Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No.2) [2019] FCCA 2638 (20 September 2019)

Last Updated: 20 September 2019

FEDERAL CIRCUIT COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v NSW MOTEL MANAGEMENT SERVICES PTY LTD & ORS (No.2)

[2019] FCCA 2638

Catchwords: INDUSTRIAL LAW – Application for imposition of civil penalties – contraventions of the Fair Work Act 2009 (Cth) – respondents made certain admissions – findings made in relation to remaining issues – appropriate penalty for contraventions by respondents.

Legislation: Fair Work Act 2009 (Cth) ss.536, 546, 550, 551, 557, Evidence Act 1995 (Cth) s.191 Crimes Act 1914 (Cth) s.4AA

Cases cited: Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No.2) [2018] FCCA 1935 Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No. 3) [2018] FCCA 2330 Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors [2019] FCCA 1055 Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors [2017] FCCA 416 Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No.2) [2017] FCCA 2759 Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors [2018] FCCA 508 Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 Fair Work Ombudsman v Phua & Foo Pty Ltd [2018] FCA 137 Gibbs v The Mayor, Councillors and Citizens of City of Altona [1992] FCA 374; (1992) 37 FCR 216, 223 McIver v Healey [2008] FCA 425 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 Kelly v Fitzpatrick [2007] FCA 1080 Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 Parker v Australian Building and Construction Commission [2019] FCAFC 56 Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39 Pearce v R (1998) HCA 57 Construction, Forestry, Mining and Energy Union v State of Victoria No. 2 [2013] FCA 1034 Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408 Rocky Holdings Proprietary Limited v Fair Work Ombudsman [2014] FCAFC 62 Fair Work Ombudsman v Lohr [2018] FCA 5 Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union (the Hutchison Ports Appeal) [2019] FCAFC 69 Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) [2019] FCAFC 59 Transport Workers’ Union of Australia v Registered Organisations Commissioner [No.2] [2018] FCAFC 203 Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97 Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73 Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171 Australian Building and Construction Commissioner v Construction Forestry, Mining and Energy Union [2017] FCAFC 113 Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 338 Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181 Australian Competition and Consumer Commission v Penital Limited [2018] FCA 491 Glenn Jordan v Mornington Inn Pty Ltd [2007] FCA 1384 Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 Fair Work Ombudsman v Han Investments Pty Ltd [2017] FCA 623 Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3 Bomanite Pty Ltd v Slatex Corporation Australia Pty Ltd & Ors [1991] FCA 536 Eva v Southern Motors Box Hill Pty Ltd [1977] FCA 2; (1977) 30 FLR 213 Fair Work Ombudsman v AJR Nominees Pty Ltd (No 2) [2014] FCA 128 Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union [2008] FCAFC 170 Cousins v Merringtons Pty Ltd & Anor (No.2) [2008] VSC 340

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

NSW MOTEL MANAGEMENT SERVICES PTY LTD

Second Respondent:

MICHAEL PARKES

Third Respondent:

ROWENA SIOCO PARKES

File Number:

MLG 661 of 2016

Judgment of:

Judge O'Sullivan

Hearing date:

29 July 2019

Date of Last Submission:

29 July 2019

Delivered at:

Melbourne

Delivered on:

20 September 2019

REPRESENTATION

Counsel for the Applicant:

Mr Avalone

Solicitors for the Applicant:

Fair Work Ombudsman

Counsel for the Respondents:

Ms Kapitaniak

Solicitors for the Respondents:

Stonier & Associates

ORDERS
First Respondent

(1) Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) (FW Act), the First Respondent pay penalties of $15,622.75 in respect of the contraventions set out in declarations 2(a) and 2(l) of the Orders dated 22 August 2018.
(2) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $15,622.75 in respect of the contravention set out in declaration 2(b) of the Orders dated 22 August 2018.
(3) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $8,700.00 in respect of the contravention set out in declaration 2(c) of the Orders dated 22 August 2018.
(4) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $13,005.00 in respect of the contravention set out in declaration 2(d) of the Orders dated 22 August 2018.
(5) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $28,627.75 in respect of the contravention set out in declaration 2(e) of the Orders dated 22 August 2018.
(6) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $0.00 in respect of the contravention set out in declaration 2(f) of the Orders dated 22 August 2018.
(7) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $15,622.75 in respect of the contravention set out in declaration 2(g) of the Orders dated 22 August 2018.
(8) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $15,622.75 in respect of the contravention set out in declaration 2(h) of the Orders dated 22 August 2018.
(9) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $28,627.75 in respect of the contraventions set out in declarations 2(i) and 2(j) of the Orders dated 22 August 2018.
(10) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $13,005.00 in respect of the contravention set out in declaration 2(k) of the Orders dated 22 August 2018.
(11) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $4,335.00 in respect of the contravention set out in declaration 2(m) of the Orders dated 22 August 2018.
(12) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $10,838.00 in respect of the contraventions set out in declarations 2(o), 2(p) and 2(q) of the Orders dated 22 August 2018.
(13) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $6,502.00 in respect of the contraventions set out in declarations 2(r) and 2(s) of the Orders dated 22 August 2018.
(14) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $15,173.00 in respect of the contravention set out in declaration 2(t) of the Orders dated 22 August 2018.
(15) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $14,347.75 in respect of the contravention set out in declaration 2(u) of the Orders dated 22 August 2018.
(16) Pursuant to section 546(1) of the FW Act, the First Respondent pay penalties of $14,347.75 in respect of the contravention set out in declaration 2(v) of the Orders dated 22 August 2018.

Second Respondent

(17) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $3,325.00 in respect of the contraventions set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contraventions of the First Respondent set out in declarations 2(a) and 2(l) of the Orders dated 22 August 2018.
(18) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $3,325.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contravention of the First Respondent set out in declaration 2(b) of the Orders dated 22 August 2018.
(19) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $2,040.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contravention of the First Respondent set out in declaration 2(c) of the Orders dated 22 August 2018.
(20) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $3,060.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contravention of the First Respondent set out in declaration 2(d) of the Orders dated 22 August 2018.
(21) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $8,160.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contravention of the First Respondent set out in declaration 2(e) of the Orders dated 22 August 2018.
(22) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $0.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contravention of the First Respondent set out in declaration 2(f) of the Orders dated 22 August 2018.
(23) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $5,100.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contravention of the First Respondent set out in declaration 2(g) of the Orders dated 22 August 2018.
(24) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $5,100.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contravention of the First Respondent set out in declaration 2(h) of the Orders dated 22 August 2018.
(25) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $8,160.00 in respect of the contraventions set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contraventions of the First Respondent set out in declarations 2(i) and 2(j) of the Orders dated 22 August 2018.
(26) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $3,060.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contravention of the First Respondent set out in declaration 2(k) of the Orders dated 22 August 2018.
(27) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $1,020.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contravention of the First Respondent set out in declaration 2(m) of the Orders dated 22 August 2018.
(28) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $2,550.00 in respect of the contraventions set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contraventions of the First Respondent set out in declarations 2(o), 2(p) and 2(q) of the Orders dated 22 August 2018.
(29) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $1,530.00 in respect of the contraventions set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contraventions of the First Respondent set out in declarations 2(r) and 2(s) of the Orders dated 22 August 2018.
(30) Pursuant to section 546(1) of the FW Act, the Second Respondent pay penalties of $3,570.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to his involvement in the contravention of the First Respondent set out in declaration 2(t) of the Orders dated 22 August 2018.

Third Respondent

(31) Pursuant to section 546(1) of the FW Act, the Third Respondent pay penalties of $2,040.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to her involvement in the contravention of the First Respondent set out in declaration 2(c) of the Orders dated 22 August 2018.
(32) Pursuant to section 546(1) of the FW Act, the Third Respondent pay penalties of $4,080.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to her involvement in the contravention of the First Respondent set out in declaration 2(u) of the Orders dated 22 August 2018.
(33) Pursuant to section 546(1) of the FW Act, the Third Respondent pay penalties of $3,880.00 in respect of the contravention set out in declaration 3 of the Orders dated 22 August 2018 relating to her involvement in the contravention of the First Respondent set out in declaration 2(v) of the Orders dated 22 August 2018.

Other matters

(34) Pursuant to section 546(3)(a) of the FW Act, the Respondents pay their respective penalty amounts in orders [1] to [33] to the Commonwealth, within 28 days of the date of the order.
(35) The Applicant has liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.

FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE

MLG 661 of 2016

FAIR WORK OMBUDSMAN

Applicant

And

NSW MOTEL MANAGEMENT SERVICES PTY LTD

First Respondent

And

MICHAEL PARKES

Second Respondent

And

ROWENA SIOCO PARKES

Third Respondent

REASONS FOR JUDGMENT

“...there are problems in the hospitality industry...a substantial problem with compliance...a growing industry with a reasonably vulnerable workforce characterised by youth, transience (reflected also in the high proportion of workers who are visa holders), language difficulties...employees ...in a weak bargaining position and have limited ability to complain or seek rectification. The temptations and opportunity to exploit such a workforce require penalties of a scale that will help to deter ...behaviour of [that] kind...”^[1]

1. This matter concerns the penalties that should be imposed on each of the respondents as a result of findings they had contravened various provisions of the Fair Work Act 2009 (Cth) (“the FW Act”) whilst operating a motel business.
2. On 20 July 2018, the Court published reasons for judgment in Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No 2) (2018) FCCA 1935 (“the Liability Decision”). The Liability Decision dealt with allegations against the respondents arising from the engagement of four employees.^[2] The Employees, who were Filipino nationals, were engaged by the first respondent on what the applicant described as a “two for the price of one” basis at a number of regional motels in Victoria, New South Wales and the ACT.
3. On 22 August 2018, declarations were made, to give effect to the findings in the Liability Decision, that the respondents had contravened various civil remedy provisions of the FW Act. Those declarations were made for the reasons set out in Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No 3) (2018) FCCA 2330 (“the Declarative Decision”).
4. The Court then fixed the proceedings for a penalty hearing and there was a timetable made for the filing of material by the parties. After a number of adjournments, the circumstances of which were dealt with in Fair Work Ombudsman v NSW Management Services Proprietary Limited & Ors (2019) FCCA 1055, the matter came before the Court for a penalty hearing on 29 July 2019.
5. The factual and procedural background is recorded in the Liability Decision at paragraphs [3] to [29] the S.O.A.F. and the amended S.O.A.F at Annexure A thereof. The Declarative Decision gave effect to the findings made in the Liability Decision. A useful summary (prepared by the applicant) of the declarations made therein is attached at Annexure A to these reasons.
6. For the purposes of these reasons terms defined in the Liability Decision and the Declarative Decision, which should be read in conjunction with these reasons, have the same meaning in these reasons unless otherwise indicated.
7. These reasons record why the penalties set out at the beginning of these reasons for decision are an appropriate penalty for the conduct engaged in by each of the respondents set out in the Liability Decision and as a result of the contraventions recorded in the Declarative Decision.

The penalty hearing

8. At the penalty hearing, the applicant was represented by Mr Avallone of Counsel. The respondents were represented by Ms Kapitaniak of Counsel.
9. The applicant relied on the amended S.O.A.F and a number of the affidavits that had been filed and were referred to in the Liability Decision. These included the affidavits of Mr Gagate, Ms Virata, Ms Monleon, Mr Tan, Inspector Hurrell and the second respondent.^[3]
10. The applicant also relied on the:
    1. affidavits of Mr Thomas filed on 31 August 2018 and 19 December 2018;
    2. affidavit of Mr Gagate filed on 31 August 2018;
    100. affidavit of Mr Tan filed on 31 August 2018;
    4. the submissions filed on 16 November 2018, 19 December 2018 and 30 January 2019.
11. For the purposes of the penalty hearing the respondents relied on:
    1. affidavit of Mr Lochlainn Parkes filed on 29 October 2018.
    2. affidavit of the second respondent filed on 30 October 2018;
    100. affidavit of the third respondent filed on 30 October 2018;
    4. affidavit of Ms Paige Becker filed 26 November 2018;
    5. affidavit of Mr Teifi Caron filed on 26 November 2018;
    6. affidavit of Ms Melinda Ryan filed on 30 November 2018;
    7. affidavit of Ms Patricia Blake filed on 30 November 2018;
    8. affidavit of Ms Rochelle Caron filed on 4 December 2018;
    9. affidavit of Ms Mari-Grace Santos filed on 5 December 2018;
    10. affidavit of Mr Ponciano Santos filed on 6 December 2018; and
    11. the submissions filed on 21 December 2018.

Issue arising from affidavits

12. For the purposes of the penalty hearing the respondents filed a number of additional affidavits. The applicant, in written submissions filed prior to the penalty hearing addressed what was said to be the “weight to be attributed to character evidence” (in those affidavits) and submitted that much of the evidence in the additional affidavits was “inadmissible”.^[4]
13. The respondents’ written submissions filed 21 December 2018 addressed those issues raised by the applicant at paragraph [26] and submitted the applicant assumed “the law of evidence applies to evidence in penalty sentencing”.
14. Finally, the applicant’s submissions in reply filed 30 January 2019, referring to s.551 of the FW Act and the decision of the High Court of Australia in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46^[5], maintained the Evidence Act 1995 (Cth) applied to these proceedings.^[6]
15. It is respectfully concluded, for the reasons set out in the applicant’s submissions and submissions in reply, that the respondents’ position in written submissions on this issue should be rejected. In any event, and as matters transpired, at the penalty hearing both counsel requested the Court to receive the affidavit evidence despite the various objections and deal with the objections by according the evidence such weight as is considered appropriate.

Summary of additional affidavit material

Affidavits of Mr Luke Thomas

16. Mr Thomas is employed by the applicant in the role of Team Leader, Fair Work Inspector, Overseas Workers, in the Compliance and Enforcement Operations Group. In his affidavit sworn on 31 August 2018 he deposed to ASIC, real property, property valuation and mortgage searches carried out on the respondents. Mr Thomas also deposed to compliance of the accommodation and food services industry and to a general report carried out in relation to 457 Visa holders.
17. In Mr Thomas’ affidavit filed on 19 December 2018 he responded to evidence contained in the affidavits of Mr Teifi Caron and Ms Rochelle Caron which are referred to below. Mr Thomas was not required for cross examination but at the penalty hearing, and by agreement of Counsel, it was made clear the ACT Motel business referred to in those affidavits was now defunct and a number of pieces of real property were held by a self managed superannuation fund.

Affidavit of Mr Rolando Gagate

18. Mr Gagate was employed by the first respondent from early 2013 to mid 2014. In his affidavit he deposed to working for the first respondent in Halls Gap, the effect of not being paid his wages, discussions held with the second respondent regarding his salary package, discussions he had with the second and third respondents regarding permanent residency, arguments between himself and his partner at the time over money, and details as to the termination of his employment with the first respondent.
19. Mr Gagate was cross examined via video link. He maintained the second respondent had told him not to discuss the details of his “salary” and that his view was he and Ms Virata were engaged as one “package”.

Affidavit of Mr Michael Tan

20. Mr Tan was employed by the first respondent from late 2012 to early January 2015. In his affidavit he deposed to his employment with the first respondent, his lack of sick leave, details of his wages, directions from the third respondent to under record his hours of work and the details of his termination of employment with the first respondent.
21. Mr Tan was also cross examined via telephone link. Mr Tan maintained his evidence that during his time at Queanbeyan he did not believe he had “control” over the hours he worked. Mr Tan agreed in cross examination that following the end of his employment he had been paid by the first respondent and received a letter of apology.

Affidavit of Mr Lochlainn Parkes

22. Mr Lochlainn Parkes, who was not required for cross examination, is the son of the second and third respondents. In his affidavit he deposed to the negative impact he observed these proceedings to have had on his parents and himself.

Affidavit of second respondent

23. The second respondent in these proceedings, deposed in his affidavit filed 30 October 2018 to the following matters:
    1. the media coverage;
    2. motel endorsement loss;
    100. financial repercussions and predicament of (b);
    4. current state of the business;
    5. effect the proceedings have had on his family;
    6. his current health;
    7. his regret of his actions in relation to Mr Gagate and Mr Tan;
    8. his cooperation with the applicant throughout the investigation and subsequent legal proceedings;
    9. his corrective action; and
    10. his response to the affidavits of Mr Tan and Mr Gagate.
24. The second respondent was cross examined and confirmed that he knew when Ms Virata’s employment was terminated she had been the primary visa holder for Mr Tan. The second respondent also confirmed there had been “adverse publicity” about the first respondent’s business before the commencement of these proceedings. The second respondent acknowledged he was an “experienced hotelier” said he knew the “ins and outs”, had been a President of a division of the Australian Hotels Association, an employer organisation and knew about Award rates.
25. Notwithstanding these acknowledgements he did not go on in his evidence to explain how given this he believed the first respondent could employ Mr Tan and Mr Gargate (as part of a two for one package or couple arrangement with Ms Monleon and Ms Virata respectively). When taken to his affidavit evidence on the impact of these proceedings on the first respondent’s business the second respondent said “business fluctuates”.
26. Finally, the second respondent was asked questions in cross examination about his affidavit evidence regarding the first respondent’s business which made plain that, inter alia, it had been realising assets to pay down debt, the income earnt from the Halls Gap property had been maintained since it was acquired and if it was sold now it would realise a nett profit. Importantly in relation to the need for the respondents to pay off debt the second respondent’s evidence was that they had brought that situation upon themselves.

Affidavit of the third respondent

27. The third respondent in these proceedings who was not required for cross examination, deposed in her affidavit to the:
    1. history of her employment in Australia;
    2. effect of the proceedings on her health; and
    100. her response to Mr Gagate’s affidavit.

Affidavit of Ms Paige Becker

28. Ms Becker who was an employee of the second and third respondents was not required for cross examination. She deposed in her affidavit that she was employed between September 2005 and May 2009, at the former Embassy Motel in Deakin in the ACT as a receptionist and then as the functions coordinator. Ms Becker deposed to being paid above the award and receiving all her correct employee entitlements and enjoyed working for the second and third respondents.

Affidavit of Mr Teifi Caron

29. Mr Caron is the son-in-law of the second and third respondents’ and was not required for cross examination. He deposed in his affidavit of the financial and emotional effect these proceedings he observed had had on the second and third respondents.

Affidavit of Ms Melinda Ryan

30. Ms Ryan is currently employed by the first respondent as a conference and events coordinator and was not required for cross examination. Ms Ryan deposed in her affidavit to her positive experience of working with the second and third respondents and the effect she observed of these proceedings on the business and wellbeing of the second and third respondents.

Affidavit of Ms Patricia Blake

31. Ms Blake is a former employee of the second respondent and was not required for cross examination. Ms Blake deposed in her affidavit that she was paid above the award wage, received all her correct employee entitlements and said she had a positive working relationship with both the second and third respondents.

Affidavit of Ms Rochelle Caron

32. Ms Caron is the daughter of the third respondent and step daughter of the second respondent and was also not required for cross examination. In her affidavit Ms Caron deposed to the effect she observed the proceedings had had on the second and third respondents and her positive working experience she had while employed by the second and third respondents.

Affidavit of Ms Mari-Grace Santos

33. Ms Santos is a former employee of the second and third respondents and was not available for cross examination. She deposed in her affidavit that she was employed on a 457 visa and worked for the second and third respondents between 2013 until 2017. She deposed she was provided with all employee entitlements and was treated fairly throughout her employment with the second and third respondents.

Affidavit of Mr Ponciano Santos

34. Mr Santos is the husband of Ms Mari-Grace Santos and is also a former employee of the second and third respondent and as a result of an agreed amendment to his affidavit was not required for cross examination. Mr Santos deposed to having a positive working relationship with the second and third respondents, and observing the negative effect on them as a result of these proceedings.

Summary of affidavit material

35. The affidavit material, not surprisingly, was not of a great deal of assistance in resolving the competing positions of the parties on the appropriate penalty. Insofar as the applicant’s affidavit material was concerned (aside from the evidence of Mr Tan and Mr Gargate which addressed the impact of the contraventions on them) ultimately it was not controversial. In relation to the respondents’ affidavit material, this contained a good deal of self-serving and hearsay material on which little weight will be placed. It served (no doubt from their point of view) to illustrate how contrite the respondents were and why what went on here was an aberration. To the extent it was relevant most of it was in relation to the need for specific deterrence, corrective action, contrition and other factors relevant to accessing penalty and will be taken into account in that context.
36. Ultimately, the Court has proceeded on the basis that inadmissible evidence will not be taken into account and the remainder has been accorded such weight as it deserves.

Summary of position of the parties

37. The applicant now seeks orders against the respondents imposing civil penalties pursuant to s.546 of the FW Act for the contraventions recorded in the Declarative Decision. The respondents concede the contraventions warrant the imposition of a civil penalty but take issue with the submissions of, and the penalties sought by, the applicant.

Applicant’s position

38. In the applicant’s written submissions filed prior to the penalty hearing, it was contended that a “just reflection of the contravening conduct” would result in penalties of up to $295,000 for the first respondent, $59,000 for the second respondent and $10,000 for the third respondent.

Respondents’ position

39. In written submissions filed prior to the penalty hearing, the respondents describe the penalties sought by the applicant as excessive. The respondents’ written submissions addressed what was said to be their early and extensive admissions, contrition and corrective action, along with a number of other mitigating factors, before taking the position that a “moderate penalty” for each of them was “justified”. The respondents’ written submissions contended that two sentencing principles were of particular importance in this case. They were the value of general deterrence and that the Court should not punish separately acts which were in truth a course of conduct.^[7] The respondents’ position was, taking into account what they said were all of the mitigating factors, a “modest penalty is all that can be justified”.

Principles relevant to the determination of penalty

40. The applicant’s submissions filed 16 November 2018 identified how the principles of the determination of penalty should be applied.^[8] Those submissions referred to Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 at [36]. In that decision it was recorded that the approach of the Court in determining penalties involves the following steps:
    1. Step One: The Court is to identify the separate contraventions involved. For the purposes of s 539(2), each contravention of an obligation located in the FW Act constitutes a separate contravention of a civil remedy provision of the FW Act;^[9]
    2. Step Two: The Court should consider whether any of the breaches taken together constitute a single course of conduct pursuant to s 557(1) such that multiple contraventions should be treated as a single contravention;
    100. Step Three: To the extent that two or more contraventions have common elements, this should be taken into account in considering what an appropriate penalty is in all the circumstances 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.^[10] Importantly, this third task is distinct from, and in addition to, the final application of the “totality principle”;^[11]
    4. Step Four: The Court will consider an appropriate penalty to impose in respect of each contravention, whether a single contravention, a course of conduct, or group of contraventions, having regard to all of the circumstances of the case; and
    5. Step Five: Having fixed an appropriate penalty for each contravention, the Court should then review the aggregate penalty so as to determine whether it is an appropriate response to the contravening conduct.^[12] In doing so, the Court should apply an “instinctive synthesis” in making this assessment.^[13] This final step is commonly known as the “totality principle”.^[14]
41. The parties’ submissions referred to the range of considerations “to which regard may be had” for the imposition of penalties.^[15] The parties’ submissions referred to the non-exhaustive considerations Tracey J identified in Kelly v Fitzpatrick [2007] FCA 1080^[16], which his Honour adopted from the judgment of Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7, as relevant to assessing the amount of penalties which were:
    • “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 breaches;
      • d. whether there had 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 deliberate;
      • h. whether senior management was involved in the breaches;
      • i. whether the party committing the breach had exhibited contrition;
      • j. whether the party committing the breach had taken corrective action;
      • k. whether the party committing the breach had cooperated with the enforcement authorities;
      • l. the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
      • m. the need for specific and general deterrence.”

Value of penalty unit

42. Under s.12 of the FW Act, a “penalty unit” has the meaning by s.4AA of the Crimes Act 1914 (Cth). Until 28 December 2012, a penalty unit was $110. So far as is relevant for present purposes, from that date, the value of a penalty unit was $170. As recorded in the Liability Decision the majority of the contraventions occurred in that latter period.
43. In my view, the maximum penalty to be applied in respect of each of the contraventions is to be assessed by reference to the higher amount. This is because by operation of the statutory course of conduct provisions in the FW Act much of the conduct in question is being treated as a single contravention and covers the period after the increase in the value of the penalty unit.^[17]

The contraventions

44. The applicant’s submissions filed 16 November 2018 helpfully contained an annexure (Annexure A) that identified each of the contraventions recorded in the Declarative Decision (for the reasons found in the Liability Decision).
45. For the purposes of these reasons it is useful to adopt that annexure which is Annexure A to these reasons as an accurate reflection of the identified contraventions.
46. Also at this stage it is important to note, as was documented in the applicant’s submissions^[18] that no penalty was sought for the contraventions of s.323(1)(a) of the FW Act. For the reasons set out in those submissions that position will be accepted.

Course of conduct & grouping

47. Section 557(1) of the FW Act provides as follows:
    • “For the purposes of this Part, two or more contraventions of 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.”
48. The parties agree that this is an important issue in determining a just and appropriate penalty in this case. However, they disagreed (in their written submissions at least) as to how the Court should give effect to the principle. The applicant’s written submissions filed 16 November 2018 address the issue at paragraphs [18] to [23]. The respondents took a different approach. In their written submissions filed 21 December 2018, the respondents’ position was set out as follows:
    • “5. If multiple contraventions arise from a single course of conduct or one transaction that fact is an important consideration in calculating the appropriate civil penalty.^[19] This accords with the long-held rule against double punishment. Ultimately this principle is based on fairness. That rule was described by the High Court in the following terms:
      • To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts.^[20]
    • 6. This protection against double (or more) punishment should be reflected in the penalties the Respondents face in this case. The contraventions in this case are, for the most part, a text-book example of one transaction or decision that has led to many contraventions.
    • 7. This is especially clear when one reviews the circumstances in which the contraventions concerning Mr Tan and Mr Gagate arose. Almost all of them[21] stem from a single, unlawful decision – namely the initial decision not to pay or not to pay adequately either of them. That one wrong decision necessarily attracted many separate contraventions. It had a compounding effect under the Act. A person who is not paid is underpaid and does not get pay slips, nor Saturday penalty rates, nor Sunday penalty rates, nor evening penalty rates, nor public holiday penalty rates, nor overtime, nor annual leave pay, nor annual leave loading and on and on the list goes. That is, from one act many contraventions flow. The penalty should be responsive to the one act, not to the number of contraventions which flow from it lest there be double or more punishment.
    • 8. The Court ought not penalise the Respondents for each separate contravention where a single unlawful decision is the unifying cause. To do so would be to ignore the context in which they occurred and to punish separately actions that were plainly part of a single course of conduct. These contraventions being part of a single course of conduct should be reflected in the penalty in order to avoid disproportion. Given the facts of this case, the principle is enlivened and should loom large in the Court’s assessment of penalty for the vast bulk of the contraventions.”
49. The applicant’s submissions in reply filed 30 January 2019 rejected the claim made in the respondents’ written submissions (but which was not pressed at the penalty hearing) that the contraventions ought be treated as a single transaction.^[22]
50. In Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (No 2)^[23] Buchanan J considered the application of s.719(2) of the Workplace Relations Act 1996, the legislative predecessor of s.557. He said as follows:

“On one view, the failure to make any of the required payments arose from a single course of conduct. They all arose from a determination by the respondents that no payment would be made upon the termination of employment of any of the employees, or the employees as a group. However, this approach gives insufficient attention to the separate legal character of the three forms of obligation earlier identified. I am satisfied that each of those forms of obligation requires separate recognition. I am not, however, satisfied that each individual example of defiance of an obligation is permitted separate recognition. In my view the individual examples, constituted by the failure to make payments to particular individual employees, arise out of a course of conduct in each of the three instances. Any penalty must be assessed taking that into account.”^[24]

51. In Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62 (“Rocky Holdings”) the Full Court rejected the respondents submissions in that case, that where there were two or more contraventions of s.44 and two or more contraventions of s.45 of the FW Act by each respondent, s.557 of the FW Act should be applied so that each contravention of s.44 and s.45 was taken to constitute a single contravention.
52. Rocky Holdings has been applied in subsequent cases. In Fair Work Ombudsman v Lohr [2018] FCA 5 Bromwich J set out the approach that should be taken following the decision in Rocky Holdings at paragraphs [29] to [34].
53. In Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union (the Hutchison Ports Appeal) [2019] FCAFC 69 the majority in the Full Court referred at [62] to [78] to Rocky Holdings and the issue of the common law course of conduct. At [92] the Full Court noted the latter was “a tool of analysis” and a Court was “not compelled to utilise the principle”.
54. In summary, s.557 does not apply to contraventions of different terms even if such contraventions arise out of the course of conduct and even if the contraventions only affect one person. Instead, s.557 applies to multiple contraventions of the one term (of, for example, a modern award), even where it may affect two or more persons.
55. The provisions of s.557(1) of the FW Act do not apply to the adverse action contraventions in this case because for the reasons referred to in the applicant’s submissions they are not prescribed by s.557(2) of the FW Act.
56. Given the written submissions made by the respondents it is appropriate to note the guidance on the common law sentencing principle of a course of conduct provided in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) [2019] FCAFC 59 at [124]. In that case, and by reference to Transport Workers’ Union of Australia v Registered Organisations Commissioner (No 2) [2018] FCAFC 203; (2018) 363 ALR 464 at [84] - [91], the Full Court stated at [124] as follows:
    • “In Transport Workers’ Union of Australia v Registered Organisations Commissioner [No 2] [2018] FCAFC 203; 363 ALR 464 at [84]–[91], the Full Court, referring to other judgments of the Full Court, considered the application of the course of conduct principle in the assessment of pecuniary penalties. The principles include the following:
    • (1) The purpose of the common law course of conduct principle is to ensure that, having regard to the circumstances (factual and legal), a party is not penalised more than once for the same conduct.
    • (2) That phrase should not simplistically be adopted to transfer multiple contraventions into one contravention, or, necessarily, to impose one penalty by reference to one maximum amount.
    • (3) The principle cannot, of itself, operate as a de facto limit on the penalty to be imposed.
    • (4) The application of the principle must be informed by the particular legislative provisions relevant to the proceedings. In particular, weight must be given to the fact that the legislature has deliberately and explicitly created separate contraventions for each relevant action.
    • (5) The application and utility of the principle must be tailored to the circumstances.
    • (6) A judge is not obliged to apply the principle if the resulting penalty fails to reflect the seriousness of contraventions.
    • (7) The task is to evaluate the conduct and its course and assess what penalty is, or penalties are, appropriate for the contraventions.
    • (8) It is necessary to examine all the conduct and enquire how its course and its explanation factually and legally informs the imposition of penalties, in order to avoid double punishment.
    • [see Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97 at [31]; Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 357 ALR 55 at [231]–[236]; Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171; 262 ALR 417 at [16]–[19]; Australian Building and Construction Commissioner v Construction Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 at [148].”^[25]
57. In relation to the written submissions made on behalf of the respondents on this issue, it is important to recall that bare identity of motive for commission of separate offences will seldom suffice to establish the same criminality in separate and distinct offending acts or omissions.^[26]
58. To the extent the respondents’ written submissions contended that the “unlawful decision” and its consequences should be reflected in the penalty to avoid disproportion that can be taken into account when grouping and when the Court comes to consider the issue of totality.
59. However, as matters transpired at the penalty hearing in submissions before the Court, Counsel for the respondents’ took the position that her clients did not “quibble” with the applicant’s submissions^[27] on the application of s.557 of the FW Act.
60. The applicant’s submissions filed 16 November 2018 set out, given the proper application of s.557 of the FW Act (noting it did not apply to the adverse action contraventions), the twenty one separate contraventions that resulted from the application of that provision.
61. The position of the applicant on the issue of the statutory course of conduct, which for the reasons set out above is accepted, is at Annexure B to these reasons.
62. I am satisfied that results in the respondents getting the proper benefit of s.557 for repeated breaches of the same applicable provision.

Grouping

63. The applicant addressed the issue of the appropriate grouping of the contraventions in submissions filed 16 November 2018 at paragraphs [24] to [31].
64. As with the position taken before the Court on the application of the statutory course of conduct, at the penalty hearing Counsel for the respondents said her clients did not “quibble” with the applicant’s position on the appropriate grouping of the contraventions.
65. The applicant’s submissions filed on 16 November 2018 set out at Annexure C the proposed grouping in light of its submissions. It is useful to reproduce Annexure C (from those submissions) as Annexure C to these reasons. This grouping results in sixteen separate contraventions for the first respondent. I am satisfied that grouping gives sufficient recognition to the inter relationship with the factual and legal elements of the contraventions for each of the respondents.
66. Given the approach in the authorities referred to above (and in the applicant’s submissions) in the circumstances of this matter and given the separate legal character of the obligations that were the subject of the contraventions recorded in the Declarative Decision, they should be grouped as follows:
    1. first respondent:

Contravention	Maximum penalty
Annual leave	$51,000
Annual leave on termination	$51,000
Cashing out annual leave	$51,000
Fair Work Information Statement	$51,000
Minimum hourly rates	$51,000
Saturday penalty rates	$51,000
Sunday penalty rates	$51,000
Public holiday penalty rates	$51,000
Overtime rates	$51,000
Evening penalty rates	$51,000
Failing to prepare roster	$51,000
Failing to make/keep records	$25,500
False records	$25,500
Pay slips	$25,500
Adverse action – threat	$51,000
Adverse action – direction	$51,000
Total	$739,500

2. second respondent:

Contravention	Maximum penalty
Annual leave	$10,200
Annual leave on termination	$10,200
Cashing out annual leave	$10,200
Fair Work Information Statement	$10,200
Minimum hourly rates	$10,200
Saturday penalty rates	$10,200
Sunday penalty rates	$10,200
Public holiday penalty rates	$10,200
Overtime rates	$10,200
Evening penalty rates	$10,200
Failing to prepare roster	$10,200
Failing to make/keep records	$5,100
False records	$5,100
Payslips	$5,100
Total	$127,500

100. third respondent:

Contravention	Maximum penalty
Cashing out annual leave	$10,200
Adverse action – threat	$10,200
Adverse action – direction	$10,200
Total	$30,600

67. This would result in a possible maximum penalty for the first respondent of $739,500, $127,500 for the second respondent and $30,600 for the third respondent.

Nature and extent of conduct

68. For the purposes of these reasons, it is only necessary to note that the applicant’s written submissions filed 16 November 2018 addressed this factor at paragraphs [39] to [55]. The respondents’ written submissions filed 21 December 2018 address this consideration at paragraph [24]. The applicant joined issue with those contentions in submissions in reply filed 30 January 2019 at paragraphs [11] to [14].
69. The Liability Decision set out the background to, and the nature of, the contravening conduct by the respondents.^[28] As the applicant’s submissions noted the Declarative Decision recorded the contraventions that, for each of the respondents, had either been admitted or were found proven in the Liability Decision.
70. The nature of the contraventions demonstrate a failure to provide minimum entitlements and to comply with basic requirements under the FW Act. The offending conduct by the respondents was a concerning array of contraventions of the FW Act including underpayments totalling $134,535.68, unauthorised cashing out of annual leave, breaches of record keeping and pay slip requirements, and adverse action contraventions.
71. Given the findings in the Liability Decision on adverse action it is important to note:
    • “[t]he opportunities for adverse action to be taken in a way that undermines entitlements to the benefits of workplace instruments [or laws] are widespread in today’s labour market...[a] clear message needs to be sent that a contravention will be accompanied by a substantial cost”^[29]

Circumstances in which conduct took place

72. The applicant’s submissions filed 16 November 2018 address this factor at paragraphs [56] to [65].
73. As recorded in the Liability Decision the circumstances surrounding the employment of both Mr Gagate and Mr Tan were redolent with the possibility of exploitation.
74. The benign paternalism that characterises the purported explanations of the respondents in their written submissions^[30] for their reasons for engaging Mr Gagate and Mr Tan belied the practical reality that through ignorance or mala fides the respondents (and in particular the second respondent) would have thought either arrangement was appropriate.
75. The adverse action contraventions occurred in aggravating circumstances which were in the shadow of the applicant’s investigation.

Nature and extent of loss or damage

76. The applicant’s submissions filed 16 November 2018 address this factor at paragraph [66] to [74].
77. The underpayments of $134,535.68 for Mr Gagate and Mr Tan occurred over 22 months and the size of the loss speaks for itself where the employees concerned were reliant on or should have been able to expect to receive at least their minimum entitlements under the FW Act.
78. The other contraventions including the adverse action contraventions illustrate the loss that is occasioned when the protections afforded against such unlawful conduct are ignored and those who could (and should) expect to enjoy that protection are left exposed to such unlawful conduct.

Similar previous conduct

79. The applicant’s written submissions filed 16 November 2018 address this factor at paragraphs [75] to [76]. The respondents’ written submissions filed 21 December 2018 contended there was “no other previous conduct of a similar character”.^[31] However, those submissions should be considered in light of the following:
    • “The absence of any evidence of previous contraventions by the respondent means, as Jessup J pointed out in Murrihy (No 2), that the respondent’s conduct must be measured in and of itself, without reference to previous conduct. I do not consider this as some kind of positive factor in the respondent’s favour, which seemed to be the implication from the respondent’s submissions. Especially in relation to unlawful discrimination, where the true reasons for conduct are often difficult to uncover, one cannot simply infer, as the respondent seemed to suggest the Court might, that this kind of conduct has not occurred before within the CFMEU. Nor can one infer that it has. Rather, the conduct stands to be assessed for what it has been found by the Court to be. In my opinion absence of evidence about prior contraventions that have been litigated and determined simply means there is no evidence of that nature which might otherwise have contributed to an increase in the penalty to be imposed.”^[32]
80. Accordingly, I will assess the relevant penalty in this case on the basis that the respondents have not previously engaged in similar conduct. But that in, and of itself does not warrant a discount.

Course of conduct

81. Matters relevant to this consideration have already been addressed earlier in these reasons.

Size of business

82. The applicant’s written submissions filed 16 November 2018 address this factor at paragraphs [77] to [85]. The respondents’ written submissions filed 21 December 2018 on this issue were at paragraph [28].
83. It is well established that the size and financial circumstances of the respondents’ do not exculpate breaches of workplace laws.
84. In submissions before the Court Counsel for the applicant, relying on his client’s written submissions, contended the evidence before the Court clearly demonstrated the financial and non financial difficulties the respondents’ complained of were “not a consequence of these proceedings”.
85. Whilst size of the business and its financial circumstances might be relevant to the question of the size of the penalty that should operate in order to properly give effect to specific deterrence^[33] there is also the issue that in considering the size of any penalty that capacity to pay is of less relevance than is the objective of general deterrence.^[34]

Whether breaches deliberate

86. The applicant’s submissions filed 16 November 2018 address this factor at paragraphs [86] to [91].
87. In this case the second respondent was the guiding mind of the first respondent. In the Liability Decision findings were made as to the second respondent’s awareness (given his statements in the record of interview with officers of the applicant) of the requirements under the FW Act. As the Liability Decision also records the adverse action contraventions whilst not deliberate were clearly reckless.
88. As stated in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181 at [131] where “any degree of awareness of the actual or potential unlawfulness of the conduct is proved then... the contravention is necessarily more serious.”
89. Accordingly, a level of penalty appropriate to those contraventions should be imposed.

Whether senior management involved

90. The applicant’s written submissions filed 16 November 2018 address this factor at paragraphs [92] to [94].
91. As noted in the Liability Decision, the second and third respondents are directors of the first respondent. The second and third respondents were at all material times involved in the day-to-day operations of the first respondent.
92. The second and third respondents were found to be accessorially liable for their involvement in a number of the contraventions by the first respondent. The Liability Decision addressed the controversy on those issues at paragraphs [328] to [366].
93. In this case there is no doubt that the senior management of the first respondent were involved in the contraventions as set out in the Liability Decision and recorded in the Declarative Decision.

Contrition, corrective action & co-operation

94. The applicant’s submissions filed 16 November 2018 address the issue of contrition at paragraphs [95] to [102]. The respondents’ submissions filed 21 December 2018 address the issue at paragraphs [12] to [16].
95. The applicant’s submissions filed 16 November 2018 address the issue of co-operation at paragraphs [103] to [108].
96. The underpayments were rectified in July 2016. The second and third respondents have both said they were embarrassed and ashamed as a result of the allegations made in these proceedings. It should also be acknowledged that the second respondent has sent a letter of apology to both Mr Gagate and Mr Tan.
97. The applicant was critical of the respondents as to whether, to the extent that they had done what was referred to above, it was either genuine or belated and merely affected for the purposes of the penalty proceedings. However, the applicant didn’t gainsay that there had been co-operation with enforcement authorities by the first respondent. It could hardly do otherwise.
98. The respondents’ written submissions on this issue were redolent with the same overweening attitude that sought to downplay the reason for the unlawful conduct in the first place (i.e. the claim it was to give the Employees a chance at a better life).
99. Whilst the attitude of the respondents may be distasteful, as was recognised by the applicant, the first respondent is entitled to a discount for its cooperation, notwithstanding the protracted nature of the proceedings.
100. In Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70, the Full Court of the Federal Court of Australia held as follows:
     • “...a discount should not be available simply because a respondent has spared the community the cost of a contested trial. Rather, the benefit of such a discount should be reserved for cases where it can be fairly shown that an admission of liability: (a) has indicated an acceptance of wrongdoing and suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate that course of justice.”
101. The first respondent made admissions in relation to many of the contraventions, did so very early in the proceedings, and agreed upon a S.O.A.F and the amended S.O.A.F referred to in the Liability Decision.
102. By taking these steps and attending to rectification of the underpayments when required to do so by the applicant, the first respondent demonstrated a level of contrition and facilitated the efficient conduct of these proceedings.
103. In this case the respondents are entitled to a discount for their contrition, cooperation and corrective action but not at the same amount given that different circumstances applied for the reasons set out in the Liability Decision as between the first respondent and the other respondents.

Compliance with minimum standards

104. The applicant’s submissions filed 16 November 2018 address this consideration at paragraphs [109] to [113].
105. As the High Court pointed out in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 at [55] (footnotes omitted):
     • “...whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at [52, 152], is primarily if not wholly protective in promoting the public interest in compliance”
106. A principle and fundamental object of the FW Act is the preservation of an effective safety net of employee entitlements and effective enforcement mechanisms. The substantial maximum penalties for failing to comply with minimum obligations under the FW Act reinforce the importance placed on compliance with minimum standards and an effective enforcement framework.
107. It is accepted that ensuring compliance with minimum standards is a very significant factor in this case. In Fair Work Ombudsman v Han Investments Pty Ltd [2017] FCA 623 in summarising the submissions of the applicant in that case the Court made the following comments, which in the context of this case are apposite:
     • 17.In short, it is submitted, unless an employer complies with the law and makes and keeps the employment records required to maintain an effective safety net for its employees, it makes them more vulnerable to exploitation and deprives them and the regulator (the FW Ombudsman) of an effective means of detecting and protecting their legal entitlements as employees.

18. The FW Ombudsman also submits that that the failure to keep the required records should not be seen as a lower order contravention. It strikes at the very foundation of a regulatory scheme designed to ensure employees are paid their legal entitlements, by making it much more difficult to determine when something has been wrongly denied and what it is that has been denied.

19. The FW Ombudsman contends that, in this case, the failure is particularly egregious in the case of employees who, for a variety of reasons, are uninformed or poorly informed about, and are denied, their legal entitlements. In such cases, the records and the regulator’s ability to review them, detect any wrongdoing and act on it is of vital importance.
20. In the case of vulnerable employees, the FW Ombudsman says, particularly temporary visa workers whose employment and residence in Australia is often transient and dependent on the ongoing support of their employer, the difficulties associated with detection and remedial action where the required records are not made and kept, or properly made and kept, is often further aggravated by an unwillingness by some such employees to take any action which might jeopardise their employment or continued residence. In such cases, the ability of the regulator to detect and act is essential. The safety net for all employees should not depend for its effectiveness on the visa status of those employees.

108. In the context of the objects of the FW Act requiring compliance with minimum standards, including minimum rates of pay and entitlements, the contraventions in this case involve an undermining of the statutory objects and purpose of the FW Act in a manner which is so egregious as to require a substantial penalty.

Specific and general deterrence

109. The overarching importance of deterrence as a means of ensuring compliance with statutorily ordained norms of behaviour, such as compliance with the FW Act, was confirmed by the High Court in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; (2018) 262 CLR 157 at [116], where the following statement was made by Keane, Nettle and Gordon JJ:
     • “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.”^[35] (emphasis added)
110. The applicant’s submissions filed 16 November 2018 address the issue of specific deterrence at paragraphs [118] to [120]. The respondents conceded in written submissions that there was a place for both general and specific deterrence in assessing appropriate penalties, but argued specific deterrence should not loom large.
111. Specific deterrence is directed to ensuring that a contravener is not prepared to embark upon the risk of engaging in the same contravening conduct in the future^[36]. In determining the need for specific deterrence, the Court should consider the respondents’ attitude to remorse and steps taken to prevent further contraventions.^[37]
112. The respondents’ submissions went into some detail as to the shock and shame it was said was felt at the publicity associated with these proceedings. The position of the respondents was to the effect that the publicity which these proceedings have attracted is a significant penalty in itself. The position of the respondents was that the Court should take this into account and find that, to a large extent, the objective of specific deterrence had already been achieved without the necessity for a substantial penalty to be imposed upon the respondents.
113. In Fair Work Ombudsman v AJR Nominees Proprietary Limited (No 2) (2014) FCA 128, it was said:
     • “46. There has been adverse media coverage of this case which I accept will have had some negative impact on the respondents both commercially and personally. I do not regard this as a mitigating factor. It is a common incident of the kind of unlawful conduct involved in this case.
     • 47. Indeed, the publication of information about compliance activities is an important part of the applicant's role as a regulator of workplace laws. A statutory function of the applicant is to promote compliance with the Act. Publicity of penalty proceedings is intended to deter others from contravening workplace laws.”
114. Whilst the respondents argued that specific deterrence was not necessary, for the reasons referred to above, publicity and embarrassment necessarily resulting from a media release are the “foreseeable consequences of the conduct engaged in”.^[38]
115. The applicant’s submissions filed 16 November 2018 address the issue of general deterrence at paragraphs [121] to [125]. As noted earlier, the respondents’ written submissions conceded there was a place for general deterrence in assessing the appropriate penalty. However, it was the respondents’ position there should be a moderation of its importance because of the issues referred to, and by reason of what was said to be the conduct of the applicant in these proceedings.
116. General deterrence is an important factor in fixing an appropriate penalty in these proceedings. Employers should be in no doubt that they have an obligation to comply with the FW Act, provide employees with correct entitlements, keep proper records and not take adverse action against their employees for prohibited reasons.
117. Counsel for the applicant in submissions before the Court, relying on his client’s written submissions, contended that given the agreed facts it was “right” there should be a measure of opprobrium attached to the “two for the price of one” arrangements that the first respondent entered into with the Employees.
118. In this context it was submitted that there was a “significant need for general deterrence” so it is clear that engaging 457 visa workers as part of a two for the price of one deal is unlawful.
119. As set out in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; (2018) 262 CLR 157 there is an important role for both specific and general deterrence in civil penalty decisions and no more so in this case given the findings made in the Liability Decision and the need to send a “potent” message to employers that conduct such as that referred in the Liability Decision will attract significant penalties.

Other matters raised in submissions

120. The respondents’ written submissions were critical of both the cost and the conduct of the proceedings.^[39] The applicant took issue with the “allegations” made in those submissions, noting, amongst other things, the legal arguments it had raised during the proceedings were not unreasonable, preposterous or tenuous, and rejected the submissions made by the respondent.^[40] The respondents’ written submissions also raised what was said to be the “personal costs” of the proceedings as a consideration to be taken into account when assessing the appropriate penalty.^[41] The applicant submitted the Court should not have regard to any costs incurred by the respondents as a relevant factor in respect of penalty.^[42]
121. The respondents in their written submissions and affidavit material referred to the media attention that followed the applicant’s investigation. Contrary to the claims made by or on behalf of the respondents, media attention does not operate as a mitigating factor nor does it reduce the need for specific deterrence in this case.
122. The authorities also indicate that generally, the impact of media coverage will only operate to mitigate the penalty where the effect of the media coverage has been “adverse” (see Eva v Southern Motors Box Hill Pty Ltd [1977] FCA 2; (1977) 30 FLR 213 (“Eva”) and Cousins v Merringtons Pty Ltd (No. 2) [2008] VSC 340 (“Cousins”).
123. The line of authority in relation to the use of media by government regulators demonstrates that the embarrassment suffered as a result of the publicity flowing from enforcement action is one of the prices to pay, or an “inevitable consequence” of the respondents’ conduct and is therefore not relevant in mitigating the penalty to be imposed.
124. There is nothing in the material before the Court in the present matter which suggests that the information released by the applicant was “adverse” in the sense described by the courts in Eva and Cousins. The media attention in this instance ought not to mitigate the penalties imposed upon the respondents.
125. The respondents, in their written submissions at least, were also critical of the applicant for what was said to be “litigation by deluge”. It is acknowledged that the first respondent cooperated and made certain admissions during the course of the proceedings. The Liability Decision sets out the course of those events. However, for the respondents to assert the applicant has engaged in “litigation by deluge” serves only to gloss over the opportunities (and indulgences) that were afforded to all the respondents during these proceedings.^[43]
126. The sad reality is that non compensable inconvenience and stress on individuals are significant elements of modern litigation.^[44] It is an unfortunate by product of litigation (and in no small part in this case the tactical and forensic decisions taken by the respondents presumably on advice) involving disputes over facts going back many years that such matters can become so protracted. The respondents’ criticisms of the applicant’s conduct (which Counsel for the respondents at the penalty hearing said were no longer agitated) are not substantiated.

Totality principle

127. The applicant’s written submissions filed 16 November 2018 address this issue at paragraphs [129] to [130]. While the respondents’ written submissions filed 21 December 2018 contended “should the Court adopt the applicant’s position, the Court would offend the principle of totality”.
128. Essentially the totality principle requires the Court, once it has arrived, in light of the evaluation of the relevant factors, at an appropriate aggregate penalty to examine one final time the aggregate penalty to determine whether it is appropriate.^[45] Whilst the penalty imposed must not be crushing or oppressive, it must nevertheless be proportionate to the seriousness of the conduct engaged in by the respondents. The application of the totality principle does not mean the penalties arrived at before its application must be reduced.
129. In this case the Court is not bound by the calculations provided by the applicant as set out in Annexure C or obliged to treat them as concessions which must be applied in favour of the respondents.
130. In the ultimate the respondents adduced no evidence sufficient to make out that the imposition of a penalty of the magnitude contemplated by the aggregate of the sums in Annexure C would have a crushing effect on them. I consider for the reasons set out below the aggregate amount for each of the respondents appropriate, just, and proportionate to the nature and magnitude of the contravening conduct.

Appropriate penalties

131. The maximum penalties have already been referred to and the position of the applicant on where (on a percentage basis) each of the grouped contraventions fall (which are largely accepted) is set out at Annexure C.
132. It is worth recalling that the submissions of the applicant on the issue of the discount to first respondent should receive were to the effect that it should be “no more than 15 per cent”. The applicant’s position in that regard was informed having regard to the rectification of the underpayments and their timing, the degree of cooperation of the first respondent, the admissions made and their timing.^[46] The applicant’s submissions also recognised there should be a discount for the first respondent at the totality stage which was a further 20%.
133. The circumstances, involvement and culpability of each of the respondents was set out in the Liability Decision.^[47]
134. The first respondent has already received a discount for its early admissions. There is no such basis to do so for the second and third respondents. In taking a last look at the total arrived at to see whether it looks wrong it needs to be borne in mind, the discounts already obtained (including those from the application of the statutory course of conduct) and an assessment of the seriousness of each contravention as a percentage of the maximum has already been considered.
135. It is important in a case such as this to take into account the totality of the circumstances. This is a task that involves some degree of synthesis of the above matters, some of which tell in favour of and some of which tell against each of the respondents. Plainly, there is commonality or overlap between some of the contraventions in relation to both the first and second respondents. This will be taken into account in the substance of the matter by imposing no penalty, or a nominal penalty, in respect of breaches of some terms, but a substantial penalty in respect of others.
136. The situation in relation to the third respondent is different. The contravening conduct in her case occurred in the particular circumstances recorded in the Liability Decision. These contraventions offended the protections under the FW Act and the third respondent was responsible for the contravention.
137. The differences in the appropriate penalties arrived at by the Court, and those that were contained in the applicant’s submissions can be gleamed from a comparison of the figures set out below and those at Annexure C.
138. Therefore:
     1. in relation to the first respondent it is appropriate to impose penalty for the contraventions made up as follows:

	Grouping	Percentage	Penalty
1	Annual leave	50%	$21,675
2	Annual leave on termination	50%	$21,675
3	Cashing out annual leave	20%	$8,700
4	Fair Work Information Statement	30%	$13,005
5	Minimum hourly rates	80%	$34,680
6	Saturday penalty rates	0%	$0
7	Sunday penalty rates	50%	$21,675
8	Public holiday penalty rates	50%	$21,675
9	Overtime rates	80%	$34,680
10	Evening penalty rates	30%	$13,005
11	Failing to prepare roster	10%	$4,335
12	Failing to make/keep records	50%	$10,838
13	False records	30%	$6,502
14	Pay slips	70%	$15,173
15	Adverse action – threat	40%	$20,400
16	Adverse action – direction	40%	$20,400

A reduction of just over 18% at the totality stage for the first respondent results in a total penalty of $220,000. A further reduction in the penalties at items 1, 2, 5, 7, 8, 9, 15 and 16 above of $6,052.25 each will produce that amount.

2. in relation to the second respondent it is appropriate to impose a penalty for the contraventions made up as follows:

	Grouping	Percentage	Penalty
1	Annual leave	50%	$5,100
2	Annual leave on termination	50%	$5,100
3	Cashing out annual leave	20%	$2,040
4	Fair Work Information Statement	30%	$3,060
5	Minimum hourly rates	80%	$8,160
6	Saturday penalty rates	0%	$0
7	Sunday penalty rates	50%	$5,100
8	Public holiday penalty rates	50%	$5,100
9	Overtime rates	80%	$8,160
10	Evening penalty rates	30%	$3,060
11	Failing to prepare roster	10%	$1,020
12	Failing to make/keep records	50%	$2,550
13	False records	30%	$1,530
14	Pay slips	70%	$3,570

In the case of the second respondent, whilst there is no a proper basis for a discount for cooperation on the same terms as the first respondent, the percentages arrived at reflect the outcome of the consideration of the above factors. A reduction of around 6% at the totality stage results in a total penalty of $50,000. A further reduction of $1,775 in the penalties at items 1 and 2 above will produce that result.

100. in relation to the third respondent it is appropriate to impose a penalty for the contraventions made up as follows:

	Grouping	Percentage	Penalty
1	Cashing out annual leave	20%	$2,040
2	Adverse action - threat	40%	$4,080
3	Adverse action - direction	40%	$4080

Finally, so far as the third respondent is concerned, given her involvement in and responsibility for the contraventions, all that is called for at totality stage is a minor reduction. In her case a 2% allowance will result in a total penalty of $10,000. A reduction to $3,880 of the amount at item 3 in the above table will produce that result.

139. For the first respondent this results in a total penalty of $220,000 or 30% of the maximum $739,500. For the second respondent this results in a total penalty of $50,000 or 40% of the maximum $127,500. For the third respondent this results in a total penalty of $10,000 or 33% of the maximum $30,600.

Conclusion

140. There is no doubt that the penalties, when viewed individually and as an aggregate, are substantial. Unfortunately, the contravening conduct in response to which those penalties have been assessed constitutes serious and sustained contraventions of important provisions of the FW Act. The level of penalties imposed will serve as a reminder that contraventions of the FW Act will be met with significant monetary penalties. For the reasons set out above, I make the orders set out at the beginning of these reasons for decision.

I certify that the preceding one hundred and forty (140) paragraphs are a true copy of the reasons for judgment of Judge O'Sullivan

Associate:

Date: 20 September 2019

ANNEXURE A: ADMITTED AND PROVEN CONTRAVENTIONS BY THE RESPONDENTS

Column 2		Column 3	Column 4
Allegations admitted by the First Respondent – First SOAF
	NSWMMS	Mr Parkes[48]	Mrs Parkes[49]
(a)	section 44 of the FW Act, by failing to pay Mr Gagate and Mr Tan their entitlements to annual leave as prescribed by subsection 90(1) of the FW Act	Involvement denied, but found to have occurred
(b)	section 44 of the FW Act, by failing to pay Mr Gagate his entitlement to annual leave upon termination of employment as prescribed by subsection 90(2) of the FW Act	Involvement denied, but found to have occurred
(c)	section 44 of the FW Act, by failing to give each of the Employees the Fair Work Information Statement as required by subsection 125(1) of the FW Act	Involvement denied, but found to have occurred
(d)	section 45 of the FW Act, by failing to pay Mr Gagate and Mr Tan minimum hourly rates as prescribed by clauses 20.1 and A.3.6 of Schedule A of the Hospitality Award during the following employment periods: Mr Gagate: 9 February 2013 to 13 April 2014; and Mr Tan: 24 November 2012 to 24 February 2013 (Taree), 17 June 2013 to 14 September 2014 (Queanbeyan) and 15 September 2014 to 11 January 2015 (Halls Gap), (Employment Periods)	Involvement denied, but found to have occurred
(e)	section 45 of the FW Act, by failing to pay Mr Gagate and Mr Tan Saturday penalty rates as prescribed in clauses 32.1 and A.7.3 of Schedule A of the Modern Award during the Employment Periods	Involvement denied, but found to have occurred
(f)	section 45 of the FW Act, by failing to pay Mr Gagate and Mr Tan Sunday penalty rates as prescribed in clauses 32.1 and A.7.3 of Schedule A of the Modern Award during the Employment Periods	Involvement denied, but found to have occurred
(g)	section 45 of the FW Act, by failing to pay Mr Gagate and Mr Tan public holiday penalty rates as prescribed in clauses 32.1 and A.7.3 of Schedule A of the Modern Award during the Employment Periods	Involvement denied, but found to have occurred
(h)	section 45 of the FW Act, by failing to pay Mr Gagate and Mr Tan overtime rates (Monday to Friday) as prescribed by subclause 33.3(a)(i) of the Modern Award during the Employment Periods	Involvement denied, but found to have occurred
(i)	section 45 of the FW Act, by failing to pay Mr Gagate and Mr Tan overtime rates (weekends) as prescribed by subclause 33.3(a)(ii) of the Modern Award during the Employment Periods	Involvement denied, but found to have occurred
(j)	section 45 of the FW Act, by failing to pay Mr Gagate and Mr Tan evening penalty rates as prescribed by subclause 32.2(a) and clauses A.7.3 and A.5.4 of Schedule A of the Modern Award during the Employment Periods	Involvement denied, but found to have occurred
(k)	section 45 of the FW Act, by failing to pay Mr Gagate and Mr Tan annual leave loading as prescribed by clause 34.2 of the Modern Award during the Employment Periods	Involvement denied, but found to have occurred
(l)	section 45 of the FW Act, by failing to prepare rosters for Mr Tan and Mr Gagate that complied with clause 30.1 of the Hospitality Award during the Employment Periods	Involvement denied, but found to have occurred
(m)	subsection 323(1)(a) of the FW Act, by failing to pay Mr Gagate and Mr Tan in full during the Employment Periods	Involvement denied, but found to have occurred
(n)	subsection 535(1) of the FW Act by failing to make and keep records as prescribed by regulation 3.32 of the FW Regulations in respect of Mr Gagate during the relevant Employment Periods	Involvement denied, but found to have occurred
(o)	subsection 535(1) of the FW Act by failing to make and keep records as prescribed by regulation 3.34 of the FW Regulations in respect of Mr Gagate and Mr Tan during the Employment Periods	Involvement denied, but found to have occurred
(p)	subsection 535(1) of the FW Act by failing to make and keep records as prescribed by regulation 3.36(1) of the FW Regulations in respect of Mr Gagate during the relevant Employment Periods	Involvement denied, but found to have occurred
(q)	subsection 535(1) of the FW Act and regulation 3.44(1) of the FW Regulations, by keeping records that were false and misleading in relation to the net amount paid to Ms Monleon on a weekly basis from on or about 8 July 2012 to 4 November 2013	Involvement denied, but found to have occurred

(r)	subsection 535(1) of the FW Act and regulation 3.44(1) of the FW Regulations, by keeping records that were false and misleading in relation to the employment status of Mr Tan while he was employed at Halls Gap	Involvement denied, but found to have occurred
(s)	section 536(1) of the FW Act, by failing to provide Ms Virata, Ms Monleon and Mr Tan pay slips within one day of payment for work performed by them	Involvement denied, but found to have occurred
Allegations admitted by the First Respondent – Second SOAF
(t)	section 44 of the FW Act, by cashing out the annual leave of Ms Virata in contravention of section 92 of the FW Act	Involvement initially denied but admitted at trial	Involvement initially denied but admitted at trial
(u)	subsection 323(1)(a) of the FW Act, by failing to pay Ms Virata in full from 11 February 2013 to 14 July 2013	Involvement initially denied but admitted at trial	Involvement initially denied but admitted at trial
Allegations denied by the First Respondent but found proven – Liability Decision
(v)	subsection 340(1)(a) of the FW Act, by taking adverse action, within the meaning of subsection 342(1) of the FW Act, against Ms Monleon because she exercised a workplace right pursuant to subsection 340(1)(a) of the FW Act		Involvement denied, but found to have occurred
(w)	subsections 340(1)(a) and 340(1)(b) of the FW Act, by taking adverse action, within the meaning of subsection 342(1) of the FW Act, against Mr Tan because he had a workplace right or to prevent him from exercising same		Involvement denied, but found to have occurred

ANNEXURE B: Identification of contraventions & maximum penalties – taking into account s.557

Provision contravened (Reference to Annexure A)	Description of contravention	No. of employees affected	Underpayment	Maximum penalty: NSWMMS	Maximum penalty: Mr Parkes	Maximum penalty: Mrs Parkes
1	s 44, FW Act (row (a))	Annual leave Failing to pay annual leave entitlements during periods of annual leave pursuant to section 90(1) FW Act	2	$4,318.55	$51,000	$10,200
2	s 44, FW Act (row (b))	Annual leave on termination Failing to pay annual leave entitlements on termination pursuant to section 90(2) FW Act	1	$3,037.91	$51,000	$10,200
3	S 44, FW Act (row (t))	Cashing out annual leave Cashing out paid annual leave in a manner not compliant with section 92 FW Act	1		$51,000	$10,200	$10,200
4	S 44, FW Act (row (c))	Fair Work Information Statement Failing to give the Fair Work Information Statement	4		$51,000	$10,200
5	S 45, FW Act (row (d))	Minimum hourly rates Failing to pay minimum hourly rates pursuant to by clauses 20.1 and A.3.6 of Schedule A of the Hospitality Award	2	$66,537.89	$51,000	$10,200
6	S 45, FW Act (row (e))	Saturday penalty rates Failing to pay Saturday penalty rates pursuant to clauses 32.1 and A.7.3 of Schedule A of the Hospitality Award	2	$7,693.65	$51,000	$10,200
7	S 45, FW Act (row (f))	Sunday penalty rates Failing to pay Sunday penalty rates pursuant to clauses 32.1 and A.7.3 of Schedule A of the Hospitality Award	2	$3,714.89	$51,000	$10,200
8	S 45, FW Act (row (g))	Public holiday penalty rates Failing to pay public holiday penalty rates pursuant to clauses 32.1 and A.7.3 of Schedule A of the Hospitality Award	2	$8,134.75	$51,000	$10,200
9	S 45, FW Act (row (h))	Overtime rates (Monday to Friday) Failing to pay overtime rates (Monday to Friday) pursuant to subclause 33.3(a)(i) of the Hospitality Award	2	$17,356.89	$51,000	$10,200
10	s 45, FW Act (row (i))	Overtime rates (weekend) Failing to pay overtime rates (weekend) pursuant to subclause 33.3(a)(ii) of the Hospitality Award	2	$49,495.63	$51,000	$10,200
11	s 45, FW Act (row (j))	Evening penalty rates Failing to pay evening penalty rates pursuant to subclause 32.2(a) and clauses A.7.3 and A.5.4 of the Hospitality Award	2	$3,196.39	$51,000	$10,200
12	s 45, FW Act (row (k))	Annual leave loading Failing to pay annual leave loading pursuant to clause 34.2 of the Hospitality Award	2	$1,073.97	$51,000	$10,200
13	s 45, FW Act (row (l))	Rosters Failing to prepare rosters in compliance with 30.1 of the Hospitality Award	2		$51,000	$10,200
14	s 535(1), FW Act (row (n))	Record-keeping Failure to make and keep records as prescribed by regulation 3.32 of the FW Regulations	1		$25,500	$5,100
15	s 535(1), FW Act (row (o))	Record-keeping Failure to make and keep records as prescribed by regulation 3.34 of the FW Regulations	2		$25,500	$5,100
16	s 535(1), FW Act (row (p))	Record-keeping Failure to make and keep records as prescribed by regulation 3.36(1) of the FW Regulations	1		$25,500	$5,100
17	s 535(1), FW Act (row (q))	False record-keeping Keeping records required by regulation 3.33(1)(b) of the FW Regulations that were false and misleading	1		$25,500	$5,100
18	s 535(1), FW Act (row (r))	False record-keeping Keeping records required by regulation 3.32(d) of the FW Regulations that were false and misleading	1		$25,500	$5,100

19	s 536(1), FW Act (row (s))	Pay slips Failing to provide pay slips at all	3			$25,500		$5,100
20	S 340(1)(a), FW Act (row (v))	Adverse action (threat to terminate) Taking adverse action because an employee exercised a workplace right	1			$51,000			$10,200
21	ss 340(1)(a) & 340(1)(b), FW Act (row (w))	Adverse action (direction to under-record hours) Taking adverse action because an employee exercised, or to prevent an employee from exercising, a workplace right	1			$51,000			$10,200
TOTAL					$134,535.68[50]		$918,000	$163,200	$30,600

ANNEXURE C: PROPOSED GROUPING OF CONTRAVENTIONS AND PROPOSED PENALTIES

First Respondent

Provision contravened (Reference to Annexure A)	Description of contravention	Maximum penalty	Discount	Maximum after discount	Range sought (%)	Range sought ($)
1	s 44, FW Act (row (a))	Annual leave Failing to pay annual leave entitlements during periods of annual leave pursuant to section 90(1) FW Act	$51,000	15%	$43,350	50-60%	$21,675 - $26,010
2	s 45, FW Act (row (k))	Annual leave loading Failing to pay annual leave loading pursuant to clause 34.2 of the Hospitality Award
3	s 44, FW Act (row (b))	Annual leave on termination Failing to pay annual leave entitlements on termination pursuant to section 90(2) FW Act	$51,000	15%	$43,350	50-60%	$21,675 - $26,010
4	S 44, FW Act (row (t))	Cashing out annual leave Cashing out paid annual leave in a manner not compliant with section 92 FW Act	$51,000	0%	$51,000	20-30%	$10,200 - $15,300
5	S 44, FW Act (row (c))	Fair Work Information Statement Failing to give the Fair Work Information Statement	$51,000	15%	$43,350	30-40%	$13,005 - $17,340
6	S 45, FW Act (row (d))	Minimum hourly rates Failing to pay minimum hourly rates pursuant to by clauses 20.1 and A.3.6 of Schedule A of the Hospitality Award	$51,000	15%	$43,350	80-90%	$34,680 - $39,015
7	S 45, FW Act (row (e))	Saturday penalty rates Failing to pay Saturday penalty rates pursuant to clauses 32.1 and A.7.3 of Schedule A of the Hospitality Award	$51,000	15%	$43,350	50-60%	$21,675 - $26,010
8	S 45, FW Act (row (f))	Sunday penalty rates Failing to pay Sunday penalty rates pursuant to clauses 32.1 and A.7.3 of Schedule A of the Hospitality Award	$51,000	15%	$43,350	50-60%	$21,675 - $26,010

9		S 45, FW Act (row (g))	Public holiday penalty rates Failing to pay public holiday penalty rates pursuant to clauses 32.1 and A.7.3 of Schedule A of the Hospitality Award		$51,000	15%			$43,350	50-60%	$21,675 - $26,010
10		S 45, FW Act (row (h))	Overtime rates (Monday to Friday) Failing to pay overtime rates (Monday to Friday) pursuant to subclause 33.3(a)(i) of the Hospitality Award		$51,000	15%			$43,350	80-90%	$34,680 - $39,015
11		s 45, FW Act (row (i))	Overtime rates (weekend) Failing to pay overtime rates (weekend) pursuant to subclause 33.3(a)(ii) of the Hospitality Award
12		s 45, FW Act (row (j))	Evening penalty rates Failing to pay evening penalty rates pursuant to subclause 32.2(a) and clauses A.7.3 and A.5.4 of the Hospitality Award		$51,000	15%			$43,350	50-60%	$21,675 - $26,010
13		s 45, FW Act (row (l))	Rosters Failing to prepare rosters in compliance with 30.1 of the Hospitality Award		$51,000	15%			$43,350	30-40%	$13,005 - $17,340
14		s 535(1), FW Act (row (n))	Record-keeping Failure to make and keep records as prescribed by regulation 3.32 of the FW Regulations		$25,500	15%			$21,675	40-50%	$8,670 - $10,838
16		s 535(1), FW Act (row (o))	Record-keeping Failure to make and keep records as prescribed by regulation 3.34 of the FW Regulations
16		s 535(1), FW Act (row (p))	Record-keeping Failure to make and keep records as prescribed by regulation 3.36(1) of the FW Regulations
17		s 535(1), FW Act; r 3.44(1), FW Regulations (row (q))	False record-keeping Keeping records required by regulation 3.33(1)(b) of the FW Regulations that were false and misleading		$25,500	15%			$21,675	20-30%	$4,335 - $6,503
18		s 535(1), FW Act; r 3.44(1), FW Regulations (row (r))	False record-keeping Keeping records required by regulation 3.32(d) of the FW Regulations that were false and misleading
19		s 536(1), FW Act (row (s))	Pay slips Failing to provide pay slips at all		$25,500	15%			$21,675	70-80%	$15,173 - $17,340
20		S 340(1)(a), FW Act (row (v))	Adverse action (threat to terminate) Taking adverse action because an employee exercised a workplace right		$51,000	0%			$51,000	40-50%	$20,400 - $25,500
21	ss 340(1)(a) & 340(1)(b), FW Act (row (w))			Adverse action (direction to under-record hours) Taking adverse action because an employee exercised, or to prevent an employee from exercising, a workplace right	$51,000		0%	$51,000		40-50%	$20,400 - $25,500
	TOTAL				$739,500			$651,525			$304,597.50 - $369,750
Percentage of maximum penalties (before grouping and before the application of a discount)											33.18% - 40.28%
Percentage of maximum penalties (after grouping and after application of the 15% discount)											46.75% - 56.75%
TOTAL (including 20% totality reduction)											$243,678 - $295,800

Second Respondent

Provision contravened (Reference to Annexure A)	Description of contravention	Maximum penalty	Discount	Maximum after discount	Range sought (%)	Range sought ($)
1	s 44, FW Act (row (a))	Annual leave Failing to pay annual leave entitlements during periods of annual leave pursuant to section 90(1) FW Act	$10,200	0%	$10,200	50-60%	$5,100 - $6,120
2	s 45, FW Act (row (k))	Annual leave loading Failing to pay annual leave loading pursuant to clause 34.2 of the Hospitality Award
3	s 44, FW Act (row (b))	Annual leave on termination Failing to pay annual leave entitlements on termination pursuant to section 90(2) FW Act	$10,200	0%	$10,200	50-60%	$5,100 - $6,120
4	S 44, FW Act (row (t))	Cashing out annual leave Cashing out paid annual leave in a manner not compliant with section 92 FW Act	$10,200	0%	$10,200	20-30%	$2,040 - $3,060
5	S 44, FW Act (row (c))	Fair Work Information Statement Failing to give the Fair Work Information Statement	$10,200	0%	$10,200	30-40%	$3,060 - $4,080
6	S 45, FW Act (row (d))	Minimum hourly rates Failing to pay minimum hourly rates pursuant to by clauses 20.1 and A.3.6 of Schedule A of the Hospitality Award	$10,200	0%	$10,200	80-90%	$8,160 - $9,180
7	S 45, FW Act (row (e))	Saturday penalty rates Failing to pay Saturday penalty rates pursuant to clauses 32.1 and A.7.3 of Schedule A of the Hospitality Award	$10,200	0%	$10,200	50-60%	$5,100 - $6,120
8	S 45, FW Act (row (f))	Sunday penalty rates Failing to pay Sunday penalty rates pursuant to clauses 32.1 and A.7.3 of Schedule A of the Hospitality Award	$10,200	0%	$10,200	50-60%	$5,100 - $6,120
9	S 45, FW Act (row (g))	Public holiday penalty rates Failing to pay public holiday penalty rates pursuant to clauses 32.1 and A.7.3 of Schedule A of the Hospitality Award	$10,200	0%	$10,200	50-60%	$5,100 - $6,120
10	S 45, FW Act (row (h))	Overtime rates (Monday to Friday) Failing to pay overtime rates (Monday to Friday) pursuant to subclause 33.3(a)(i) of the Hospitality Award	$10,200	0%	$10,200	80-90%	$8,160 - $9,180
11	s 45, FW Act (row (i))	Overtime rates (weekend) Failing to pay overtime rates (weekend) pursuant to subclause 33.3(a)(ii) of the Hospitality Award
12	s 45, FW Act (row (j))	Evening penalty rates Failing to pay evening penalty rates pursuant to subclause 32.2(a) and clauses A.7.3 and A.5.4 of the Hospitality Award	$10,200	0%	$10,200	50-60%	$5,100 - $6,120
13	s 45, FW Act (row (l))	Rosters Failing to prepare rosters in compliance with 30.1 of the Hospitality Award	$10,200	0%	$10,200	30-40%	$3,060 - $4,080
14	s 535(1), FW Act (row (n))	Record-keeping Failure to make and keep records as prescribed by regulation 3.32 of the FW Regulations	$5,100	0%	$5,100	40-50%	$2,040 - $2,550
16	s 535(1), FW Act (row (o))	Record-keeping Failure to make and keep records as prescribed by regulation 3.34 of the FW Regulations
16	s 535(1), FW Act (row (p))	Record-keeping Failure to make and keep records as prescribed by regulation 3.36(1) of the FW Regulations
17	s 535(1), FW Act; r 3.44(1), FW Regulations (row (q))	False record-keeping Keeping records required by regulation 3.33(1)(b) of the FW Regulations that were false and misleading	$5,100	0%	$5,100	20-30%	$1,020 - $1,530
18	s 535(1), FW Act; r 3.44(1), FW Regulations (row (r))	False record-keeping Keeping records required by regulation 3.32(d) of the FW Regulations that were false and misleading
19	s 536(1), FW Act (row (s))	Pay slips Failing to provide pay slips at all	$5,100	0%	$5,100	70-80%	$3,570 - $4,080
TOTAL			$127,500		$127,500		$61,710 - $74,460
Percentage of maximum penalties (before grouping)							37.81% - 45.63%
Percentage of maximum penalties (after grouping)							48.4% - 58.4%
TOTAL (including 20% totality reduction)							$49,368 - $59,568

Third Respondent

Provision contravened (Reference to Annexure A)	Description of contravention	Maximum penalty	Discount		Maximum after discount		Range sought (%)	Range sought ($)
1	S 44, FW Act (row (t))	Cashing out annual leave Cashing out paid annual leave in a manner not compliant with section 92 FW Act	$10,200	0%		$10,200		20-30%	$2,040 - $3,060
2	S 340(1)(a), FW Act (row (v))	Adverse action (threat to terminate) Taking adverse action because an employee exercised a workplace right	$10,200	0%		$10,200		40-50%	$4,080 - $5,100
3	ss 340(1)(a) & 340(1)(b), FW Act (row (w))	Adverse action (direction to under-record hours) Taking adverse action because an employee exercised, or to prevent an employee from exercising, a workplace right	$10,200	0%		$10,200		40-50%	$4,080 - $5,100
TOTAL			$30,600		$30,600				$10,200 - $13,260
Percentage of maximum penalties									33.33% - 43.33%
TOTAL (including 20% totality reduction)									$8,160 - $10,608

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^[1] Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 at [134]
^[2] The engagement of at least one of those has been described in another case as “exploitative” see [2015] FWC 7932 at [4].
^[3] see Table at Tab 5 of Court Book.
^[4] see supplementary submissions filed 19 December 2018.
^[5] at paragraphs [55] to [57] thereof.
^[6] see submissions in reply filed 30 January 2019 at paragraphs [15] to [16].
^[7] see respondents’ submissions filed 21 December 2018 at paragraphs [2] to [3] where similar factors referred to.
^[8] see paragraphs [14] to [130] of applicant’s submissions.

^[9] Gibbs v The Mayor, Councillors and Citizens of City of Altona [1992] FCA 374; (1992) 37 FCR 216, 223 (Gray J); McIver v Healey [2008] FCA 425, [16] (Marshall J).

^[10] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, [71] (Graham J).

^[11] Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70, [41]-[46] (Stone and Buchanan JJ).

^[12] see Kelly v Fitzpatrick [2007] FCA 1080, [30] (Tracey J): Australian Ophthalmic Supplies, [23] (Gray J), [71] (Graham J) and [102] (Buchanan J).
^[13] Australian Ophthalmic Supplies, [27] (Gray J), [55] and [78] (Graham J).
^[14] see Fairwork Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown (2017) FCA 1301.
^[15] see, for example, the applicant’s submissions at paragraphs [36] to [38] and the respondents’ submissions at paragraph [23].
^[16] Ibid.
^[17] see Fair Work Ombudsman v Phua & Foo Pty Ltd [2018] FCA 137 at [31]
^[18] see paragraph 11 submissions filed 16 November 2018.
^[19] Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 269 ALR 1 [39], [41].
^[20] Pearce v R [1998] HCA 57; (1998) 194 CLR 610 at [40] per McHugh, Hayne and Callinan JJ
^[21] Statement of Agreed Facts, paragraphs [15]-[99]
^[22] see paragraphs [3] to [4].
^[23] Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408.
^[24] Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408 at [2] the passage was approved by the Full Court in Rocky Holdings Pty Limited v Fair Work Ombudsman [2014] FCAFC 62 at [18].
^[25] The Full Court in Parker v Australian Building and Construction Commission [2019] FCAFC 56 also discussed the principles in relation to the common law course of conduct at [267]-[288].
^[26] see Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39.
^[27] see discussion in Parker v Australian Building and Construction Commission [2019] FCAFC 56 at [274] which the respondents’ Counsel conceded in final submissions was correct.
^[28] see Annexure A for details of contraventions.
^[29] see Construction, Forestry, Mining and Energy Union v State of Victoria No. 2 [2013] FCA 1034 at [135].
^[30] see paragraph 24 of respondents’ submissions filed 21 December 2018 where it was claimed that the conduct that led to the breaches was a “misguided attempt to assist the workers to come to Australia for a better life.”
^[31] see paragraph [24].
^[32] Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 338 at [51].
^[33] see Australian Competition and Consumer Commission v Penital Limited [2018] FCA 491 at [52]
^[34] see Glenn Jordan v Mornington Inn Pty Ltd [2007] FCA 1384 at [99]
^[35] footnote references omitted and emphasis added.
^[36] Fair Work Ombudsman v AJR Nominees Proprietary Limited (No 2) [2014] FCA 128 at [50].
^[37] Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union [2008] FCAFC 170 at [37].
^[38] Cousins v Merringtons Pty Ltd & Anor (No. 2) 2008 VSC 340 at [59]- [65].
^[39] see paragraphs [31] to [39] of submissions filed 21 December 2018.
^[40] see paragraphs [19] to [25] of the submissions filed 30 January 2019.
^[41] see paragraph [17] to [22] of the submissions filed 21 December 2018.
^[42] see paragraphs [26] to [28] submissions filed 30 January 2019.
^[43] see for example : Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors (No. 2) [2017] FCCA 2759 and Fair Work Ombudsman v NSW Motel Management Services Pty Ltd & Ors [2019] FCCA 1055.
^[44] see Bomanite Pty Ltd v Slatex Corporation Australia Pty Ltd & Ors [1991] FCA 536; (1991) 32 FCR 379 at [392] per French J.
^[45] Australian Ophthalmic Supplies Pty Ltd v Mc Alary-Smith [2008] FCAFC 8 at [27]- [28] per Gray J and [78] per Graham J.
^[46] see paragraphs [106] to [108], applicant’s submissions filed 16 November 2018.
^[47] see paragraphs [3] to [366] Liability Decision.

^[48] Liability Decision at [355].

^[49] Liability Decision at [366].

^[50] The total underpayment includes a deduction of $30,024.84 pursuant to cl 39.1 of the Hospitality Award, per [77]-[78] of the First SOAF.