Yang v DS Shopfitters Pty Ltd
[2021] FedCFamC2G 150
•15 October 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Yang v DS Shopfitters Pty Ltd [2021] FedCFamC2G 150
File number(s): SYG 1794 of 2017 Judgment of: JUDGE BAIRD Date of judgment: 15 October 2021 Catchwords: INDUSTRIAL LAW – penalties – contraventions of civil penalty provisions of the Fair Work Act 2009 (Cth) – where contraventions by first respondent company of s 340 by constructive dismissal of applicant, and by communications with workers compensation insurer, and of s 536 by non‑provision of pay slips – where second, third and fourth respondents were persons ‘involved’ within the meaning of s 550 in the contraventions of the Act by first respondent company – applicable principles – relevant considerations – pecuniary penalties determined Legislation: Crimes Act 1914 (Cth), s 4AA
Fair Work Act 2009 (Cth), ss 340, 536, 539, 546
Fair Work Regulations 2009 (Cth)
Cases cited: Australian Building and Construction Commissioner v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union & Ors (The Australian Paper Case) (No.2) [2017] FCA 367
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (the BKH Contractors Case) (No 2) [2018] FCA 1563
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (ABCC v CFMEU) (2017) 254 FCR 68; (2017) 271 IR 321; [2017] FCAFC 113
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union & Anor (2018) 262 CLR 157; [2018] HCA 3
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46
Fair Work Ombudsman v A to Z Catering Solution Pty Ltd & Anor (No 3)(2018) 342 FLR 46; [2018] FCCA 3574
Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128
Fair Work Ombudsman v Australian Wild Tuna Pty Ltd (2016) 313 FLR 126; [2016] 2626
Fair Work Ombudsman v Kentwood Industries Pty Ltd (No 3) [2011] FCA 579
Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown (2017) 275 IR 148; [2017] FCA 1301
Kelly v Fitzpatrick (2007) 116 IR 14; [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd t/as Pangaea Restaurant & Bar [2007] FMCA 7
Rocky HoldingsPty Ltd v Fair Work Ombudsman (2014) 221 FCR 153, [2014] FCAFC 62
Yang v DS Shopfitters Pty Ltd & Ors [2020] FCCA 84
Division: Division 2 General Federal Law Number of paragraphs: 112 Date of last submission: 11 September 2020 Date of hearing: Determined on the papers Place: Sydney Applicant: The applicant was self-represented Counsel for the Respondents: Richard Johnson Solicitor for the Respondents: Lawside Lawyers ORDERS
SYG 1794 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: XINGYU YANG
Applicant
AND: DS SHOPPFITTERS PTY LTD
First Respondent
HUI MIN DONG
Second Respondent
CHRISTOHER LU (AKA XIAO WEI LU)
Third Respondent
LI XIAO
Fourth RespondentYOUSHENG LU
Fifth Respondent
ORDER MADE BY:
JUDGE BAIRD
DATE OF ORDER:
15 OCTOBER 2021
THE COURT DECLARES:
1.The second respondent, Ms Hui Min Dong, contravened s 340(1) of the Fair Work Act 2009 (Cth) by reason of being involved in, for the purposes of s 550 of the Act, the first respondent, DS Shopfitters Pty Ltd’s, contravention of s 340(1) of the Act referred to in declaration 2(a) made on 22 May 2020 in respect of DS Shopfitters’ dismissal of the applicant, Mr Xingyu Yang.
2.Ms Dong contravened sub-ss 536(1) and (2) of the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of s 536 of the Act referred to in declaration 4 made on 22 May 2020 in respect of DS Shopfitters’ failure to provide Mr Yang with pay slips.
3.The fourth respondent, Ms Li Xaio contravened s 340(1) of the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of s 340 of the Act referred to in declaration 2(a) made on 22 May 2020 in respect of DS Shopfitters’ dismissal of Mr Yang.
4.Ms Li contravened s 340(1) of the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of the s 340 of the Act referred to in declaration 2(b) made on 22 May 2020 in respect of DS Shopfitters’ conduct in emailing CGU Insurance in July 2017.
5.Ms Li contravened sub-ss 536(1) and (2) of the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of s 536 of the Act referred to in declaration 4 made on 22 May 2020 in respect of DS Shopfitters’ failure to provide Mr Yang with pay slips.
6.The fifth respondent, Mr Yousheng Lu, contravened s 340(1) of the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of s 340 of the Act referred to in declaration 2(a) made on 22 May 2020 in respect of DS Shopfitters dismissal of Mr Yang.
7.Mr Lu contravened sub-ss 340(1) of the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of the s 340 of the Act referred to in declaration 2(b) made on 22 May 2020 in respect of its conduct in emailing CGU Insurance in July 2017.
8.Mr Lu contravened sub-ss 536(1) and (2) of the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of s 536 of the Act referred to in declaration 4 made on 22 May 2020 in respect of DS Shopfitters’ failure to provide Mr Yang with pay slips.
THE COURT:
9.ORDERS DS Shopfitters pay a total net penalty in the sum of $41,281.78 to the applicant pursuant to s 546(1) of the Act for committing the contraventions set out in paragraphs 2 (a) and (b), and 4 of the orders made on 22 May 2020.
10.ORDERS Ms Dong pay a total penalty in the sum of $9,450 to the applicant pursuant to s 546(1) of the Act, for committing the contraventions set out in paragraphs 1 and 2 of these orders.
11.ORDERS Ms Li pay a total penalty in the sum of $6,426 to the applicant pursuant to s 546(1) of the Act, for committing the contraventions set out in paragraphs 3, 4, and 5 of these orders.
12.ORDERS Mr Lu pay a total penalty in the sum of $18,144 to the applicant pursuant to s 546(1) of the Act, for committing the contraventions set out in paragraphs 6, 7, and 8 of these orders
13.ORDERS the respondents pay the penalties ordered pursuant to paragraphs 9, 10, 11, and 12 (as applies to them) to the applicant within 28 days of this order.
REASONS FOR JUDGMENT
INTRODUCTION
This is a civil penalty determination arising out of a proceeding brought by Mr Xingyu Yang, also known as William Yang, against his former employer, the first respondent, DS Shopfitters Pty Ltd, and 4 individual respondents, for breaches of employment law obligations under the Fair Work Act 2009 (Cth), and breach of his contract of employment. I have earlier delivered reasons on liability and made declarations and certain orders in this proceeding: see Yang v DS Shopfitters Pty Ltd & Ors [2020] FCCA 84.
Relevant to this penalty determination, in Yang v DS Shopfitters I found that DS Shopfitters contravened s 340(1) of the Act first, by dismissing Mr Yang from his employment, and secondly, by its actions in importuning the company’s workers compensation insurer, CGI Insurance, and that it contravened s 536 of the Act by its failure to provide pay slips as required, or at all: see Yang v DS Shopfitters at [244] and [248], [250], [92] and [251]. Section 539 provides that s 340 and sub-ss 536(1) and (2) are civil remedy provisions under the Act.
In Yang v DS Shopfitters at [258] I concluded that s 793 of the Act operated to deem the conduct of the second respondent, Ms Hui Min Dong, and the fifth respondent, Mr Sam Lu, also known as Mr Yousheng Lu, to be that of the company. I found that each of Ms Dong, the fourth respondent, Ms Li Xiao, also known as Abby and also as Li Xiao, and Mr Sam Lu were persons ‘involved’ within the meaning of s 550 of the Act in DS Shopfitters’ contraventions of the Act: see Yang v DS Shopfitters – [255]-[259], and as to Ms Dong at [260]‑[268], as to Ms Li at [273]-[275], and as to Mr Sam Lu at [276]-[277]. Accordingly, pursuant to s 550 of the Act, to the extent I found, Ms Dong, Ms Li, and Mr Sam Lu are each taken to have contravened the same civil remedy provisions as DS Shopfitters, namely s 340 and s 536 of the Act.
I concluded that the third respondent, Mr Christopher Lu, was not a person involved in DS Shopfitters’ contraventions of the Act: see Yang v DS Shopfitters at [272].
In this stage of the proceeding Mr Yang seeks the imposition of pecuniary penalties against each of DS Shopfitters, Ms Dong, Ms Li and Mr Sam Lu. For convenience in these reasons I refer to these four respondents collectively as the Respondents, and Ms Dong, Ms Li and Mr Sam Lu collectively as the individual Respondents.
Following upon the delivery of reasons in Yang v DS Shopfitters, and the making of certain declarations and orders, at a hearing by telephone on 17 July 2020, I made timetabling orders for the parties to file and serve any material and submissions they relied on with respect to penalties. By consent, I directed that the issue of penalties be determined on the papers, unless the Court otherwise advised that it required an oral hearing. Mr Yang, Ms Dong, Ms Li and Mr Sam Lu have each affirmed and rely on an affidavit addressing penalty. Mr Yang has filed and provided submissions dated 11 September 2020, in addition to submissions on penalty he made within submissions dated 9 April 2018 relied upon in the first hearing. The Respondents, by their counsel, have provided brief submissions on penalty dated 27 August 2020. No oral hearing has been required.
In Yang v DS Shopfitters the parties are identified and described at section B, the factual background, history and procedural background to the proceeding are set out at sections C to D, my conclusions on DS Shopfitters’ contraventions and breaches are set out at section J at [245]-[253], and the application of s 550 of the Act to the individual respondents Ms Dong, Ms Li and Mr Sam Lu, and their involvement in DS Shopfitters conduct are set out at section K (see these reasons at [3] above).
Relevant dates
Mr Yang was employed by DS Shopfitters commencing in September 2015, and worked until he was injured and hospitalised in the course of his employment on 13 June 2016. Mr Yang did not return to work. I concluded that DS Shopfitters took adverse action against Mr Yang by constructively dismissing him on 20 March 2017 because he exercised a workplace right, contrary to s 340 of the Act: Yang v DS Shopfitters at [238]-[244].
APPLICABLE PRINCIPLES - THE APPROACH FOR ASSESSING PENALTIES
As I am satisfied that each of the Respondents have contravened civil remedy provisions (see Yang v DS Shopfitters), under s 546(1) of the Act I have the power to order each of them to pay a pecuniary penalty I consider appropriate.
As contraventions, the penalties are to be imposed upon the application of the principles relating to civil penalties. That power must be exercised having regard to the purpose for which the power is given. The purpose of a civil penalty is primarily, if not wholly, protective in promoting the public interest in compliance, the object is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the relevant statute: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46 at [55]. In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union & Anor (2018) 262 CLR 157; [2018] HCA 3, Keane, Nettle and Gordon JJ said of these purposes, at [116]:
As has been observed, the principal object of an order that a person pay a pecuniary penalty under s 546 is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners. According to orthodox sentencing conceptions as they apply to the imposition of civil pecuniary penalties, specific deterrence inheres in the sting or burden which the penalty imposes on the contravener. Other things being equal, it is assumed that the greater the sting or burden of the penalty, the more likely it will be that the contravener will seek to avoid the risk of subjection to further penalties and thus the more likely it will be that the contravener is deterred from further contraventions; likewise, the more potent will be the example that the penalty sets for other would-be contraveners and therefore the greater the penalty's general deterrent effect. Conversely, the less the sting or burden that a penalty imposes on a contravener, the less likely it will be that the contravener is deterred from further contraventions and the less the general deterrent effect of the penalty. Ultimately, if a penalty is devoid of sting or burden, it may not have much, if any, specific or general deterrent effect, and so it will be unlikely, or at least less likely, to achieve the specific and general deterrent effects that are the raison d'être of its imposition.
Earlier, in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113 the Full Federal Court stated at [98] (citations omitted):
[98]… The principal object of pecuniary penalty is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene; both specific and general deterrence are important. A pecuniary penalty for a contravention of the law must be fixed with a view to ensuring that the penalty is not to be regarded by the offender or others as an acceptable cost of doing business. In relation to general deterrence, it is important to send a message that contraventions of the sort under consideration are serious and not acceptable.
In determining the appropriate penalty, appropriate regard must be had to the facts and circumstances giving rise to the contraventions, and of the need to sustain public confidence in the legislative regime by which the relevant obligations are imposed, here, the Act: Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith (2008) 165 FCR 560; [2008] FCAFC 8.
The Court has a broad discretion to assess the appropriate penalty. In Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown (2017) 275 IR 148; [2017] FCA 1301, at [36] Bromwich J summarised the following steps to be considered in assessing penalties (citations omitted):
(1)Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award [and each statutory obligation] 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 [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 [applicant] 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.
As observed by Judge Manousaridis in Fair Work Ombudsman v A to Z Catering Solution Pty Ltd & Anor (No 3) [2018] FCCA 3574, at [7], the above passage prescribes 3 broad steps: (1) identify the contraventions; (2) (provisionally) assess the penalty for each contravention; and (3) consider whether adjustments should be made to the penalty provisionally assessed for each contravention. However, the steps identified in New Shanghai above,
… may not necessarily reveal all of the steps for assessing penalties; and it may incorrectly imply that contraventions that have been treated as 1 contravention under s 557(1) of the [Act] may be grouped further to give effect to the principle that the same conduct should not be penalised more than once.
Justice Flick in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (the BKH Contractors Case) (No 2) [2018] FCA 1563, at [59], approached the task by first (provisionally) assessing a penalty for 2 or more contraventions, and then adjusting the penalties so assessed having regard to the degree of commonality between the conduct that constitutes each contravention, stating as follows:
[59]Of particular concern in the present proceeding is the need to:
•Separately consider the penalty which should be imposed in respect to each contravention and to properly characterise conduct which may constitute separate contraventions by reference to the objective facts and circumstances giving rise to those contraventions.
But also the need to:
•Consider whether the conduct giving rise to separate contraventions was such that the separate imposition of penalties would be effectively imposing multiple penalties for either the same conduct or for overlapping parts of the same conduct which separately went to make out the separate contraventions; and
•Ensure that a person who has engaged in contravening conduct is not punished twice for the same conduct and to ensure that the total penalty imposed in respect to the contraventions is “just and appropriate” and not disproportionate.
The attempt being made is to quantify the appropriate penalty for each contravention whilst at the same time recognising that conduct may involve different factual elements – some elements of which go towards one contravention and different elements going to another contravention. Common to multiple contraventions, however, may be one or more of those common facts.
Factors relevant to penalty
A non-exhaustive list of considerations relevant to the imposition of penalty was endorsed by Tracey J in the Federal Court in Kelly v Fitzpatrick (2007) 116 IR 14; [2007] FCA 1080 at [14]. Those considerations are:
(a)the nature and extent of the conduct which led to the contraventions;
(b)the circumstances in which the conduct took place;
(c)the nature and extent of any loss or damage sustained as a result of the contraventions;
(d)whether there had been similar previous conduct by the respondent;
(e)whether the contraventions 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 contraventions were deliberate;
(h)whether senior management was involved in the contraventions;
(i)whether the party committing the contraventions had exhibited contrition, taken corrective action and/or had cooperated with the enforcement authorities;
(j)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
(k)the need for specific and general deterrence.
The factors provide guidance as to the considerations that may be useful in the exercise of the statutory discretion when imposing a penalty. I am conscious that caution must be exercised against treating them as a rigid catalogue, or mandatory criteria.
The maximum penalty prescribed by the Act for a specific contravention serves as a “yardstick” against which the assessment of penalties is generally to proceed: BKH Contractors Case at [19]. As to the relevant maximum penalties see below.
Having provisionally assessed the penalty for each contravention, the Court is required to consider whether any adjustment should be made under the one transaction principle, which is also explained as requiring the Court to assess the extent to which 2 or more contraventions have common elements. As explained by McKerracher J in Fair Work Ombudsman v Kentwood Industries Pty Ltd (No 3) [2011] FCA 579 at [10]:
To the extent that two or more contraventions have common elements, this may be taken into account when considering what is an appropriate penalty for each contravention. The respondents should not be penalised more than once for the same conduct. The penalties imposed by the Court should be an appropriate response to the respondents’ actions.
Lastly, a related, although distinct principle, known as the “totality principle” has been held to apply to the assessment of pecuniary penalties under the Act, and usually must also be considered: see New Shanghai, above at [13(5)]. It is directed to the assessment of the overall quality of the contravener’s conduct, pursuant to which 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: see A to Z Catering at [26]-[37].
IDENTIFICATION, AND GROUPING OF CONTRAVENTIONS UNDER S 557(1) OF THE ACT
I have identified above at [2] that the Respondents have contravened the civil remedy provisions of s 340 of the Act and s 536 of the Act. To reiterate:
·DS Shopfitters contravened s 340(1) of the Act:
(i)first, by constructively dismissing Mr Yang from his employment because he exercised his workplace rights within the meaning of the Act (see inter alia, Yang v DS Shopfitters at [224], [227], [238]-[244], [248]) (First s 340 Contravention), and
(ii)secondly, by its actions in importuning the company’s workers compensation insurer, CGI Insurance (see inter alia, Yang v DS Shopfitters at [138]-[143], [145], [249]-[250] (Second s 340 Contravention).
Each of these actions is a separate contravention of s 340;
·DS Shopfitters contravened s 536(1) of the Act by its failure to provide pay slips as required, or at all, to Mr Yang throughout the period of his employment (see Yang v DS Shopfitters at [89]-[92], [251]. Each time DS Shopfitters failed to provide a pay slip as required under the Act it contravened s 536 (s 536 Contravention); and
·pursuant to s 550, each of the individual Respondents is taken to have contravened the same civil remedy provisions as the company to the extent I found in Yang v DS Shopfitters.
Grouping pursuant to s 557
Section 557 of the Act provides when multiple contraventions of one of a subset of the civil penalty provisions created by s 539(1) of the Act are to be treated as single contravention. Section 557(1) and (2) of the Act are as follows:
(2)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.
(3)The civil remedy provisions are the following:
…
(o)subsections 536(1), (2) and (3) (which deal with employer obligations in relation to pay slips); …
Subsection 557(3) has no application in the present case.
Thus, sub s 557(2) defines civil remedy provisions for the purposes of s 557(1). In so doing it lists a subset of the civil remedy provisions created by s 539(1) of the Act. Pursuant to sub s 557(2)(o), the civil remedy provision to which sub s 557(1) applies in the present case is s 536(1) of the Act. In Yang v DS Shopfitters I found that Mr Yang never received a pay slip, that is, that DS Shopfitters’ failure to provide pay slips was a recurring omission. Thus, there were multiple contraventions of s 536(1) of the Act.
In Rocky HoldingsPty Ltd v Fair Work Ombudsman (2014) 221 FCR 153, [2014] FCAFC 62, the Full Court of the Federal Court of Australia said (at [13]) that the function of s 557(2) is to indicate that when a provision is identified, it is the substance of the provision found elsewhere in the Act which is the civil remedy provision (see also at [23]). At [18], the Full Court said that:
The object and purpose of provisions such as s 557 and its predecessor provisions is to ensure that an “offender is not punished twice for what is essentially the same criminality.
Thus, as explained by Bromwich J in New Shanghai at [39], what is required is a focus on the substance of the particular obligation creating provisions (in this case, provisions of the Act), and “grouping” them accordingly to produce a rational outcome. As Judge Manousaridis in Fair Work Ombudsman v Australian Wild Tuna Pty Ltd (2016) 313 FLR 126; [2016] FCCA 2626, explained at [32], s 557(1) has both a negative and a positive aspect. In its negative aspect, the section does not apply to contraventions of different civil remedy provisions listed in sub-s 557(2), even if the contraventions arise out of a course of conduct, and even if they affect only one person. The positive aspect is that the section applies to the multiple contraventions of a single civil penalty provision, even though the contraventions may affect two or more persons.
The consequence is that, in the present case, each time DS Shopfitters contravened a civil remedy provision by failing to provide Mr Yang with a pay slip, it separately contravened the civil remedy provision, namely s 536(1). However, s 557(1) directs attention to whether those contraventions were committed by the same person and as a course of conduct by that person.
In Wild Tuna at [33]-[34], Judge Manousaridis explained that from the words themselves, it may be said that [a] “course of conduct” denotes a series of acts or omissions that are connected in some way; and 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. Proof of that state of mind may and usually will be inferred from objective matters existing outside the person’s mind. It may be a pattern of conduct composed of a series of acts or omissions over a period of time. Matters such as the number of times that are claimed to be the course of conduct, the time between each act or omission, and whether the acts or omissions are similar or dissimilar may be relevant.
In the case of its non‑provision of pay slips, DS Shopfitters did the same thing multiple times: each time it paid Mr Yang it omitted to issue a pay slip. There was no system in place in DS Shopfitters for the provision of pay slips to Mr Yang. In this case, I find that the omissions frequently (each pay period), and regularly (over the course of his employment) occurred, and the conduct was the same each time (failure to provide a pay slip). For these reasons, as I stated in Yang v DS Shopfitters at [92], and there found, s 557(1) applies to group the multiple times DS Shopfitters failed to provide Mr Yang a pay slip so as to treat that conduct as a single contravention of the civil remedy provision s 536(1) of the Act.
Application of section 556
Section 556 provides that the Court is prohibited from making more than one pecuniary penalty order in relation to 2 or more contraventions of separate provisions arising from the same conduct, whilst s 557 provides for circumstances where a number of distinct contraventions of the same civil remedy provision are treated as a single contravention.
In the present case, I concluded that DS Shopfitters had contravened s 536(1) and (2) of the Act. It did so since each time it did not issue a pay slip (a breach of s 536(1)), it also did not issue it in proper form including the information required under the Regulations (a breach of s 536(2)). The breaches arose out of the same conduct, and comprised the same course of conduct. For this reason I conclude that s 556 applies to the contraventions of s 536(1) and s 536(2) with the consequence that the Court will impose the one penalty in relation to those contraventions.
After grouping pursuant to s 557 the multiple instances of failure to provide a pay slip to be the one contravention, and the multiple instances of failure to issue a pay slip in proper form as the one contravention, and then applying s 556, I consider no further grouping, aggregation or adjustment to avoid double penalty is applicable. The pay slip contravention (so grouped and adjusted), and each of s 430 contraventions of the Act by DS Shopfitters, arose from different, and distinct conduct. Section 556 does not further apply.
Having identified the contraventions after applying ss 557 and 556, the next step is to provisionally assess the penalties for each of the contraventions by reference to the conduct that constitutes each contravention.
MAXIMUM PENALTY UNITS AND AMOUNTS FOR EACH CONTRAVENTION
The maximum penalties are specified by reference to penalty units (see s 539(2) of the Act) and by the dollar value accorded to a unit. Contraventions of certain of the civil penalty provisions – relevantly, s 536 – may attract a higher or lower maximum penalty depending upon whether or not the contravention is determined to be a “serious contravention” within the meaning of s 557A. In Yang v DS Shopfitters at [93] I concluded that there was insufficient evidence to establish the factors relevant to apply s 557A. Accordingly, I find that the contravention is not a serious contravention.
Pursuant to ss 539(2) and 546(2) of the Act, at the relevant times:
(a)for each contravention of s 340(1) of the Act, the relevant maximum penalty was 300 penalty units for DS Shopfitters, and 60 penalty units for each of Ms Dong, Ms Li, and Mr Sam Lu; and
(b)for each contravention of s 536 of the Act, the relevant maximum penalty was 150 penalty units for DS Shopfitters, and 30 penalty units for each of Ms Dong, Ms Li, and Mr Sam Lu.
Pursuant to s 12 of the Act, a “penalty unit” has the same meaning as in s 4AA of the Crimes Act 1914 (Cth). From July 2015, and at the time of the contraventions (in the period 2015 to March 2017), the value of a single penalty unit in the Crimes Act was $180.00: Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 (Cth), as amended by the Crimes Legislation Amendment (Penalty Unit)Act 2015 (Cth).
Accordingly, in sum, the relevant maximum penalty per contravention that the Court can impose for each contravention of s 340 is $54,000 on DS Shopfitters (300 x $180), and $10,800 on each of Ms Dong, Ms Li, and Mr Sam Lu (60 x $180), and for the contravention of s 536 is $27,000 on DS Shopfitters (150 x $180) and $5,400 on each of Ms Dong, Ms Li, and Mr Sam Lu (30 x $180).
Accordingly, the total amount of penalties which can be imposed on DS Shopfitters is $135,000, and the total amount of penalties which can be imposed on each of Ms Dong, Ms Li, and Mr Sam Lu is $27,000.
The parties’ proposed ranges of penalties
Mr Yang submits that the appropriate penalties to be imposed in this matter are 100% of the maximum penalty on each of Ms Dong, Ms Li, and Mr Sam Lu, and “at least” 85% of the maximum penalty be imposed on DS Shopfitters. The Respondents make brief submissions on penalties, summarising the affidavits filed, but do not propose any particular figures or percentages. The Respondents submit that generally the Court would take into account the “over payment” (counsel’s description) to Mr Yang of $5,968.22 on about 22 May 2017 as an offset. This overpayment has been acknowledged by Mr Yang and is recorded in Note B to the orders made 17 July 2020. It will be taken into account in my final orders.
PARTIES EVIDENCE AND SUBMISSIONS ON PENALTY
I next turn to consider the evidence and submissions of the parties, before making my determination on the penalty for each contravention and undertaking the next steps described in New Shanghai and A to Z Catering (see above at [13]-[14]).
The parties rely on the following affidavit evidence in this penalty determination:
(a)Mr Yang on his affidavit affirmed 4 September 2020, and additionally certain material exhibited to his affidavit affirmed 9 April 2018 (see below, at [49]), and refers to other material dealt with in Yang v DS Shopfitters at [79], [76]);
(b)Ms Dong on her affidavit affirmed 26 August 2020;
(c)Ms Li on her affidavit affirmed 25 August 2020; and
(d)Mr Sam Lu on his affidavit affirmed 25 August 2020.
As I have stated above (at [6]), each of Mr Yang and the Respondents have made submissions.
Respondents’ evidence
Each of Ms Dong, Ms Li and Mr Sam Lu affirm their affidavit having been read to them in Mandarin Chinese before signing the English language affidavit.
Ms Dong affirms that:
(a)she was a director of DS Shopfitters between 17 August 2015 and ceasing on 10 May 2017;
(b)she did not participate in the day‑to‑day operation of the company, but accepts that there has been a finding to the contrary (Yang v DS Shopfitters at [265]);
(c)before being appointed director she had no experience as a director, nor did she have “any business acumen”. Whilst director, she acted in accordance with the instructions given to her by her husband, Mr Sam Lu;
(d)she accepts that in signing documents she became responsible for them. She says that during her tenure as director, all documents were prepared for her or sent (in the case of emails) under her name, and explains that she says this not to diminish any responsibility, but to explain how the documents came into being;
(e)Ms Dong does not receive any income, apart from that which Mr Sam Lu earns as a shopfitter.
Ms Li affirms that:
(a)she arrived in Australia in 2015, and commenced working for DS Shopfitters in a bookkeeping role in December 2015. Her employment involved her supporting the role of Mr Yang, who was the accountant for the company;
(b)whilst she had some experience in China, it was only of partial assistance to her in carrying out her role for the company;
(c)DS Shopfitters has been her only employer whilst she has been in Australia. It continues to be her employer;
(d)at all times she acted under the direction of Mr Yang, until he was injured, and then of Mr Sam Lu;
(e)Mr Sam Lu directed her on how she was to deal with Mr Yang after he was injured including payroll and employment records;
(f)she “felt if [she] did not comply with Directors (sic) and instructions from [Mr Sam] Lu her employment may be in jeopardy”;
(g)Ms Li has an income before tax of approximately $39,000 per annum;
(h)the company has made improvements to its payroll system (although these improvements are not described).
Mr Sam Lu annexes to his affidavit a current and historical company search of DS Shopfitters which demonstrates that the company is currently registered, and that Mr Christopher Lu is the current and sole company director and shareholder, and as director assumes the role of company secretary (as was the case at the time of the liability hearing).
Mr Sam Lu accepts responsibility for Ms Dong’s (his wife) and Ms Li’s (DS Shopfitters’ employee) actions, as well as his own. He affirms that:
(a)he has never held a position with DS Shopfitters as a director or officer;
(b)he is/was an employee of DS Shopfitters, but acknowledges that he completed various activities for and on behalf of it, including employing staff, directing staff where and how to perform their duties, and that at all times he directed the company and its officers and employees in dealing with Mr Yang;
(c)DS Shopfitters is a small business involved in the business of shopfitting, and the number of employees varied depending on the amount of work available to the company;
(d)to his knowledge DS Shopfitters has no prior contraventions of the Act; and
(e)since the matter involving Mr Yang occurred, DS Shopfitters has “implemented changes in the company in a constructive effort to comply with its obligations imposed by the Act”. Changes include insuring [sic] payments for employees, superannuation guarantee and taxation payments are made as and when required. There have been changes to its provision of pay slips to all employees. This work is now performed by its accountants, and pay slips are issued weekly. The company also enquired that small business employees are also paid in accordance with the relevant award;
(f)in dealing with the applicant, he directed Ms Li to prepare to send letters to CGU Insurance, and to prepare the letter for Ms Dong to send to Kairros referred to in Yang v DS Shopfitters at [218], and letter of 26 April 2017 referred to at [263]. As he recalls, Ms Dong signed 3 letters at his request.
Applicant’s evidence
Mr Yang annexes to his affidavit affirmed 4 September 2020:
(a)a current and historical company search of the company DS Group Constructions Pty Ltd (ACN 120 916 921). This search discloses that this company at the time of the search has the same registered office and principal place of business as DS Shopfitters, that since its registration in 2006, Ms Dong has been a director (and since 2011, its sole director), and is and has been its sole shareholder (of 100 fully paid $1 shares), and a company secretary, as one of 2 company secretaries, and that since 21 March 2018, Ms Li has been co-company secretary with Ms Dong;
(b)an email and cv of Ms Li which she sent to him in 2015 when she applied for the job of bookkeeper with DS Shopfitters. The cv reveals that Ms Li claimed to have double bachelor degrees from Tianjin University of Finance and Economics in Accounting and in Business English, and nearly 6 years of accounting job experience in China with the one company in Tianjin, and to have held an accounting position with the company “Omni Home Hardware & General Pty Ltd” from April 2015, when she arrived in Australia;
(c)a page of the 2015 tax return prepared by DS Shopfitters’ accountants for Ms Dong, disclosing rental income. This page shows that at that time Ms Dong was earning income from a rental property which she owned, in the net sum of $6,865, which property the DS Group company search reveals was its principal place of business until June 2016. It is not apparent whether this page is a draft, or was part of the return as filed, nor does Mr Yang disclose how he came to have this document.
Mr Yang affirms that he has “been assessed by accredited medical professions and found this injury has caused me a certain degree of permanent impairment. I have been in difficulties in finding jobs because of it”. This claim is unsubstantiated.
Mr Yang also refers to pages of Exhibit A to his affidavit dated 9 April 2018. That material was excluded from evidence at the first hearing. I ruled it inadmissible, and rejected its tender. The pages purport to be some historical Australian Taxation Office (ATO) correspondence with DS Group. This penalty determination is not concerned with DS Group’s conduct. The pages do not evidence that any of the individual Respondents has been found to have contravened the Act in the past. The material does not concern DS Shopfitters. The material is irrelevant to this determination. It does not form part of the evidence before me, and I have not had any further regard to it.
Applicant’s submissions
In his submissions at the liability hearing Mr Yang referred to the principles and some of the case law I have summarised above. In both those submissions, and his submissions dated 11 September 2020, he submits a high penalty should be imposed on the Respondents because, he says:
(a)a worker’s fundamental right has been breached, to a high extent;
(b)the adverse actions taken against Mr Yang took place when he was injured at work;
(c)by reason of his injuries he has sustained “a certain degree of permanent impairment” which he claims to have been assessed for, and his loss of current and future earning capacity is significant;
(d)Ms Dong has previously engaged in similar activity (“similar previous conducts”);
(e)the breaches are distinct;
(f)the size of [DS Shopfitters] is irrelevant because “it is a phoenix shell company”;
(g)the breaches were deliberate;
(h)each of Ms Dong, Ms Li, and Mr Sam Lu are senior management of DS Shopfitters;
(i)whilst they claim they have taken some unspecified improvements (in respect of payroll, which he submits is mandated by the ATO), the Respondents have not put in specific measures to address the breaches;
(j)the need for compliance with the Act is paramount, and
(k)the need for specific and general deterrence is high.
In relation to his submission that the individual Respondents are senior management, in his 2018 submissions Mr Yang submitted that they are the “brain and head” of DS Shopfitters. He makes the following further submissions:
·Ms Dong has accepted only some responsibilities, but continues to mislead the Court about her income, and positions in other companies (referring to her position in DS Group, which she does not disclose, and the page from her 2015 tax return), and that she is hiding behind her position in the company to limit the penalty that should be imposed;
·Ms Li shows no contrition and accepts no responsibilities, and continues to mislead the Court about her positions in other companies (as she did not disclose she is a company secretary of DS Group), and her income;
·Mr Sam Lu is a “de facto” director, has accepted only some responsibilities, but shows no contrition, and Mr Yang speculates that he must be a “de facto” director of DS Group.
In sum, the Respondents’ submissions reflect the stated income position of each individual Respondent set out in their affidavit, say that any pecuniary penalty will have a significant effect on Ms Dong (and likely be paid from joint family resources), and on Ms Li, and whilst accepting that Mr Sam Lu’s liability is greater than Ms Dong’s and Ms Li’s, submit that any penalty would be commensurate with Mr Sam Lu’s capacity to pay, improvements in the company’s systems, and his and its lack of antecedent breaches of the Act. They seek a set‑off as I have noted above at [38].
CONSIDERATION OF EVIDENCE AND SUBMISSIONS
Mr Yang makes a number of assertions about the individual Respondents, as to their credit, degree of disclosure, involvement in other businesses, and as I have summarised above.
I have regard to his submissions to the extent they are substantiated by relevant documentary evidence (and here I give him the benefit of the material annexed to his most recent affidavit), or identify inconsistencies between the individual Respondent’s evidence in relation to this penalty determination, and the findings in Yang v DS Shopfitters, that are not explained. Except in these limited respects, Mr Yang’s submissions are speculative, and without foundation. I do not accord them any weight.
DS Shopfitters
The evidence at the first hearing did not substantiate Mr Yang’s claim that DS Shopfitters is a “phoenix shell company”; nor does the material he has adduced in relation to penalty alter that position. The contention is without foundation. I reject it.
In Yang v DS Shopfitters at [9]-[13] I found that the company was a small company, with $2 issued share capital. I accept Mr Sam Lu’s evidence that the number of employees varied with the work available. I accept that the company has implemented changes to its employee payment systems and that its accountants have assumed responsibility for pay slips, issued weekly: see Mr Sam Lu’s evidence referred to above at [46(e)].
Mr Sam Lu
I have referred above to Mr Yang’s submission that Mr Sam Lu is a “de facto” director of DS Shopfitters, and his speculations about his role in DS Group. Mr Sam Lu’s position in DS shopfitters and his role in the contraventions is described in and the subject of findings in Yang v DS Shopfitters, see at [22]-23], [276]-[277]. None of the material now adduced provides any basis to reconsider those findings. Mr Yang claims both that Ms Dong is hiding her income and position, and that Mr Sam Lu is the de facto director/controller of DS Group, rather than Ms Dong. Mr Yang’s speculations as to Mr Sam Lu’s “de facto” directorship in DS Group are unsubstantiated. I reject them.
In his affidavit in relation to this penalty determination, Mr Sam Lu accepts responsibility for DS Shopfitters actions and those of Ms Dong and Ms Li. I have regard to that expression of acceptance. The Respondents’ submissions acknowledge that Mr Sam Lu is an integral part of DS Shopfitters, and that his liability is greater than that of Ms Dong and Ms Li.
Ms Dong
As I have said above, Mr Yang submits that Ms Dong is attempting to hide her income in order to limit any penalties which may be imposed on her. It does not follow, however, from the income Ms Dong may have earnt in 2015 from a rental property (net $6,865), that she still owns that property or earns income from it. It does not follow from the facts that Ms Dong was and is a director and a company secretary of DS Group that she earns a director’s fee from her position.
That said, Ms Dong has not been fulsome in her affidavit in relation to this penalty determination (her only affidavit made in the proceeding), indeed, she has misstated her experience as a director, and been silent on her business activities in owning and earning income from commercial real estate (whether or not these are current activities). She expressly asserts to the Court that she was a novice director as at 2015, with no business acumen. She represents herself and as a “compliant dupe” for her husband (as described in the Respondents’ submissions). Her positions in DS Group, and her ownership of the rental property (at least as at 2015), reveal her to be a more experienced director and business woman, than she claims.
Ms Dong’s position in DS Shopfitters, and her involvement in its activities and in the contraventions is the subject of the evidence, consideration and findings in Yang v DS Shopfitters: [217]-[220], [260]-[268]; see also at [213]. The evidence and findings there do not support the construction that Ms Dong was merely a passive director, nor one who simply followed her husband’s direction. Whilst I accept Mr Sam Lu’s taking responsibility for the actions of Ms Dong, given the content of her communications set out in Yang v DS Shopfitters, and her conduct there discussed, and the above evidence, I do not accept her avowal now that she just followed her husband’s instructions, nor the Respondents’ submission that she was a “compliant dupe”, as excusing her from responsibility or penalty from the representations made, and actions undertaken in her name, and thus her involvement in the company’s contraventions.
Whilst she is no longer a director of the company, and whilst she accepts responsibility for the documents in her name, Ms Dong does not express any contrition, nor give any assurance that she will take greater care in the future.
Ms Li
Ms Li states that her income is $39,000 per annum, and that her sole employer is DS Shopfitters. Mr Yang submits, and the evidence discloses, that Ms Li is also a company secretary of DS Group.
In Yang v DS Shopfitters at [20], and at [23], I found that Ms Li was paid $74,724 per annum as at July 2016 when she succeeded Mr Yang as clerk and accountant after Mr Yang was injured. At [123]-[126] I discussed and made findings concerning this salary and Mr Sam Lu’s evidence seeking to justify that salary that Ms Li worked for him in two companies, although there was no evidence that he had any role in any other company than DS Shopfitters.
Ms Li does not provide any explanation about the difference between her previous salary and her present income.
I considered the evidence as to her communications regarding Mr Yang’s wages and with CGU Insurance in Yang v DS Shopfitters, and made findings consequent upon that consideration at [130]-[143], and as to her involvement in the contraventions also at [273]-[275].
Ms Li now says that she felt if she didn’t comply with directions and instructions from Mr Sam Lu her employment may be in jeopardy. She provides no basis for this expression of her feelings. She did not disclose in her 2020 affidavit her role as company secretary in DS Group, a company owned by the wife of the person at whose mercy she says the continuance of her employment may be in jeopardy if she did not follow his directions.
Her position as company secretary of DS Group is a responsible position. Her appointment in March 2018, and continued holding of the position of company secretary, demonstrates that she is held in sufficient regard to be entrusted with a position of responsibility.
Ms Li accepts no responsibility for her actions, nor her involvement in the contraventions, she expresses no contrition, nor gives any assurance that she has learnt from the findings and conclusions set out in Yang v DS Shopfitters.
Whilst it may be accepted that Ms Li felt that her employment was in jeopardy if she didn’t follow directions, I consider the facts that she did not disclose her position in DS Group, does not explain her difference in income, does not provide any detail of the claimed improvements in the company’s payroll system, and expresses no responsibility, or contrition are relevant matters to take into account in my determination of the penalty to be imposed on her.
PENALTY ASSESSMENT
Determination of the penalty for each contravention – relevant factors
I next turn to consider the factors listed in Kelly v Fitzpatrick, as applicable to the present determination. As I have observed above, they are not mandatory criteria, but provide guidance on the factors that inform my consideration as to the exercise of my statutory discretion in determining the penalties for the contraventions. It is convenient to deal with those considerations under the following subheadings.
Nature and extent of conduct
In each case, the nature and extent of the relevant conduct was discussed at length in Yang v DS Shopfitters.
Circumstances
Again, the relevant circumstances were discussed at length in Yang v DS Shopfitters. They need not be repeated here, other than to highlight a few circumstances.
Mr Yang was employed in a small, family company. At the time he was a new Australian. The company had poor, ad hoc, or non‑existent payroll (pay slips, and PAYG) and superannuation guarantee reporting systems. Its management appears to have been equally ad hoc. The consequences of DS Shopfitters’ failure to provide pay slips are identified in Yang v DS Shopfitters at [94]-[96]. Much of the consequent distress and dispute regarding pay, PAYG payments to the ATO, and superannuation underpayments could have been minimised or dealt with promptly had DS Shopfitters, and its officers and employees, met its obligations under the Act.
DS Shopfitters’ support and that of the individual Respondents consequent upon Mr Yang’s injury was notable by its absence; its subsequent engagement with CGU Insurance, was reprehensible (see Yang v DS Shopfitters at [141]-[143]; its behaviour leading to Mr Yang’s constructive dismissal, was similarly reprehensible (see Yang v DS Shopfitters esp. at [220]-[223], [227]-[228], [238]-[243]).
Nature and extent of loss and damage
As to the nature and extent of any loss or damage sustained as a result of the contraventions, these were recorded in Yang v DS Shopfitters at [278]-[280], [283] (noting that other non‑payments, and underpayments are also there recorded), and see amounts and payments identified in paragraphs 5 and 6 orders made 22 May 2020, and the orders made 12 June 2020, and 17 July 2020. For Mr Yang, the loss or damage was not insignificant.
Any similar conduct
Contrary to the submissions made by Mr Yang, there is no evidence of similar previous conduct by the Respondents. Mr Sam Lu affirms that he is not aware of any other similar conduct of DS Shopfitters, Mr Yang’s suspicions of any of the individual Respondents involvement in alleged (but not established) contravening conduct of the third party, DS Group, are unsubstantiated.
Whether contraventions were properly distinct or arose out of the one course of conduct
As I have said, each of the contraventions of s 340 are distinct, and they are each distinct from the s 536 Contravention.
Size of the business enterprise
In Yang v DS Shopfitters at [9], I described DS Shopfitters as a small, family company: see above at [56]. Mr Sam Lu’s evidence is to the same effect. Mr Yang’s submission that this is due to the “illegal phoenix activity” engaged in by the Respondents, is unsubstantiated, speculative and cannot be accepted. I conclude that it is a small business enterprise. Whilst this does not excuse its contraventions, nor those of the individual Respondents, I have regard to its size in determining the penalties for each of the contraventions accordingly.
Whether or not the contraventions were deliberate
For the following reasons, I conclude that each of the contraventions was deliberate. I give this factor considerable weight, accordingly.
(a) First s 340 Contravention - constructive dismissal by 20 March 2017
In Yang v DS Shopfitters in relation to this contravention, I found that at all relevant times DS Shopfitters’ conduct was deliberate. Mr Yang’s dismissal was the probable and foreseeable result of the actions and failures to act on the part of the company and each of the individual Respondents. Those actions and failures to act were deliberate.
Mr Sam Lu accepts responsibility. Given Ms Dong’s conduct as I found in the first judgment, and her economy with the truth in her affidavit, I do not accept that her actions were not deliberate, or that they were unknowing. Whilst I take into account that Ms Li says she felt that her employment may be in jeopardy, given her actions, I do not accept that her conduct was not deliberate, or was unknowing.
(b) Second s 340 Contravention – correspondence with CGU Insurance
I set out my consideration and findings in Yang v DS Shopfitters concerning the Respondents interactions with CGU Insurance regarding Mr Yang’s worker’s compensation payments (see at [130]-[140], [249]-[250]).
I conclude the conduct of DS Shopfitters, through Ms Li and Mr Sam Lu, was deliberate. The intention was to alter the position of Mr Yang to his detriment, and to stop or reduce the payments he was receiving from CGU Insurance. I conclude that those individual Respondents actions were deliberate. As I have said above, I do not accept that Ms Li’s actions were not deliberate, or that they were unknowing.
Ms Dong was no longer a director of the company at the time of its dealings with CGU Insurance, and I take this into account.
(c) Section 536 Contravention - pay slips
Whilst the evidence did not enable me to determine whether or not the company’s non‑compliance was knowing and systemic, or limited to its dealings with Mr Yang (see Yang v DS Shopfitters at [93]), at the hearing on liability the Respondents maintained that it was for Mr Yang to ask for a pay slip, not the obligation of DS Shopfitters to provide one voluntarily. I consider that this evidences that its conduct in relation to Mr Yang was deliberate, and that conduct of each of the individual Respondents conduct was likewise deliberate.
Whether senior management was involved in each contravention
I conclude that each of the individual Respondents was part of the management of DS Shopfitters, and as a small enterprise, part of senior management.
Contrition, corrective action and /or cooperation
The procedural history and the Respondents conduct up to and at the hearing on liability reveals that DS Shopfitters consistently denied any responsibility, denied its conduct contravened the Act, and that the Respondents sought to place blame on Mr Yang for the contraventions, and cover up their actions and inaction: see among other paragraphs, Yang v DS Shopfitters at [42], [66]-[69], [89], [139], [221], [228], [241], [264], [273], and [276]. I take this conduct into consideration.
Following upon delivery of judgment in Yang v DS Shopfitters, however, DS Shopfitters has taken corrective action in relation to its systems for issuing pay slips and ensuring employees are paid their entitlements: see above at [46], [56]. In addition it has promptly paid the amounts I concluded were due to Mr Yang, and did so without dispute: see notations of the Court made in the orders made on 12 June 2020 (at [1]), and 17 July 2020 (at [A]). I take these corrective actions and prompt payments into account.
Mr Yang submits that the improvements to which the Respondents refer are the “streamline processes driven by the ATO”. Mr Yang also submits that he believes the Respondents will not address the issues of providing pay slips to employees and taking adverse action against employees for exercising workplace rights, as Ms Dong, Ms Li, and Mr Sam Lu are still operating other companies. These submissions are unsubstantiated and cannot be accepted.
Mr Sam Lu has accepted responsibility for DS Shopfitters’ conduct, and that of each of the other Respondents. I take his acceptance of responsibility into account.
Mr Sam Lu has not, however, given any indication of any steps taken by him or at his direction to ensure that contraventions of the sort seen in this matter by the company, and its’ management treatment of Mr Yang, are not repeated by DS Shopfitters, or by any of the individual Respondents.
I have already noted Ms Dong’s acceptance that in signing or sending documents she became responsible for them, although she says she acted in accordance with her husband’s instructions, and did not participate in the day-to-day operations of DS Shopfitters, accepting however that a finding to the contrary was made (see Yang v DS Shopfitters at [265]). She does not unequivocally accept responsibility for her actions. I have already referred to Ms Li’s statement that she felt that her employment may be in jeopardy if she didn’t do what she did. Ms Li has not, however, accepted responsibility for her involvement.
None of the individual Respondents has expressed any contrition.
In short, there was no admission by the Respondents of any liability prior to judgment, nor since then by Ms Dong or Ms Li, there were no concessions proffered, and there is no evidence of any acceptance of wrongdoing save as I have said immediately above, and no expression of any suitable regret by any of the Respondents.
There is no warrant to give any discount on penalty for factors of contrition, concession or cooperation in this case.
Compliance with minimum standards – provision of an effective means for investigation and enforcement of employee entitlements
The s 340 Contraventions occurred in circumstances where Mr Yang had attempted to exercise a workplace right to investigate compliance with his workplace rights and entitlements, after being injured in the workplace, and secondly, in circumstances where he was reliant on worker’s compensation payments. In each case, the employer’s conduct was inconsistent with the minimum standards afforded to employees under the Act to enable employees an effective means for investigation and enforcement of their entitlements.
So too, the failure to provide an employee pay slips compromises that employee’s ability to monitor their employers’ compliance with industrial laws. Provision of pay slips is not optional, it is obligatory.
I consider that contraventions of this nature should be dealt with in a way which signifies the Court’s and the community’s disapproval. The amount of penalty should signal the importance of employers, and senior management and officers ensuring that they are aware of, and comply with, their employment law obligations, no matter the size of the business, or that management or directors are acting in accordance with instructions, as both Ms Dong and Ms Li claimed.
The need for specific and general deterrence
For the reasons I have already stated, I consider that specific deterrence is an important consideration in this case. Directors and senior management have a responsibility to ensure that they know of, and comply with the statutory and regulatory regimes under which business operates, including the Act and regulations. Mr Sam Lu is senior management. Notwithstanding that Ms Dong is no longer a director of DS Shopfitters, she holds other directorships. Ms Li is a company secretary. The individual respondents should be left in no doubt that contraventions of the Act cannot be tolerated, particularly having regard to the protective objects the Act seeks to secure.
Likewise, I consider that there is a need for general deterrence, for the reasons set out in the authorities to which I refer above, which are relevant in the present case.
CONCLUSION
Provisional penalty determination
I am conscious that the maximum penalty is a “yardstick” against which the appropriate penalty should be assessed. Having regard to the matters I have considered above, the contraventions, and the circumstances in which the contraventions occurred, I find that the penalty I should provisionally assess for each contravention is as follows:
Table 1 – Provisional Assessment
Contravention DS Shopfitters Ms Dong Ms Li Mr Sam Lu 1 First s 340 Contravention (Dismissal) 50%
$27,000
75%
$8,100
30%
$3,240
100%
$10,800
2 Second s 340 Contravention (Alter position) 50%
$27,000
n/a
30%
$3,240
100%
$10,800
3 S 536 Contravention (no pay slips) 50%
$13,500
100%
$5,400
50%
$2,700
80%
$4,320
Total Penalty
(provisional)
$67,500 $13,500 $9,180 $25,920 Adjustments
There are no common elements among any of the three contraventions outlined above sufficient to require adjustment of the separate penalties. Accordingly, I make no adjustment to the provisional assessments I have made.
Overall Assessment
Finally, I consider whether the provisional penalties I have assessed, viewed as a whole, are just and appropriate, and proportionate to the contravening conduct, also viewed as a whole, given the circumstances of the case, that is, applying the totality principle.
Considering the aggregate total of the penalties as provisionally assessed, and having regard to the above I find that the total would not be just and appropriate. Therefore, I apply a totality discount to each of the Respondents of 30%. Accordingly, having regard to the totality principle, I assess the penalties as follows:
Table 2 – Penalties
Contravention DS Shopfitters Ms Dong Ms Li Mr Sam Lu 1 First s 340 Contravention (Dismissal) $18,900 $5,670 $2,268 $7,560 2 Second s 340 Contravention (Alter position) $18,900 n/a $2,268 $7,560 3 S 536 Contravention (no pay slips) $9,450 $3,780 $1,890 $3,024 Total Penalty $47,250 $9,450 $6,426 $18,144
As referred to at [38] above, as agreed by the parties and previously noted by the Court, the penalties imposed on DS Shopfitters will be set‑off by the amount of $5,968.22. Accordingly, the net total penalties imposed on DS Shopfitters will be $41,281.78.
DISPOSITION
Further to the findings and conclusions in Yang v DS Shopfitters, and in particular to the paragraphs to which I have referred in these reasons, declarations should be made in respect of the conduct of each of Ms Dong, Ms Li, and Mr Sam Lu.
In respect of Ms Dong, declarations to the following effect will be made:
(a)that Ms Dong contravened the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of s 340(1) of the Act in respect of its conduct in dismissing Mr Yang; and
(b)that Ms Dong contravened the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of s 536 of the Act in respect of its failure to provide Mr Yang with pay slips,
see [3] and [61] above; see also Yang v DS Shopfitters: [260]-[268].
In respect of Ms Li, declarations to the following effect will be made:
(a)that Ms Li contravened the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of s 340(1) of the Act in respect of its conduct in dismissing Mr Yang;
(b)that Ms Li contravened the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of s 340(1) of the Act in respect of its conduct in emailing CGU Insurance in July 2017; and
(c)that Ms Li contravened the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitter’s contravention of s 536 of the Act in respect of its failure to provide Mr Yang with pay slips,
see [3] and [66] above; see also Yang v DS Shopfitters: [273]-[275].
In respect to Mr Sam Lu, declarations to the following effect will be made:
(a)that Mr Sam Lu contravened the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention of s 340(1) of the Act in respect of its conduct in dismissing Mr Yang;
(b)that Mr Sam Lu contravened the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitters’ contravention 340(1) of the Act in respect of its conduct in emailing CGU Insurance in July 2017; and
(c)that Mr Sam Lu contravened the Act by reason of being involved in, for the purposes of s 550 of the Act, DS Shopfitter’s contravention of s 536 of the Act in respect of its failure to provide Mr Yang with pay slips,
see [3] and [57] above; see also Yang v DS Shopfitters: [276]-[277].
I believe that the total penalties set out in Table 2 are just and appropriate. Taking into account the set‑off referred to in [106] in respect of the amount payable by DS Shopfitters, I will order that the Respondents each pay total penalties as follows:
DS Shopfitters $41,281.78 Ms Dong $9,450 Ms Li $6,426 Mr Sam Lu $18,144
The Respondents are to pay Mr Yang the above amounts within 28 days.
I certify that the preceding one hundred and twelve (112) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Baird. Deputy Associate:
Dated: 15 October 2021
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