Federal Court of Australia

Australasian Meat Industry Employees Union v Dick Stone Pty Ltd (No 2) [2022] FCA 1263

ORDERS

THE COURT ORDERS THAT:

1.    For contravening s 44 of the Fair Work Act 2009 (Cth) by requiring the second applicant to work 12 hours a week in excess of the maximum prescribed by s 62(1) of the Act, the respondent pay a penalty of $30,000.

2.    For contravening s 44 of the Fair Work Act by failing to provide the second applicant with a copy of the Fair Work Information Statement before, or as soon as practicable after, he started employment with the respondent as prescribed by s 125(1) of the Fair Work Act, the respondent pay a penalty of $3,000.

3.    For contravening s 45 of the Fair Work Act by failing to pay Mr Boateng overtime rates as required by cll 31.2(d) and 36.1(a) of the Meat Industry Award 2010, the respondent pay a penalty of $20,000.

4.    For contravening s 45 of the Fair Work Act by failing to ensure that copies of the Award and the National Employment Standards were available to all employees in the manner prescribed by cl 5 of the Award, the respondent pay a penalty of $25,000.

5.    For contravening s 45 of the Fair Work Act by failing to post a roster showing the start and finishing times for ordinary hours of employees during the period from December 2017 to 10 September 2019, in breach of cl 34.1 of the Award, the respondent pay a penalty of $15,000.

6.    The penalties be paid to the first applicant.

7.    In the event that they wish to pursue their application for costs, the applicants file any evidence and submissions within 14 days of the publication of these reasons.

8.    The respondents file any evidence and submissions in relation to any such application within 14 days thereafter.

9.    The applicants file any submissions in reply within 7 days of receipt of the respondents’ submissions.

10.    No submissions may exceed 5 pages, without the leave of the Court.

11.    Any application for costs will be heard on the papers.

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

REASONS FOR JUDGMENT

KATZMANN J:

1    This proceeding is concerned with aspects of the employment of Samuel Boateng by Dick Stone Pty Ltd (Dick Stone), who for approximately three and a half years worked 50 hours a week, every week, in its establishment at Regents Park in Sydney. In the initiating process he and the union to which he belongs, the Australasian Meat Industry Employees Union, alleged that Dick Stone contravened the Fair Work Act 2009 (Cth) (FW Act) in a number of respects. They sought declaratory relief, compensation and pecuniary penalties.

2    Earlier this year I delivered judgment on liability: Australasian Meat Industry Employees Union v Dick Stone Pty Ltd [2022] FCA 512 (liability judgment or LJ).

3    Amongst other things, I found that Dick Stone wrongly classified Mr Boateng as a Meat Industry Level 3 employee within the meaning of that term in the Meat Industry Award 2010 when his correct classification was at Level 4, and failed to pay Mr Boateng overtime rates for hours worked between 2 am and 4 am Monday to Saturday, in contravention of cll 31.2(d) and 36.1(a) of the Award. I also found that Dick Stone did not convey to Mr Boateng its intention to incorporate overtime entitlements into his wages either in his contract of employment or in any other document and did not identify in his pay slips any amounts for overtime for hours worked under 50 hours a week. Consequently, I held that Dick Stone was not entitled to a set off for amounts it had paid above the award rates for ordinary hours. I also held that Dick Stone contravened cl 5 of the Award by failing to ensure that copies of the Award and the NES were available to Mr Boateng during his employment either on a noticeboard conveniently located at or near the workplace or electronically. And I held that Dick Stone contravened cl 34.2 of the Award by failing to post a roster on the premises from December 2017. As a result of each of the Award breaches, Dick Stone contravened s 45 of the FW Act.

4    In addition, I held that Dick Stone had contravened a number of other provisions of the FW Act by requiring or requesting Mr Boateng to work 12 hours over and above 38 hours every week of his employment, contrary to s 62 and by not giving Mr Boateng a Fair Work Information Statement (FWIS) before, or as soon as reasonably practicable after, he commenced employment, contrary to s 125. Sections 62 and 125 form part of the National Employment Standards (NES) laid down in Pt 2-2 of the FW Act. By contravening those provisions Dick Stone also contravened s 44 of the Act, which provides that an employer must not contravene a provision of the NES.

5    On 28 June 2022 I made declarations reflecting these conclusions.

6    At that point three matters remained to be determined. They were:

(1)    the amount payable by Dick Stone to Mr Boateng as a result of its failure to pay him overtime rates for work performed between 2 am and 4 am Monday to Saturday;

(2)    whether there was an underpayment of superannuation and, if so, in what amount; and

(3)    what, if any, penalties should be imposed on Dick Stone for its contraventions of ss 44 and 45 of the FW Act.

7    In this part of the proceeding the applicants relied on additional affidavits filed by Mr Boateng, and two Union officials: Patricia Fernandez and Jason Schultz. Dick Stone relied on an affidavit of Glen Marler, its general manager, and Ray McKenna, its financial controller. Each of the deponents, with the exception of Mr Schultz and Mr McKenna, gave evidence in the earlier part of the proceeding. No deponent was required for cross-examination on the affidavits read in this part of the proceeding.

8    This judgment should be read with the liability judgment.

Compensation for failure to pay overtime rates

9    In their further amended originating application the applicants sought an order for compensation for unpaid wages arising from the Award contraventions.

10    In the event that the Court is satisfied that there has been a contravention of a civil remedy provision, s 545 of the FW Act relevantly entitles the Court to make any order it considers “appropriate”, including an order awarding compensation for loss suffered by a person because of the contravention.

11    The parties agreed that the amount of the underpayment is $13,271.34.

12    On 9 September 2022 Mr Marler instructed its payroll provider to pay Mr Boateng the amount calculated to be owing to him as a result of the liability judgment. It was not suggested that there was any shortfall in the amount he was paid. Consequently, there was no dispute that he has received the full amount he was underpaid. No claim for interest on the outstanding payments was ever made. And the claim for compensation was not pressed.

13    This issue therefore falls away.

Superannuation

14    The applicants submitted that Mr Boateng was underpaid superannuation in contravention of cl 30.2 of the Award. Clause 30.2 provides that:

An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.

15    The reference in cl 30.2 to “superannuation legislation” includes the Superannuation Guarantee Administration Act 1992 (Cth) (SG Administration Act) and the Superannuation Guarantee Charge Act 1992 (Cth) (SG Charge Act). A detailed description of the operation of the superannuation legislation appears in the judgment of the Full Court in Bluescope Steel (AIS) Pty Ltd v Australian Workers Union (2019) 270 FCR 359.

16    The applicants asked the Court to make an additional declaration that s 45 of the FW Act has been contravened in this respect and seek an order that Dick Stone pay compensation for the alleged underpayment. They contended that the amount of the underpayment is $1,260.78. Dick Stone insisted that there was no underpayment. The resolution of the dispute turned on the meaning of “ordinary time earnings” in the superannuation legislation.

17    On the morning of the hearing, however, the parties settled the dispute. Upon the applicants agreeing not to press their claims for a declaration and a civil penalty, Dick Stone agreed to pay Mr Boateng the full amount of the alleged underpayment without admission of liability.

18    It follows that this issue also falls away and the only remaining issue is whether pecuniary penalties should be imposed and, if so, in what amount or amounts.

Penalties

The relevant statutory provisions

19    Section 546(1) of the FW Act relevantly provides that “the court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision”.

20    The maximum pecuniary penalty that may be imposed on a body corporate for a contravention of s 44 or s 45 is 300 penalty units: FW Act. S 546(2)(b). “Penalty unit” has the meaning given by s 4AA(1) of the Crimes Act 1914 (Cth): FW Act, s 12. At the time Mr Boateng began working for Dick Stone s 4AA(1) relevantly defined “penalty unit” to mean “the amount of $180 (subject to indexation under subsection (3))”. Section 4AA(1) was amended by Sch 1 cl 1 of the Crimes Amendment (Penalty Unit) Act 2017 (Cth), which substituted “$210” for “$180”. The result was that from 1 July 2017 until 30 June 2020 the value of a penalty unit was $210.

21    It was common ground that the maximum penalty for each contravention was $63,000. That sum was derived by multiplying 300 by $210. But the parties overlooked the fact that the contravening conduct commenced on 21 March 2016, when Mr Boateng started working for Dick Stone. At that time the maximum penalty for a contravention of ss 44 or 45 was $54,000 (300 x $180). For the reasons I gave in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 at [394]–[395] that is the maximum penalty which applies to the second contravention (the failure to give Mr Boateng the FWIS before, or as soon as reasonably practicable after, he commenced his employment). The other contraventions occurred both before and after the change to the definition of “penalty unit”. Where a contravention of the FW Act involves a course of conduct which begins before an amendment which increases the amount of a penalty unit in the definition in s 4AA(1) of the Crimes Act and continues after the increase comes into effect, the Court may take into account the increase in fixing an appropriate penalty: Grouped Property Services at [396]–[398]. See also Ahmed v Al-Hussain Pty Ltd t/as The Cheesecake Shop (No 3) [2019] FCA 848 at [35]-[36] (Rares J); Registered Organisations Commissioner v Australian Nursing and Midwifery Federation (No 2) [2018] FCA 2004 at [123]-[126] (Barker J); and Fair Work Ombudsman v Australian Workers’ Union [2020] FCA 60 at [47]–[48] (Snaden J).

22    Section 557 of the FW Act relevantly provides that:

Course of conduct

(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.

(2)    The civil remedy provisions are the following:

(a)    subsection 44(1) (which deals with contraventions of the National Employment Standards);

(b)    section 45 (which deals with contraventions of modern awards)[.]

…

The general principles

23    For the most part, there was no disagreement about the general principles to be applied.

24    First, the purpose of a civil penalty under the FW Act “is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act”: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 96 ALJR 426; 399 ALR 599; 175 ALD 383; 314 IR 301 at [9]. In determining an appropriate penalty for the purpose of s 546, this purpose must be kept firmly in mind.

25    Second, that purpose is to be achieved by imposing penalties that are sufficiently high to deter the wrongdoer from engaging in “contraventions of a like kind” (specific deterrence) and to deter others who might be tempted to contravene (general deterrence). The penalty for each contribution is no more and no less than is necessary for that purpose. See Commonwealth v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at [55] (French CJ, Kiefel, Bell, Nettle and Gordon JJ), citing Trade Practices Commission v CSR Ltd (1991) ATPR ¶41-076 (TPC v CSR) at 52,152 (French J). The same language was used by the plurality in Pattinson at [9] where their Honours said that the penalties fixed by the primary judge in that case were “appropriate because they were no more than might be considered to be reasonably necessary to deter further contraventions of a like kind …” (emphasis added).

26    Dick Stone submitted that this means that in determining penalty the Court must consider what, if any, penalty is required to deter a contravention of the particular award term or provision of the NES which underpinned the contraventions of ss 44 and 45 of the FW Act, rather than what penalty is required to deter contraventions of the NES and the Award. In so doing it relied upon the analysis in Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 at [24] where the Full Court (North, Flick and Jagot JJ) said:

[I]t it is wrong to characterise the provision of the NES and the term of the modern award alleged to be contravened as a mere particular of the contravention of section 44(1) and 45 and then to seek to apply that to the construction question. Whether the provision of the NES or the term of the modern award is a particular or an element of the offence is not the question. Accordingly, the concept of elevating a particular to an element of the contravention is inapt and liable to confuse the proper inquiry.

27    Dick Stone’s use of these remarks to interpret what the High Court meant when it referred in Pattinson to “contraventions of a like kind” is misconceived. Rocky Holdings provides no support for Dick Stone’s submission. If anything, it supports the contrary proposition. The Full Court in Rocky Holdings was considering a completely different question. That question was the proper construction of s 557(1) of the Act. The purpose of s 557 is to ensure that a contravenor is not punished twice for what is essentially “the same criminality”: Rocky Holdings at [18]. In Rocky Holdings at [23], the paragraph immediately preceding the paragraph upon which Dick Stone relied, the Full Court expressed its agreement with the remarks of Jessup J in Murrihy v Betezy.com.au Pty Ltd (No 2) (2013) 221 FCR 118 at [33] that, in the context of s 557(1), the reference to a “civil remedy provision” is “a conscious, specific, one” and the section should not be given a broader operation than that for which Parliament expressly provided. The argument the Full Court was addressing in Rocky Holdings, and which it rejected, was that s 557 requires the imposition of a single penalty for multiple contraventions of s 44 and s 45 respectively. The argument put by Dick Stone is a variation on the same theme. Like the argument put by Rocky Holdings, it is without merit. All the High Court meant by “further contraventions of a like kind” was further contraventions of laws of a similar kind to the contraventions admitted or proved in the particular case. That said, I accept, of course, that the Court must penalise a contravenor for the proven contraventions. When determining the appropriate amount for the purpose of deterrence, however, a court does not shut its eyes, so to speak, to the prospect of contraventions of an award or the NES in general. It follows that the mere fact that corrective action is taken to address a particular contravention does not mean that no or no appreciable penalty is required for that particular contravention. The effect of Dick Stone’s submission is to read the reference to “contraventions of a like kind” in Pattinson as “the same” or “the identical contraventions”.

28    Third, the fundamental proposition in criminal sentencing that the punishment must fit the crime which, before Pattinson¸ had influenced courts to impose civil penalties that are proportionate to the seriousness of the contravening conduct, has no place in a civil penalty regime. The statutory maximum is not reserved for the worst cases or, put another way, for the most serious examples of misconduct covered by the section which has been contravened. Rather, as the plurality put it in Pattinson at [10]:

What is required is that there be “some reasonable relationship between the theoretical maximum and the final penalty imposed”. That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of s 546: the deterrence of future contraventions of a like kind by the contravenor and by others.

(Citations omitted).

29    In Pattinson the plurality endorsed the imposition of the maximum penalty where it is considered necessary for the purpose of deterrence even if the nature of the conduct does not fall into the most serious category of wrongdoing. As Wigney J observed in Construction, Forestry, Maritime, Mining and Energy Union v Richard Crookes Construction Pty Limited [2022] FCA 992 at [161] (CFMMEU v Crookes), it appears to follow that a large pecuniary penalty may be appropriate for a relatively minor contravention in order to serve the purpose of deterrence, whether specific or general or both. And the converse is also true, namely, that a small pecuniary penalty may be appropriate for a serious contravention if such a penalty would be a sufficient deterrent.

30    The plurality in Pattinson explained at [46]:

It is important to recall that an “appropriate” penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case. A contravention may be a “one-off” result of inadvertence by the contravenor rather than the latest instance of the contravenor’s pursuit of a strategy of deliberate recalcitrance in order to have its way. There may also be cases, for example, where a contravention has occurred through ignorance of the law … or where the official responsible for a deliberate breach has been disciplined ... In such cases, a modest penalty, if any, may reasonably be thought to be sufficient to provide effective deterrence against further contraventions.

31    Fifth, the reasonableness of the relationship between the theoretical maximum and the final penalty imposed may be established having regard to the circumstances of the conduct involved in the contravention and the circumstances of the contravenor. That is because either the circumstances of the contravening conduct or the circumstances of the contravenor may bear upon the extent of the need for deterrence in the penalty. See Pattinson at [55].

32    Thus, in determining “a penalty of appropriate deterrent value”, a number of factors will be relevant, although there is “no rigid catalogue” or “legal checklist”: Pattinson at [19]. They include: the nature and extent of the contravening conduct and the circumstances in which it took place; the nature and extent of loss or damage; whether the conduct was deliberate; the period over which the conduct extended; whether senior management was involved; whether the contraventions are truly distinct or arose out of the one course of conduct; whether the contravener has previously engaged in similar conduct; the size of the contravening company; the existence and extent of any contrition and corrective action; and whether the company has a corporate culture conductive to compliance. See, for example, TPC v CSR at 52, 152–3 (French J); Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14 (Tracey J) at [14].

33    Some of these factors will weigh in favour of a heavy penalty, some will pull in the opposite direction. A court might consider it “appropriate to impose only a moderate penalty” where those responsible for a contravention of the Act express “genuine remorse” or the conduct is unlikely to recur because of changes implemented by the contravenor: Pattinson at [47]. A small penalty is unlikely to act as an effective deterrent to a “well-resourced contravenor”: Pattinson at [60]. The Court must ensure that the penalty imposed is not to be regarded by the contravenor or anyone else as “an acceptable cost of doing business”: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [66]. As the plurality in Pattinson explained at [66]:

The theory of s 546 of the Act is that the financial disincentive involved in the imposition of a pecuniary penalty will encourage compliance with the law by ensuring that contraventions are viewed by the contravenor and others as an economically irrational choice.

34    The question whether particular contraventions arise out of a course of conduct is not determined exclusively by s 557 of the FW Act. It is well established that s 557 is not a code and the common law course of conduct principle continues to apply. That principle was described by the Full Court in Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 194 IR 461; 269 ALR 1 at [39] in the following way:

The principle recognises that where there is an interrelationship 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 offending acts or omissions.

(Original emphasis.)

35    But the principle is neither a rigid rule of law nor “a straitjacket, denying a judge the capacity to craft a result that properly reflects the conduct in question even if the course of conduct principle does squarely apply”. Rather, it is a guide to the exercise of judicial discretion. See Parker v Australian Building and Construction Commissioner (2019) 270 FCR 39 at [273]-[274] (Besanko and Bromwich JJ). The fact that two or more contraventions may be part of a single course of conduct does not limit “the penal response” to a single maximum penalty: Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) (2019) 269 FCR 262 at [12] (Allsop CJ).

36    Finally, where multiple contraventions are being penalised, it is necessary to conduct “a final check” to ensure that the aggregate penalty is “not unjust or out of proportion to the circumstances of the case”: Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383 at [42]. This is commonly referred to as the “totality principle”. If the aggregate penalty is unjust or out of proportion to the circumstances of the case, then an adjustment or adjustments to the figures will need to be made.

The appropriate penalties

37    In considering the penalties necessary to achieve the statutory purpose it is important first to examine the nature and character of the provisions that were contravened: CFMMEU v Crookes at [172]. The contraventions with which this case is concerned are contraventions of minimum standards. The modern awards objective is to “provide a fair and relevant minimum safety net of terms and conditions”: FW Act, s 134(1).

38    Generally speaking, because the NES and the awards are concerned to protect minimum standards, contravening the NES or a term of a modern award will almost always be a serious matter, particularly if it is part of a pattern of conduct.

The nature of the contraventions

39    The nature of the contraventions is apparent from the declarations I made in June. They relevantly included declarations that:

(1)    Dick Stone contravened s 44 of the FW Act by requiring or requesting that Mr Boateng work 12 additional hours every week of his employment in circumstances where that request was not reasonable having regard to all the relevant circumstances, in contravention of the NES prescribed by s 62(1) of the Act (the first contravention –the requirement to work excessive hours);

(2)    Dick Stone contravened s 44 of the FW Act by not giving Mr Boateng a copy of the FWIS before, or as soon as reasonably practicable after, he commenced his employment, as prescribed by the NES in s 125 of the Act (the second contravention – failure to provide the FWIS);

(3)    Dick Stone contravened s 45 of the FW Act by failing to pay overtime rates to Mr Boateng for hours worked between 2 am and 4 am Monday to Saturday as prescribed by cll 31.2(d) and 36.1(a) of the Award between 21 March 2016 and 1 March 2019 (the third contravention – failure to pay overtime rates);

(4)    Dick Stone contravened s 45 of the FW Act by failing to ensure that copies of the Award and the NES were available to Mr Boateng as prescribed by cl 5 of the Award between 21 March 2016 and 10 September 2019 (the fourth contravention – failure to ensure the availability of the Award and the NES); and

(5)    Dick Stone contravened s 45 of the FW Act by failing to post a roster on the premises as prescribed by cl 34.2 of the Award between December 2017 and 10 September 2019 (the fifth contravention – failure to post a roster on the premises).

40    Dick Stone accepts that each provision of the NES and the Award which was found to have been contravened is a separate civil remedy provision. To the extent that there may have been multiple contraventions in each pay period, it was common ground that contraventions of the same civil remedy provision are to be taken as a single contravention. Section 557(1) of the Act requires that they be treated this way.

The circumstances in which the contraventions took place

41    The contraventions concern the treatment of an immigrant worker from a developing country, who started work for the company within three weeks of his arrival in Australia. On the first day of his employment, 21 March 2016, Mr Boateng presented for work at 1.45 am. There was no discussion about the terms or conditions of his employment. As counsel for the applicants described it, his contract of employment was a contract of adhesion in that he was, in effect, presented with a contract and asked to sign it. He had no input into its terms and was not apparently afforded any opportunity to bargain. The first he was told of the conditions was on the day after he started work, when he was given an “employment form” to complete and an “employment commencement pack”, which included a letter of offer. It is common ground that the letter of offer formed part of his contract of employment. The position he was offered was as a “knifehand/labourer”, a position not mentioned in the Award.

42    The letter of offer recorded what were described as “general conditions”. They included conditions relating to hours of work. The letter (and hence the contract) stipulated that “[t]he ordinary work hours for a full time week are 50 hours per week”, within the hours of 2.00 am to 11.30 am weekdays and from 2.00 am to 7.00 am on Saturdays, but the span of hours could change because of “business requirements”. It also stipulated that there was “an expectation that when requested by the Company employees shall work a reasonable amount of additional hours”. While the letter proceeded to set out the leave entitlements, it was curiously silent about a number of critical terms of employment and other entitlements. It made no mention, for example, of the wages Mr Boatang would receive or his pay rate. Nor did it mention his entitlement to receive overtime rates for working in excess of 38 hours a week and for working outside the ordinary span of hours. While the “employment commencement pack” included copies of the company’s policies, it did not include any information about wages. Nor did it include a copy of the FWIS. Neither the letter of offer nor any other document in the pack mentioned the Award or, for that matter, the fact that Mr Boateng’s work was covered by an award.

43    It was not until he received his first pay slip that Mr Boateng learned his rate of pay. Then he discovered that he was paid a flat rate of $20.70 per hour. He was not informed that the rate was intended by his employer to incorporate other entitlements or loadings.

44    For the entire period of his employment with Dick Stone Mr Boateng worked a 50 hour week for which he received a flat hourly rate. In accordance with what was said in the letter of offer, on the occasions when he worked in excess of 50 hours a week, he was paid overtime rates for the additional hours calculated on a base hourly rate derived by dividing the weekly wage by 50. Mr Boateng was given no choice but to work a 50 hour week until sometime after the Union began investigating the conditions of employment at Dick Stone. Mr Boateng found working 50 hours a week very difficult, especially as it meant he had to rise at about midnight every day. He found the hours damaged his relationship with his wife and family. When Mr Marler told production workers at a meeting on 28 February or 1 March 2019, which Mr Boateng attended, that anyone who wanted to work 38 hours should go to management and discuss it, Mr Boateng did not do so, fearful of the potential repercussions. The Union first raised with Dick Stone its concerns about the 50 hour working week and underpayments of award entitlements in November 2017. The Union endeavoured to have its concerns resolved through the dispute settlement procedure set out in the Award but Dick Stone was unwilling to do so and when the Union applied to the Fair Work Commission in March 2019 to have the dispute over underpayments resolved in this way, Dick Stone refused to agree to arbitration.

45    The contravening conduct occurred over a period of three years or more. Most of the contraventions were deliberate. Senior management was involved. As I mentioned earlier, Mr Marler was the general manager. He also supervised production floor employees, including Mr Boateng. Although he was not his direct supervisor, Mr Marler was aware of the work he was performing and the conditions in which he worked, including his long hours and early starts.

46    On the other hand, there is no evidence to suggest that Dick Stone has ever previously contravened the FW Act. Mr Marler’s evidence was that, before this proceeding, he was unaware of Dick Stone ever having had legal proceedings brought against it for any breach of employment or industrial laws, work health and safety laws or, indeed, any other laws. And there was no evidence to the contrary.

47    Moreover, the conduct relates to one employee only and the extent of his financial loss is limited to the amount he has now been paid. Still, the evidence indicates that some of the contravening conduct was not confined to Mr Boateng but applied to production workers in general.

The circumstances of the contravenor

48    Mr Marler described Dick Stone as a “large meat wholesaler and distributor”, “concerned with retail and wholesale sales to restaurants, cafes, hotels, licensed clubs, the Australian Defence Force, catering and foodservice companies and community based organisations such as aged care homes, schools, hospitals and child care centres”. The business was established in 1887 as a single butcher shop and grew to a chain of retail butchers before developing into a meat wholesaler. In an exhibit to Mr Marler’s last affidavit it is referred to as “Sydney’s largest meat wholesaler”.

49    Since 2007 it has occupied a large site in Regents Park where Mr Boateng worked. No information was provided about the current workforce. But in the financial year ending 30 June 2019, in which Mr Boateng was still employed, its workforce included seven butchers, 13 truck drivers, three administration workers, three knife hand/labourers, seven full-time and two casual machine operators, six warehouse workers, six office workers, and two managers. Ms Fernandez described Dick Stone as a “medium-sized employer” in the meat industry.

50    No evidence was adduced about the profitability or viability of the business. In the absence of any evidence to the contrary, I infer that the company would have ample resources from which to pay substantial penalties should they be called for.

51    In his final affidavit Mr Marler apologised on behalf of Dick Stone for the contravening conduct.

52    No direct evidence was adduced about the company’s “culture”. I accept that it sought advice from time to time from industrial relations consultants but the evidence is unpersuasive as to any culture of compliance.

53    The Union submitted, in effect, that the refusal of Dick Stone to agree to arbitration was an aggravating factor but I struggle to see how its position on that matter is pertinent to the question at hand. As counsel for Dick Stone put it, it is hard to see how the company’s decision to decline to participate in a consent arbitration has any rational connection to deterring contraventions.

In what amount(s) should Dick Stone be penalised?

54    Dick Stone submitted that in all the circumstances no penalty or a low penalty should be imposed for each contravention. It argued that the contraventions were not deliberate or systematic. It pointed to the absence of previous contraventions and to Mr Marler’s apology and to “wide commentary on the case attracting adverse publicity for the respondent”, all of which it submitted, were relevant to determining the appropriate penalties. In the case of each contravention, Dick Stone submitted that the evidence reveals it genuinely believed that it had complied with the relevant obligations or had, at least, sought to discharge or give effect to “the spirit of its obligations”. It asserted that the overall evidence shows that the contraventions were committed “inadvertently or ignorantly, in the belief [that it] had acted in compliance with its obligations”, not intending to avoid or defy them or to exploit vulnerable employees. It claimed that there was “nothing to suggest that Mr Boateng [had] been practically prejudiced as a result of the contraventions”.

55    I take into account in Dick Stone’s favour that this appears to be the first time it has been prosecuted for a contravention of a workplace, employment or industrial law. I also take into account in its favour that the conduct in question only concerns one employee. But I reject the notion that no penalty is warranted or that the penalties should necessarily be low. To the contrary, I am satisfied that there is a need for both specific and general deterrence.

56    Specific deterrence is warranted, despite Dick Stone’s exemplary record, because it not only did not admit liability but because, even now, it seeks to excuse or minimise its culpability and the evidence does not persuade me that it has learned very much from the litigation or the judgment. Despite the fact that some corrective action has been taken, which I address below, the risk of recurrence is real. It certainly cannot be discounted.

57    It is true that my liability judgment attracted some publicity. Annexed to Mr Marler’s last affidavit were a number of articles reporting on the case. None of them were mainstream media publications. They were either reports by law firms or industrial publications, like Workplace Express. No evidence was adduced to indicate the extent of the readership. In the circumstances I am unable to gauge the likely effect of the publicity. It is significant that Mr Marler said nothing about what impact it may have had on him or anyone else at Dick Stone. He merely referred to it and annexed copies of the publications. All he said was:

This case has been widely reported and commented upon. Examples of these articles are behind Tab 1 of the Exhibit.

58    In these circumstances I cannot infer that the adverse publicity is likely to deter Dick Stone from committing further contraventions of a similar kind.

59    I accept Mr Marler’s apology on behalf of the company. But I do not think that it is entitled to much weight. That is because it was no more than a bare apology. And a bare apology unaccompanied by an acknowledgment of, let alone an insight into, the wrongdoing, points to the need for specific deterrence.

60    Mr Marler sought to deflect responsibility for Dick Stone’s contraventions by pointing to the absence of complaint from employees or the Union.

61    Mr Marler deposed that Dick Stone had never been made aware that there was any difficulty with paying a “blended” rate or that there could be no set off. He went further, adding that Dick Stone was advised that it “should” use a blended rate. The evidence indicates that that was not true. Dick Stone was not advised that it should use a blended rate. The evidence was that in 2013 Mr Marler was informed by an employee relations consultant that, if overtime were performed at the start of a shift, the employee would not be a shift worker “attracting a loading”. This was not a directive or recommendation. It was an option. The consultant advised that “this option is cheaper but you need to have in place that their ordinary hours are 4 am to 11:30 am and that the 2am – 4am is overtime”. The reason Dick Stone was found to have contravened the Award provisions requiring the payment of overtime rates was that Dick Stone did not “have in place” that the employees’ ordinary hours were from 4 am to 11.30 am and 2 am to 4 am was overtime (see LJ [188]). Steps were not taken to inform the then current employees that this was the position until 2019. Little wonder that no-one raised the matter with Dick Stone before then. It is difficult to understand why, before the Union’s intervention, the company thought it was not necessary to inform its employees that the first two hours of their employment was overtime. And there is reason to be concerned that the practice of keeping new employees in the dark might continue because, while the then current employees were informed of the “blended rate” in 2019, no evidence was adduced to indicate that new employees would be informed that their wages would be calculated on that basis.

62    Furthermore, Mr Marler did not indicate any appreciation of the Court’s finding that the requirement for Mr Boateng to work every week an additional 12 hours more than the ordinary working hours prescribed by the Award and the FW Act was unreasonable or the reasons the finding had been made. As I said at LJ [250]:

… The question is whether requiring or requesting Mr Boateng to work the excess hours was unreasonable. The time those hours are required to be worked has a logical bearing on the question of reasonableness. So, too, do the number of additional hours, the regularity and frequency of them, and the fact that, to the extent that they took Mr Boateng over the ordinary 5-day working week, they deprived him of his weekends. Whether or not the majority of Dick Stone’s workers preferred a 50-hour week does not make the hours reasonable in Mr Boateng’s case. The fact that he did not question Dick Stone’s offer or attempt to negotiate its terms is unsurprising, having regard to the fact that he had only recently arrived in Australia from a third-world country, needed employment, and was likely to be unfamiliar with Australian law. The fact that he made no complaint about working 50 “ordinary hours” before the Union’s involvement is also unsurprising in the circumstances. As I go on to explain below, I am not satisfied that he was given a copy of the Fair Work Information Statement before he started work or as soon as practicable thereafter. It seems tolerably clear he had no idea of his award entitlements until he contacted the Union …

63    About four months after the liability judgment was published, employees were given a form to complete to indicate whether they wished to continue working 50 hours a week over a six day week or would prefer to work 45 or 38 hours a week Monday to Friday. They were informed that:

While it is not a requirement for you to make a change to your current working hours, it is important that any arrangement of working hours that you nominate below takes into account your own individual and family circumstances, and that any additional/ overtime hours that are offered are considered by you to be reasonable in your particular circumstances.

64    One of the factors I took into account in finding that the additional 12 hours a week were unreasonable was the risk to health and safety (LJ at [229]–[230]). Yet the form that was given to the employees made no mention of such a risk.

65    While Mr Boateng has now been compensated for the underpayment of overtime, there is no evidence that Dick Stone has considered or assessed the extent to which other employees in the same position as Mr Boateng were underpaid as might be expected if the company had insight into its wrongdoing and was genuinely contrite.

66    The need for general deterrence is readily apparent from the evidence given by Ms Fernandez which was unchallenged. Ms Fernandez was well placed to give the evidence. She has extensive experience in the meat industry. She has been employed by the Union for nearly 30 years, before which she had worked in the industry for a decade. She is currently the Secretary of the NSW Branch and she is a former National President.

67    Ms Fernandez pointed out that process workers in the meat industry are not well paid. Some of the work is carried out in cold or freezing conditions, including at Dick Stone, and often during “unsociable hours”. Most of the labour force have no formal qualifications. There are “very high levels of employment” of migrants on visas with a very limited understanding of their employment rights and entitlements and who are reluctant to engage in disputes with their employer. The workforce also includes poorly educated Australians with “limited literacy”. It is common for workers in the industry not to be given information about their rights. A substantial part of the workforce is not unionised. The Union has had trouble organising workers in the industry and struggles to find members willing to be named in complaints against their employers for fear of retribution.

The first contravention – the requirement to work excessive hours

68    The first of the contraventions is the first contravention of s 62(1).

69    This was a deliberate breach and it occurred over an extended period of time. Dick Stone arranged its business on the basis that employees on the production floor like Mr Boateng were required to work a 50 hour week over six days. As I have already indicated, I am not persuaded that it is contrite about its conduct and has taken any real corrective action.

70    I take account of the fact that this is Dick Stone’s first contravention, but, having regard to the need for deterrence, both specific and general, I consider that a penalty of $30,000 should be imposed.

The second contravention – the failure to provide the FWIS

71    This was a significant contravention in the circumstances in which Mr Boateng found himself. On the other hand, it is common ground that it was “a one-off breach”. Mr Marler deposed that he was unaware that Mr Boateng had not received a copy of the FWIS on induction and that he genuinely believed he was consistent with his practice of providing all employees with one at the time they received their other “induction documents”. He said he had no intention of depriving Mr Boateng of the information. As he was not challenged about these matters, I accept his evidence in this regard. The effect of that evidence is that this breach was not deliberate.

72    I also note Mr Marler’s evidence that, since the induction system was “automated” in 2017, each employee must sign a document acknowledging receipt of the FWIS before “onboarding”, which I take to mean induction, is complete and will ensure that the problem will not arise in the future. I accept that evidence. In these circumstances, the need for specific deterrence is minimal but there remains a need for general deterrence.

73    I will impose a penalty of $3,000.

The third contravention – failure to pay overtime rates

74    This conduct was deliberate and systematic. Having regard to the company’s lack of insight into its wrongdoing in this regard, the penalty should reflect the need for specific and general deterrence.

75    Four months after the liability judgment was published, but a month before the hearing of the remaining issues was due to take place, Dick Stone arranged to pay Mr Boateng what he was owed. It should have some credit for the fact that the money was paid before the Court adjudicated on the matter but, in view of the unexplained delay, limited credit. The failure to consider whether other employees have been underpaid, however, is a matter of some concern.

76    I do not accept Dick Stone’s contention that the first and third contraventions should be “grouped” into a single course of conduct because of “overlapping elements”. Whether overtime rates are paid for additional hours is only one matter to be taken into account in determining whether the request or requirement to work additional hours was not unreasonable. Imposing separate penalties for a contravention of s 62 of the Act and for a contravention of the requirement in the Award for overtime rates to be paid for work outside the ordinary span of hours would not involve penalising the company for what is “essentially the same criminality”. But I do accept that there is some relationship between the breaches of cll 31.2(d) and 36.1(a) which it is proper to take into account.

77    In all the circumstances I impose a penalty of $20,000 for these Award breaches.

The fourth contravention – failure to ensure the availability of the Award and the NES

78    I found that that Dick Stone did not ensure that copies of the Award and the NES were available to Mr Boateng during his employment either on a noticeboard conveniently located at or near the workplace or electronically.

79    In the liability judgment I observed that:

266    Mr Marler deposed that the Award and NES were accessible to all employees from computers in the offices and on Mr Boateng’s mobile phone but Mr Boateng deposed that he had no idea how to access them. While he was aware that three or four staff members worked on computers in the office area upstairs, Mr Boateng said he was never told and did not know that the Award or the NES was available from these people. He said he was also unaware of any computer terminals that were available for him to use to access the information or that the information could be accessed through his mobile phone.

267    Mr Boateng deposed that it would never have occurred to him that he would be able to use the computers in the offices and that, with two exceptions, he never saw any labourer, butcher or other production worker use them. The two exceptions were Mr Bertram, the head butcher, and a worker named Cassie who sometimes helped in the office. Mr Boateng said that the only time he used a computer when working at Dick Stone was in about July 2019 when he was called into a small office where his “picking slips” were allocated and was directed to set up a “Flare” account to enable the pay slips to be provided electronically.

268    There is no evidence that Mr Boateng was ever informed that the Award and the NES were available on a computer at work to which he had access or that he could access copies on his mobile phone. Of course copies of the Award and the NES are available on the internet but the employer’s obligation is to ensure that they are available and accessible to the employees. That obligation is not discharged by the fact that they can be found on the internet unless the employees are told where to find them and how to access them. Nor, it seems to me, does the fact that the documents may be accessed on a computer used by other members of staff make them more accessible than if they were on the noticeboard in the staff lunchroom.

80    This was a serious contravention. The extent to which other employees may have been similarly affected is unclear. Corrective action has been taken in that since August 2019 a bound copy of the Award and the NES have been on display on a noticeboard in the staffroom. Once again, however, Mr Marler sought to deflect responsibility by pointing out that neither the Union nor Mr Boateng had ever raised the issue with Dick Stone before this proceeding was commenced. He also emphasised that electronic access was always available, but he gave no evidence about any steps the company may have taken to ensure that employees knew how and where to access the information and to facilitate that access.

81    In the circumstances, I impose a penalty of $25,000.

The fifth contravention – failure to post a roster on the premises

82    Clause 34.2 of the Award requires an employer to “post a roster in the premises, showing the starting and finishing times for ordinary hours for employees”.

83    The evidence adduced by Dick Stone was that Mr Boateng’s roster of ordinary hours were set out in his letter of offer and did not change at all during his employment, that rosters had been posted on a wall in the main office area until December 2017, and that on 21 June 2019 online rostering was introduced which Mr Boateng could access through an online portal from 25 June 2019. Mr Marler deposed that he thought online rosters would be more convenient for employees (“advantageous” was the word he used). Mr Marler also observed that no issue was raised with the company about the matter before this proceeding was commenced.

84    There are several problems with this evidence. First, it suggests that the company does not accept that it has done anything wrong. Whether or not it might have been more advantageous to provide employees with online rosters, that was not what the Award required. In any event, for it to be advantageous for employees it would be necessary for the employer to ensure that all employees knew how to access the information. Yet there is no evidence to suggest that Dick Stone has ever taken any steps to satisfy itself that all employees had personal computers or mobile phones or knew that they could access computers in the office at any time convenient to them. Again, Mr Marler sought to deflect responsibility.

85    Nevertheless, I am not satisfied that the contravention was deliberate. I accept the submission made on behalf of the company that the decision not to continue to post rosters was based on a mistaken or misguided view that providing online access would make it more accessible to employees and thereby satisfy the company’s obligation. Furthermore, corrective action has since been taken. Mr Marler gave uncontradicted evidence that Dick Stone now posts rosters on the HR noticeboard in the staff lunchroom. On the other hand, there is no evidence as to what information the rosters contain. Notably, Mr Marler did not say that these rosters show the starting and finishing times for ordinary hours for all employees, which is what the Award requires. He did not annexe to his affidavit a copy of a single roster. Nor did he say he sought advice about how to comply with this term of the Award.

86    Taking all relevant matters into account, I impose a penalty of $15,000.

Conclusion

87    These penalties total $93,000. I am not persuaded that there is a need to make any adjustment having regard to the totality principle. It could not be said that the amount is oppressive or disproportionate to that which is required to achieve the legislative purpose.

To whom should the penalties be paid?

88    The Court may order that all or part of a pecuniary penalty be paid to the Commonwealth, a particular organisation or a particular person: FW Act, s 546(3). The applicants sought an order that all the penalties be paid to the Union. Dick Stone did not oppose the order. The usual order in cases like this is that the penalty is paid to the successful applicant: Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336 at [101] (Tracey, Barker and Katzmann JJ). See also CFMMEU v Crookes at [209].

89    Here, there are two applicants. But the proceedings were brought on the initiative of the Union to enforce the NES and the Award for the benefit of Mr Boateng and, no doubt, other (actual and potential) Union members. It is the Union which has borne the burden of prosecuting them. But for the Union’s action, Dick Stone’s contravening conduct may never have been exposed. Mr Boateng does not ask that any part of the penalties be paid to him. In all the circumstances the penalties should be paid to the Union.

Costs

90    The applicants applied for an order that Dick Stone pay its costs. No submissions in support of the application have yet been made. The applicants asked to be heard after judgment is published. No objection was taken to that course. I will therefore make orders to enable that to take place.

Associate:

Dated:    28 October 2022