conduct took place.
4.The size of the contravening company.
5.The degree of power it has, as evidenced by its market share and ease of entry into the market.
6.The deliberateness of the contravention and the period over which it extended.
7.Whether the contravention arose out of the conduct of senior management or at a lower level.
8.Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.
9.Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention.
The plurality characterised these as factors that “informed the assessment under the Trade Practices Act 1974 (Cth) of a penalty of appropriate deterrent value”,[27] further noting the following:[28]
It may readily be seen that this list of factors includes matters pertaining both to the character of the contravening conduct (such as factors 1 to 3) and to the character of the contravenor (such as factors 4, 5, 8 and 9). It is important, however, not to regard the list of possible relevant considerations as a “rigid catalogue of matters for attention” as if it were a legal checklist. The court’s task remains to determine what is an “appropriate” penalty in the circumstances of the particular case.
[27] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
[28] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [19] (footnotes omitted)
Approach to assessing penalties for multiple contraventions
What I have said so far concerns the assessment of an appropriate penalty for a single contravention. In many cases, however, the Court is required to assess multiple contraventions of civil remedy provisions of the FW Act. The approach to assessing pecuniary penalties in those circumstances 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):[29]
(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 . . . .
[29] Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301, at [36]
Step 1 - identify each contravention
The first step requires the Court to identify the contraventions in relation to which the appropriate penalties are to be assessed.
Step 2 – determine whether s 557(1) applies to two or more contraventions
The second step requires the Court to consider whether any two or more of the contraventions in question are to be treated as a single contravention under s 557(1) of the FW Act, which provides:
For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a)the contraventions are committed by the same person; and
(b)the contraventions arose out of a course of conduct by the person.
I considered some of the principles relating to s 557(1) of the FW Act in Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor.[30] After reviewing a number of cases, I said:[31]
Two firm principles may be drawn from the cases to which I have referred, one negative, and one positive. The negative principle is that s.557(1) of the FW Act does not apply to contraventions of different terms of modern awards, even if such contraventions arise out of a course of conduct, and even if the contraventions affect only one person. The positive principle is that s.557(1) of the FW Act applies to the multiple contravention of the one term of a modern award, even where the contravention may affect two or more persons. These principles may be extrapolated to contraventions of civil penalty provisions that do not involve the contravention of a term of a modern award. Just as s.557(1) of the FW Act does not apply to the contravention of two or more separate terms of an award, so too does it not apply to contraventions of two or more separate civil remedy provisions that do not involve a breach of a term of an award. On the other hand, s.557(1) of the FW Act applies to multiple contraventions of a single civil penalty provision, even though the contraventions may affect two or more persons.
These principles, important as they are, are limited. The judgments to which I have referred do not explicitly consider the meaning of “course of conduct”. From the words themselves, it may be said that “course of conduct” denotes a series of acts that are connected in some way; and given that it is conduct – namely, acts or omissions of a person – that is required to be connected in some way, the required connection must be sought, at least in substantial part, in the state of mind that the person engaging in the conduct has in relation to the conduct. That a contravener’s state of mind is relevant to determining whether conduct he or she has engaged in is a “course of conduct” is supported by the judgment of Nettle J in Berlyn v Brouskos.[32] In that case, his Honour considered the meaning of “course of conduct” as that expression appears in the definition of “stalking” given in s.21A(2) of the Crimes Act 1958 (Vic). His Honour concluded that “course of conduct” for the purposes of that subsection is a course of conduct as prescribed in the California Penal Code, namely, “a pattern of conduct composed of a series of acts over a period of time however short, evidencing a continuity of purpose”.[33]
Although the question whether conduct amounts to a “course of conduct” is to be determined, at least substantially, by reference to the person’s state of mind, proof of that state of mind may, and usually will be inferred from objective matters existing outside that person’s mind. Of importance would usually be whether the relevant conduct consists of an omission, the number of acts or omissions that are claimed to constitute the course of conduct, the time that separates each act or omission from the other, and whether the acts or omissions are similar or dissimilar, and, if dissimilar, whether they are jointly necessary to the achievement of the conduct that constitutes the contravention.
[30] Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626
[31] Fair Work Ombudsman v Australian Wild Tuna Pty Ltd & Anor [2016] FCCA 2626, at [32]-[34]
[32] Berlyn v Brouskos (2002) 134 A Crim R 111
[33] Berlyn v Brouskos (2002) 134 A Crim R 111, at [20], [24]
Subsection 557(1) of the FW Act applies only to the civil remedy provisions listed in s 557(2). These include s 44(1) and s 536(1), (2), and (3); but s 557(2) does not include s 340(1) of the FW Act.
Step 3 – (provisionally) assess the appropriate penalty for each contravention
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).
Given s 557(1) of the FW Act, however, there would appear to be no further room to treat two or more contraventions as one contravention by applying what is often referred to as the “one transaction principle” or the “course of conduct principle”. 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”.[34] That is also what the Full Federal Court held in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union:[35]
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.
[34] Fair Work Ombudsman v Lohr [2018] FCA 5, at [33]
[35] [2017] FCAFC 113, at [114], [148] (Dowsett, Greenwood, and Wigney JJ)
Thus, the third step when assessing multiple contraventions of provisions of the FW Act is to provisionally assess the appropriate penalty for each contravention, including each set of contraventions which, because of s 557(1) of the FW Act, are to be treated as single contraventions.
Step 4 – apply the “one transaction principle”
The fourth step is to consider whether any adjustment should be made to the penalties that have been (provisionally) considered to be appropriate for the contraventions in question. That involves applying what is often referred to as the “one transaction principle”, which has been described as follows:[36]
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.
[36] Royer v Western Australia [2009] WASCA 139, at [22]
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:[37]
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 . . .
[37] Trade Practices Commission v Bata Shoe Company of Australia Pty Ltd [1980] FCA 47; (1980) 44 FLR 149; (1980) ATPR 40-161, at 42, 277
The Full Federal Court has 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:[38]
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.
[38] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, at [148] (Dowsett, Greenwood, and Wigney JJ)
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.[39] 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”.[40]
[39] Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, at [114], [148] (Dowsett, Greenwood, and Wigney JJ)
[40] Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73, at [235] (Allsop CJ, Middleton and Robertson JJ)
Step 5 – apply 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”.[41] In R v Holder Street CJ described the principle as follows:[42]
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.
[41] Contin v The Queen [2012] VSCA 247, at [38]
[42] R v Holder (1983) 3 NSWLR 245, at page 260
The totality principle has been held to apply to the assessment of pecuniary penalties.[43]
[43] Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59, at [41]
CONTRAVENTIONS FOR WHICH PENALTIES ARE TO BE ASSESSED
The Consulate contravened s 340(1) of the FW Act in relation to each of Ms Yalda, Mr Al-Attar, and Mr Sultan. Given s 557(1) of the FW Act does not apply to contraventions of s 340(1), I must (provisionally) assess the appropriate penalty for each of the Consulate’s contraventions of s 340(1) of the FW Act, and then consider whether any adjustments should be made under the one transaction principle.
Subsection 557(1) does apply to contraventions of s 44(1) and s 536(1) of the FW Act. I am satisfied that the Consulate’s contraventions of each of s 44(1) and s 536(1) of the FW Act in relation to Ms Yalda, Mr Al-Attar, and Mr Sultan each arose out of a course of conduct by the Consulate. The Consulate’s contraventions of s 44(1) of the FW Act in relation to each of Ms Yalda, Mr Al-Attar, and Mr Sultan, therefore, are to be taken to constitute a single contravention of s 44(1) of the FW Act; and the Consulate’s contraventions of s 536(1) of the FW Act in relation to each of Ms Yalda, Mr Al-Attar, and Mr Sultan are to be taken to constitute a single contravention of s 536(1) of the FW Act.
PENALTIES FOR CONTRAVENTIONS OF s 340(1) (BEFORE ADJUSTMENTS)
Ms Yalda
Nature and extent of contravention
The Consulate’s contravention of s 340(1) of the FW Act consisted of its taking adverse action against Ms Yalda by not renewing Ms Yalda’s contract of employment because Ms Yalda had on two occasions exercised her workplace rights.
(a)The first occasion occurred on 13 September 2018, when Ms Yalda lodged a bullying complaint with the Fair Work Commission (FWC). This constituted a proceeding under a workplace law and, for that reason, constituted the exercise by Ms Yalda of a workplace right within the meaning of s 341(1)(b) of the FW Act.[44]
(b)The second occasion occurred on and after 3 October 2018, when Ms Yalda approached the Office of the Fair Work Ombudsman (OFWO) with enquiries about matters relating to her employment. That resulted in the OFWO contacting the Consulate by telephone on 7 November 2018 raising the matters that Ms Yalda had raised with the OFWO, and the OFWO confirming the matters it discussed with the Consulate on 7 November 2018 in an email the OFWO sent to the Consulate on 8 November 2018.[45] Ms Yalda’s conduct constituted the making of an enquiry or complaint to a person or body having the capacity under the FW Act, being a “workplace law” within the meaning of s 12(1) of the FW Act, to seek compliance with that law; and, for that reason, constituted the exercise by Ms Yalda of a workplace right within the meaning of s 341(1)(c)(i) of the FW Act.[46]
[44] Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 499, at [143]
[45] Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 499, at [102]-[105]
[46] Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 499, at [143]
Counsel for the Consulate submitted that, given I found the Consulate did not discharge the burden of proving that the Consulate decided not to renew Ms Yalda’s employment for the reason, or for a reason that did not include as a substantial reason Ms Yalda’s having exercised her workplace rights, there is no finding of a deliberate breach by the Consulate of s 340(1) of the FW Act and, for that reason, the contravention should be regarded “as at the lower end”. It is unclear what counsel intended to convey by “deliberate breach”. If the intention of the submission is to convey that the Consulate did not deliberately engage in the acts that constituted its contravention of s 340(1) of the FW Act, I would not accept the submission.
The effect of the Consulate not discharging the burden of proving that it did not renew Ms Yalda’s employment for the reason, or for reasons that did not include as a substantial reason, that Ms Yalda exercised her workplace rights, is that s 361(1) of the FW Act applies to presume that the Consulate did not renew Ms Yalda’s contract of employment because she exercised her workplace rights. In that sense, therefore, the Consulate’s contravention of s 340(1) of the FW Act was, and is to be assessed, as deliberate.
Circumstances in which contravention occurred
The Consulate’s contravening conduct occurred after the OFWO contacted the Consulate on 7 November 2018 and communicated to it the matters Ms Yalda had raised with the OFWO in relation to her employment, and after the Consulate was notified on 15 November 2018 that Ms Yalda had lodged a bullying complaint with the FWC. And it occurred in circumstances where: the Consulate had regularly renewed Ms Yalda’s contract of employment since she commenced working with the Consulate in 2011; there was no evidence that during Ms Yalda’s employment with the Consulate it had any concerns about her integrity and ability to discharge her duties as an employee; and on informing Ms Yalda on 27 November 2018 that her contract would not be renewed, the Consulate directed Ms Yalda not to return to her work, even though her contract of employment was not due to end until 31 December 2018.
The amount of loss or damage caused.
The consequence of the Consulate’s contravention of s 340(1) of the FW Act is that it did not renew Ms Yalda’s employment contract in circumstances where, had she not exercised the workplace rights I found she exercised, the Consulate would have renewed her contract of employment.[47] Ms Yalda was unable to find employment until 25 July 2019, and Ms Yalda, therefore, lost over six months of the wages she would otherwise have earned had the Consulate renewed her contract of employment. That is a significant loss.
[47] Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 499, at [154]
At the hearing, counsel for the Consulate referred to the following passage from the judgment of Lee J in Patrick Stevedores Holdings Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union (No 4):[48]
However, in approaching this task, I note that I have ordered significant compensation be paid by the Union to the applicants in the respective proceedings. Given the focus on both general and specific deterrence, it necessarily follows that, in the specific circumstances of this case, the fact that I have awarded significant compensation rationally affects the size of the penalty required to be imposed in order to serve the end of specific deterrence. Having noted this, the submission made by the respondents that a compensatory order means that a penal order is thereby rendered unnecessary should be rejected.
[48] Patrick Stevedores Holdings Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union (No 4) [2021] FCA 1481, at [169]
Counsel submitted these observations applied to the circumstances of this case “where your Honour has awarded compensation to be paid, which has been paid, and that’s a factor to be taken into account”. Later in the hearing, however, after Mr Al-Attar said he had not been paid the compensation that on 16 July 2021 I ordered the Consulate pay to him, counsel for the Consulate confirmed that the Consulate has not paid the compensation I ordered the Consulate pay to any of Ms Yalda, Mr Al-Attar, or Mr Sultan. Counsel, nevertheless, submitted “there are significant payments to be made which are appropriate to take into account in fixing a penalty in the way that Lee J” did in Patrick Stevedores.
Counsel did not explain how the Consulate’s having been ordered to pay compensation operates to specifically deter the Consulate from future contraventions, or deter others from engaging in the contravening conduct in which I found the Consulate had engaged, where, without any explanation, the Consulate has not paid the compensation it has been ordered to pay; and where nothing was said on its behalf about whether the Consulate intended to pay the compensation, or whether it intended to apply for a stay of the order because it intended to appeal against the orders I made requiring the Consulate to pay Ms Yalda compensation. I therefore do not place any weight in assessing penalty on my having ordered the Consulate to pay compensation.
Other matters
The Consulate, in its written submissions, submitted it has not previously breached any provision of the FW Act; the Consulate is a small organisation in Australia with no dedicated human resources function; and its contravention of s 340(1) of the FW Act arose “in circumstances of the continual rotation of Consul General between Australia and Iraq creating the potential for inconsistencies in terms of approaches to employees in Australia”. Further, counsel for the Consulate submitted that the Consulate’s response to issues such as the need to provide payslips, group certificates, and superannuation contributions, indicated “a culture of compliance within the organisation, which is a government organisation, as distinct from a commercial business enterprise”. The Consulate particularly relies on the following evidence given by Mr Witwit in his affidavit made on 12 June 2020:[49]
I say that the Consulate was at that time not aware of the need to provide payslips, group certificates and/or SGC contributions under Australian law but it subsequently rectified those administrative oversights including the payment to the ATO of all superannuation contributions due to Ms Yalda over the course of her employment.
[49] Respondent’s Outline of Submissions on Penalty, at [6(v)]
A difficulty with the Consulate relying on this evidence is that it was given before I published my reasons for judgment on 19 March 2021. In those reasons I found the Consulate took adverse action against Ms Yalda precisely because the Consulate had become aware that Ms Yalda had lodged a bullying complaint with the FWC, in exercise of rights conferred by the FW Act; and because by its email of 8 November 2018 the OFWO confirmed that it had brought to the Consulate’s attention specific allegations made by Ms Yalda about annual leave entitlements, personal leave entitlements, and the payment of superannuation. On the findings I have made, the Consulate did not respond to Ms Yalda applying to the FWC and Ms Yalda informing the OFWO of matters relating to her personal leave, annual leave, and superannuation entitlements, by seeking to make enquiries about whether it had complied with the requirements of the FW Act and, if not, to take steps to rectify its non-compliance. The Consulate instead responded by taking the adverse action against Ms Yalda I found the Consulate had taken. In these circumstances, it is impossible to find, and therefore to assess penalties on the basis that the Consulate has a culture of compliance.
Further, the Consulate has adduced no evidence in relation to “the continual rotation of Consul General between Australia and Iraq”, or how such rotation created “the potential for inconsistencies in terms of approaches to employees in Australia”, or how the Consulate’s contravening conduct arose from any such potential inconsistencies.
Bearing of factors on deterrence
Counsel for the Consulate submitted that the Consulate “is not an enterprise, not a business, but a representative of a foreign government, so that the normal principles or the usual principles that apply to a commercial enterprise, in protection of the public interest, are not so applicable to this case”. Counsel did not explain what those normal or usual principles are, and why such principles are not so applicable in the case of the Consulate’s contravention of s 340(1) of the FW Act. The purpose of assessing a penalty is one and the same, namely, to set a “penalty of appropriate deterrent value”.[50]
[50] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
The appropriate deterrent value of the penalty the Consulate should be ordered to pay for its contravention of s 340(1) of the FW Act should reflect the need for both specific and general deterrence. The need for specific deterrence arises from the circumstances of the contravention itself. The Consulate’s decision to take the adverse action against Ms Yalda in response to her exercising her workplace rights, first by lodging a bullying complaint and, second, by her making enquiries of the OFWO about matters relating to her employment with the Consulate, manifested an unwillingness by the Consulate to engage with the processes Ms Yalda initiated by the exercise of her workplace rights. Further, there is no evidence to suggest the Consulate no longer operates, or that it intends to discontinue its operations; and it has not produced any evidence whether it has taken any steps to ensure it will not in the future respond to any employees who seek to exercise their workplace rights by taking adverse action against them.
As for general deterrence, the Consulate’s contravention of s 340(1) of the FW Act was unequivocally egregious, and brazen. It was directed to punishing an employee who did nothing more than exercise rights the FW Act conferred on employees to apply to authorities established by the FW Act to enforce, or give effect to, or to make enquiries in relation to, rights provided for by the FW Act. Punishing an employee who seeks to exercise such rights undermines the enforceability of the rights the FW Act creates, and the penalty should be set to deter employers from engaging in such egregious conduct.
Assessment of penalty (before adjustments)
The appropriate penalty for the Consulate’s contravention of s 340(1) of the FW Act in relation to Ms Yalda, before considering any adjustment, is $35,000.
Mr Al-Attar
Nature and extent of contravention
The Consulate’s contravention of s 340(1) of the FW Act consisted of its taking adverse action against Mr Al-Attar by not renewing Mr Al-Attar’s contract of employment because Mr Al-Attar had exercised his workplace rights on the following occasions:[51]
(a)On 29 August 2018 Mr Al-Attar sent to Mr Witwit a letter complaining of abuse and bullying by Mr Al-Mashhadani. That constituted Mr Al-Attar’s making a complaint or enquiry in relation to his employment and, for that reason, Mr Al-Attar exercised a workplace right within the meaning of s 341(1)(c)(ii) of the FW Act.
(b)On 31 August 2018 Mr Al-Attar lodged with the FWC an “Application for an order to stop bullying” in which he claimed he had been bullied by Mr Al-Mashhadani for two years. In so doing Mr Al-Attar initiated a proceeding under a “workplace law” within the meaning of s 12(1) of the FW Act and, for that reason, Mr Al-Attar exercised a workplace right within the meaning of s 341(1)(b) of the FW Act.
(c)On 28 September 2018 Mr Al-Attar made enquiries of the OFWO about the Consulate’s not having paid his September 2018 salary. In doing so Mr Al-Attar made an enquiry or complaint to a person or body having the capacity under the FW Act, being a “workplace law” within the meaning of s 12(1) of the FW Act, to seek compliance with that law; and, for that reason, Mr Al-Attar exercised a workplace right within the meaning of s 341(1)(c)(i) of the FW Act.
(d)On 4 October 2018 Mr Al-Attar sent an email to Mr Witwit in which Mr Al-Attar informed Mr Witwit that he had contacted the OFWO in relation to his September 2018 salary not having been paid, and set out matters relevant to his not having received his September payment. In so doing Mr Al-Attar made an enquiry in relation to his employment and, for that reason, Mr Al-Attar exercised a workplace right within the meaning of s 341(1)(c)(ii) of the FW Act.
[51] Al-Attar v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 500, at [91]
Counsel for the Consulate submitted that, given I found the Consulate did not discharge the burden of proving that the Consulate decided not to renew Mr Al-Attar’s employment for the reason, or for a reason that did not include as a substantial reason Mr Al-Attar’s having exercised his workplace rights, there is no finding of a deliberate breach by the Consulate of s 340(1) of the FW Act and, for that reason, the contravention should be regarded “as at the lower end”. I do not accept that submission.
The effect of the Consulate not discharging the burden of proving that it did not renew Mr Al-Attar’s employment for the reason, or for reasons that did not include as a substantial reason, that Mr Al-Attar exercised his workplace rights, is that s 361(1) of the FW Act applies to presume that the Consulate did not renew Mr Al-Attar’s contract of employment because he exercised his workplace rights. In that sense, therefore, the Consulate’s contravention of s 340(1) of the FW Act in relation to Mr Al-Attar was, and is to be assessed as, deliberate.
Circumstances in which contravention occurred
The Consulate’s contravening conduct occurred in circumstances where: the Consulate had renewed Mr Al-Attar’s contract of employment since he commenced working with the Consulate in 2016; there was no evidence that during Mr Al-Attar’s employment with the Consulate that it had any concerns about his integrity and ability to discharge his duties as an employee; and on informing Mr Al-Attar on 27 November 2018 that his contract would not be renewed, the Consulate directed Mr Al-Attar not to return to his work, even though his contract of employment was not due to end until 31 December 2018.
The amount of loss or damage caused
The consequence of the Consulate’s contravention of s 340(1) of the FW Act is that it did not renew Mr Al-Attar’s employment contract in circumstances where, had he not exercised the workplace rights I found he exercised, the Consulate would have renewed his contract of employment.[52] Mr Al-Attar has not found alternative employment; and the Consulate did not submit or lead evidence that would suggest that Mr Al-Attar’s not having found other employment after 31 December 2018 is due to his failing to do that which it was reasonable for him to do to find employment. That represents a significant loss.
[52] Al-Attar v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 500, at [90]
Counsel for the Consulate submitted that I should take into account that I have ordered the Consulate pay compensation to Mr Al-Attar. I give that submission no weight because, despite my having made the order for compensation on 21 July 2021, the Consulate has not paid it; and the Consulate has given no explanation for not having paid the compensation.
Other matters
The Consulate, in its written submissions, submitted it has not previously breached any provision of the FW Act; the Consulate is a small organisation in Australia with no dedicated human resources function; and the contravention arose “in circumstances of the continual rotation of Consul General between Australia and Iraq creating the potential for inconsistencies in terms of approaches to employees in Australia”. Further, counsel for the Consulate submitted that the Consulate’s response to issues such as the need to provide payslips, group certificates, and superannuation contributions, indicated “a culture of compliance within the organisation, which is a government organisation, as distinct from a commercial business enterprise”. The Consulate particularly relies on the following evidence given by Mr Witwit in his affidavit made on 12 June 2020:[53]
I say that the Consulate was at that time not aware of the need to provide payslips, group certificates and/or SGC contributions under Australian law but it subsequently rectified those administrative oversights including the payment to the ATO of all superannuation contributions due to Ms Yalda over the course of her employment.
[53] Respondent’s Outline of Submissions on Penalty [6(v)]
A difficulty with the Consulate relying on this evidence is that it was given before I published my reasons for judgment on 19 March 2021. In those reasons I found the Consulate took adverse action against Mr Al-Attar precisely because the Consulate had become aware of the matters that constituted Mr Al-Attar’s exercise of workplace rights, which included his lodging an application to the FWC for bullying, making enquiries about his salary, and his having approached the OFWO with such enquiries. On the findings I have made, the Consulate did not respond to Mr Al-Attar’s exercise of rights by seeking to make enquiries about whether it had complied with the requirements of the FW Act and, if not, to take steps to rectify its non-compliance. Instead, the Consulate responded by taking the adverse action against Mr Al-Attar I found the Consulate had taken. It is impossible to find, and therefore to assess penalties on the basis that, the Consulate has a culture of compliance.
Further, the Consulate has adduced no evidence in relation to “the continual rotation of Consul General between Australia and Iraq”, or how such rotation created “the potential for inconsistencies in terms of approaches to employees in Australia”, or how the Consulate’s contravening conduct arose from any such potential inconsistencies.
Bearing of factors on deterrence
Counsel for the Consulate submitted that the Consulate “is not an enterprise, not a business, but a representative of a foreign government, so that the normal principles or the usual principles that apply to a commercial enterprise, in protection of the public interest, are not so applicable to this case”. As I have already noted, counsel did not explain what those normal or usual principles are, and why such principles are not so applicable in the case of the Consulate’s contravention of s 340(1) of the FW Act. The purpose of assessing the penalty is one and the same, namely, to set a “penalty of appropriate deterrent value”.[54]
[54] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
The appropriate deterrent value of the penalty the Consulate should be ordered to pay for its contravention of s 340(1) of the FW Act should reflect the need for both specific and general deterrence. The need for specific deterrence arises from the circumstances of the contravention itself. The Consulate’s decision to take the adverse action against Mr Al-Attar in response to his exercising his rights manifested an unwillingness by the Consulate to engage with the processes Mr Al-Attar initiated by the exercise of his workplace rights. Further, there is no evidence to suggest the Consulate no longer operates, or that it intends to discontinue its operations; and it has not produced any evidence whether it has taken any steps to ensure it will not in the future respond to any employees who seek to exercise their workplace rights by taking adverse action against them.
As for general deterrence, the Consulate’s contravention of s 340(1) of the FW Act in relation to Mr Al-Attar was unequivocally egregious, and brazen. The Consulate’s contravening conduct was directed to punishing an employee who did nothing more than exercise rights the FW Act conferred on employees. Punishing an employee who seeks to exercise such rights undermines the enforceability of the rights the FW Act creates, and the penalty should be set to deter employers from engaging in such egregious conduct. This points to the appropriate penalty being set at the high end of the scale.
Assessment of penalty (before adjustments)
The appropriate penalty for the Consulate’s contravention of s 340(1) of the FW Act in relation to Mr Al-Attar, before considering any adjustment, is $35,000.
Mr Sultan
Nature and extent of contravention
The Consulate’s contravention of s 340(1) of the FW Act consisted of its taking adverse action against Mr Sultan by not renewing Mr Sultan’s contract of employment because Mr Sultan had exercised his workplace rights on the following two occasions:[55]
(a)On 6 May 2018 Mr Sultan sent an email to Ms Alesi, the Consulate’s head of mission in which he stated he expected to be given due respect, and that the decision to transfer Mr Sultan from the Visa and Passport section to the Power of Attorney section was unfair and he was being disadvantaged. That constituted Mr Sultan’s making a complaint or enquiry in relation to his employment and, for that reason, Mr Sultan exercised a workplace right within the meaning of s 341(1)(c)(ii) of the FW Act.
(b)On 7 May 2018 stating at a meeting with Ms Alesi and Mr Witwit that he was being treated unfairly. That constituted Mr Sultan’s making a complaint or enquiry in relation to his employment and, for that reason, Mr Sultan exercised a workplace right within the meaning of s 341(1)(c)(ii) of the FW Act.
[55] Sultan v Consulate General of the Republic of Iraq, Sydney (No 2) [2021] FCCA 1610, at [58]
Counsel for the Consulate submitted that, given I found the Consulate did not discharge the burden of proving that the Consulate decided not to renew Mr Sultan’s employment for the reason, or for a reason that did not include as a substantial reason Mr Sultan’s having exercised his workplace rights, there is no finding of a deliberate breach by the Consulate of s 340(1) of the FW Act and, for that reason, the contravention should be regarded “as at the lower end”.
As with the Consulate’s contraventions of s 340(1) of the FW Act in relation to Ms Yalda and Mr Al-Attar, the effect of the Consulate not discharging the burden of proving that it did not renew Mr Sultan’s employment for the reason, or for reasons that did not include as a substantial reason, that Mr Sultan exercised his workplace rights, is that s 361(1) of the FW Act applies to presume that the Consulate did not renew Mr Sultan’s contract of employment because he exercised his workplace rights. In that sense, therefore, the Consulate’s contravention of s 340(1) in relation to Mr Sultan was, and is to be assessed as, deliberate.
Circumstances in which contravention occurred
The Consulate’s contravening conduct occurred in circumstances where the Consulate had renewed Mr Sultan’s contract of employment since he commenced working with the Consulate in around 2011; and where Mr Sultan had made a complaint or enquiry in relation to the decision the Consulate made concerning where Mr Sultan would work.
The amount of loss or damage caused
The consequence of the Consulate’s contravention of s 340(1) of the FW Act is that it did not renew Mr Sultan’s employment contract in circumstances where, had Mr Sultan not exercised the workplace rights I found he exercised, the Consulate would have renewed Mr Sultan’s contract of employment for one year commencing on 1 January 2019.[56] Mr Sultan has not found alternative employment; and the Consulate did not submit or lead evidence that would suggest that Mr Sultan’s not having found other employment after 31 December 2018 was due to his failing to do that which it was reasonable for him to do to find employment. That represents a significant loss.
[56] Sultan v Consulate General of the Republic of Iraq, Sydney (No 2) [2021] FCCA 1610, at [61]
As with the Consulate’s contraventions of s 340(1) in relation to Ms Yalda and Mr Al-Attar, counsel for the Consulate submitted that I should take into account that I have ordered the Consulate pay compensation to Mr Sultan. I give that submission no weight because, despite my having made the order for compensation on 16 July 2021, the Consulate has not paid it; and the Consulate has given no explanation for not having paid the compensation.
Other matters
The Consulate, in its written submissions, submitted it has not previously breached any provision of the FW Act; the Consulate is a small organisation in Australia with no dedicated human resources function; and the contravention arose “in circumstances of the continual rotation of Consul General between Australia and Iraq creating the potential for inconsistencies in terms of approaches to employees in Australia”. Further, counsel for the Consulate submitted that the Consulate’s response to issues such as the need to provide payslips, group certificates, and superannuation contributions, indicated “a culture of compliance within the organisation, which is a government organisation, as distinct from a commercial business enterprise”.
I have already noted I do not accept the Consulate has a culture of compliance; and I have also noted that the Consulate has adduced no evidence in relation to “the continual rotation of Consul General between Australia and Iraq”, or how such rotation created “the potential for inconsistencies in terms of approaches to employees in Australia”, or how the Consulate’s contravening conduct arose from any such potential inconsistencies.
Bearing of factors on deterrence
Counsel for the Consulate submitted that the Consulate “is not an enterprise, not a business, but a representative of a foreign government, so that the normal principles or the usual principles that apply to a commercial enterprise, in protection of the public interest, are not so applicable to this case”. As I have already noted, counsel did not explain what those normal or usual principles are, and why such principles are not so applicable in the case of the Consulate’s contravention of s 340(1) of the FW Act. The purpose of assessing the penalty is one and the same, namely, to set a “penalty of appropriate deterrent value”.[57]
[57] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
The appropriate deterrent value of the penalty the Consulate should be ordered to pay for its contravention of s 340(1) of the FW Act should reflect the need for both specific and general deterrence. There is no evidence to suggest the Consulate no longer operates, or that it intends to discontinue its operations; and it has not produced any evidence whether it has taken any steps to ensure it will not in the future respond to any employees who seek to exercise their workplace rights by taking adverse action against them.
As for general deterrence, the Consulate’s contravention of s 340(1) of the FW Act in relation to Mr Sultan may be viewed as less serious than its contravening conduct in relation to Ms Yalda and Mr Al-Attar. That is because the Consulate engaged in its contravening conduct in relation to Ms Yalda and Mr Al-Attar in response to Ms Yalda and Mr Al-Attar making complaints or enquiries in relation to their legal entitlements, and to their approaching the OFWO in relation to those entitlements, and their lodging bullying claims with the FWC; whereas the workplace right Mr Sultan exercised was the ability to make a complaint or enquiry in relation to his employment, and the complaint or enquiry I found Mr Sultan made, although it related to his employment, did not relate to any rights or entitlements he had asserted attached to his employment. Nevertheless, the adverse conduct I found the Consulate had taken had significantly adverse consequences for Mr Sultan. The penalty should be set to deter employers from engaging in such conduct.
Assessment of penalty (before adjustments)
The appropriate penalty for the Consulate’s contravention of s 340(1) of the FW Act in relation to Mr Sultan, before considering any adjustment, is $20,000.
CONTRAVENTION OF s 44(1) (BEFORE ADJUSTMENTS)
Nature and extent of contravention
This consisted in the Consulate failing to pay to each of Ms Yalda, Mr Al-Attar, and Mr Sultan, at 31 December 2018, being the time at which their employment ended, amounts that represent accrued but untaken annual leave as follows:
Employee Accrued annual leave Amount for accrued annual leave Ms Yalda 51 days USD4,521.53 Mr Al-Attar 22.5 days USD1,1991.79 Mr Sultan 63 days USD5,577.01
It appears the Consulate has paid the amounts owing; but it did not do so until around 7 December 2021.[58] The only evidence that may be taken to constitute an explanation for the Consulate’s delay in paying the amounts owing to Ms Yalda, Mr Al-Attar, and to Mr Sultan is Mr Witwit’s having deposed in his affidavit made on 12 June 2020 that the Consulate had reconciled the amounts that are due to each of Ms Yalda, Mr Al-Attar, and Mr Sultan and “stands ready, willing and able to make payment to” each of Ms Yalda, Mr Al-Attar, and Mr Sultan “in respect of” the amounts.[59]
[58] I rely on the “Foreign Currency Account Transfer” attached to Mr Sultan’s letter to the Registry sent on 14 December 2021.
[59] Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 332, at [12]; Al-Attar v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 334, at [11]; Sultan v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 333, at [11]
In each of my three reasons for judgment I published on 10 December 2021, I noted that Mr Witwit’s evidence may have been intended to imply that the Consulate had done everything it was reasonably open to it to do to pay the amount of accrued but untaken annual leave it acknowledged was owing to each of Ms Yalda, Mr Al-Attar, and Mr Sultan; but found that, if that were the intended implication, there was no evidence to support it. I further found as follows:[60]
It is reasonable to infer that before [each of Ms Yalda, Mr Al-Attar, and Mr Sultan] ended [her or his] employment with the Consulate, the Consulate had been making regular payments to [each of Ms Yalda, Mr Al-Attar, and Mr Sultan] which, in turn, implies it possessed all information (payment details) it required to enable it to pay any amount it owes to [each of Ms Yalda, Mr Al-Attar, and Mr Sultan]. The Consulate has not adduced evidence that the payment details have changed; and the Consulate has still not paid to [each of Ms Yalda, Mr Al-Attar, and Mr Sultan] the amounts it acknowledges it owes [her or him] for accrued but untaken annual leave.
[60] Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 332, at [17]; Al-Attar v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 334, at [16]; Sultan v Consulate General of the Republic of Iraq, Sydney [2021] FedCFamC2G 333, at [16]
Other matters
The Consulate, in its written submissions, submitted it has not previously breached any provision of the FW Act; the Consulate is a small organisation in Australia with no dedicated human resources function; and the contravention arose “in circumstances of the continual rotation of Consul General between Australia and Iraq creating the potential for inconsistencies in terms of approaches to employees in Australia”. Further, counsel for the Consulate submitted that the Consulate’s response to issues such as the need to provide payslips, group certificates, and superannuation contributions, indicated “a culture of compliance within the organisation, which is a government organisation, as distinct from a commercial business enterprise”.
These submissions are incapable of applying to the circumstances in which the Consulate failed to pay to each of Ms Yalda, Mr Al-Attar, and Mr Sultan the amounts it was required to pay to them under s 90(2) of the FW Act. The Consulate appears first to have confirmed that it had determined the amounts owing to Ms Yalda, Mr Al-Attar, and Mr Sultan when Mr Witwit so deposed in his affidavit of 12 June 2020, almost 18 months after it became liable to pay to each of Ms Yalda, Mr Al-Attar, and Mr Sultan accrued but untaken annual leave; and even then, it was necessary for an order to be made on 10 December 2021 that the Consulate pay to Ms Yalda, Mr Al-Attar, and Mr Sultan the amounts for accrued but untaken annual leave it owes them before the Consulate paid the amounts it acknowledged it owed to Ms Yalda, Mr Al-Attar, and Mr Sultan.
Bearing of factors on deterrence
Counsel for the Consulate submitted that the Consulate “is not an enterprise, not a business, but a representative of a foreign government, so that the normal principles or the usual principles that apply to a commercial enterprise, in protection of the public interest, are not so applicable to this case”. Counsel did not explain what those normal or usual principles are, and why such principles are not so applicable in the case of the Consulate’s contravention of s 44(1) of the FW Act. The purpose of assessing the penalty is one and the same, namely, to set a “penalty of appropriate deterrent value”.[61]
[61] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, at [18]
The appropriate deterrent value of the penalty the Consulate should be ordered to pay for its contravention of s 44(1) of the FW Act, based on its failure to comply with s 90(2), should reflect the need for both specific and general deterrence. There is no evidence to suggest the Consulate no longer operates, or that it intends to discontinue its operations; and it has not produced any evidence whether it has taken any steps to ensure it will not in the future respond to any employees who seek to exercise their workplace rights by taking adverse action against them. On the contrary, the extreme delay in the Consulate’s paying the amounts for accrued but untaken leave, and the absence of evidence to explain the delay, manifest an unwillingness by the Consulate to comply with its legal obligations under the FW Act; and the penalty should be assessed to bring home to the Consulate the consequences of its unwillingness to comply with its obligations under the FW Act.
As for general deterrence, the Consulate’s contravention of s 44(1) of the FW Act which, I repeat, consisted of not paying for around three years amounts it owed under s 90(2) of the FW Act to Ms Yalda, Mr Al-Attar, and to Mr Sultan, is unequivocally egregious, and brazen. The penalty should be set to deter employers from engaging in such egregious conduct.
Assessment of penalty (before adjustments)
The appropriate penalty for the Consulate’s contravention of s 44(1) of the FW Act, based on its failure to comply with s 90(2) of the FW Act, is $30,000.
CONTRAVENTIONS OF s 536(1)
These contraventions consisted in the Consulate’s failure to provide payslips to each of Ms Yalda, Mr Al-Attar, and Mr Sultan. The contraventions occurred from 21 October 2011 to 31 December 2018 in the case of Ms Yalda, from 1 June 2016 to 31 December 2018 in the case of Mr Al-Attar, and from around 2011 to 31 December 2018 in relation to Mr Sultan.
The Consulate, in its written submissions, submitted it has not previously breached any provision of the FW Act; the Consulate is a small organisation in Australia with no dedicated human resources function; and the contravention arose “in circumstances of the continual rotation of Consul General between Australia and Iraq creating the potential for inconsistencies in terms of approaches to employees in Australia”.
(a)It may be accepted that the Consulate has not previously breached any provision of the FW Act. That, however, cannot disguise the fact that the contraventions which, under s 557(1) of the FW Act are taken to constitute one contravention, occurred over some 7 years.
(b)The Consulate does not explain how the Consulate’s being a small organisation with no dedicated human resources function accounts for the Consulate’s failure to comply with s 536(1) of the FW Act.
(c)There is no evidence relevant to “the continual rotation of Consul General between Australia and Iraq”, or how such rotation created “the potential for inconsistencies in terms of approaches to employees in Australia”, or how the Consulate’s contravening conduct arose from any such potential inconsistencies.
Counsel for the Consulate submitted that the Consulate’s response to issues such as the need to provide payslips, group certificates, and superannuation contributions, indicated “a culture of compliance within the organisation, which is a government organisation, as distinct from a commercial business enterprise”. I have already concluded that it is impossible to assess penalties on the basis that the Consulate has a culture of compliance.
I accept that the Consulate has reviewed its administrative procedures to the extent that it issues pay slips and, for that reason, there is no need for the penalty to reflect an element for specific deterrence. It is otherwise for general deterrence. The Consulate’s failure to comply with s 536(1) of the FW Act was extensive; and the penalty should be set to deter employers from ignoring basic provisions of the FW Act, such as s 536(1) of the FW Act, and encouraging them to ensure that they establish procedures that will ensure they comply with the FW Act.
Assessment of penalty (before adjustments)
The appropriate penalty for the Consulate’s contravention of s 536(1) of the FW Act, before considering any adjustment, is $15,000. In assessing this penalty, I have taken into account the fact that up to 14 September 2017 the penalty for a contravention by a body corporate of s 536(1) of the FW Act was 150 penalty units, and after that day it was 300 penalty units; and I have also taken into account the fact that the value of the penalty unit was increased to $210 from 1 July 2017 and that, during the period of contravening conduct the value of the penalty unit was less.
ADJUSTMENTS?
There is some overlap between the Consulate’s contraventions of s 340(1) of the FW Act in relation to Ms Yalda and Mr Al-Attar. It appears the Consulate made its decision not to renew their contracts of employment at the same time. On the other hand, the acts constituting the exercise of workplace rights by Ms Yalda and Mr Al-Attar differed and, therefore, to that extent, the reasons for which the Consulate decided not to renew their contracts of employment differed. In those circumstances, it would be appropriate to apply the one transaction principle and reduce by $10,000 each of the $35,000 penalties I have provisionally assessed.
There is no overlap between, on the one hand, the Consulate’s contraventions of s 340(1) of the FW Act in relation to Ms Yalda and Mr Al-Attar and, on the other hand, the Consulate’s contravention of s 340(1) in relation to Mr Sultan. There is therefore no need on that account to further adjust, under the one transaction principle, the penalties in relation to Ms Yalda and Mr Al-Attar, or to reduce the penalty I have assessed in relation to Mr Sultan.
There is no other overlap between the Consulate’s contraventions of s 340(1), s 44(1), and s 536(1) of the FW Act.
Finally, I have considered whether there should be any further adjustment under the totality principle. I am satisfied no further adjustment should be made on the basis of that principle.
CONCLUSION AND DISPOSITION
The flowing are what I consider to be the appropriate penalties:
(a)$25,000 for the Consulate’s contravention of s 340(1) of the FW Act in relation to Ms Yalda;
(b)$25,000 for the Consulate’s contravention of s 340(1) of the FW Act in relation to Mr Al-Attar;
(c)$20,000 for the Consulate’s contravention of s 340(1) of the FW Act in relation to Mr Sultan;
(d)$30,000 in relation to the Consulate’s contraventions of s 44(1) of the FW Act; and
(e)$15,000 in relation to the Consulate’s contraventions of s 536(1) of the FW Act.
I propose to order under s 546(3)(c) of the FW Act that the Consulate:
(a)pay to Ms Yalda the penalty of $25,000 for the Consulate’s contravention of s 340(1) of the FW Act;
(b)pay to Mr Al-Attar the penalty of $25,000 for the Consulate’s contravention of s 340(1) of the FW Act;
(c)pay to Mr Sultan the penalty of $20,000 for the Consulate’s contravention of s 340(1) of the FW Act;
(d)pay to each of Ms Yalda, Mr Al-Attar, and Mr Sultan one third of the penalty of $30,000 in relation to the Consulate’s contraventions of s 44(1) of the FW Act; and
(e)pay to each of Ms Yalda, Mr Al-Attar, and Mr Sultan one third of the penalty of $15,000 in relation to the Consulate’s contraventions of s 536(1) of the FW Act.
My proposing to order that the Consulate pay to each of Ms Yalda, Mr Al-Attar, and Mr Sultan one third of the penalties for the Consulate’s contraventions of s 44(1) and s 536(1) of the FW Act is based on the orders Lee J made in Patrick Stevedores.[62]
[62] Patrick Stevedores Holdings Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union (No 4) [2021] FCA 1481, at [172]
I also propose to order that the Consulate pay the penalties within 28 days after the day I pronounce my orders.
I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis. Dated: 29 July 2022
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