WARDMAN v Macquarie Bank Limited (No.2) - [2020] FCCA 3317

FEDERAL CIRCUIT COURT OF AUSTRALIA

WARDMAN & ORS v MACQUARIE BANK LIMITED (No.2)

[2020] FCCA 3317

Catchwords:
INDUSTRIAL LAW – Penalty hearing – whether penalty should be imposed – need for specific and general deterrence – penalty order made.

Legislation:

Fair Work Act 2009 (Cth), ss.44, 45, 56, 557, 90, 99, 106, 116, 545, 546

Federal Court Rules 2011 (Cth), r.39.02

Banking, Finance and Insurance Award 2010

Cases cited:

Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177

Roohizadegan v TechnologyOne Limited (No 3) [2020] FCA 1571

First Applicant:

JOHN WARDMAN

Second Applicant:

MATTHEW BOASE

Third Applicant:

NICHOLAS SANDFORD

Fourth Applicant:

DAVID DALL

Fifth Applicant:

ANDREW DAVIES

Sixth Applicant:

ANTHONY DOYLE

Seventh Applicant:

WILLIAM EDWARDS

Eighth Applicant:

MURRAY HEWITT

Ninth Applicant:

CHARLES KAPLAN

Tenth Applicant:

MARK O’LEARY

Eleventh Applicant:

JED RICHARDS

Twelfth Applicant:

JASON BALL

Thirteenth Applicant:

DAVID SCHMIDT

Fourteenth Applicant:

DARRELL SEETO

Fifteenth Applicant:

TIMOTHY COOPER

Respondent:

MACQUARIE BANK LIMITED

File Number:

SYG 1540 of 2018

Judgment of:

Judge Street

Hearing date:

23 November 2020

Date of Last Submission:

23 November 2020

Delivered at:

Sydney

Delivered on:

22 December 2020

REPRESENTATION

Counsel for the Applicant:

Mr A Britt

Solicitors for the Applicant:

WilliamsonBarwick Lawyers

Counsel for the Respondent:

Mr A Moses SC

Solicitors for the Respondent:

Kingston Reid

ORDERS

The respondent pay a pecuniary penalty under s 546 of the Fair Work Act 2009 (Cth) in the amount of $110,000.00 to the applicants that succeeded in obtaining relief within 14 days.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 1540 of 2018

JOHN WARDMAN

First Applicant

MATTHEW BOASE

Second Applicant

NICHOLAS SANDFORD

Third Applicant

DAVID DALL

Fourth Applicant

ANDREW DAVIES

Fifth Applicant

ANTHONY DOYLE

Sixth Applicant

WILLIAM EDWARDS

Seventh Applicant

MURRAY HEWITT

Eighth Applicant

CHARLES KAPLAN

Ninth Applicant

MARK O’LEARY

Tenth Applicant

JED RICHARDS

Eleventh Applicant

JASON BALL

Twelfth Applicant

DAVID SCHMIDT

Thirteenth Applicant

DARRELL SEETO

Fourteenth Applicant

TIMOTY COOPER

Fifteenth Applicant

And

MACQUARIE BANK LIMITED

Respondent

REASONS FOR JUDGMENT

On 2 October 2020, this Court found that 13 applicants have succeeded and made out contraventions of s 45 of the Fair Work Act 2009 (Cth) (“the Act”) by the respondent in failing to pay annual leave loading prescribed by cl 24.3(a) of the Banking, Finance and Insurance Award 2010 (“the Award”).
This Court also found that 10 applicants had made out contraventions of s 45 of the Act by the respondent in failing to pay annual leave loading on termination of employment prescribed by cl 24.3(a) of the Award.
This Court also found that 13 applicants had made out contraventions of s 44 of the Act by the respondent in failing to pay their base rate of pay for ordinary hours of work in the periods of annual leave when the applicants took periods of annual leave as required by s 90 of the Act.
This Court also found that 12 applicants had made out contraventions of s 44 of the Act by the respondent in failing to pay those applicants at their base rate of pay for the ordinary hours of work in the periods of personal/carer’s leave when those applicants took periods of personal/carer’s leave as required by s 99 of the Act.
This Court also found that 3 applicants had made out contraventions in respect of s 44 of the Act by the respondent in failing to pay those applicants at their base rate of pay for the ordinary hours of work in periods of compassionate leave when those applicants took compassionate leave as required by s 106 of the Act.
The Court also found that 13 applicants had made out contraventions of s 44 of the Act by the respondent in failing to pay those applicants when they were absent from their employment on a day that is a public holiday at their base rate of pay for those applicants’ ordinary hours of work on those days as required by s 116 of the Act.
All told, this amounts to 64 contraventions over several years by the respondent corporate entity, subject to application of s 557 of the Act, which reflects a corporate penalty unit amount at the time of the contraventions pleaded totalling $4,032,000.00. Taking into account the course of conduct provision in s 557 of the Act, for the reasons given below that gives rise to six single contraventions in respect of which the maximum penalty for each single contravention is $63,000 which makes a total of $378,000.
The amounts the subject of the contraventions payable by the respondent to the respective applicants was also the subject of orders in respect of each of the relevant contraventions. The summary of these contraventions can be found in Table 1 below.

Table 1
S 45 (cl.24.3(a) of the award)	S 45 ( cl.24.3(a) of the award )	S 44 (s 90)	S 44 (s 99)	S 44 (s 106)	S 44 (s 116)
1st applicant	1	1	1	1	0	1
2nd applicant	1	1	1	1	0	1
4th applicant	1	1	1	1	0	1
5th applicant	1	1	1	1	1	1
6th applicant	1	0	1	1	0	1
8th applicant	1	1	1	1	0	1
9th applicant	1	0	1	1	0	1
10th applicant	1	1	1	1	1	1
11th applicant	1	1	1	1	0	1
12th applicant	1	1	1	1	0	1
13th applicant	1	1	1	1	1	1
14th applicant	1	0	1	0	0	1
15th applicant	1	1	1	1	0	1
Total Contraventions by section	13	10	13	12	3	13
Total Contraventions:	64
Penalty Units	60
Corporation	x 5
Penalty Unit Amount	$210
$ 4,032,000.00

The Court has taken into account the terms of the s 546 of the Act which relevantly provides as follows:
546 Pecuniary penalty orders
(1) The Federal Court, the Federal Circuit Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.
Note: Pecuniary penalty orders cannot be made in relation to conduct that contravenes a term of a modern award, a national minimum wage order or an enterprise agreement only because of the retrospective effect of a determination (see subsections 167(3) and 298(2)).
Determining amount of pecuniary penalty
(2) The pecuniary penalty must not be more than:
(a) if the person is an individual—the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or
(b) if the person is a body corporate—5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).
Payment of penalty
(3) The court may order that the pecuniary penalty, or a part of the penalty, be paid to:
(a) the Commonwealth; or
(b) a particular organisation; or
(c) a particular person.
Recovery of penalty
(4) The pecuniary penalty may be recovered as a debt due to the person to whom the penalty is payable.
No limitation on orders
(5) To avoid doubt, a court may make a pecuniary penalty order in addition to one or more orders under section 545.
The applicants’ Court proceedings were unsuccessful in establishing a core alleged contravention that would have given rise to substantially higher compensation under s 545(2) of the Act. That, however, is not relevant to the determination of the penalty in respect of the contraventions that have been made out by the applicants.
The conduct in the proceedings is one in which the Court accepts that the contraventions were not deliberate and do not reflect anything other than inadvertence and/or a lack of competence by those in the human resources department responsible at the lower management level for calculating and paying the entitlements of the employees. This was, however, a responsibility not just of management but also importantly of the board of the respondent and reflects a failure in the corporate governance by the board to have in place proper systems to prevent such inadvertent contraventions.
The Court accepts that there were systems in place to try to ensure compliance with the Act and with the Award but, on the findings of the Court, the systems failed to ensure compliance with the workplace laws governing payment obligations to the relevant employees, the responsibility for which rests with the board of the respondent.
The first substantial issue for determination by the Court is as to whether any penalty should be imposed as a matter of discretion.
In relation to that issue as to whether or not any penalty should be imposed, the first respondent relied upon its impeccable record and the substantial number of employees that it employs, being in the order of 15,000, and its good repute in that regard.
The first respondent also relied upon the circumstances in which these contraventions occurred in respect of a commission payment system that no longer is in place by the respondent.
It is submitted that there is no need for a specific deterrent given the inadvertent nature of the contraventions that occurred. This submission overlooks the corporate governance obligations of the respondent to ensure compliance with workplace employment laws and that a proper system could readily have prevented that inadvertence.
This case is one in respect of which no evidence has been adduced from the corporate mind of the respondent in relation to the systems that were in place, the express recognition of the failings and what corporate governance steps have been now put in place by the board of the respondent to prevent the inadvertence that occurred and to ensure compliance with the Act and the Award. The respondent was put on notice of the Court’s concern as to the absence of this evidence from anyone responsible for the corporate governance, was given an opportunity to adduce the same and failed to do so.
The contraventions in the present case arose from a defective and deficient system designed by human resources department without proper attention to the terms of the Act and the Award. The defect and deficiency should have been apparent to a reasonably competent employment lawyer spending 30 minutes or less reading the relevant award and being informed of the nature of the steps that were being taken in respect of the different entitlements under the Award and under the National Employment Standards (“NES”) by the respondent in respect of the relevant employees, the method of identification on payslips of purported compliance with the Act and the Award as well as the terms of the contracts of employment for the relevant employees. The absence of steps taken under the individual arrangements permitted under cl.7 of the Award and the notification of annual salary satisfaction of award payment provisions in cl.14.1(b), as found in this Court’s written reasons published on 2 October 2020 should have rung alarm bells as to the defective and deficient BCR model. This exercise should not have involved much more than 2 hours of input by a reasonably competent employment lawyer. Moreover, the human resources department should have been the subject of proper and adequate supervision systems by the board to ensure compliance with workplace laws. In that regard those responsible for the inadequate system simply had to consider whether the BCR model complied with the respondent’s payment obligations under the Act and the Award in respect of the relevant employees. The very simple question for the corporate governance of all employers is are the relevant employees being paid in accordance with the Act and the applicable award. The compelling inference is there was no such question properly addressed by the respondent’s systems during the relevant period of the contraventions.
There is no ability to contract out of the requirements of the Act and, whilst the Award did provide mechanisms by which there may have been steps taken by the respondent consensually to reach an agreement to depart from certain provisions of the Award, it is relevant that no such step was taken by the respondent. This is a reflection of the defective and deficient system that ultimately the board of the respondent were responsible for as a matter of corporate governance.
The making of the declarations of contraventions are, of course, of significance in themselves. However, the absence of evidence at the corporate mind level by the respondent was an issue raised by the Court and upon which the respondent was given an opportunity, if the respondent saw fit, to put on affidavit evidence. Despite that opportunity no such evidence was put on by the respondent.
The issue of specific deterrence is also of importance given the contest advanced by the respondent in respect of the contraventions and in the context of circumstances where the order made by this Court on 2 October 2020, on a proper understanding of the construction of the Federal Circuit Court Rules 2001 (Cth) (“the FCC Rules”) and the Federal Court Rules 2011 (Cth) (“the FCA Rules”)., which required payment within 14 days.
The Court does accept that an undertaking was given to the Court at the hearing today on 23 November 2020 by the respondent, through its counsel, Mr Moses SC, to take steps identified in the submissions for the calculation and payment of the outstanding amounts to each of the applicants. That was a simple task of calculation and payment that should have been attended to within the 14 days applicable for payment. However, those are steps taken substantially after the period for payment, applying the 14 days applicable as a result of the proper construction of the FCC Rules and the FCA Rules.
It is the case, as Mr Moses pointed out, that the respondent had made inquiry about a mechanism for payment to preserve the position pending an appeal and received no response from the applicants in that regard. Be that as it may, this Court expects its orders to be complied with and the respondent did not make payment within 14 days.
The Court also identified at the hearing on 2 October 2020 that whether payment was made was a factor that the Court would take into account in determining penalty. The failure to earlier pay the applicants, other than as will and/or has occurred under the undertaking, is a further relevant factor to be taken into account as to whether there is a need for specific deterrence.
The Court does not suggest that there was a deliberate failure to comply with the Court’s orders and the Court accepts that there was an erroneous construction of the FCC Rules adopted by the respondent. Mr Moses submitted that the FCCRules did not pick up, in the circumstances, r 39.02 of the FCA Rules because of the carve out in respect of the provisions expressly contained in the FCC Rules. It is clear in the Federal Court of Australia that r 39.02 of the FCA Rules has been treated as having application to the payment of costs: Roohizadegan v TechnologyOne Limited (No 3) [2020] FCA 1571.
Mr Moses SC submitted that that decision had no application in the circumstances of the express carve out in the FCCRules and it was submitted that, accordingly, r 39.02 of the FCA Rules had no application. The Court does not accept that submission and the Court finds that there was in fact a requirement by the respondent to pay within 14 days, which the respondent failed to do. Even if a different construction was correct, which it is not, the failure of the respondent to pay the applicants under the orders made promptly had been flagged as a relevant consideration which the Court would take into account.
The inadvertence of the respondent in respect of payment in accordance with the Court orders does not make the conduct irrelevant in relation to the issue of penalty. The Court accepts there has been further inadvertence by the respondent in respect of the contraventions concerning the respective applicants the subject of the declarations that the Court has made and the orders for payment to those applicants.
The Court does not accept the respondent’s submission that there is no need for specific deterrence of the respondent. The duration over which the contraventions occurred and the number of contraventions further support the need for specific deterrence. This need for specific deterrence means that the Court rejects the submission that no penalty should be imposed.
Further, quite apart from the need for specific deterrence, the Court is also mindful that the Award applies more broadly than just to the respondent in the present case and, whilst the respondent in the present case may have been alone in its defective and deficient human resources payments system for the relevant applicants under a commission‑based system, that does not mean that the Court should treat lightly the importance in the object of general deterrence in determining whether a penalty should be imposed and, if so, in what amount.
The fact that the payment system that was adopted by the respondent is no longer in place and was unique to the respondent is not a basis upon which the Court is persuaded that there is no need for general deterrence in respect of the obligation to comply with the Award. Nor does the fact that the respondent succeeded in defending other contraventions give rise to a reason why this Court should not, in all the circumstances, impose a penalty upon the respondent for reasons of general deterrence. The imposition of a penalty upon the respondent is likely to have a significant deterrent effect, even if the amount involved is towards the lower end of the sting available to the Court. Accordingly, independently from the finding of the need for specific deterrence, the Court is satisfied that for the purpose of general deterrence the submission that no penalty should be imposed is rejected.
The Court does, however, accept the respondent’s submission that in light of its impressive clean record and important charitable work the penalty to be imposed should be towards the lower range.
The Court does not accept that this is a case in which it is appropriate to impose no penalty at all. In that regard, these are not proceedings that were run as a test case and, whilst there may have been genuine issues about disputed construction of the contract and the application of the Award and the respondent succeeded in its defence of the substantial part of the case advanced by the applicants, that does not sound in there being no need for any penalty to be imposed in respect of the contraventions that have been made out.
Nor is the Court persuaded that it would be appropriate to suspend the imposition of any penalty. Nor does the Court accept the submission that the penalty should be paid to consolidated revenue fund.
The Court accepts that the applicants have incurred reasonably significant costs in the bringing and conduct of the proceedings which is relevant only to s 546(3) of the Act as to whom the penalty should be paid. The Court is satisfied in the circumstances of the present case that it is appropriate for the penalty to be paid to the successful applicants.
The Court has taken into account the affidavit evidence by the global human resources operations leader and by a senior employee relations consultant, as well as a person who is the global head of Macquarie Group Foundation and a global head of employment and, in relation to the issue concerning compliance with the Court orders, the affidavit by Mr Fleeton of Kingston Reid.
The Court has taken into account the objects of the Act as identified in Division 2. The Court accepts that there is no role for retribution or rehabilitation in the context of the imposition of a civil penalty. The Court accepts that the task is to determine to impose a penalty that it considers appropriate: see Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177, at [98].

In that regard, the Court must take into account a consideration of the appropriateness from the circumstances in which the contraventions occurred, as well as what is reasonably necessary to deter contraventions of the kind that have occurred before the Court. The Court must determine this process by an instinctive synthesis, having regard to all the factors relevant to affixing a penalty.
Those relevant factors have been identified in a number of cases, but include:
a)The nature and extent of the conduct which led to the breaches;
b)The circumstances in which that conduct took place;
c)The nature and extent of any loss or damage sustained as a result of the contraventions;
d)Whether there has been similar previous conduct by the respondent;
e)Whether the breaches were properly distinct or arose out of the one course of conduct;
f)The size of the business enterprise involved;
g)Whether or not the breaches were flagrant and/or deliberate;
h)Whether senior management was involved in the breaches;
i)Whether the party committing the breach had exhibited contrition; and
j)The need for specific and general deterrence.
The Court accepts that these considerations must not be applied in a rigid manner and that it is the circumstances of a particular case that must be taken into account in determining the appropriate penalty in those circumstances.
The contraventions in the present case occurred over a substantial period of time and, as identified in these proceedings, involved a reasonably significant number of employees in this case in respect of most of the contraventions.
Whilst the Court has no obligation to impose a penalty, the Court is satisfied that this is a case where a penalty should be imposed. This is also not a case in which it could be said that the contraventions were of the narrow compass or a confined construction issue and the contraventions reflect both a departure from the NES, contrary to s 44 of the Act, as well as a contravention of s 45 of the Act in relation to the Award. The Court does not accept that this is a case in which, because of a narrow issue of misconstruction of an industrial instrument, no penalty should be imposed.
The Court has taken into account the findings that the Court made as identified in the respondent’s submissions, that:
a)Macquarie’s Human Resources Department created a method of remuneration and revenue sharing by commission and bonus for the Applicants that, for the relevant period of employment, contained two distinct streams of payments (described as the BCR [Basic Cost Responsibility] Model and BCR Package);
b)The BCR Model had been designed prior to the FW Act to provide maximum flexibility for the tax-efficient structuring of an employee’s remuneration;
c)During the relevant employment period the maximum salary under the BCR method of remuneration was set at level in line with the minimum annual salary and minimum weekly rate wage obligations taking into account the Applicants’ classification under the Award;
d)The maximum salary was stated in the BCR policy to be in satisfaction of amounts payable to employees as a consequence of employment, including amounts arising under legislation, a modern award or another industrial instrument, including but not limited to minimum hourly rates, allowances, overtime and penalty rates and leave loading;
e)The Applicants knew the remuneration under their contracts of employment was to be determined by the BCR policy and made no complaint whatsoever as to Award entitlements;
f)During the relevant employment period, the Applicants were each remunerated monthly via the BCR Package based on the set salary per annum and separately remunerated monthly via the BCR Package based on commission;
g)There was no recovery by Macquarie of any shortfall under the BCR Package against the salaries component paid to the Applicants. Any commission deficit was not recovered and the deficit was deleted;
h)The BCR Package with its commission structure was fair, flexible and in revenue sharing generous for these senior employees and was intended by Macquarie to meet the guaranteed safety net through the National Employment Standards, the applicable modern award and the national minimum wage;
i)The Applicants as a result of their employment with Macquarie received commissions which were very substantial;
j)Whilst the BCR remuneration method did not expressly identify over-award payments, it was apparent from the contracts of employment that each Applicant was to receive payments of salary and commission well in excess of any specific monetary obligations imposed on Macquarie by the Award;
k)All the Applicants were paid the monthly salary component by Macquarie during their relevant employment period;
l)In the above context, the Applicants’ claims against Macquarie were “rapacious”; and
m)The relevant Applicants continued to receive the salary component of the BCR Package during the periods of leave taken and there is an element of double dipping in respect of the claims of the relevant Applicants on the basis that the salary component of the BCR Package was in fact received by the Applicants during the relevant leave and was intended by Macquarie to meet its obligations relating to leave entitlements.
The Court has also taken into account s 556 of the Act, which is as follows:
Civil double jeopardy
If a person is ordered to pay a pecuniary penalty under a civil remedy provision in relation to particular conduct, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of a law of the Commonwealth in relation to that conduct.
Note: A court may make other orders, such as an order for compensation, in relation to particular conduct even if the court has made a pecuniary penalty order in relation to that conduct (see subsection 546(5)).
In this regard, the Court has excluded from its consideration in the determination of whether a penalty should be imposed and in the determination of the amount of the penalty the contraventions that have occurred in the two other proceedings heard concurrently.
The Court has also taken into account s 557 of the Act in respect of which there was substantial agreement that four of the six different contraventions the subject of the six declarations should each be treated as arising out of a course of conduct and each a single contravention. The respondent submitted that the other two of the six different contraventions should also together be treated as a single contravention arising out of a course of conduct.
The respondent submitted that the first and second declarations as made by the Court, which relate to payment of annual leave loading prescribed by cl 24.3(a) of the Award, should also together be treated as a single contravention arising out of a course of conduct and that the only difference relates to the first referring to payment of annual leave loading during the employment and the second referring to annual leave loading on accrued leave upon termination of employment. The respondent submits that the obligation to pay annual leave loading arises out of the same course of conduct by the respondent.
The Court does not accept that submission. The Court finds that the conduct in respect of the payment of annual leave loading during the employment in contravention of cl 24.3(a) of the Award is not the same course of conduct as that involved in the failure to pay annual leave loading on accrued leave upon termination of employment.
Accordingly, the Court finds that there are, in effect, six different contraventions in respect of which s 557 of the Act has application, reflecting the six declarations made, and that it is each of the six different contraventions the subject of the six declarations that should each be treated as arising out of a course of conduct by the respondent. Accordingly, applying s 557 of the Act the Court finds that there were six single contraventions for the purposes of Part 2 of the Act.
In these circumstances, the maximum penalty that could be imposed in respect of the six single contraventions, taking into account s 557 of the Act, is $378,000.00. The maximum is obviously only for the most serious end of the spectrum in respect of contravention conduct and there is no suggestion, as identified above, that the respondent should be treated as having engaged in conduct deserving of the maximum. Taking into account the respondent’s clean record which the Court has identified, it is an amount towards the lower end of the scale of penalty that, in the circumstances of the present case, should be imposed.
In relation to the nature and extent of the conduct and the circumstances in which the contravention occurred, the Court has taken into account the findings which the Court made, to which the respondent has referred, as well as the dispute that existed about the construction of the contracts of employment that applied to each of the applicants and the varying provisions interacting with the provisions of the Act and the Award, to which the Court has referred in its reasons.
The Court has also taken into account the findings made as referred to in paragraph 4.12 of the respondent’s submissions as follows:
a)The BCR Model was designed to provide benefits and flexibilities to the Applicants;
b)The evidence makes clear that Macquarie took steps to understand and comply with its obligations relating to employee entitlements and set the salary component of the BCR on the basis of such a consideration;
c)Contrary to the Applicants’ Submissions at paragraph 50, on the FW Act and Award commencing to operate, Macquarie again reviewed its obligations and re-adjusted the salary component of the BCR. Communications were issued to its employees explaining the change to the BCR Model and the need to increase the salary component;
d)None of the Applicants raised any issues as to the application of the Award;
e)The BCR Package was intended by Macquarie to meet the guaranteed safety net through the National Employment Standards, Award and national minimum wage;
f)Each of the Applicants received payments of salary and commission well in excess of any specific monetary obligations imposed on Macquarie by the Award; and
g)Importantly, the Applicants continued to receive the salary component of the BCR Package during the periods of leave taken. As a consequence of the orders of the Court for payment, the Applicants will receive additional leave payments despite them having received the benefit of a salary payment during the relevant periods of leave.
As to the nature and extent of the loss, the amount the subject of the compensation orders to the respective applicants is identified in the Court’s orders of 2 October 2020 and the actual amounts referable to each contravention are identified in the Court’s written reasons for judgment. The Court sees no need to repeat the same.
The Court does accept that the nature and the extent of the loss in the present case was not very significant in comparison to the overall remuneration, and that the applicants were, in fact, well remunerated. Nonetheless, they were not remunerated, according to the findings made by this Court, in accordance with their entitlements under the Act and taking into account the Award. The amounts ordered are not trifling and for the successful applicants are benefits that should have been paid by the respondent in accordance with the Act and the Award.
The Court accepts that there has been no prior relevant conduct in the context of the respondent having over 6,000 employees across Australia and some 15,700 globally and having been in operation since 1969. The Court gives this factor considerable weight. The weight does not, however, warrant the imposition of no penalty.
The Court has already identified considering the matter of penalty in relation to s 557 of the Act in respect of the course of conduct giving rise to six single contraventions. The Court does not, however, accept that the contraventions involving a number of successful applicants over a substantial period of time, as identified in these proceedings, weighs in favour of no penalty being imposed.
The Court has taken into account the applicants' annual reports that were put into evidence but this is not a case where the respondent’s asset pool or profits have any material bearing in the circumstances of this case.
The Court has already identified that the Court accepts that the contraventions were not deliberate and were inadvertent. However, for the reasons identified above, the fact that they were inadvertent does not mean that there is no role for specific deterrence.
As the Court has identified, no evidence has been adduced from the corporate mind of the respondent, despite being given an opportunity to do so, in relation to its belief concerning the systems in place for complying with the Act and the Award, the basis for the belief or as to the circumstances that gave rise to the decision to depart from the commission-based entitlements on 1 July 2020 and the systems now in place in respect of the corporate governance by the board of the respondent to ensure compliance with workplace laws and proper supervision of human resources to ensure compliance with the Act and the Award.
This is in circumstances where the respondent would have the finest legal minds readily available to it in respect of its obligations under the Act and vast resources to ensure compliance with the Act and the Award and quite apart from the other internal auditing and supervision that should have been in place over the period of the contraventions. Of concern in that regard to the Court is that the Award was not a long and difficult instrument for a reasonably competent director, CEO, CFO, COO or General Counsel to read or comprehend and such a person could readily have ascertained that no step had been taken under cl 7 or cl 14.1(b) of the Award. Had that occurred, it is likely that the defective and deficient payment system would have been apparent to any such reader aware of the BCR model, contracts of employment and payment method. It is also apparent that only partial attention was given by those in human resources department to the terms of the Award in the defective and deficient payment system that was implemented by the respondent.
The BCR model and the BCR package were not compliant with the Act and the Award for the payment of the relevant employees. The contraventions the subject of these proceedings were not such that could not have been fairly readily ascertained by a reasonably competent employment lawyer, as identified above. Moreover, the need to ensure that there was a proper system in place to ensure compliance with the Act and the Award was the responsibility of the corporate mind of the respondent. The Court has taken into account in this regard the duration over which the contraventions have occurred.
The absence of evidence from the corporate mind of the respondent or the CEO, CFO, COO or General Counsel, despite having been expressly invited to do so, on the above matters is of significance given the failure by the respondent to implement a proper system to ask the simple question identified above and to ensure compliance with the Act and the Award over the period of the contraventions. Further whilst it is the position that the applicant did not place weight on the failure to make payment in accordance with the Court’s order in relation to the need for specific deterrence, the Court does regard this conduct as being of relevance, particularly when the Court had expressly identified on 2 October 2020 that the payment was a factor that the Court would take into account in determining the issue of penalty.
The Court has not accepted the respondent’s submission that there is no need for any specific deterrence. Nor does the Court accept the fact that there has been a cessation of the BCR model from 1 July 2020 and an ending of the practice of paying commission to wealth advisors effective from 1 April 2019 as meaning that there is, in the circumstances of this case, no need for specific deterrence.
The benevolent activities of the respondent and its impeccable record are matters of considerable weight in relation to the determination of what penalty is appropriate, but they are not factors in all the circumstances that give rise to the Court being satisfied that no penalty should be imposed.
Further, as identified above, the need for general deterrence, independently of whether there is any need for specific deterrence, warrants imposition of a penalty. Even if the Court had accepted the respondent’s submission that there was no need for specific deterrence, which the Court does not accept, the Court is still of the view that the importance of this legislation and the objects of the same in relation to general deterrence, taking into account the contraventions in this case that involve important obligations of employers to employees caught by the Award, warrant that a penalty should be imposed.
There was a suggestion that the imposition of a penalty would somehow be contrary to the advancement of general deterrence. The Court does not accept that submission. The Court finds that the imposition of a penalty in the circumstances of this case is likely to have a real and significant deterrent effect on others employing persons covered by the Award in the banking industry. Further, the plain fact is that more diligent steps by the respondent, both at the corporate mind level and below, could have prevented the contraventions in the present case. The imposition of a penalty on the respondent will have a general deterrent effect on other employers in terms of corporate governance and proper systems and supervision to ensure compliance with the Act and the Award.
The Court finds that the need for general deterrence in the circumstances outweighs the significant record and philanthropic contribution that has been made by the respondent more generally in the community and that, in the context of other employers in this banking field, the general deterrent effect of the imposition of a penalty, even be it towards the smaller end of sting, is likely to advance the public interests in terms of compliance with the Act and the Award by other employers.
There is also the issue of contrition that might be taken into account. The Court does accept that there has been an undertaking given to effect payment but, in the context in which this occurred, does not regard that as giving rise to relevant contrition.
The Court does accept the respondent’s submission that whether or not an appeal is pursued is irrelevant to the issue of contrition. The Court does not accept that the partial success by the respondent or its previous impeccable record gives rise to circumstances in which it is not appropriate to impose a penalty.
The applicants’ proposed penalties are as follows:

Contravention			Underpayments	Employees affected	Maximum penalties	Proposed penalties
Contravention			Underpayments	Employees affected	Maximum penalties	$	%
(1)	S 45	Annual leave loading during employment	$27,687.21	13	$63,000	$12,600-$18,900	20%-30%
(2)	S 45	Annual leave loading on termination of employment	$13,285.85	10	$63,000	$12,600-$18,900	20%-30%
(3)	S 44	Annual leave	$158,212.67	13	$63,000	$18,900-$25,200	30%-40%
(4)	S 44	Personal/carer’s leave	$18,522.86	12	$54,000	$16,200-$21,600	30%-40%
(5)	S 44	Compassionate leave	$1,545.06	3	$54,000	$10,800-$16,200	20%-30%
(6)	S 44	Public holidays	$84,116.58	13	$63,000	$18,900-$25,200	30%-40%
TOTALS	$303,370.23	$360,000	$90,000-$126,000	25%-35%

The Court finds, in relation to each of the six single contraventions, that the appropriate penalty to be imposed on the respondent is an amount in the sum of $18,900.00, making a total of $113,400. Taking into account the principle of totality, the Court finds that the appropriate penalty to impose in all the circumstances is one in the sum of $110,000.00. That sum of $110,000 is to be paid by the respondent to the successful applicants as a pecuniary penalty under s 546 of the Act within 14 days.

I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of Judge Street

Associate:

Date: 22 December 2020