FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Hu (No 3) [2020] FCA 936

ORDERS

THE COURT DECLARES THAT:

1.    The first respondent was involved in, within the meaning of s 550(2) of the Fair Work Act 2009 (Cth) (FW Act), the contravention by HRS Country Pty Ltd (HRS Country) of each of the following civil penalty provisions:

(a)    s 45 of the FW Act by HRS Country failing to pay each of its employees who were 20 years of age or older and have an applicable entry in Column A of Schedule A to these orders (save for the employee at line 80 of Schedule A), the minimum hourly rate for ordinary hours worked pursuant to cl 14.1 of the Horticulture Award 2010 (the Horticulture Award);

(b)    s 45 of the FW Act by HRS Country failing to pay the employee who was under 20 years of age and has an applicable entry in Column A of Schedule A to these orders, namely, the employee at line 80, the minimum hourly rate for hours worked pursuant to cl 16.1 of the Horticulture Award and cll A.2 and A.3 of Schedule A of the Horticulture Award;

(c)    s 45 of the FW Act by HRS Country failing to pay each of its employees who have an applicable entry in Column B of Schedule A to these orders, a casual loading pursuant to cl 10.4(b) of the Horticulture Award and cl A.5 of Schedule A of the Horticulture Award;

(d)    s 45 of the FW Act by HRS Country failing to pay its employees who have an applicable entry in Column C of Schedule A to these orders, public holiday rates pursuant to cl 28.3 of the Horticulture Award and cl A.7 of Schedule A of the Horticulture Award;

(e)    s 45 of the FW Act by HRS Country failing to pay its employees who have an applicable entry in Column D of Schedule A to these orders, for a ten minute rest break pursuant to cl 23.2 of the Horticulture Award; and

(f)    s 536(2)(b) of the FW Act by HRS Country failing to include superannuation contribution information in the payslips of its employees entitled to superannuation listed in Schedule B to these orders, as required by reg 3.46(5) of the Fair Work Regulations 2009 (Cth).

THE COURT ORDERS THAT:

2.    The first respondent pay the following penalties, pursuant to s 546(2) of the FW Act, in respect of her involvement in each of the contraventions declared in Declaration 1 above, to the applicant within 28 days of this order:

3.    The penalties paid in accordance with Order 2 above, be thereafter distributed by the applicant to the HRS Country employees listed in Schedule A to this order, within 180 days of this order, in amounts proportionate to their outstanding underpayments as set in Column F of Schedule A to these orders.

4.    In the event that any of the HRS Country employees listed in Schedule A to these orders cannot be located within 180 days of this order, the balance of the amounts received in accordance with Order 2 be paid into the Consolidated Revenue Fund of the Commonwealth.

5.    The applicant have liberty to apply on 7 days’ notice in the event that any of the preceding orders are not complied with.

6.    There be no order as to costs.

SCHEDULE A

SCHEDULE B

(List of employees paid an hourly rate who did not receive superannuation contribution information in their payslips)

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

REASONS FOR JUDGMENT

(DELIVERED EX TEMPORE AND REVISED)

RANGIAH J:

1    The applicant, the Fair Work Ombudsman, brought proceedings for contraventions of ss 45 and 36 of the Fair Work Act 2009 (Cth) (the FW Act) against the first respondent, Tao Hu, the second respondent, Marland Mushrooms Qld Pty Ltd (Marland Mushrooms), and the third respondent, Troy Marland. The second and third respondents defended the proceedings and were ultimately successful: see Fair Work Ombudsman v Hu (No. 2) [2018] FCA 1034; Fair Work Ombudsman v Hu [2019] FCAFC 133; Fair Work Ombudsman v Hu [2020] HCATrans 011. However, Ms Hu admitted the allegations at an early stage.

2    Ms Hu has agreed a statement of facts with the applicant. Ms Hu was the sole director and shareholder of HRS Country Pty Ltd (HRS Country). HRS Country operated a labour hire business. It employed a number of persons whom it supplied to Marland Mushrooms to pick mushrooms and perform other farm duties. The employees were predominantly transient workers from other countries. On 1 August 2016, a liquidator was appointed to HRS Country.

3    Ms Hu has admitted liability as an accessory to the following contraventions of the FW Act by HRS Country, involving noncompliance with the Horticulture Award 2010 (the Horticulture Award):

    Failure to pay the minimum rate of pay to adult employees: s 45 of the FW Act, cl 14.1 of the Horticulture Award.

    Failure to pay the minimum rate of pay to junior employees: s 45 of the FW Act, cl 16.1 of the Horticulture Award and cll A.2 and A.3 of Sch A of the Horticulture Award.

    Failure to pay casual loading: s 45 of the FW Act, cl 10.4(b) of the Horticulture Award and cl A.5 of Sch A of the Horticulture Award.

    Failure to pay public holiday rates: s 45 of the FW Act, cl 28.3 of the Horticulture Award and cl A.7 of Sch A of the Horticulture Award.

    Failure to provide paid rest breaks: s 45 of the FW Act, cl 23.2 of the Horticulture Award.

    Failure to include superannuation contribution details on payslips as required: s 536(2)(b) of the FW Act, reg 3.46(5) of the Fair Work Regulations 2009 (Cth).

4    Sections 45 and 536(2)(b) of the FW Act are civil remedy provisions. The applicant seeks an order pursuant to s 546(1) of the FW Act that Ms Hu pay pecuniary penalties in respect of her admitted contraventions of the civil remedy provisions. Ms Hu accepts that pecuniary penalties ought to be imposed and has agreed with the applicant as to the appropriate amounts of those penalties.

5    The agreed penalties are as follows:

6    In Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at [58] (Agreed Penalties Case), the High Court confirmed that parties to civil penalty proceedings may make submissions in respect of the quantum of pecuniary penalties, including in respect of proposed agreed penalties.

7    However, it is necessary for the Court to satisfy itself that the agreed penalties are appropriate: Agreed Penalties Case at [48]. Despite this, the Court ought not to depart from the proposed amounts, merely because it might have been disposed to select some other amounts: Agreed Penalties Case at [47]-[48].

8    Subject to the Court being persuaded of the accuracy of the parties’ agreement as to facts and that, the penalties proposed are an appropriate remedy, the High Court has recognised that it is consistent with principle and highly desirable in practice for the Court to accept the parties’ proposed agreement as to penalties: Agreed Penalties Case at [58]

9    In a number of cases, various factors have been listed that may be relevant to the fixing of civil penalties: see, for example, Construction, Forestry, Mining and Energy Union v Coal & Allied Operations (No 2) (1999) 94 IR 231 at [8]; Kelly v Fitzpatrick (2007) 166 IR 14 at [14]; Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61 at [40]. In this case, the relevant factors include the following.

10    The High Court has confirmed that deterrence is the sole, or at least, the primary objective of pecuniary penalties: Agreed Penalties Case at [55]; Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 249 FCR 458 at [90]. General deterrence is very important in this case. Given the nature of fruit and vegetable picking and that its workforce is often comprised of transient non-English speaking workers from overseas, contraventions of the Horticulture Award are likely to be common but difficult to detect.

11    Specific deterrence is somewhat less significant in this matter given that Ms Hu is no longer involved in the labour hire industry and the contraventions are very unlikely to be repeated.

12    The contraventions are objectively serious. They involved approximately 80 employees and occurred over a significant period of time from 1 January to 31 August 2014.

13    The employees impacted by the contraventions suffered the loss of award entitlements, translating into a financial loss of over $78,000. These employees are a very vulnerable group in the community, being predominantly made up of workers from overseas. It may be noted that the applicant has not sought an order for compensation, for reasons that have not been explained.

14    There is no allegation that Ms Hu has contravened any industrial legislation in the past.

15    The underpayments that occurred have not been repaid, whether by HRS Country or Ms Hu.

16    I take into account that Ms Hu has made admissions at an early stage and agreed as to appropriate penalties: Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383 at [76]. I am satisfied that she is remorseful about her contraventions, and that is reflected in her willingness to facilitate the course of justice.

17    I am satisfied that the agreed penalties are appropriate.

18    I will make the declarations and other orders in the form proposed by the parties.

Associate:    

Dated:    13 July 2020