FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832

ORDERS

THE COURT DECLARES THAT:

1.    The First Respondent engaged the following employees as casuals (Casual Employees) in 2010 within the meaning of cl 12.5 of the Cleaning Services Award 2010 (CS Award):

(a)    Ashin Maharjan;

(b)    Avi Narayan Baskota;

(c)    Biswajit Sarkar;

(d)    Dongog Kim;

(e)    Kumar Shrestha;

(f)    Kyewoon Lee;

(g)    Prabin Rajbhandari;

(h)    Rabin Bk;

(i)    Raj Kumar Aryal;

(j)    Sanju Shrestha;

(k)    Sehwan Kim; and

(l)    Wenjin Liao

2.    The First Respondent engaged the following employees as permanent full-time (Full-time Employees) in 2010 within the meaning of cl 12.3 of the CS Award:

3.    Pursuant to s 21 of the Federal Court Act 1976 (Cth) (FC Act) that, by reason of his involvement for the purposes of s 728 of the Workplace Relations Act 1996 (Cth) (WR Act) and s 550 of the Fair Work Act 2009 (Cth) (FW Act) respectively in the conduct of South Jin Pty Ltd, the Second Respondent contravened:

During the period 16 February 2009 and 30 June 2009

(a)    subsection 185(2) of the WR Act in relation to Avi Narayan Baskota by failing to pay the guaranteed casual loading percentage of 20% of the basic periodic rate of pay, in addition to the applicable rate of pay as provided for in subs 182(3) of the WR Act;

During the period 1 July 2009 to 31 December 2009

(b)    Item 5 of Sch 16 of the Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act) in relation to Avi Narayan Baskota, Dongog Kim, Kyewoon Lee, Prabin Rajbhandari, Rabin Bk, Sehwan Kim and Wenjin Liao by failing to pay the transitional default casual loading percentage of 20% of the basic periodic rate of pay, in addition to the applicable rate of pay as provided for in Item 3 of subs 185(2) of the WR Act;

During the period 1 January 2010 to 22 April 2010

(c)    clause 16 of the CS Award and thereby s 45 of the FW Act in relation to casuals Ashin Maharjan, Biswajit Sarkar, Dongog Kim, Kumar Shrestha, Kyewoon Lee, Prabin Rajbhandari, Rabin Bk, Sanju Shrestha and Sehwan Kim by failing to pay the applicable minimum rates of pay;

(d)    subclause 12.5(a) of the CS Award and thereby s 45 of the FW Act in relation to casuals Ashin Maharjan, Biswajit Sarkar, Dongog Kim, Kumar Shrestha, Kyewoon Lee, Prabin Rajbhandari, Rabin Bk, Sanju Shrestha and Sehwan Kim by failing to pay the applicable casual loading of 25% in addition to the applicable rates of pay under the CS Award;

(e)    clause 28 of the CS Award and thereby s 45 of the FW Act in relation to full-time employees Changhoon Yang, Daeseong Kim, Dongil Lee, Haegyu Kang, Hyeongtae Kim, Hyeon Cheol Cho, Hyunok Kim, Hyunwoo Jeon, Ildoo Kim, Jongsu Jeong, Minhwan Cheon, Minseok Yang, Mit Eum Lee, Sanghun Han, Sungyong Song, Wookyung Kwun and Yunseok Kim by failing to pay the applicable overtime rates for work performed in excess of 7.6 hours in one day or in excess of 5 days in the 7 day period from Monday to Sunday;

During the period 23 April 2010 to 30 June 2010

(f)    the CS Award and thereby s 45 of the FW Act in relation to casuals Ashin Maharjan, Biswajit Sarkar, Dongog Kim, Kumar Shrestha, Kyewoon Lee, Prabin Rajbhandari and Sanju Shrestha by failing to pay the applicable minimum rates of pay as required by cl 16.1 of the CS Award and applicable overtime rates for work performed in excess of 7.6 hours in one day or in excess of 5 days in the 7 day period from Monday to Sunday as required by cl 28;

(g)    clause C.7.2 of Sch C of the CS Award and thereby s 45 of the FW Act in relation to casuals Ashin Maharjan, Biswajit Sarkar, Dongog Kim, Kumar Shrestha, Kyewoon Lee, Prabin Rajbhandari and Sanju Shrestha by failing to pay the transitional default casual loading of 20%, in addition to the applicable rates of pay;

(h)    the CS Award and thereby s 45 of the FW Act in relation to full-time employees Changhoon Yang, Changwoo Lee, Daeseong Kim, Dongil Lee, Hyeongtae Kim, Hyeon Cheol Cho, Hyunwoo Jeon, Ildoo Kim, Jongsu Jeong, Minhwan Cheon, Minseok Yang, Mit Eum Lee, Sanghun Han, Sungyong Song and Yunseok Kim by failing to pay the highest hourly rate applicable from time to time for each employee’s work including overtime rates for work performed in excess of 7.6 hours in one day or in excess of 5 days in the 7 day period from Monday to Sunday as required by cl 28 of the CS Award and minimum rates as required by cl 16.1 of the CS Award;

During the period 1 July 2010 to 21 November 2010

(i)    the CS Award and thereby s 45 of the FW Act in relation to casuals Ashin Maharjan, Dongog Kim, Kumar Shrestha, Kyewoon Lee, Prabin Rajbhandari, Raj Kumar Aryal and Sanju Shrestha by failing to pay the applicable transitional minimum rates of pay as required by cl C.2.5 of Sch C of the CS Award, the applicable penalty rates for shift and weekend work as required by cl 27.2 of the Award and applicable overtime rates for work performed in excess of 7.6 hours in one day or in excess of 5 days in the 7 day period from Monday to Sunday as required by cl 28;

(j)    clause C.7.3 of Sch C of the CS Award and thereby s 45 of the FW Act in relation to casuals Ashin Maharjan, Dongog Kim, Kumar Shrestha, Kyewoon Lee, Prabin Rajbhandari, Raj Kumar Aryal and Sanju Shrestha by failing to pay the transitional casual loading of 21% of the ordinary hourly rate of pay in addition to the applicable rate of pay;

(k)    the CS Award and thereby s 45 of the FW Act in relation to full-time employees Changwoo Lee, Daero Kang, Daeseong Kim, Daeyeul Kim, Dongil Lee, Hyeon Cheol Cho, Jeongjung Kim, Jongsu Jeong, Junhee Won, Minho Sim, Minhwan Cheon, Minseok Yang, Sanghun Han, Sungyong Song, Yusuck Won by failing to pay the highest hourly rate applicable from time to time for each employee’s work including the applicable transitional minimum rates of pay as required by cl C.2.5 of Sch  C of the CS Award; the applicable penalty rates for shift and weekend work as required by cl 27.2 of the CS Award and applicable overtime rates for work performed in excess of 7.6 hours in one day or in excess of 5 days in the 7 day period from Monday to Sunday as required by cl 28;

Superannuation

(l)    cl 23.2 of the CS Award and thereby s 45 of the FW Act by failing to pay the minimum superannuation contributions in respect of the Casual Employees and Full-time Employees who were employed during the period 1 January 2010 to 21 November 2010;

Payslips

(m)    reg 19.20(1) of the Workplace Regulations 1996 (Cth) (WR Regulations) in relation to the Casual Employees and Full-time Employees who were employed during the period 16 February 2009 to 30 June 2009, by failing to provide them with a written payslip;

(n)    subs 536(1) of the FW Act in relation to the Casual Employees and Full-time Employees who were employed during the period 1 July 2009 to 12 September 2010 by failing to provide them with a payslip within one day of payment;

Record-keeping

(o)    reg 19.4(1) of the WR Regulations in relation to the Casual Employees and Full-time Employees who were employed during the period 16 February 2009 to 30 June 2009, by failing to make or cause to be made a record in accordance with Divs 3 and 4 of the WR Regulations; and

(p)    section 535 of the FW Act in relation to the Casual Employees and Full-time Employees who were employed during the period 1 July 2009 to 21 November 2010, by failing to make and keep employment records of the kind prescribed by the Fair Work Regulations 2009 (Cth) (FW Regulations) in that the records did not:

(i)    record whether the employees were full-time, part-time or casual as required by reg 3.32 of the FW Regulations; and

(ii)    include overtime records as required by reg 3.34 of the FW Regulations.

4.    Pursuant to s 21 of the FC Act that, by reason of their involvement for the purposes of s 550 of the FW Act in the conduct of South Jin Pty Ltd, each of the Third Respondent and Fourth Respondent contravened:

During the period 1 January 2010 to 22 April 2010

(a)    subclause 12.5(a) of the CS Award and thereby s 45 of the FW Act in relation to casuals Ashin Maharjan, Biswajit Sarkar, Dongog Kim, Kumar Shrestha, Kyewoon Lee, Prabin Rajbhandari, Rabin Bk, Sanju Shrestha and Sehwan Kim by failing to pay the applicable casual loading of 25% in addition to the applicable rates of pay under the CS Award;

(b)    clause 28 of the CS Award and thereby s 45 of the FW Act in relation to full-time employees Changhoon Yang, Daeseong Kim, Dongil Lee, Haegyu Kang, Hyeongtae Kim, Hyeon Cheol Cho, Hyunok Kim, Hyunwoo Jeon, Ildoo Kim, Jongsu Jeong, Minhwan Cheon, Minseok Yang, Mit Eum Lee, Sanghun Han, Sungyong Song, Wookyung Kwun and Yunseok Kim by failing to pay the applicable overtime rates for work performed in excess of 7.6 hours in one day or in excess of 5 days in the 7 day period from Monday to Sunday;

During the period 1 July 2010 to 2 September 2010

(c)    the CS Award and thereby s 45 of the FW Act in relation to casuals Ashin Maharjan, Dongog Kim, Kumar Shrestha, Kyewoon Lee, Prabin Rajbhandari, Raj Kumar Aryal and Sanju Shrestha by failing to pay the applicable transitional minimum rates of pay as required by cl C.2.5 of Sch C of the CS Award, by failing to pay the applicable penalty rates for shift and weekend work cl 27.2 of the CS Award and failing to pay the applicable overtime rates for work performed in excess of 7.6 hours in one day or in excess of 5 days in the 7 day period from Monday to Sunday as required by cl 28;

(d)    clause C.7.3 of Sch C of the CS Award and thereby s 45 of the FW Act in relation to casuals Ashin Maharjan, Dongog Kim, Kumar Shrestha, Kyewoon Lee, Prabin Rajbhandari, Raj Kumar Aryal and Sanju Shrestha by failing to pay the transitional casual loading of 21% of the ordinary hourly rate of pay in addition to the applicable rate of pay;

(e)    the CS Award and thereby s 45 of the FW Act in relation to full-time employees Changwoo Lee, Daero Kang, Daeseong Kim, Daeyeul Kim, Dongil Lee, Hyeon Cheol Cho, Jeongjung Kim, Jongsu Jeong, Junhee Won, Minho Sim, Minhwan Cheon, Minseok Yang, Sanghun Han, Sungyong Song, Yusuck Won by failing to pay the highest hourly rate applicable from time to time for each employee’s work including failing to pay the applicable transitional minimum rates of pay as required by cl C.2.5 of Sch C of the CS Award, by failing to pay the applicable penalty rates for shift and weekend work cl 27.2 of the CS Award and failing to pay the applicable overtime rates for work performed in excess of 7.6 hours in one day or in excess of 5 days in the 7 day period from Monday to Sunday as required by cl 28;

5.    The Casual Employees and Full-time Employees were underpaid a total of $85,367.62 during their employment with the First Respondent.

THE COURT ORDERS THAT:

6.    Penalties be imposed as follows:

7.    Pursuant to s 545 of the FW Act the Respondents pay the penalties within 28 days to the Consolidated Revenue Fund of the Commonwealth:

(a)    up to the amount of $85,367.62 then be transferred by the Applicant to the Employees within 180 days of this order in the amount or proportion shown opposite their name in the following table; and

(b)    any remaining monies, to be retained by the Commonwealth.

8.    In the event that any of the Employees cannot be located within 120 days of this order, their share of the penalties is to be retained by the Commonwealth.

9.    The Applicant is to make reasonable efforts to locate and contact each of the Employees for the purposes of making the payments referred to in para 7(a).

10.    The balance of the Application as set out in the Third Amended Statement of Claim dated 26 April 2012 is dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

WHITE J:

1    This decision concerns the declarations to be made and the penalties to be imposed on the second respondent (Mr Jin), the third respondent (CTS) and the fourth respondent (Mr Stroop) in respect of their liability as accessories in contraventions by the first respondent (South Jin) of provisions in industrial legislation. It should be read in conjunction with the decision in Fair Work Ombudsman v South Jin Pty Ltd [2015] FCA 1456 (the Liability Judgment) in which the findings of the respective contraventions were made. Whenever possible, I will endeavour in these reasons to avoid repetition.

2    The proceedings concerned the employment of trolley collectors by South Jin in the period between 16 February 2009 and 21 November 2010. South Jin had subcontracted to CTS for the provision of trolley collection services at five supermarket sites in Adelaide. CTS had in turn subcontracted to Integrated Trolley Management Pty Ltd (ITM) in respect of four of those sites.

3    In the Liability Judgment, I found (in summary) that:

(1)    South Jin had contravened s 185(2) of the Workplace Relations Act 1996 (Cth) (the WR Act) in the period between 16 February and 30 June 2009 (actually between 1 April and 30 June 2009) by failing to pay to one trolley collector, Avi Narayan Baskota, a loading on his ordinary time rate which was at least equal to the “guaranteed casual loading percentage” of 20%, in respect of the hours which he worked in this period, at [164];

(2)    South Jin had contravened Item 5 of Sch 16 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the Transitional Act) in the period between 1 July and 31 December 2009 by failing to pay a loading which was at least equal to “the guaranteed casual loading percentage” of 20% to seven trolley collectors (Avi Narayan Baskota, Dongog Kim, Kyewoon Lee, Prabin Rajbhandari, Rabin Bk, Sehwan Kim and Wenjin Liao) in respect of each hour that they worked in this period, at [165];

(3)    South Jin had in the period between 1 January and 22 April 2010 contravened each of cll 16 and 12.5(a) of the Cleaning Services Award (the CS Award), and thereby in each case s 45 of the Fair Work Act 2009 (Cth) (the FW Act), by failing to pay to nine casual trolley collectors the prescribed hourly rate and the prescribed casual loading of 25% in respect of each hour worked by those employees, at [166];

(4)    South Jin had in the period between 1 January and 22 April 2010 contravened cl 28 of the CS Award by failing to pay to each of 17 full-time trolley collectors the prescribed rate for each hour of overtime worked by each employee, at [166];

(5)    South Jin had in the period between 23 April and 30 June 2010 contravened each of cl 16.1 and cl 12.5(a) of the CS Award, and thereby in each case s 45 of the FW Act, by failing to pay the prescribed hourly rate and the prescribed casual loading of 20% in respect of each hour of work performed by seven casual trolley collectors, at [167];

(6)    South Jin had in the period between 23 April and 30 June 2010 breached cl 28 of the CS Award, and thereby s 45 of the FW Act, by failing to pay to each of 15 full-time trolley collectors the prescribed rate for each hour of overtime work worked by those trolley collectors, at [167];

(7)    South Jin had in the period between 1 July and 21 November 2010 contravened cl C.2.5 and cl C.7.3 of Sch C of the CS Award, and thereby s 45 of the FW Act, by failing to pay to each of seven trolley collectors the minimum hourly rate and the casual loading of 21% in respect of each hour of work performed by those trolley collectors, at [168];

(8)    South Jin had in the period between 1 July and 21 November 2010 contravened cl C.2.5 of Sch C (the minimum hourly rate), cl 27.2 (Saturday and Sunday penalty rates) and cl 28 (overtime) of the CS Award, and thereby s 45 of the FW Act, by failing to pay the highest rate required by those provisions for the hours of work performed by each of nine full-time trolley collectors, at [168];

(9)    South Jin had in the period from 1 January to 21 November 2010 contravened cl 23.2 of the CS Award, and thereby s 45 of the FW Act, by failing to pay the minimum superannuation contributions in respect of each trolley collector, at [194];

(10)    South Jin contravened reg 19.20(1) of the Workplace Relations Regulations 1996 (Cth) (the WR Regulations) in the period between 16 February to 30 June 2009 and s 536(1) of the FW Act in the period between 1 July 2009 and 12 September 2010 by failing to issue payslips to each of its employees, at [203], [205];

(11)    South Jin had contravened reg 19.4(1) of the WR Regulations in the period between 16 February and 30 June 2009 and s 535 of the FW Act in the period between 1 July 2009 and 21 November 2010 by failing to keep proper employment records, at [217], [218];

(12)    Mr Jin was knowingly involved in each of South Jin’s contraventions and accordingly liable as an accessory, at [223];

(13)    CTS and Mr Stroop (the CTS Respondents) were knowingly involved in South Jin’s underpayment contraventions during the periods 1 January to 22 April 2010 and 1 July to 2 September 2010 and accordingly liable as accessories in respect of those contraventions; at [226].

4    I dismissed the remaining claims made by the FWO.

Declarations

5    The FWO did not seek declarations that South Jin committed the contraventions just summarised. An order for South Jin’s liquidation was made on 18 July 2012 and it was deregistered by the Australian Securities and Investment Commission on 13 July 2014.

6    The FWO does, however, seek declarations with respect to the accessorial liability of Mr Jin, CTS and Mr Stroop. As noted in the Liability Judgment, accessories involved in a contravention are taken to have contravened the same provision as did the principal contravenor: s 725 of the WR Act and s 550 of the FW Act. The FWO contended that the declarations concerning the accessorial liability were appropriate even in the absence of declarations directed to South Jin. None of the respondents contested that contention.

7    I am satisfied that the declarations should be issued. They will serve to identify the contravening conduct and will be an indication of the Court’s disapproval of that conduct: Australian Competition and Consumer Commission v Yellow Page Marketing BV (No 2) [2011] FCA 352 at [69]. In addition, the declarations may enhance compliance with the requirements of industrial legislation and industrial awards by their warning to employers of the consequences of non-compliance. In this respect, I note that in DFWBII v CFMEU [2015] FCA 1213 at [7], Tracey J observed that declarations can serve an educative purpose in explaining to the public and to persons whose conduct is governed by particular legislation, how and why contraventions of that legislation have occurred.

8    The Court directed the FWO to prepare minutes of the declarations appropriate to give effect to its decision. The draft declarations initially proposed by the FWO did not reflect accurately the Court’s findings. Further, the parties had not agreed the amount of the underpayments to the trolley collectors on the basis of the Court’s findings. In those circumstances, the Court adjourned the penalty hearing for the FWO to provide a further draft and for further submissions. However, the further hearing was vacated at the parties’ request as they reached agreement on the form of orders and on the declarations. The agreed declarations are in some respects in composite form, rather than identifying with respect to each employee each provision which was contravened. In this respect, they still do not reflect fully the Court’s findings and this has not facilitated the Court’s task in imposing penalties. Further, the declarations as agreed by the parties do not include any declaration of the involvement of the CTS Respondents in the contraventions by South Jin of cl 16 of the CS Award in respect of the casual employees during the period between 1 January and 22 April 2010. Nevertheless, as they have been agreed, I will issue declarations in the terms proposed.

Maximum penalties

9    By ss 539(2) and 546(2) of the FW Act, the maximum penalty for the contravention of s 45 applicable at the times of the contraventions in this case was 60 penalty units in the case of an individual and 300 penalty units in the case of a body corporate. By Item 5 of Sch 16 to the Transitional Act, the same maximum penalties also applied to a contravention of that provision.

10    In respect of contraventions of ss 535 and 536(1) of the FW Act, the maximum penalties were, respectively, 30 and 150 penalty units.

11    By s 710(4) of the WR Act, the maximum penalty for a contravention of s 185(2) was 60 penalty units in the case of an individual and 300 penalty units in the case of a body corporate. In the case of the contraventions of reg 19 of the WR Regulations, the maximum penalty was 10 penalty units in the case of an individual and 50 in the case of a body corporate.

12    A “penalty unit” is defined in s 4 of the WR Act and in s 12 of the FW Act to have the same meaning as in s 4AA of the Crimes Act 1914 (Cth). At the time of the respondents’ contraventions, s 4AA defined a penalty unit to be $110. Accordingly, the maximum penalty for the contraventions of ss 45, 535 and 536(1) of the FW Act and of Item 5 of Sch 16 of the Transitional Act is $6,600 in the case of individuals and $33,000 in the case of bodies corporate.

13    In the case of the contraventions of the WR Act and the WR Regulations committed, relevantly, only by Mr Jin, the maximum penalties were, in the case of s 185(2), $6,600 and, in the case of regs 19.4(1) and 19.20(1), $1,100.

Penalty principles

14    The matters relevant to the imposition of penalty in circumstances like the present are well established, and it is not necessary to refer to the authorities in any detail. The Court has a discretion as to whether any penalty is to be imposed. It is not bound to do so.

15    Prominent among the matters to be considered in relation to both the decision to impose a penalty and the amount of the penalty are the nature, circumstances and significance of the contraventions, whether or not they were deliberate, the effect on the employees of the contraventions, any previous like conduct by the respondents, and the extent to which the respondents have taken corrective action or have exhibited contrition: Stuart-Mahoney v CFMEU [2008] FCA 1426, (2008) 177 IR 61 at [40]; Temple v Powell [2008] FCA 714, (2008) 169 FCR 169 at [56], [78]; Cahill v CFMEU (No 4) [2009] FCA 1040, (2009) 189 IR 304 at [9], [10].

16    Considerations of deterrence, both personal and general, are particularly important. In Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 326 ALR 476 (Commonwealth v DFWBII) at [59], the plurality (French CJ, Keifel, Bell, Nettle and Gordon JJ) said, in relation to civil penalties generally, that they are not retributive but are “essentially deterrent or compensatory and therefore protective”. Earlier, at [24], the plurality had noted that civil penalties are part of the range of enforcement mechanisms available to regulators by which to achieve compensation, prevention and deterrence. The plurality also referred to the central role of deterrence in the fixing of civil penalties at [55]:

[W]hereas 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, is primarily if not wholly protective in promoting the public interest in compliance:

“Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.”

(Citations omitted)

See also the observations of Keane J at [102].

17    The Court is to determine an appropriate penalty in each case by a process of instinctive synthesis after taking into account all relevant factors: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, (2008) 165 FCR 560 at [27], [55]; Markarian v The Queen [2005] HCA 25, (2005) 228 CLR 357 at [37], [39].

Deemed single contraventions

18    Account must be taken of s 719 of the WR Act and s 557 of the FW Act, both of which specify that contraventions of particular provisions which arise out of a course of conduct are to be taken to constitute a single contravention of those provisions. By Item 5 of Sch 16 of the Transitional Act, s 557 is also applicable to contraventions of that provision.

19    Section 719 provides (relevantly):

(1)    An eligible court may impose a penalty in accordance with this Division on a person if:

(a)    the person is bound by an applicable provision; and

(b)    the person breaches the provision.

(2)    Subject to subsection (3), where:

(a)    2 or more breaches of an applicable provision are committed by the same person; and

(b)    the breaches arose out of a course of conduct by the person;

the breaches shall, for the purposes of this section, be taken to constitute a single breach of the term.

…

20    An “applicable provision” for the purpose of s 719 includes a term of the Australian Fair Pay and Conditions Standard (the AFPCS), (s 717). Section 185(2) of the WR Act was one of the provisions constituting the AFPCS.

21    Section 557(1) of the FW Act provides:

(1)    For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:

(a)    the contraventions are committed by the same person; and

(b)    the contraventions arose out of a course of conduct by the person.

Subsection (2) lists a number of civil remedy provisions and, relevantly, includes s 45 which was contravened in the present case. It also includes “any other civil remedy provisions prescribed by the regulations”. Subsection (3) has the effect that subs (1) does not apply to contraventions which have been the subject of previous court decisions.

22    The “2 or more contraventions” of a civil remedy provision or of an applicable provision, to which s 557(1) and s 719(2) refer, may be committed in respect of two or more employees: Clothing and Allied Trades Union v Snugglerite Industries Pty Ltd (1990) 34 IR 124 at 126. That is to say, contraventions of the same provision but in respect of two or more employees will constitute “2 or more contraventions”, as will successive contraventions of the one provision in respect of a single employee. The pertinent question is whether the breaches arose out of a single course of conduct.

23    However, it is not possible to regard contraventions of corresponding provisions in the WR Act, the Transitional Act and the CS Award as constituting a single contravention. That is because each of s 719(2) and s 557(1) apply only to contraventions of the same provision. They have no application to contraventions of different provisions, even if those provisions impose obligations of the same or a broadly similar kind.

24    The civil remedy provisions to which s 557(2) refers are not just the sections which it lists. They include each term of a modern award which has been breached. That has the consequence that, in a case like the present, in which there have been breaches of more than one term of a modern award, s 557(1) does not operate to deem a single contravention of s 45. It operates instead to deem a single contravention of each particular award term which has been contravened: Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62; (2014) 221 FCR 153.

25    Neither s 719(2) of the WR Act or s 557(1) of the FW Act are to be understood as exhausting the circumstances in which a “course of conduct” may be relevant to the imposition of penalties for industrial offences. Their effect is to make the circumstance that a contravention occurred as part of a course of action one of the integers which must be present before the Court is obliged to treat multiple contraventions in the way it requires in relation to the contraventions to which they apply. However, in relation to other contraventions, the Court’s satisfaction that a contravention forms part of course of conduct may be relevant to the assessment of penalty in a number of ways: as indicating that particular contraventions before the Court are not isolated; as reducing the scope for leniency; or as indicating that the two or more contraventions really reflect a single incursion by the contravenor into unlawful conduct.

26    In CFMEU v Cahill [2010] FCAFC 39; (2010) 269 ALR 1, Middleton and Gordon JJ said of the way in which a course of conduct is relevant:

[39]    … The principle recognises that where there is an inter relationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality. That requires careful identification of what is “the same criminality” and that is necessarily a factually specific enquiry. Bare identity of motive for commission of separate offences will seldom suffice to establish the same criminality in separate and distinct defending acts or omissions.

(Emphasis added)

27    I am satisfied that the conduct of South Jin in underpaying the trolley collectors did constitute a course of conduct. The underpayments were not random, unconnected, or accidental. Instead, South Jin adopted, deliberately, a system which would result in underpayments and sought to disguise that by producing wage records which were not just inaccurate but false. These findings do South Jin and Mr Jin, in particular, no credit.

28    The course of conduct involved several elements. First, the recruitment of young men, mostly nationals from Asian countries, who were in Australia on tourist or students visas. I infer that these young men had limited English and could be taken to have limited knowledge of their industrial entitlements. This meant that they were less likely to complain about their treatment. In this sense they were a group of vulnerable employees.

29    Secondly, the course of conduct involved the payment to trolley collectors of amounts which were well less than their entitlements. Mr Sarkar, a casual trolley collector, said that he was being paid at the rate of $8 per hour. Other trolley collectors had told him that they were also being paid that rate. Mr Jeong told Ms Peters, the FWO inspector, that he worked seven days per week and that he too was being paid at the rate of $8 per hour.

30    At the trial, it was suggested that the amount of $8 per hour was the net amount remaining after South Jin had deducted income tax at the higher rate because no declaration form had been provided to it. However, there was no evidence at trial, or for that matter at the penalty hearing, of amounts deducted having been remitted to the Australian Taxation Office which would be expected if this was in fact the explanation. Such evidence should have been relatively easy to obtain had this been a true explanation. The absence of such evidence is telling. I am not satisfied that deduction of PAYG instalments accounts for the underpayments.

31    Thirdly, I am satisfied that this is not a case in which South Jin proceeded in ignorance of its statutory and award obligations. I will refer shortly to evidence indicating that it was both informed and reminded from time to time of its obligations. In addition, Mr Hyun, who was involved in the business in a way not fully disclosed in the evidence, must have been aware of an employer’s obligations to trolley collectors by reason of his having been prosecuted, successfully, by the FWO in the South Australian Industrial Relations Court for contraventions of the FW Act.

32    In the Liability Judgment, I found that wage records provided by Mr Jin to the FWO were unreliable. They had many of the hallmarks of documents prepared in retrospect in an attempt to disguise the underpayments. I consider that the wage records were an attempt by South Jin to conceal its underpayments, and that Mr Jin knew that was so.

33    In this context, the failure by South Jin to comply with the various statutory and award obligations can be seen, appropriately, to form part of a single course of conduct, namely, the exploitation of the employed trolley collectors by not paying to or on their behalf the amounts to which they were entitled under the WR Act, the Transitional Act and the FW Act.

34    The contraventions as accessories by each of the respondents are also properly to be understood as occurring in a course of conduct.

35    When the multiple contraventions are treated as a single contravention pursuant to ss 719 or 557, then the maximum penalty for a single contravention is applicable. That penalty should reflect all of the conduct involved: Hamberger v CFMEU [2002] FCA 585 at [27].

Approach to fixation of penalty

36    The FWO submitted that the Court should proceed as follows:

(i)    The Court had found in the Liability Judgment that “each term” had been contravened by South Jin in respect of 38 employees.

(ii)    Each contravention formed part of a single course of conduct as one decision had been made by South Jin in respect of each kind of underpayment, one decision not to issue payslips and one decision not to make and keep employee records;

(iii)     On this basis, there were 10 failures to pay the correct entitlements, two failures to issue payslips and two record-keeping failures, a total 14 contraventions. The 10 underpayment failures were calculated by separating out the different periods in which underpayments of casual loading, prescribed minimum rates, overtime, penalty rates and superannuation contributions had occurred. Likewise the two pay slip and record-keeping failures distinguished between those occurring when the WR Act was in force and those occurring after the FW Act came into operation;

(iv)    However, the nature and quality of the contraventions relating to the failure to pay the correct basic rate of pay, casual loading, minimum rate of pay, overtime and penalties and the failure to issue payslips and to keep employee records remained constant from 1 January 2009 to 21 November 2010. That is to say, that the single decisions/failures of South Jin remained the same during the periods in which the WR Act, the Transitional Act and the FW Act applied, albeit that the changes in legal framework meant that South Jin’s conduct had different consequences at different times;

(v)    This meant that the number of contraventions should be reduced from 14 to seven, and penalties should be imposed on that basis.

37    In my opinion, this approach is incorrect, for a number of reasons.

38    In the first place, the Court did not conclude that each of the contraventions it found established had occurred in respect of each of the 38 employees. Amongst other things, the provisions with respect to casual rates of pay were contravened only in respect of the 12 employees found to be casual, and the composition of the cohort of casuals in 2009 when the WR Act and the Transitional Act were in force did not match exactly the cohort of casuals in 2010 when the CS Award applied.

39    Secondly, the “terms” which the Court found had been breached in relation to casual employees were not the same in each case. In the period from 16 February 2009 to 30 June 2009, it was s 185(2) of the WR Act which was contravened; in the period from 1 July to 31 December 2009, it was Item 5 of Sch 16 of the Transitional Act which was contravened; and from 1 January 2010, it was different provisions in the CS Award which were contravened. Similarly, the provisions containing the pay slip and record keeping obligations which were breached were not the same throughout the period from 16 February 2009 and 21 November 2010, even though the substance of the obligations they imposed were similar.

40    As already noted, s 719 of the WR Act and s 557(1) of the FW Act operate in respect of contraventions of the same provisions, and not in respect of provisions which serve only to impose similar obligations.

41    Accordingly, I am not willing to adopt the approach for which the FWO contended.

42    Instead, I will treat each of the contraventions listed below as constituting separate single contraventions:

(a)    the contraventions of s 185(2) of the WR Act (failure to pay the casual loading to Avi Narayan Baskota in the period between 1 April and 30 June 2009);

(b)    the contraventions of Item 5 of Sch 16 of the Transitional Act (failure to pay the casual loading in the period between 1 July and 31 December 2009 to seven casual employees);

(c)    the contraventions of cl 16 of the CS Award (failure to pay the prescribed hourly rate in the period between 1 January and 22 April 2010 to the nine casual employees who worked in that period);

(d)    the contraventions of cl 12.5(a) of the CS Award (failure to pay the casual loading of 25% in the period between 1 January and 22 April 2010 to the nine casual employees who worked in that period);

(e)    the contraventions of cl 16.1 and cl 28 of the CS Award (failure to pay the applicable transitional minimum hourly rates of pay to the seven casual employees who worked in the period between 23 April to 30 June 2010);

(f)    the contraventions of cl C.7.2 of Sch C of the CS Award (failure to pay the transitional default casual loading of 20% in the period between 23 April and 30 June 2010 to the seven casual employees who worked in that period);

(g)    the contraventions of cl C.2.5 of Sch C, cl 27.2 and cl 28 of the CS Award (failure to pay the highest applicable hourly rate to the seven casual employees who worked in the period between 1 July and 21 November 2010);

(h)    the contraventions of cl C.7.3 of Sch C of the CS Award (failure to pay the transitional casual loading of 21% to the seven casual employees who worked in the period between 1 July and 21 November 2010);

(i)    the contraventions of cl 16 and cl 28 of the CS Award (failure to pay the highest applicable rate to the 17 full-time employees who worked in the period between 1 January and 22 April 2010);

(j)    the contraventions of cl 16.1 and cl 28 of the CS Award (failure to pay the highest applicable rate to the 15 full-time employees who worked in the period between 23 April and 30 June 2010);

(k)    the contraventions of cl C.2.5 of Sch C, cl 27.2 and cl 28 of the CS Award (failure to pay the highest applicable rate to the 15 full-time employees who worked in the period between 1 July and 21 November 2010);

(l)    the contraventions of cl 23.2 of the CS Award (failure to pay superannuation contributions in respect of all the trolley collectors who performed work in the period 1 January to 21 November 2010);

(m)    the contraventions of reg 19.4(1) of the WR Regulations (failure to make and keep employee records in the period from 16 February to 30 June 2009);

(n)    the contraventions of s 535 of the FW Act (failure to make and keep employee records in the period from 1 July 2009 to 21 November 2010);

(o)    the contraventions of reg 19.20(1) of the WR Regulations (failure to issue pay slips in the period 16 February to 30 June 2009);

(p)    the contraventions of s 536(1) of the FW Act (failure to issue pay slips in the period 1 July 2009 to 12 September 2010).

43    Mr Jin was involved in all these contraventions but the CTS Respondents in some only. Further, on my findings their involvement ceased with effect from 2 September 2010.

44    By proceeding in the way just outlined, I will give effect to s 719(2) and s 557(1) respectively. In addition, I will take into account that each of the deemed single contraventions involving the failure to pay trolley collectors their statutory and award entitlements was a manifestation of a more widespread course of conduct, namely, the underpayment of wages and other entitlements. By doing so, I will endeavour to avoid the imposition of a double punishment for the separate manifestations of what in some cases is in substance the same conduct. I will then consider application of the totality principle.

45    The material provided by the FWO does not identify the losses suffered by each employee by each contravention or even the total underpayments resulting from each group of contraventions. Given the unreliability of South Jin’s records there are obvious difficulties in making a precise calculation. This does not mean that penalties may not be imposed: only that some circumspection in doing so is necessary.

Mr Jin

46    As noted in the Liability Judgment, at [6], Mr Jin denied the FWO allegations concerning his liability as an accessory, but did not participate in the trial. This meant that he put the FWO to proof of the allegations against him. At the penalty hearing, his counsel informed the Court that Mr Jin “accepts the decision” in the Liability Judgment. Despite that, many of the submissions on Mr Jin’s behalf sought to minimise his personal responsibility. For example, counsel submitted that “the fundamental liability should rest with Coastal Trolleys as he [Mr Jin] followed their directions”; that Mr Jin “ran his business in accordance with directions from other respondents”; that Mr Jin had “virtually no control in terms of the number of employees or the rate of pay”; that Mr Jin “was under significant control by Mr Stroop”; that “CTS was dominant in work relations”; that Mr Jin “has been naïve”; and that “he is an unsophisticated business person”.

47    Mr Jin did not adduce any evidence to support these contentions. The only he adduced was from Ms Chiro, his accountant. However, she could not give evidence about Mr Jin’s contraventions as he had not retained her until more than 12 months after the last of the contraventions to which these proceedings relate.

48    Ms Chiro’s affidavit indicates that, since December 2011, Mr Jin and his wife have operated a trolley collection business subcontracting directly to ITM; that the business is operated by Mr Jin’s family trust; that it has between four and seven employees; that Ms Chiro considers that the business complies with its liabilities with respect to wages, tax, superannuation and employment records, and that, with Ms Chiro’s assistance, Mr and Mrs Jin have taken a number of steps to familiarise themselves with the obligations of conducting a business. In the financial year ending 30 June 2015, Mr and Mrs Jin had a combined income of $57,389.

49    I accept that evidence but note that Mr Jin did not provide any evidence at all with respect to the conduct which is the subject of these proceedings, let alone provide an evidential basis for the submissions made on his behalf, as summarised above. Nor did Mr Jin provide any evidence as to what South Jin did with the monies it did receive periodically from CTS in 2009 and 2010 and which it could have applied to paying trolley collectors their lawful entitlements or at least amounts which were more closely aligned to their entitlements. Nor did Mr Jin adduce any evidence as to the way in which South Jin had used the additional lump sum payment of $56,381 it had received from CTS in September 2010 and, in particular, to establish that that money had been applied, at least in part, to make good its underpayments.

50    At the heart of the submissions on Mr Jin’s behalf was the suggestion that the amounts which South Jin received periodically from CTS meant that it was not financially possible for it to pay its employees their entitlements. However, financial difficulty is not a justification for an employer to fail to comply with its statutory and award obligations. The observations of Keely J in Lynch v Buckley Sawmills Pty Ltd (1984) 3 FCR 503 at 508 are pertinent in this respect:

[I]t is important that the respondent – and other employers bound by the award or by other awards under the Act – understand the importance of complying with an award and it follows that any decision taken by them which is regarded as affecting their obligations to comply with particular provisions of an award or the award generally should only be taken after careful consideration. They must not be left under the impression that in times of financial difficulty they can breach an award made under the Act either with impunity or in the belief that no substantial penalty will be imposed in respect of a breach found by a court to have been committed.

51    Given the submissions made on Mr Jin’s behalf, it is appropriate to repeat some of the findings in the Liability Judgment concerning him. These were that Mr Jin was the principal of South Jin and involved personally in the day to day management of its trolley collecting operations. He was South Jin’s alter ago. Mr Jin had knowledge of South Jin’s operations and of matters concerning its employment of trolley collectors, at [378], and he had knowledge of his statutory obligations under the WR Act and the CS Award, at [381] because, amongst other things, he had participated in an “updated induction and compliance program” conducted by ITM in April 2009 which included the provision of information on a number of an employer’s obligations to trolley collectors, at [387] and had attended an information session at the office of CTS in February 2010 in which Mr Vickery from ITM had provided information about the CS Award and its obligations. In addition, Mr Stroop had also provided Mr Jin from time to time with information concerning his obligations.

52    In summary, the submission that Mr Jin proceeded, in effect, almost as a mere cipher of CTS is not supported by any evidence, and is inconsistent with the evidence at the trial and the findings in the Liability Judgment. Mr Jin has primary responsibility for South Jin’s contraventions. His refusal even now to accept personal responsibility for his conduct counts against him having any genuine contrition and therefore against mitigation of penalty on that account.

53    I accept the FWO’s submission that the conduct of Mr Jin was more egregious than that of the CTS Respondents. There are a number of reasons why that is so. First, Mr Jin was the alter ego of South Jin and controlled its conduct. Secondly, Mr Jin was involved in all of South Jin’s contraventions whereas the CTS Respondents were involved only in the underpayments occurring between 1 January to 22 April 2010 and from 1 July to 2 September 2010.

54    In making those findings, I am not overlooking the findings in the Liability Judgment to the effect that the periodic amounts which CTS paid to South Jin were, in the main, inadequate to allow it to meet its statutory and award obligations. However, as already indicated, that circumstance does not mitigate, let alone justify, South Jin’s conduct.

55    Further, South Jin’s obligations with respect to record keeping and the issue of pay slips existed independently of, and were unaffected by, its relationship with CTS or the payments it received from CTS. Irrespective of the conduct of the CTS Respondents it could, and should, have complied with its obligations in that respect. I agree, with respect, with the observations of Riethmuller FM in Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd [2012] FMCA 258 at [67] concerning the purpose of provisions requiring the issue of pay slips. Such slips allow employees to understand how their pay is calculated and to obtain independent advice concerning their entitlements. They allow genuine mistakes or misunderstandings to be identified quickly and rectified. In this way, the obligation of employers to issue pay slips is a significant adjunct to the enforcement of compliance with the requirements of industrial legislation and industrial awards. The keeping of proper employment records serves a like purpose.

56    The losses to the trolley collectors resulting from the underpayments by South Jin were substantial. The FWO has calculated these to total $85,367.62 and Mr Jin has accepted the accuracy of that calculation.

57    South Jin did not remedy its underpayments before going into liquidation, and none have been paid by the liquidator since. It is improbable that any of the trolley collectors will be able to recoup their losses in the liquidation.

58    As I found at [390] in the Liability Judgment, Mr Jin knew that there were concerns about South Jin’s compliance with its obligations to employees because of the requests made by CTS that he produce his wage records and other information and its further request that he obtain a letter from his accountant certifying as to South Jin’s compliance with its statutory and award obligations.

59    Although Mr Jin did not participate in the liability trial, he is not entitled to any mitigation of penalty on account of voluntary cooperation with the FWO. He did not admit his liability and, instead, put the FWO to proof. The fact that he did so is not an aggravating matter, but it does deprive Mr Jin from an entitlement to any lenience on this account. As noted earlier, Mr Jin’s attempt to divert his personal responsibility for the contraventions also counts against the Court being satisfied that he has any genuine contrition for what has occurred.

60    On the other hand, it is to Mr Jin’s credit that he has in respect of his current business taken steps, in particular by enlisting the aid of his accountant, to ensure that he complies with his statutory and award obligations.

61    It is also to Mr Jin’s credit that he has no prior record of non-compliance with the requirements of industrial legislation.

62    Nevertheless, I consider that the penalty should, as is ordinarily the case, reflect the elements of both general and personal deterrence. As indicated earlier, this is a principal purpose of penalties. Ms Smith, an FWO inspector, has deposed that in the period between July 2011 and December 2015, the FWO received approximately 125 requests for assistance from workers within the trolley collection industry. The majority of the requests (some 55%) concerned questions of pay and conditions. The evidence did not disclose the extent to which (if at all) the requests reflected non-compliance by employers in the trolley collection industry with their obligations but the number of requests does tends to confirm that this is an industry in which vigilance is necessary to ensure compliance by employers with their obligations.

63    Specific deterrence is appropriate because of Mr Jin’s continued employment of workers. The fact that he continues to be engaged in the trolley collection business makes specific deterrence even more pertinent.

The CTS Respondents

64    I found that the CTS Respondents were liable as accessories in respect of the underpayments by South Jin in the period from 1 January to 23 April 2010 and from 1 July to 2 September 2010. The FWO submitted that the underpayments to the trolley collectors during this period totalled $49,722 and, as noted earlier, the Court was told later that these calculations were agreed.

65    I found that the CTS Respondents were liable as accessories because they knew the service hours under the contracts with Coles, Woolworths and Foodland; knew the number of hours for which South Jin would have to engage trolley collectors to meet the service requirements at each site (even when those hours were adjusted to provide the bare minimum coverage); knew the minimum rates of pay and other entitlements which South Jin would have to pay to the trolley collectors; knew that South Jin would be required to engage trolley collectors to work on Saturdays and Sundays when penalty rates were applicable; knew that South Jin relied on the payments from CTS to meet its statutory and award obligations; knew that the rates payable under the CS Award exceeded the effective rates which it was paying; and knew that the amounts which CTS was paying to South Jin were insufficient to allow South Jin to meet its obligations under the CS Award. Despite this knowledge, and despite its inadequate payments, the CTS Respondents expected and encouraged South Jin to continue to provide trolley collection services so as to comply with its contractual obligations to CTS. It did so because it was by this means that CTS fulfilled its obligations under its contracts, and avoided itself being in breach of contract with ITM and because, in 2010, it was earning some $2,600-$2,900 per week from the contracts with the supermarkets which were being performed by South Jin.

66    I also accepted that Mr Stroop had counselled Mr Jin to reduce the number of his trolley collectors at each site but, at the same time, he knew that South Jin could not reduce those numbers below the minimum necessary to service adequately each site and that the amounts CTS was paying South Jin were inadequate to allow it to meet its award obligations with respect to that minimum.

67    The participation of the CTS Respondents in the underpayment contraventions of South Jin is serious, but I repeat my earlier finding that the primary responsibility rests with South Jin and Mr Jin, and not with the CTS Respondents.

68    CTS had the means to pay additional amounts to South Jin during 2010 to permit it to comply with its statutory and award obligations. In [293] of the Liability Judgment, I set out a table which demonstrated that, by 1 January 2010, CTS was retaining from the amounts which it received from ITM in respect of the contracts performed by South Jin $2,672.72 per week and, by 4 July 2010, $2,914.12 per week. There was accordingly a readily available means by which CTS could have addressed the problem which it knew existed. Further still, the profit and loss statements for CTS provided by the CTS Respondents reveal the following:

I infer that the net income figures in each of these years were derived after Mr Stroop’s own wages had been deducted as an expense. The CTS Respondents did not contend to the contrary. These figures demonstrate that CTS had the means, whether by use of income in the current year or in the FYE 30 June 2011 from its retained profits, to have made additional payments to South Jin which would have permitted it to comply with its statutory and award requirements with respect to payment of its employees.

69    Counsel for the CTS Respondents acknowledged expressly that an increase by CTS in the payments it made to South Jin was one of the options available when the labour costs increased following the commencement of the CS Award on 1 January 2010. No explanation has been provided for it failing to do so until 2 September 2010, other than that CTS had not itself received any increase in payments in respect of the contracts being performed on its behalf by South Jin. In these circumstances, I accept the FWO’s submission that it appears that the CTS Respondents chose to place their own financial interests above the interests of South Jin and its trolley collectors.

70    There is other action which the CTS Respondents could have taken. Mr Stroop deposed that the catalyst for the supermarkets agreeing ultimately (in 2010 and 2011 respectively) to increase the payments which they made with respect to the provision of trolley collection services was his conduct in causing the numbers of trolley collectors at the Parabanks and Elizabeth Shopping Centres to be reduced to one trolley collector each day. The respective store managers then complained about the level of service provided. This led to the complaints being addressed at the national level and Coles and Woolworths then agreeing to make additional payments. This action, although of a confrontational kind, could have been taken earlier.

71    I proceed on the basis that neither of the CTS Respondents has a previous history of non-compliance with the requirements of industrial legislation. The written outline of submissions by the FWO referred to her determination on a complaint of underpayment made by an employee of CTS in March 2010. However, CTS had disputed that determination and subsequent proceedings in the SAIRC were discontinued following a settlement. Initially, counsel for the FWO submitted that the Court could take into account the fact that CTS had been subject to a complaint and that the FWO had found that complaint to have substance. Ultimately however, counsel for the FWO conceded that CTS did not have any history of previous non-compliance with industrial legislation.

72    The CTS Respondents raised a number of matters in mitigation. Mr Stroop deposed that CTS had lost its subcontracts with Woolworths on 25 September 2011 and its subcontracts with Coles on 10 April 2012. He attributed the loss of these contracts to the effects of articles published by the FWO on its own website and in mainstream media. Mr Stroop provided copies of a number of these articles.

73    An article published in The Advertiser newspaper on 13 August 2011 commenced with the following:

Workers employed by two Adelaide trolley-collection firms have allegedly been underpaid about $165,000.

The Fair Work Ombudsman alleges the firms underpaid the 48 workers from India, South Korea, Nepal and Burma between $500 and $8,000 each between February, 2009 and November last year.

The companies – Coastal Trolley Services and South Jin – provided trolley-collecting services at major shopping centres including Marion and West Lakes and for supermarkets including Coles, BigW, Woolworths, Kmart, Target and Foodland and the Dan Murphy’s store at Marion.

Federal Court documents alleged the workers were underpaid their minimum hourly rates, overtime, weekend penalty rates and superannuation entitlements.

…

74    A more extensive article concerning the commencement of the present litigation which also named CTS was published on the FWO website on 14 August 2011. Later articles were published on the FWO website on 1 September 2013 and 29 August 2014, but this occurred well after CTS had lost the Woolworths and Coles subcontracts.

75    The evidence demonstrating a causal relationship between the publication of the articles, on the one hand, and the loss of the contracts on the other, is slight. Mr Stroop deposed only that “following the publication of these articles [in 2011], Coles and Woolworths chose to distance themselves from CTS immediately. I was told by Rob Chamberlain of the EMS Department of Woolworths that this was a decision that came from head office”. That evidence does not establish that any relevant officer within Coles or Woolworths had even seen the articles, let alone been prompted to terminate the contracts because of their contents.

76    Further, the contracts to which Mr Stroop appears to be referring are the contracts from Woolworths and Coles which were the subject of the present proceedings. I note that CTS did not contract directly with Woolworths or Coles in relation to these contracts. Instead, it was ITM which held the contracts with Woolworths and Coles and which subcontracted to CTS.

77    Adverse publicity of the kind to which Mr Stroop deposed does not generally operate as a mitigating factor. No doubt that is because those who choose to engage in unlawful conduct cannot be heard to complain when the unlawful conduct is detected and the community informed of its occurrence. It is ordinary experience that many persons in the community choose not to have dealings with those whom they know, or believe, to have acted unlawfully. When that occurs in a given case, it is appropriately seen as a consequence which the contravenor has brought upon itself.

78    In Ryan v The Queen [2001] HCA 21; (2001) 206 CLR 267, McHugh J (with whose reasons on this topic Hayne J said at [157] he substantially agreed) said that he was not convinced that factors such as public opprobrium and a permanent and public stigma entitled a convicted person to a lesser sentence than would otherwise be the case, at [52]. McHugh J continued:

[53]    First, it would seem to place a burden on the sentencing judge which would be nearly impossible to discharge. The opprobrium attaching to offences varies greatly from one offender and one offence to another. How a judge could realistically take such a matter into account is not easy to see. Whether or not public opprobrium will attach to an offence and, if so, to what extent, will depend on the individual, his or her position and reputation in society, whether and when the offender will return to the community where the offence occurred and the nature of the publicity, if any, that the conviction receives. In the case of long sentences, taking into account the impact of public opprobrium or stigma would seem an impossible exercise and almost meaningless. In addition, taking public opprobrium or stigma into account would seem to favour the powerful and well known over those who were lesser known. I see no reason why the well known individual should get a lesser sentence than the person who is hardly known in his or her community.

[54]    No doubt it is legitimate to take into account many matters that are personal to the offender and that will have consequences on that person's future life. It is legitimate, for example, to take into account that the conviction will result in the offender losing his or her employment or profession or that he or she will forfeit benefits such as superannuation. But I am not convinced at the moment that public opprobrium is to be treated as equivalent to the loss of a job or similar personal or financial loss.

[55]    Second, the worse the crime, the greater will be the public stigma and opprobrium. The prisoner who rapes a child will undoubtedly be subject to greater public opprobrium and stigma than the prisoner who rapes an adult person. But, without the benefit of a full argument on the issue, I do not see why the objectively appropriate sentence for raping a child should be reduced by reason of any public opprobrium or stigma that the prisoner might suffer.

(Citations omitted)

79    Kirby J at [123] and Callinan J at [177] took a contrary view with Kirby J holding that at least in some cases “account might properly be taken of the particular features to which such a prisoner is exposed, including the additional opprobrium, adverse publicity, public humiliation and personal, social and family stress which he has suffered”.

80    In Church v The Queen [2012] NSWCCA 149, Button J with whom McClellan CJ at CL and Price J agreed, held that actions of the media can, in extreme cases, amount to a form of extra-curial punishment of which account could be taken in the criminal sentencing process, at [34]. Other cases too have suggested that the cases in which account is taken of the adverse publicity tend to be exceptional such as when the publicity has resulted in public vilification or has had a significant psychological effect.

81    In Cousins v Merringtons Pty Ltd (No 2) [2008] VSC 340, Hansen J at [59]-[64], after referring to a number of decisions concerning prosecutions under the Trade Practices Act 1974 (Cth), noted that:

(a)    the cases recognise that a regulator may appropriately issue a media release concerning a case it has commenced but with the expectation that a release issued before trial should have an “appropriate restraint in tone and content”;

(b)    publicity resulting from the issue of a media release by a regulator of this kind is a foreseeable consequence of the conduct in which a contravenor engages with the consequence, in a real sense, that the respondents can be regarded as the authors of their own misfortune.

82    I also observe that publicity of the kind of which the CTS Respondents complain presently can be a part of a regulator’s role in educating the public and deterring future contraventions.

83    For all these reasons, I do not consider it appropriate to take account of any adverse consequence to the CTS Respondents resulting from the publicity to which Mr Stroop deposed.

84    It is appropriate to take into account that CTS ceased trading in 2012. Neither it nor Mr Stroop have any continuing involvement in the trolley collection business. Mr Stroop is now unemployed.

85    I accept that Mr Stroop has suffered a number of misfortunes in his life since 2010, including a marital separation and divorce, a motorcycle accident and the death of a daughter.

86    It is to the credit of the CTS Respondents that there is no suggestion that CTS was in breach of its obligations under the CS Award to the trolley collectors which it employed directly.

87    Counsel for the CTS Respondents submitted that penalties should be imposed on the basis that “there is really one kind of contravention involved” resulting from the knowledge of the CTS Respondents that South Jin did not have the means to pay the full entitlements of its employees. I reject this approach. It is contrary to the statutory requirement imposed by s 557.

88    The FWO emphasised that the CTS Respondents had defended the proceedings “vigorously and at significant cost to the public purse”. That may be so, but the CTS Respondents were entitled to do so. As it happens, they succeeded in defending parts of the claims made against them by the FWO. Further, and in any event, the circumstance that a contravenor has disputed the allegations made against it is not an aggravating factor. All it means is that the contravenor is not entitled to any credit on account of an early acknowledgment of its wrongful conduct for its cooperation with the regulator. That is to say, the defence of the proceedings means that the contravenor is not entitled to leniency but it is not of itself an aggravating factor.

89    The CTS Respondents have not made any expression of contrition for their own wrongful conduct. Counsel submitted only that “they are sorry that South Jin did not correctly pay the employees”.

90    The observations made above with respect to personal and general deterrence apply with equal force in the case of the CTS Respondents.

91    It is to the credit of the CTS Respondents that CTS made an additional payment of $56,381 to South Jin on 2 September 2010. It provided those monies from its own pocket as this was well before Coles and Woolworths made their additional payments. The evidence does not permit the Court to conclude that this sum offset, in whole or in part, the underpayment of $49,722 which occurred during the participation by the CTS Respondents in South Jin’s contraventions. In the Liability Judgment, I found that the liability of the CTS Respondents ceased with effect from 2 September 2010 because it may have intended that South Jin apply those monies to meet its obligations after that date. That being so, it would be inappropriate to regard the $56,381 as making good the whole of the earlier underpayments of South Jin.

92    I take into account that the CTS Respondents did provide some education to Mr Jin and South Jin with respect to its obligations as an employer. However, it remains the fact that CTS did not provide South Jin with the means by which it could comply with those obligations whilst at the same time requiring it to fulfil CTS’s obligations under its contracts with ITM and, in one case, directly with a supermarket.

Imposition of penalties

Mr Jin

Contraventions of s 185(2) of the WR Act with respect to Mr Baskota

93    South Jin contravened s 185(2) by failing to pay Mr Baskota the appropriate casual rate in the period between 1 April 2009 and 30 June 2009. The FWO did not identify the total underpayment in this period. However, the total underpayment is agreed to be $85,367.62 of which $2,216.42 is attributable to Mr Baskota. As Mr Baskota worked both before and after 1 July 2009, the pro-rata underpayment in respect of his employment in the period 1 April 2009 and 30 June 2009 would appear to be a little less than $750.

94    A single penalty of $750 is imposed on Mr Jin in respect of his contraventions in this period.

Contraventions of Item 5 Sch 16 of the Transitional Act

95    There were contraventions with respect to seven casual trolley collectors during this period. Again, the underpayment cannot be calculated with any precision, because many continued as casual employees in 2010. I take into account that the contraventions of Item 5 Sch 16 were a continuation of the course of conduct which had commenced before 1 July 2009 but that it now involved multiple employees. I consider a single penalty of $4,000 to be appropriate.

Contraventions of cl 16 of the CS Award (failure to pay the applicable minimum rate in the period 1 January to 22 April 2010

96    These were contraventions of the obligation to pay the minimum hourly rate. It affected nine casual employees and in several cases continued over many months. The total underpayment has not been identified by the FWO.

97    I consider a single penalty of $4,500 to be appropriate.

Contravention of cl 12.5(a) of the CS Award (failure to pay the casual loading of 25% in the period from 1 January to 22 April 2010)

98    These contraventions affected the same nine casual employees and in most cases continued throughout the period. They went hand in hand with the contraventions for which the previous penalty was imposed. In order to avoid double punishment, a reduced single penalty is appropriate. I impose a penalty of $1,000.

Contraventions of cl 16.1 of the CS Award (failure to pay the applicable minimum rate to nine casual employees in the period 23 April and 30 June 2010)

99    These contraventions also affected several employees and continued over many months. The total underpayment has not been identified by the FWO. I consider a single penalty of $4,500 to be appropriate.

Contraventions of cl C.7.2 of the Sch C of the CS Award (failure to pay the transitional default casual loading of 20% in the period 23 April to 30 June 2010)

100    Again, in order to avoid double punishment for these contraventions which accompanied the contraventions concerning the casuals in the same period, I will impose a reduced penalty for the deemed single contravention in respect of this period. I impose a penalty of $1,000.

Contraventions of cl C.2.5 of Sch C, cl 27.2 and cl 28 of the CS Award (failure to pay the highest applicable rate to casual employees in the period 1 July and 21 November 2010)

101    These contraventions also occurred for many months and affected several employees. The contraventions continued even after South Jin received the additional lump sum payment from CTS. The FWO has not identified the losses suffered by the employees in this period.

102    I consider a single penalty of $4,500 to be appropriate.

Contraventions of cl C.7.3 of Sch C of the CS Award (failure to pay the transitional casual loading of 21% in respect of the seven casual employees in the period 1 July and 21 November 2010)

103    For the same reasons as given previously, I impose a single penalty of $1,000 in respect of this deemed single contravention.

Contraventions of cl 16 and cl 28 of the CS Award (failure to pay highest minimum rate to full-time employees in the period 1 January to 22 April 2010)

104    I consider that a single penalty of $4,500 should be imposed. That reflects the number of employees who were affected (15), the long period of time over which the contraventions occurred and the greater culpability constituted by the persistence in the contravening conduct.

Contraventions of cl 16.1 and cl 28 of the CS Award (failure to the highest applicable rate to full-time employees in the period 23 April to 30 June 2010)

105    Again, and for similar reasons, I consider that a single penalty of $4,500 is appropriate.

Contraventions of cl C.2.5 of Sch C, cl 27.2 and cl 28 of the CS Award (failure to pay the highest applicable rate to full-time employees in the period 1 July to 21 November 2010)

106    As with the immediately preceding contraventions, these contraventions also affected multiple employees and continued over a long period. The FWO has not identified the underpayment involved. A single penalty of $4,500 is appropriate.

Contraventions of cl 23.2 of the CS Award (failure to pay superannuation payments in respect of the period 1 January to 21 November 2010)

107    The contravention affected all 49 employees who worked during this period. I consider that a single penalty of $6,000 is appropriate.

Contraventions of reg 19.4(1) of the FW Regulations (failure to keep employee records in respect of the period 16 February to 30 June 2009)

108    A single penalty of $800 is appropriate.

Contraventions of s 535 of the FW Act (failure to keep employee records in the period 1 July 2009 to 21 November 2010)

109    A single penalty of $1,000 is appropriate.

Contravention of reg 19.20(1) of the WR Regulations (failure to issue pay slips)

110    A single penalty of $800 is appropriate.

Contraventions of s 536(1) of the FW Act (failure to issue pay slips)

111    A single penalty of $1,000 is appropriate.

The CTS Respondents

112    As previously noted, on my findings the CTS Respondents were knowingly involved in South Jin’s underpayment contraventions during the periods 1 January to 22 April 2010 and 1 July to 2 September 2010. Although the FWO did not seek declarations with respect to the accessorial liability of the CTS Respondents in the contraventions of cl 16 of the CS Award in the period 1 January to 22 April 2010, it is nevertheless appropriate for penalties to be imposed.

Contraventions of cl 16 of the CS Award in respect of the nine casual employees in the period 1 January to 22 April 2010

113    I consider that a single penalty of $3,250 is appropriate in the case of Mr Stroop and $15,000 in the case of CTS. I will not impose any additional penalty in relation to the failure to pay the casual loadings because to do so would involve double punishment.

Contraventions of cl 16 and cl 28 of the CS Award (failure to pay the highest applicable rate in the period 1 January and 22 April 2010)

114    These contraventions affected 17 full-time employees.

115    It is difficult to disaggregate the culpability of the CTS Respondents in respect of these contraventions from the contraventions occurring in the same period with respect to the casual employees. This makes it particularly important to avoid imposing penalties which would involve double punishment. In these circumstances, I consider penalties of $1,000 and $5,000 respectively to be appropriate.

Contraventions of cl C.2.5 of Sch C, cl 27.2 and cl 28 of the CS Award (failure to pay the highest applicable rate to the casual employees in the period 1 July to 2 September 2010)

116    These contraventions affected seven employees. As previously indicated, the FWO has not identified the losses to these employees in this period. I take into account that the involvement of the CTS Respondent in South Jin’s contraventions was, on my findings, for a shorter period than was the case with Mr Jin. I consider penalties of $1,000 and $3,000, respectively to be appropriate. I will not impose any additional penalty in relation to the failure to pay the casual loadings, in order to avoid the imposition of double punishment.

Contraventions of cl C.2.5 of Sch C, cl 27.2 and cl 28 of the CS Award (failure to pay the highest applicable rate to full-time employees in the period 1 July and 2 September 2010)

117    The considerations just mentioned in relation to the contraventions concerning the casual employees in this period are also applicable. I consider that single penalties of $3,250 and $15,000 respectively are appropriate.

The totality principle

118    I have considered whether these penalties should be reduced on account of the totality principle. As has been seen, I have in the fixing of the individual single penalties sought to avoid double punishment. In my opinion, the total of the penalties in each case is not disproportionate to the respondents’ culpability. I consider that the proper application of the totality principle does not require any adjustment of these penalties.

Payment of penalties

119    The parties were agreed that the penalties should be paid by the respondents to Consolidated Revenue. They were also agreed that the FWO should then apply an amount from the penalties up to $85,367.62 in paying to the trolley collectors’ amounts of underpayment. The proportions each trolley collector is to receive were agreed. The FWO is to make reasonable attempts to locate each of the trolley collectors for the purposes of making the payments. In the event that it is not possible or practical for the FWO to contact any employee, the portion attributable to that employee is to be retained in Consolidated Revenue. I accept that orders to this affect are appropriate and will make the agreed orders.

Summary

120    In summary:

(1)    I impose penalties as follows:

(2)    I will order, pursuant to s 545 of the FW Act that all penalties be paid by the respondents to the Consolidated Revenue Fund of the Commonwealth. I will then order that the portions of the total penalties agreed by the parties be paid to the individual trolley collectors in the manner upon which the parties have agreed.

(3)    The balance of the FWO application is dismissed.

Associate:

Dated:    22 July 2016

SCHEDULE OF PARTIES