Federal Court of Australia

Fair Work Ombudsman v PTES 928 Pty Ltd [2023] FCA 934

ORDERS

THE COURT ORDERS THAT:

1.    The first respondent pay pecuniary penalties totalling $200,375.00.

2.    The second respondent pay pecuniary penalties totalling $138,600.00.

3.    The third respondent pay pecuniary penalties totalling $8,820.00.

4.    The fourth respondent pay pecuniary penalties totalling $27,720.00.

5.    The penalties referred to in orders 1 to 4 above be paid to the Commonwealth within 28 days.

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

REASONS FOR JUDGMENT

SNADEN J:

1    At various times between February 2018 and October 2019, each of Messrs Jeyaratnam Ramu, Vimalsan Thalaisingham, Sivasakthivel Ananthavadivel, Sachithanantham Sithiravelayutham and Merenchi Wanigasekara (collectively, the “Relevant Employees”) was employed by the first respondent, then known as Polytrade Employment Services Pty Ltd (“PES”), to work at one of two waste recycling facilities operated by the second respondent (then known as Polytrade Pty Ltd—hereafter, “Polytrade”). Their employment was, in each case, subject to requirements imposed by the Waste Management Award 2010 (the “Award”), which was an instrument made pursuant to (and that had force under) the Fair Work Act 2009 (Cth) (the “FW Act”).

2    By an originating application dated 22 January 2021, the applicant charges PES with having breached obligations that the Award imposed upon it, as well as other obligations imposed by the FW Act. It seeks relief primarily in the form of declarations and penalties against PES, Polytrade and two other individuals; the latter three of whom are said to have been accessorily involved in some of the contraventions that are alleged (and, therefore, are said themselves to have relevantly contravened).

3    For the reasons that follow, I am satisfied that each of the contraventions that is alleged transpired. I will decline, for want of utility, to grant declaratory relief; but I consider that it is appropriate to (and I will) impose upon the respondents pecuniary penalties in respect of those contraventions as follows, namely:

(1)    for PES, penalties totalling $200,375.00;

(2)    for Polytrade, penalties totalling $138,600.00;

(3)    for the third respondent, penalties totalling $8,820.00; and

(4)    for the fourth respondent, penalties totalling $27,720.00.

Background

4    The applicant is the holder of a statutory office. Her standing to bring this action is not controversial and is, in any event, well-established.

5    At times that are presently relevant, Polytrade operated two waste management facilities in Victoria (perhaps amongst others): one located at Thomas Murrell Crescent, Dandenong; and another located at David Lee Road, Hallam. In connection with both, it engaged PES, which was tasked with supplying labour to the facilities on what the applicant’s amended statement of claim describes as “an on-hire basis”.

6    The third respondent, Ms Ho, was the sole director, secretary and sole shareholder of PES. She performed the role of PES’s Chief Financial Officer. She also held 10% of the shareholdings in Polytrade. Her husband, the fourth respondent (Mr Cheng), held the other 90%. He was Polytrade’s sole director and secretary.

7    Each of the Relevant Employees was employed by PES to work at one of the two facilities mentioned above. Each of them was engaged on a casual basis, each performed duties that involved the sorting of recyclable materials and each was properly classified as a “level 2” employee for the purposes of the Award. When they performed their work, each was (subject to minor variations into which it is not presently necessary to descend) paid at a flat rate of $22 per hour. That position obtained regardless of when the work was performed, including at night times, on weekends and on public holidays.

8    That arrangement resulted in each of the Relevant Employees receiving less by way of remuneration than the Award entitled him to receive. Those underpayments are the subject of articulation in the applicant’s amended statement of claim of 24 February 2021. There, it is said that PES failed to pay the Relevant Employees various amounts to which they were entitled on account of the work that they performed and the times that they performed it, including amounts referrable to minimum hourly rates, minimum engagement periods, casual loadings, overtime rates, shift loadings, and weekend and public holiday penalties.

9    The amended statement of claim alleges that, over the period spanning February 2018 to October 2019, PES failed to pay to the Relevant Employees amounts due to them under the Award totalling $194,249.70. Although those sums ultimately were paid prior to the commencement of this proceeding, the amended statement of claim nonetheless charges PES with having contravened various provisions of the Award; and, in so doing, with having contravened s 45 of the FW Act (which is the subject of exploration below). Further, it is said that each of Polytrade, Ms Ho and Mr Cheng was involved in all but one of those contraventions, such that (by reason of s 550(1) of the FW Act), each is taken also to have committed equivalent contraventions.

10    The amended statement of claim outlines further contraventions of the FW Act (and regulations made pursuant to it) in which PES is alleged to have engaged (but in respect of which no accessorial liability is alleged as against the other respondents). Specifically, it charges PES with having:

(1)    failed to inform the Relevant Employees in writing of certain Award-prescribed information relating to the terms of their employment (as the Award required);

(2)    failed to make the superannuation contributions that it made on behalf of the Relevant Employees into a nominated superannuation fund (as the Award required); and

(3)    failed to make and keep certain employment records in relation to its engagement of the Relevant Employees (as the FW Act required).

11    The matter was the subject of unremarkable case management orders, pursuant to which it followed an orthodox course to mediation. Not long thereafter, some kind of accord seems to have been struck. In November 2021, orders were made by consent giving the respondents leave to file amended defences, and requiring the filing and service of evidence and submissions relevant to the question of penalty.

12    Thereafter, amended defences were filed. Save for very minor respects, they contained wholesale admissions to the matters alleged within the applicant’s amended statement of claim. Thus the landscape of the proceeding was altered: no longer would the court be called upon to determine whether the various statutory contraventions had transpired as the applicant alleged; instead, attention would focus upon what relief it should grant in connection with what the respondents admitted.

13    That is the trajectory that then played out. Evidence and submissions relevant to the question of what relief the court should grant in light of the respondents’ admissions were filed and served, and the matter was the subject of a hearing that was much shorter than what might otherwise have been necessary. That took place on Thursday, 2 February 2023.

14    At the hearing, the applicant read without objection the following affidavits, namely:

(1)    an affidavit that Mr Ramu swore on 15 February 2022;

(2)    an affidavit that Mr Ananthavdivel affirmed on 16 February 2022;

(3)    an affidavit that Mr Sithiravelayutham affirmed on 17 February 2022; and

(4)    an affidavit that Mr Adam Doe, an inspector employed in the office of the applicant, swore on 18 February 2022.

15    PES and Ms Ho read—again, without objection—an affidavit affirmed by the latter on 18 March 2022. Polytrade and Mr Cheng read two affidavits of Mr Anthony John Lyons: one affirmed on 30 March 2022 and the other affirmed on 13 January 2023. They were the subject of various evidential objections, which were resolved in the usual way. Mr Lyons was cross-examined.

16    Before mapping out precisely what is the subject of allegation and admission—and the findings to which I am drawn in consequence—it is prudent to identify the statutory and quasi-statutory provisions that assume some relevance in this matter.

The legislation and the Award

17    Section 45 of the FW Act provides, very simply:

45 Contravening a modern award

A person must not contravene a term of a modern award.

…

18    A modern award does not impose obligations upon a person—and a person cannot therefore contravene one of its terms—unless or until it “applies to the person”: FW Act s 46(1). The application of the Award to PES is not controversial: it applied such that PES was bound to honour its terms in respect of its employment of each of the Relevant Employees.

19    Contravention of the injunction for which s 45 provides attracts liability for remedies under pt 4-1 of the FW Act. Section 539 operates to deem s 45 a “civil remedy provision” and confers upon various classes of people (including, for present purposes, the applicant) standing to pursue in this court remedies pursuant to ss 545 and 546. The former relevantly provides as follows:

545 Orders that can be made by particular courts

Federal Court and Federal Circuit and Family Court of Australia (Division 2)

(1)     The Federal Court or the Federal Circuit and Family Court of Australia (Division 2) may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.

…

20    Section 546 of the FW Act relevantly provides as follows:

546 Pecuniary penalty orders

(1)    The Federal Court, the Federal Circuit and Family Court of Australia (Division 2) or an eligible State or Territory 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.

…

Determining amount of pecuniary penalty

(2)    The pecuniary penalty must not be more than:

(a)     if the person is an individual—the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or

(b)     if the person is a body corporate—5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).

Payment of penalty

(3)    The court may order that the pecuniary penalty, or a part of the penalty, be paid to:

(a)     the Commonwealth;

(b)     a particular organisation; or

(c)     a particular person.

…

21    Insofar as concerns s 45 of the FW Act, “the relevant item in column 4 of the table in subsection 539(2)” is 60 penalty units. At the times that are relevant, a penalty unit was equal to $210.00: Crimes Act 1914 (Cth), s 4AA.

22    Section 557(1) of the FW Act assumes some significance. It provides (and provided) as follows:

557 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.

23    Section 45 of the FW Act is amongst those referred to in s 557(2). Section 557(3) is not presently relevant.

24    Section 550 of the FW Act is also of some significance presently. It serves to establish a form of accessorial liability that attaches to those who are “involved in” the contravention of civil remedy provisions. The section provides (and provided) as follows:

550 Involvement in contravention treated in same way as actual contravention

(1)     A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.

…

(2)     A person is involved in a contravention of a civil remedy provision if, and only if, the person:

…

(c)     has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention…

…

25    As has been rehearsed, the Award was made pursuant to the FW Act and, at relevant times, applied to PES’s employment of each of the Relevant Employees. Several of its requirements are the subject of allegations in the amended statement of claim and concession in each of the amended defences; and it is convenient now to outline them, albeit at a headline level.

26    The first concerns the minimum hourly rate of pay to which the Relevant Employees were entitled for working “ordinary hours”. The amended statement of claim alleges—and all of the amended defences concede—that the Award required that they be paid as follows for such hours of work, namely:

(1)    prior to 30 June 2018, at the rate of $22.20 per hour;

(2)    between 1 July 2018 and 30 June 2019, at the rate of $22.97 per hour; and

(3)    from 1 July 2019, at the rate of $23.66 per hour.

27    Additionally to those amounts, the Award required payment to casual employees of a “casual loading”, which was equal to:

(1)    25% of the prevailing minimum rate payable for ordinary hours of work; and

(2)    10% of the prevailing minimum rate payable for all other hours of work.

28    When the Relevant Employees worked “night shifts”—that is, shifts that ended between 12:30am and 8:30am—they were entitled to a “night shift loading” equal to 30% of the prevailing minimum rate payable for ordinary hours of work. When they worked weekday shifts that exceeded eight hours’ duration or that involved work not performed between 4:00am and 5:00pm, they were entitled (in lieu of the “night shift loading”) to overtime rates of pay equal to:

(1)    in the case of the first two such hours of work, one-and-a-half times the rate payable for ordinary hours of work; and

(2)    in the case of hours of work thereafter, twice the rate payable for ordinary hours of work.

29    Weekend work attracted its own premium under the Award. When the Relevant Employees worked shifts involving work performed primarily on Saturdays, they were entitled (in lieu of any “night shift loading”) to what the amended statement of claim refers to as “Saturday Shift Work Overtime Rates”), which, as with overtime rates, were equal to:

(1)    in the case of the first two such hours of work, one-and-a-half times the rate payable for ordinary hours of work; and

(2)    in the case of additional hours of work, twice the rate payable for ordinary hours of work.

30    When they worked shifts that involved work performed primarily on Sundays, the Relevant Employees were entitled (again, in lieu of any “night shift loading”) to what the amended statement of claim refers to as “Sunday Shift Work Overtime Rates”, which were equal to twice the rate payable for ordinary hours of work.

31    Work that was performed on public holidays was more expensive again. When the Relevant Employees worked shifts involving work performed primarily on public holidays, they were entitled to be paid:

(1)    in the case of Good Friday and Christmas Day, at the rate equivalent to 325% of the rate payable for ordinary hours of work; and

(2)    in the case of other public holidays, at the rate equivalent to 275% of the rate payable for ordinary hours of work.

32    The Award also made provision for a minimum engagement period per shift of four hours. Employees who were required to work on any given day were to be paid at least what would be payable for a shift of that duration.

33    There were also some administrative requirements to which the Award gave effect. Two are of relevance presently. The first concerned a requirement that, upon their engagement, employees be notified in writing of the basis upon which they were engaged (and, in particular, whether they were engaged on a full-time, part-time or casual basis). The second concerned the payment of superannuation contributions. In the absence of election to the contrary, the Award required that contributions be paid on behalf of the Relevant Employees into the “twusuper” fund or its successor.

34    The applicant’s case extends beyond those Award requirements (and the statutory requirement to honour them that s 45 of the FW Act imposed upon PES) to other requirements contained elsewhere within the FW Act (or regulations made pursuant to it). Section 535 of the FW Act concerns the creation and retention of employee records. It relevantly provides as follows, namely:

535 Employer obligations in relation to employee records

(1)     An employer must make, and keep for 7 years, employee records of the kind prescribed by the regulations in relation to each of its employees.

…

(2)     The records must:

(a)     if a form is prescribed by the regulations—be in that form; and (b) include any information prescribed by the regulations.

…

35    The Fair Work Regulations 2009 (Cth) (the “Regulations”) make provision for the form and content that records must assume and contain in order that they might satisfy the requirements of s 535(1). Of particular relevance presently are the following regulations, namely:

3.34 Records—overtime

For subsection 535(1) of the Act, if a penalty rate or loading (however described) must be paid for overtime hours actually worked by an employee, a kind of employee record that the employer must make and keep is a record that specifies:

(a)    the number of overtime hours worked by the employee during each day; or

(b)    when the employee started and ceased working overtime hours.

…

3.40 Records—termination of employment

For subsection 535(1) of the Act, if an employee’s employment is terminated, a kind of employee record that the employer must make and keep is a record that sets out:

(a)    whether the employment was terminated:

(i)    by consent; or

(ii)    by notice; or

(iii)    summarily; or

(iv)    in some other manner (specifying the manner); and

(b)    the name of the person who acted to terminate the employment.

…

36    Section 536 of the FW Act concerns the creation and provision of pay slips. Relevantly, it provides as follows, namely:

536 Employer obligations in relation to pay slips

(1)     An employer must give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.

…

(2)     The pay slip must:

(a)     if a form is prescribed by the regulations—be in that form; and

(b)     include any information prescribed by the regulations.

    …

37    Again, the Regulations make provision for the form and content that a pay slip must assume and contain in order that its provision to an employee will accord with the requirements of s 536(1) of the FW Act. Of relevance, reg 3.46 provides as follows, namely:

3.46 Pay slips—content

    (1)    For paragraph 536(2)(b) of the Act, a pay slip must specify:

   (a)    the employer’s name; and

   (b)    the employee’s name; and

   (c)    the period to which the pay slip relates; and

(d)    the date on which the payment to which the pay slip relates was made; and

   (e)    the gross amount of the payment; and

   (f)    the net amount of the payment; and

(g)    any amount paid to the employee that is a bonus, loading, allowance, penalty rate, incentive-based payment or other separately identifiable entitlement; and

(h)    on and after 1 January 2010—the Australian Business Number (if any) of the employer.

…

(5)    If the employer is required to make superannuation contributions for the benefit of the employee, the pay slip must also include:

(a)    the amount of each contribution that the employer made during the period to which the pay slip relates, and the name, or the name and number, of any fund to which the contribution was made; or

(b)    the amounts of contributions that the employer is liable to make in relation to the period to which the pay slip relates, and the name, or the name and number, of any fund to which the contributions will be made.

…

38    Like s 45, ss 535(1) and 536(2) are “civil remedy provision[s]”, in respect of the contravention of which this court is empowered to grant, under ss 545 and 546, relief equivalent to that which might be granted in respect of contraventions of s 45: FW Act, s 539(1).

The contraventions

39    It is convenient now to articulate the statutory contraventions that the applicant alleges. That endeavour should begin by mapping the contraventions alleged against PES in its capacity as the Relevant Employees’ employer. The amended statement of claim charges PES with having contravened s 45 of the FW Act by reason of each of the following, namely by its failure to:

(1)    pay each of the Relevant Employees the rates of pay to which he was entitled under the Award in respect of his ordinary hours of work;

(2)    pay each of the Relevant Employees the casual loading to which he was entitled under the Award in respect of his ordinary hours of work;

(3)    pay each of the Relevant Employees the casual loading to which he was entitled under the Award in respect of work that he performed outside of his ordinary hours of work;

(4)    pay each of the Relevant Employees the night shift loading to which he was entitled under the Award in respect of work that he performed during night shifts;

(5)    pay each of the Relevant Employees the overtime rates of pay to which he was entitled under the Award in respect of overtime work that he performed;

(6)    pay each of the Relevant Employees the rates of pay to which he was entitled under the Award in respect of shifts that he worked on (or predominantly on) Saturdays;

(7)    pay each of the Relevant Employees the rates of pay to which he was entitled under the Award in respect of shifts that he worked on (or predominantly on) Sundays;

(8)    pay each of the Relevant Employees the rates of pay to which he was entitled under the Award in respect of shifts that he worked on (or predominantly on) public holidays;

(9)    pay four of the Relevant Employees for a minimum engagement period of four hours on the occasions that each of them worked a shift of lesser duration;

(10)    inform each of the Relevant Employees in writing as to the terms of his engagement; and

(11)    make superannuation contributions to the twusuper fund (or its successor) on behalf of each of the Relevant Employees.

40    As well as identifying the conduct said, in each case, to amount to the statutory contraventions summarised above, the amended statement of claim also particularises the amounts that ought to have been but were not paid to each of the Relevant Employees (specifically as a consequence of the first nine of the 11 contraventions described in the preceding paragraph—to which I shall refer, hereafter, as the “Underpayment Contraventions”). Although some of the constituent figures are modest, the sum total is not. The amended statement of claim pleads that PES failed to pay the following amounts to the Relevant Employees (the contravention numbers correspond to the numbering in [39] above):

41    Additionally, the amended statement of claim accuses PES of having contravened s 535(1) of the FW Act by reason of its failure to make and retain records containing information about:

(1)    the amount of work attracting an entitlement to overtime rates of pay that each of the Relevant Employees performed; and

(2)    the circumstances in which Mr Ramu’s employment was terminated and, in particular, whether the termination was effected by consent, by notice, summarily or in some other manner, and the identity of the person who acted to effect it.

42    Finally, the amended statement of claim alleges that PES contravened s 536(2) of the FW Act by failing to provide to Messrs Ramu and Sithiravelayutham pay slips that recorded the name of the fund into which it made superannuation contributions on their behalves.

43    By its amended defence, PES admits all of the conduct relevantly alleged against it and concedes that it committed the 14 contraventions that are summarised above (which is to say, the 11 contraventions of s 45 that are set out at [39] above, the two contraventions of s 535(1) that are set out at [41] above and the single contravention of s 536(2) that is set out at [42] above). On the strength of those admissions, I am satisfied that PES has contravened those civil remedy provisions as alleged.

44    The applicant also seeks to constitute each of Polytrade, Ms Ho and Mr Cheng as accessories to some of those contraventions, specifically to the first eight of the nine Underpayment Contraventions set out at [39] above. In each case, the amended statement of claim alleges that Polytrade, Ms Ho and Mr Cheng engaged in conduct that sufficed to implicate them in those eight contraventions (hereafter, the “Accessorial Contraventions”), and that they each did so knowing that the Relevant Employees were not being paid the amounts to which each of them pertains. The specific conduct and knowledge of each alleged accessory is the subject of analysis below; but, for now, it suffices to note that each of the amended defences filed by Polytrade, Ms Ho and Mr Cheng concedes what is alleged.

45    Again, on the strength of those admissions, I am satisfied that each of Polytrade, Ms Ho and Mr Cheng was involved in (within the meaning that s 550(1) of the FW Act attributes to that phrase) PES’s commission of the Accessorial Contraventions; and, by reason of that involvement, is taken also to have committed those same contraventions.

The relief that is sought

46    By her written submissions on the question of relief, the applicant urges the court to make declarations recording the contraventions that are alleged (and that I have found to have occurred) and to impose upon the respondents pecuniary penalties as follows, namely:

(1)    upon PES, in amounts totalling between $249,480.00 and $312,984.00;

(2)    upon Polytrade, in amounts totalling between $185,976.00 and $222,264.00; and

(3)    upon each of Ms Ho and Mr Cheng, in amounts totalling between $37,195.20 and $44,452.80.

47    Those figures are mathematically particularised in a series of helpful tables that were annexed to the applicant’s written outline of submissions. In each of them, the applicant identifies what is described as a “discount” of 20%, which she says should be applied in recognition of the respondents’ cooperation in this matter (more is said about that below). Thereafter, she identifies in respect of the individual contraventions some penalty ranges, each referrable to the maximum that the court is authorised to impose minus that “discount”.

48    There is benefit to be realised in replicating the relevant parts of that annexure. The applicant submits that the court should impose penalties against PES as follows, namely:

(1)    for its failure to pay Award rates of pay for ordinary hours of work (see above, [39(1)]), between 50% and 60% of the discounted maximum penalty that the court is authorised to impose (which, in the case of PES, is $63,000.00—making the discounted maximum $50,400.00);

(2)    for its failure to pay casual loadings in respect of ordinary hours of work (see above, [39(2)]), between 50% and 60% of the discounted maximum;

(3)    for its failure to pay casual loadings in respect of hours other than ordinary hours of work (see above, [39(3)]), between 50% and 60% of the discounted maximum;

(4)    for its failure to pay weekday night shift loadings (see above, [39(4)]), between 50% and 60% of the discounted maximum;

(5)    for its failure to pay weekday overtime rates (see above, [39(5)]), between 60% and 70% of the discounted maximum;

(6)    for its failure to pay Saturday overtime rates (see above, [39(6)]), between 60% and 70% of the discounted maximum;

(7)    for its failure to pay Sunday overtime rates (see above, [39(7)]), between 60% and 70% of the discounted maximum;

(8)    for its failure to pay public holiday overtime rates (see above, [39(8)]), between 30% and 40% of the discounted maximum;

(9)    for its failure to pay for minimum periods of engagement (see above, [39(9)]), between 10% and 20% of the discounted maximum;

(10)    for its failure to provide information concerning the terms of employee engagement (see above, [39(10)]), between 30% and 40% of the discounted maximum;

(11)    for its failure to make superannuation contributions into the correct fund (see above, [39(11)]), between 10% and 20% of the discounted maximum;

(12)    for its failure to make and retain records pertaining to overtime hours (see above, [41(1)]), between 70% and 80% of the discounted maximum;

(13)    for its failure to make and retain records pertaining to the termination of Mr Ramu’s employment (see above, [41(2)]), between 10% and 20% of the discounted maximum; and

(14)    for its failure to provide pay slips that recorded the name of the superannuation fund into which contributions were paid (see above, [42]), between 10% and 20% of the discounted maximum.

49    The applicant then submits that the sum of the penalties to be imposed should be reduced by operation of the so-called “totality” principle. She contends that a 10% reduction is appropriate in that regard.

50    Insofar as Polytrade, Ms Ho and Mr Cheng are concerned, the applicant submits that the court should impose penalties as follows, namely:

(1)    for their involvement in PES’s failure to pay Award rates of pay for ordinary hours of work (see above, [39(1)]), between 50% and 60% of the discounted maximum (namely, $63,000.00 for Polytrade, and $12,600 for each of Ms Ho and Mr Cheng—making the discounted maximums $50,400 and $10,800 respectively);

(2)    for their involvement in PES’s failure to pay casual loadings in respect of ordinary hours of work (see above, [39(2)]), between 50% and 60% of the discounted maximum;

(3)    for their involvement in PES’s failure to pay casual loadings in respect of hours other than ordinary hours of work (see above, [39(3)]), between 50% and 60% of the discounted maximum;

(4)    for their involvement in PES’s failure to pay weekday night shift loadings (see above, [39(4)]), between 50% and 60% of the discounted maximum;

(5)    for their involvement in PES’s failure to pay weekday overtime rates (see above, [39(5)]), between 60% and 70% of the discounted maximum;

(6)    for their involvement in PES’s failure to pay Saturday overtime rates (see above, [39(6)]), between 60% and 70% of the discounted maximum;

(7)    for their involvement in PES’s failure to pay Sunday overtime rates (see above, [39(7)]), between 60% and 70% of the discounted maximum; and

(8)    for their involvement in PES’s failure to pay public holiday overtime rates (see above, [39(8)]), between 30% and 40% of the discounted maximum.

51    Again, the applicant then submits that the sum of the amounts imposed should be reduced by 10% by operation of the so-called “totality” principle.

52    Other than Ms Ho, the respondents accept that the court should impose penalties upon each of them on account of the contraventions that are agreed to have occurred (and that I have found did occur). They submit that appropriate penalties fall lower down the scale than what the applicant has proposed. They also propose some “group[ing]” of the contraventions for the purposes of assessing penalties: in other words, that the court should approach the question of penalty alive to the reality (as they advance it) that some of the contraventions arose from the same or similar conduct, in respect of which some penalty amelioration is appropriate.

53    PES contends that the casual loading contraventions (above, [39(2)] and [39(3)]) and the weekend penalty contraventions (above, [39(6)] and [39(7)]) should, in each case, be “grouped” for the purposes of assessing penalties. It also makes an equivalent submission in respect of public holiday overtime. That seems to be a response to the applicant’s written submission, which purported to constitute PES’s failure to pay public holiday overtime in respect of work performed on Good Friday and Christmas Day (on the one hand) and its failure to pay public holiday overtime in respect of work performed on other public holidays (on the other) as separate contraventions of s 45. The amended statement of claim does not allege (certainly not clearly) separate contraventions in those respects and the applicant accepts that only a single penalty should flow in any event. Thus, little needs to be made of PES’s point about the “group[ing]” of public holiday overtime penalties.

54    In terms of quantum, PES submits that it is appropriate for the court to impose upon it penalties “in the low range (10-15%)” in respect of its failure to pay Award rates of pay for ordinary hours of work (above, [39(1)]); and “in the low to mid range” for its other Underpayment Contraventions. For the “non-pecuniary contraventions” (that is to say, the contraventions that did not result in the Relevant Employees being paid less than what the Award required), it is proposed that the court should impose penalties “in the low range, other than [insofar as concerns the] overtime record keeping [contraventions], which should be in the low to mid range”.

55    Ms Ho submits that no penalties should be imposed upon her.

56    Polytrade and Mr Cheng (who were represented separately from PES and Ms Ho) accept that penalties should be imposed upon them for their involvement in the Accessorial Contraventions; but, again, they maintain that appropriate penalties fall below what the applicant has proposed. As with PES, that submission has three dimensions. First, they press for the same “group[ing]” of contraventions as PES. Second, they propose a “cooperation discount” of 25% (rather than 20%, as the applicant proposes) and, third, they propose penalties set at lower percentages of the maximums that the court is able to impose, specifically:

(1)    for their involvement in PES’s failure to pay Award rates of pay for ordinary hours of work (see above, [39(1)]), between 30% and 40% of the discounted maximum penalty that the court is authorised to impose (namely, $47,250.00 for Polytrade, and $9,450 for Mr Cheng);

(2)    for their involvement in PES’s failure to pay casual loadings (see above, [39(2)] and [39(3)]), between 30% and 40% of the discounted maximum;

(3)    for their involvement in PES’s failure to pay weekday night shift loadings (see above, [39(4)]), between 30% and 40% of the discounted maximum;

(4)    for their involvement in PES’s failure to pay weekday overtime rates (see above, [39(5)]), between 40% and 50% of the discounted maximum;

(5)    for their involvement in PES’s failure to pay weekend overtime rates (see above, [39(6)] and [39(7)]), between 40% and 50% of the discounted maximum; and

(6)    for their involvement in PES’s failure to pay public holiday overtime rates (see above, [39(8)]), between 15% and 25% of the discounted maximum.

57    They then submit, consistently with the position adopted by the applicant, that the total amount imposed should be reduced by 10% to account for application of the so-called “totality principle”. By application of those percentages, Polytrade and Mr Cheng submit that it would be appropriate for the court to impose upon them penalties of between $78,671.25 and $104,186.25 for Polytrade; and between $15,734.25 and $20,837.25, for Mr Cheng.

58    I return to the question of declaratory relief. The applicant urges the court to make declarations in terms that reflect the findings that I have made (see above, [43] and [45]), specifically, that PES contravened the FW Act in the 14 ways that are identified above, and that Polytrade, Ms Ho and Mr Cheng were involved in PES’s contravention of the Accessorial Contraventions (and, thereby, themselves committed those same contraventions).

Declaratory relief

59    I shall address, first, the applicant’s request for declaratory relief. In doing so, I should note the position of the respondents. PES and Ms Ho submit that, in the event that the court is minded to impose penalties in respect of the contraventions that I have found to be established on the pleadings, limited or no utility will attach to the making of the declarations that the applicant seeks and, therefore, they ought not to be made. Polytrade and Mr Cheng accept that declaratory relief might carry some utility in that “…they will serve the purposes of general deterrence, by deterring others from engaging in similar contravening conduct”.

60    As was made clear from the outset, I am satisfied that it is appropriate to (and I will) impose upon each of the respondents penalties for the conduct in which they have engaged in contravention of the FW Act. In light of that (and for the reasons that follow), I am not persuaded that there is any utility in also granting declaratory relief.

61    I have had occasion in the past to consider what, if any, utility might attach to the making of declarations in relation to conduct that attracts the imposition of penalties under the FW Act: see, for example, Fair Work Ombudsman v Australian Workers’ Union [2020] FCA 60. It is necessary here only to record at a headline level the points of principle that guide the court’s discretion.

62    It is well accepted that the court has the power to grant declaratory relief that does nothing more than state that a respondent’s prior conduct was engaged in in contravention of a statute: Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) v Milin Builders Pty Ltd [2019] FCA 1070 (Snaden J; hereafter Milin), [85]. The authorities suggest that the court may adopt that course as a means of marking its disapproval of conduct that is found to have been undertaken in breach of a statute; and that there might be circumstances in which declaratory relief is appropriate to realise some broader educative or deterrent effect, or otherwise to vindicate or assist an applicant’s action: Milin, [98]. In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 (Dowsett, Greenwood and Wigney JJ), the full court of this court held (at 87 [93]) that “[d]eclarations relating to contraventions of legislative provisions are likely to be appropriate where they serve to record the Court’s disapproval of the contravening conduct, vindicate the regulator’s claim that the respondent contravened the provisions, assist the regulator to carry out its duties, and deter other persons from contravening the provisions”.

63    There is now at least some reason to doubt those propositions. In Australian Building and Construction Commissioner v Pattinson (2022) 399 ALR 599 (Kiefel CJ, Gageler, Keane, Gordon, Edelman, Steward and Gleeson JJ; hereafter, “Pattinson”), the High Court made clear, at least in the context of relief in the form of pecuniary penalties, that “appropriate” relief is relief that is calculated to deter repetition of the conduct in respect of which it is imposed; both specifically, in the case of the respondent that engaged in it, and generally, in the case of other persons who might otherwise be minded to emulate that conduct in the future. In other words, relief—or, at the least, relief in the nature of penalties—will be “appropriate” insofar as its imposition seeks to vindicate the public interest in ensuring “…compliance with norms of industrial behaviour prescribed by Parliament”: Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) (2018) 265 FCR 208, 226 [69] (Logan J, with whom Tracey J agreed).

64    Insofar as that reasoning may be applied beyond the realm of pecuniary penalties, it would seem that considerations such as the vindication of a regulator’s claims and the provision of some species of judicial “assistance” should not, absent some deterrent effect, factor in the court’s assessment of the appropriateness of declaratory relief. Why, it might rhetorically be asked, should the assessment of what is “appropriate” for the purposes of s 545(1) of the FW Act proceed otherwise than upon the same considerations that guide assessments of what is “appropriate” for the purposes of s 546(1)? In other words, why should declaratory (or any other form of non-penal) relief be thought to be “appropriate” unless its imposition can be understood to visit some deterrent effect, specifically or generally?

65    Those questions can be left for determination at another time. For now, I proceed upon the assumption that nothing said by the High Court in Pattinson serves to alter what this court has said about the appropriateness of declaratory relief in cases such as this one, or about the considerations that guide the court in assessing whether or not particular declaratory relief is appropriate in any given case.

66    It doesn’t much matter. I am not satisfied that it is appropriate here to grant declaratory relief as sought. The declaratory relief for which the applicant moves in this case does nothing more than record what the parties have themselves agreed and what I, by the conclusions already set out in these reasons (above, [43] and [45]), have accepted: namely, that the respondents contravened the FW Act in the ways so far explored. Though perhaps difficult to reconcile with other authorities, it has been said that declaratory relief in that form is not an appropriate deployment of the remedy: Warramunda Village Inc v Pryde (2001) 105 FCR 437, 440 [8] (Gray, Branson and North JJ); Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378, 388 [35] (Greenwood, Logan and Yates JJ).

67    Further, I do not accept that declaratory relief in the form that the applicant proposes would serve to, as the applicant put it, “…assist in clearly identifying the contravening conduct and set out the foundation on which any consequential orders…are made”. The contravening conduct has already been clearly identified. The basis underpinning the “consequential orders”—most notably, the pecuniary penalties that I intend to impose—is the subject of analysis below. I do not accept that any further clarity might be realised by granting declaratory relief. That is so in part because of the generalised nature of the declarations that the applicant seeks; but also because it seems, in the absence of evidence, quite unrealistic to assume that anybody other than the parties and a handful of lawyers would ever have occasion closely to study their terms.

68    Moreover, I am unable to see how the relief that is sought might assist or vindicate the applicant any more than will already be the case given these reasons and the penalty orders that I intend to make in reliance upon them. I am, in particular, quite unable to see how declarations might visit any deterrent effect; or, more significantly, any deterrent effect above and beyond that which is to be realised by the imposition of penalties. I am alive to the frequency with which this court grants relief of the kind now sought; but that alone does not assist. Additionally, I am conscious that, with the exception of PES and Ms Ho, the parties tell me that declarations will visit some deterrent effect; but they do not satisfactorily explain how.

69    For the proposition to hold any water, the court would need to accept that there are employers (and others) who, upon learning of the penalties that are to be imposed in this matter, might nonetheless be minded to emulate the respondents’ conduct; but who would somehow be led to a different course were the court also to grant declaratory relief. One might imagine the internal monologue of a would-be contravenor:

I see that the Federal Court has imposed significant penalties on a business that breached an award by underpaying its workers. Perhaps I should start honouring my own award obligations… Ah…never mind, I think I’ll just continue on the way that I always ha… Oh, wait a minute! It also made declarations! Well…that changes everything. I’m going to straighten up and fly right.

70    I would require persuasive evidence before accepting such a proposition. There will be no declaratory relief.

Pecuniary penalties

71    The principles that guide the imposition of civil penalties for contraventions of the FW Act (and, indeed, generally) are well-settled. They are distilled in the joint judgment of Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ in Pattinson. In Fair Work Ombudsman v Roach (The Melbourne Quarter Case) [2023] FCA 781, Wheelahan J, referring to Pattinson, summarised them as follows (at [13]):

(1)    The purpose of the civil penalty regime under the FW Act is primarily, if not solely, the promotion of the public interest in compliance with provisions of the Act by the deterrence of further contraventions of the Act.

(2)    Reflecting the text of s 546 of the FW Act, the Court’s task is to determine what it considers to be an “appropriate” penalty in a particular case. A penalty should not be greater than is necessary to achieve the object of deterrence, and severity beyond that would be oppression. An appropriate penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case.

(3)    The assessment of an appropriate penalty may be informed by the factors listed by French J in Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 52,152-3 to the extent that those factors relate to deterrence. However, that list is not a rigid catalogue of matters for attention as if it were a legal checklist. Account of the factors listed by French J in CSR, such as an expression of genuine remorse, may moderate the penalty that is appropriate to protect the public interest by deterring future contraventions of the FW Act.

(4)    Some concepts familiar from criminal sentencing, such as totality, parity, and course of conduct may assist in the assessment of what may be considered reasonably necessary to deter further contraventions of the FW Act.

(5)    The maximum penalties provided for by the FW Act are not reserved for the worst cases. Rather, what is required is that there be some reasonable relationship between the theoretical maximum and the final penalty imposed viewed through the lens of achieving the deterrence which is the purpose of the FW Act civil penalty regime.

(6)    In some cases, the circumstances of the contravener may be more significant to the assessment of an appropriate penalty than the circumstances of contravention, because, all other things being equal, a greater financial incentive will be necessary to persuade a well-resourced contravener to abide by the law rather than to adhere to its preferred policy than will be necessary to persuade a poorly resourced contravener that its unlawful policy preference is not sustainable.

72    In determining what penalties are appropriate in the present case, the court’s discretion is very broad: A & L Silvestri Pty Limited v Construction, Forestry, Mining and Energy Union [2008] FCA 466, [6] (Gyles J). The task of assessing what amount to impose is one of instinctive synthesis that involves the selection of a figure that takes due account of all factors relevant to the particular case: Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) (2018) 260 FCR 68, 84 [55] (Allsop CJ, Davies and Wigney JJ); Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25, 36 [44] (Jagot, Yates and Bromwich JJ).

73    The sole object to which the court must give effect in setting appropriate penalties is to deter the repetition of the conduct in respect of which they are to be imposed: Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) (2018) 264 FCR 155 (hereafter, the “NIPP Case”), 167 [19] (Allsop CJ, White and O’Callaghan JJ). Deterrence, in that sense, is both specific and general: the court must endeavour 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]”: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68, 88 [98] (Dowsett, Greenwood and Wigney JJ); Trade Practices Commission v CSR Ltd (1991) ATPR 41-076, 52,152 (French J).

74    In the NIPP Case (Allsop CJ, White and O’Callaghan JJ), the full court set the task in the following terms (at 167 [20]-[21]):

Relevant factors in the overall assessment of penalty were helpfully listed by French J in CSR. They have been adopted in many cases. For present purposes, they can be restated as follows: the nature, character and seriousness of the conduct; the loss and damage caused; the circumstances in which the conduct took place; the size of the contravener and its degree of power; the deliberateness of the conduct and the time over which it occurred; the degree of involvement of senior officials or management; the culture of the organisation as to compliance or contravention; and, any co-operation with the regulator and contrition.

The seriousness of the contravention and other features of the conduct which may be seen as relevant to it…find their place in understanding the degree of deterrence that is necessary to be reflected in the size of the penalty: Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; (2018) 260 FCR 68 at [71].

75    Inherent in realising the sole objective to which its imposition is directed is a recognition that a civil penalty “…must be fixed with a view to ensuring that the penalty is not such as to be regarded by [the] offender or others as an acceptable cost of doing business”: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640, 659 [66] (French CJ, Crennan, Bell and Keane JJ); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 249 FCR 458, 481 [101] (Dowsett and Rares JJ, North J dissenting—hereafter, the “Perth Airport Case”).

76    For reasons that will shortly be made apparent, it is prudent to separate the analysis that follows into two parts: the first addressing the penalties that should be imposed upon PES (as the Relevant Employees’ employer and, therefore, the primary contravenor); and the second addressing the penalties that should be imposed upon each of the accessories (Polytrade, Ms Ho and Mr Cheng).

Penalties to be imposed upon PES

77    The penalties to be imposed upon PES in light of the conduct in which (as I have found) it engaged in contravention of the FW Act call for some analysis of the circumstances within which that conduct was engaged. All of what follows emerges without material controversy from the pleadings (especially the admissions) and the evidence.

78    There can be no doubt that, by reason of the conduct in which I am satisfied that PES engaged in contravention of the FW Act, each of the Relevant Employees was underpaid a substantial sum of money over a relatively confined period of time. It is agreed that, in total, they were underpaid $194,249.70 over a period of just 20 months. For the work that they performed over that period, they were paid between 53 and 58 per cent only of what the Award required that they be paid. On any view, those are damning figures.

79    They are made worse by considering the personal circumstances of the Relevant Employees. All are from migrant backgrounds and have limited to negligible written and verbal English skills. At least two of them were recent arrivals in Australia who had limited (if any) employment history here. The three who gave evidence by affidavit all noted what might otherwise fairly be presumed: that they possessed little if any knowledge about their workplace rights or the existence of (or their entitlements under) the Award. All deposed to having experienced difficulty finding employment in Australia.

80    Further, it could hardly be doubted that the Relevant Employees worked hard for what they did receive. Those who gave evidence deposed to working 12-hour shifts, usually six and sometimes seven days per week. For that, they received a flat rate of $22 for every hour that they worked (regardless of when).

81    Although it cannot factor into present calculations, the evidence makes clear that PES’s Award transgressions were not limited to the Relevant Employees or the period between February 2018 and October 2019. Once alerted to its wrongdoing (or otherwise prodded into addressing it), PES (and, it would seem, the other respondents) took steps to identify other employees over other periods who might similarly have been paid otherwise than what the Award required that they be paid. Those inquiries revealed a much more significant problem: approximately $2,200,000.00 of entitlements wrongly withheld since 2012. The evidence discloses that those underpayments have since been rectified. That acknowledged, it bears repeating: the court is not here concerned to impose penalties otherwise than in respect of the $194,249.70 by which the Relevant Employees were underpaid between February 2018 and October 2019.

82    Although it would appear no longer to operate (at least not in respect of the two sites at which the Relevant Employees worked), PES is or was, on any view, a sizeable operation. Polytrade is (or was) self-described as one of the “three largest recycling companies in Victoria”. Between them, the related entities were able to raise funds sufficient to correct the significant underpayments that were uncovered (including in respect of other employees and other periods). It must be inferred that they were possessed of not insignificant financial means.

83    The enormity of Award underpayments notwithstanding, PES appears (perhaps together with Polytrade) to have reacted responsibly once conscious of the need to address them. It facilitated the applicant’s efforts to ascertain the extent of the Relevant Employees’ underpayment and agreed to admit the contraventions that were later alleged against it in this proceeding (albeit some months after they were first aired). More significantly, it took measures of its own to correct the underpayments before this proceeding was even commenced (although, again, that did not transpire until after the passage of several months). Those measures extended beyond the Relevant Employees and the period spanning February 2018 to October 2019; but, in the case of the Relevant Employees, the bulk of the amounts comprising the total underpayment amount were repaid on 29 June 2020, with additional, much smaller remedial amounts paid to some of them in January 2021 (a few weeks before this proceeding was commenced).

84    PES (with the assistance of Polytrade), also took steps to guard against repetition of the Award contraventions in which it had engaged. Audit processes were established and maintained to ensure that Award non-compliance would not repeat. It is apparent that the measures that were adopted to address and guard against future Award contraventions reflect an acceptance on the part of PES (at the least) that what occurred ought not to have.

85    Nonetheless, it is also apparent that PES’s decision to pay the Relevant Employees a flat rate of pay for all hours worked, regardless of how many they totalled or at what times that work occurred was wantonly naïve, at best. At worst, it involved a deliberate and cavalier disregard of important Award safety net obligations. In light of its no longer operating at the two relevant sites, the need specifically to deter PES from further Award contraventions does not loom as largely as might otherwise be the case. But the need to deter other employers generally in that regard very much does. For the court to realise the deterrent effect that the imposition of penalties must be fashioned to achieve, it is clear that PES must pay a heavy toll for its misconduct.

86    I turn, then, to the individual contraventions and what should suffice to deter their repetition into the future. Insofar as concerns its failure to pay Award rates of pay for ordinary hours of work (above, [39(1)]), I consider that the applicant’s proposed penalty—between 50% and 60% of the maximum (discounted for cooperation)—is more punitive than is warranted. PES is a first-time (and, one hopes, a one-time-only) contravenor that, despite the scale and audacity of its transgressions, has responded in a responsible and conscientious way that bespeaks an acceptance of wrongdoing and an eagerness to ensure against similar conduct in the future. The amount of the underpayment ($3,232.44)—though no doubt significant for the Relevant Employees—is nonetheless modest. I consider that, in the circumstances, a penalty set at 20% of the (undiscounted) maximum is appropriate to deter repetition of PES’s conduct; both by it and by other employers who might be minded to emulate it.

87    As concerns its failure to pay casual loadings (above, [39(2)] and [39(3)]), I do not accept that PES’s contraventions should be seen by operation of s 557(1) as a single contravention for the purposes of pt 4-1 of the FW Act. The Award obligation to pay a casual loading in respect of ordinary hours of work was separate to the Award obligation to pay a casual loading in respect of other hours of work. Contraventions of those obligations involve (and, in this case, involved) different species of omission and, therefore, sufficiently different conduct: Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 (North, Flick and Jagot JJ—hereafter, “Rocky Holdings”).

88    Nonetheless, the legal and factual elements of the casual loading contraventions are plainly interrelated. The court should be alive to that reality and should guard against the possibility—any possibility—of double punishment. Thus, it has been said that the “course of conduct” principle:

…recognises that, where there is an interrelationship between the legal and factual elements of two or more offences with which an offender has been charged, care needs to be taken so that the offender is not punished twice (or more often) for what is essentially the same criminality. The interrelationship may be legal, in the sense that it arises from the elements of the crimes. It may also be factual, because of a temporal or geographical link or the presence of other circumstances compelling the conclusion that the crimes arise out of substantially the same act, omission or occurrences.

See: Royer v Western Australia (2009) 197 A Crim R 319, 328 [22] (Owen JA, with whom Miller JA agreed in the result, Buss JA dissenting).

89    The principles that guide the application of the “course of conduct” principle are notorious and not obviously in dispute. I need not repeat the observations that I made in Australian Building and Construction Commissioner v Pattinson (2019) 291 IR 286, 314-316 [105]-[111]. I am satisfied that it is appropriate to impose upon PES separate penalties for the two casual loading contraventions; but, again, I am not minded to fashion them at the level proposed by the applicant (50% to 60% of the discounted maximum). In the circumstances, penalties set at 30% and 20% of the maximum, respectively, are appropriate to meet the deterrent effect to which the imposition of penalties is directed. The different amounts reflect the severity of the impacts that the contraventions visited upon the Relevant Employees (at least collectively).

90    In relation to PES’s failure to pay weekday night shift loadings (above, [39(4)]), I am again not minded to impose a penalty at the level proposed by the applicant. In my view, a penalty set at that level (between 50% and 60% of the discounted maximum) would trespass beyond the requirements of deterrence into the realm of “oppressive severity”. As with the non-payment of Award rates of pay for ordinary hours of work, I consider that a penalty set at 30% of the maximum strikes an appropriate balance.

91    I turn to consider PES’s failure to pay weekday overtime rates (above, [39(5)]). I accept the applicant’s submission that PES’s conduct in that regard is deserving of a greater penalty than is warranted for the casual and shift loading contraventions. Nonetheless, I am again unable to agree that a penalty fashioned at 60% to 70% of the discounted maximum strikes a reasonable balance between oppressive severity and the need for deterrence in this case. In saying so, I need not repeat the observations already made about PES having not previously been found to have contravened the Award, nor about its acceptance of wrongdoing. I consider, in all of the circumstances, that a penalty set at 40% of the maximum is appropriate.

92    I take the same approach to the “group[ing]” of PES’s failures to pay Saturday and Sunday overtime (above, [39(6)] and [39(7)]) as to the non-payment of casual loadings (above, [87]-[89]). I am satisfied that the conduct that gave rise to those contraventions does not attract the operation of s 557(1) of the FW Act; but also that, by operation of the “course of conduct” principle, the court should be careful to account for the interrelationships between the legal and factual elements of each. Again, I am not minded to impose penalties at the level that the applicant proposes. Penalties set at that level would be inappropriately severe relative to the need for general and specific deterrence. I consider that penalties set at 30% of the maximum for each contravention are appropriate in the circumstances.

93    Insofar as concerns PES’s failure to pay public holiday overtime rates (above, [39(8)]), I am, again, not minded to impose a penalty at the level that the applicant proposes (30% to 40% of the discounted maximum). Again, a penalty set at that level would extend beyond what is necessary to deter repetition of the conduct (generally and specifically). It would be oppressive in its severity. In the circumstances (and, in particular, having regard to the amount of the underpayment), a penalty set at 20% of the maximum is appropriate.

94    PES’s failure to pay for minimum periods of engagement (above, [39(9)]), though not insignificant, was plainly less egregious than its other conduct. Respectfully, I agree with the applicant’s submission (which is consistent with that of PES itself) that it warrants the imposition of a penalty between 10% and 20% of the discounted maximum. A penalty set at 15% of the maximum is appropriate.

95    I am unable, however, to accept that PES’s failure to provide information concerning the terms of employee engagement (above, [39(10)]) warrants the imposition of a penalty set at between 30% and 40% of the discounted maximum. It is difficult to discern why it might be said that a penalty in that range strikes an appropriate balance between oppressive severity and the need to deter. Unlike amounts that were underpaid, it is more difficult to gauge the impacts that PES’s failure surely visited. Plainly, the obligation to inform is an important one that should be honoured. But it is not apparent here that it has resulted in particular consequences for the Relevant Employees that ought to factor in the court’s assessment of what is appropriate. In the circumstances—and, in particular, having regard to PES’s status as a first-time “offender” and the measures that it took to correct its misconduct—I consider than a penalty set at 17.5% of the maximum is appropriate.

96    I next turn to consider PES’s failure to make superannuation contributions into the correct fund (above, [39(11)]). The applicant proposes that a penalty set at between 10% and 20% of the discounted maximum should be imposed. Although perhaps within the window of appropriateness, I am not minded to set a penalty at that high a level. It is, again, difficult to know what, if any, impact PES’s conduct has visited upon the Relevant Employees. Without wishing to understate the significance of the contravention—for a contravention it was—it appears to have been of little more than administrative consequence. I consider that, in all of the circumstances, a penalty set at $3,500.00 is appropriate.

97    PES’s failures to make and maintain compliant employee records (above, [41(1)] and [41(2)]) are more serious. It has been said that proper record keeping is “the bedrock of compliance”: Fair Work Ombudsman v Dosanjh [2016] FCCA 923, [46] (Judge Altobelli); Fair Work Ombudsman v ACN 052 182 180 Pty Ltd & Anor [2013] FCCA 688, [20] (Judge F Turner) and Fair Work Ombudsman v Soleimani & Anor [2014] FCCA 2380, [55] (Judge Jones). Plainly—and as the applicant submitted—“[i]nadequate record keeping undermines…the effectiveness of the statutory safety-net for employees”. Insofar as concerns PES’s failure, in particular, to maintain records of employee overtime, that proposition rings loud and true. In the absence of accurate records of what hours employees have worked, it is impossible—or, at the least, needlessly difficult—to reliably ascertain whether they have been paid what they are entitled to have been paid. Thus the creation and maintenance of accurate records is no mere administrative triviality.

98    Those observations notwithstanding, the penalty that the applicant proposes (between 70% and 80% of the discounted maximum) in respect of PES’s failure to make and keep overtime records is well above what the circumstances here warrant as appropriate. It must be borne in mind presently that PES’s failure to make and create records of that nature does not, for example, appear to have been (and was not suggested to have been) a deliberate exercise in obfuscation or trickery. Records, of course, ought to have been made and retained; but the circumstances do not here present as warranting anything like 80% of the discounted maximum. Rare will be the case that penalties at that level will be appropriate for a first-time contravenor that has shown the measure of appreciation for its wrongdoing that PES has shown. In the circumstances, I am minded to set, as appropriate, a penalty at 40% of the maximum.

99    The failure to make or maintain records pertaining to the termination of Mr Ramu’s employment is less egregious. As much is accepted by the applicant, who proposes a penalty of between 10% and 20% of the discounted maximum. I accept that that window is appropriate. I will impose a penalty set at 10% of the maximum.

100    PES’s failure to provide pay slips that recorded the name of the superannuation fund into which contributions were paid on behalf of the Relevant Employees (above, [42]) is similar (though not identical) in seriousness to its failure to make contributions into the fund required under the Award. The significance of the failure for the Relevant Employees is not obvious; it may traverse no further than that they were denied a record of the kind to which they were entitled under the FW Act. Again, the applicant proposes a penalty of between 10% and 20% of the discounted maximum. I accept that a penalty set at 10% of the maximum is appropriate in the circumstances.

101    All told, then, I am minded to impose upon PES the following penalties, namely:

102    The so-called “totality principle” requires that, before proceeding to levy multiple penalties, the court consider whether the total of what is proposed is proportionate to the wrongdoing that warrants them. Given the scale of what I propose, that holistic pause is particularly important in this matter. There can be no doubt that penalties in the order of $200,375.00 represent a significant imposition upon PES. Nonetheless, I am satisfied that they are proportionate to the totality of PES’s misadventure. The court must exact a heavy toll: not merely to ensure that PES is brought to account for its obnoxious conduct; but also to serve as a warning to other employers who might be minded to ignore their own important Award and statutory obligations in the way that PES did. I am satisfied that the imposition upon PES of penalties totalling $200,375.00 will achieve that end.

The conduct of the accessories

103    Polytrade, Ms Ho and Mr Cheng are in somewhat different positions to PES. As has been rehearsed, they are said to have been (and, on the strength of their admissions, I have found that they were) involved in PES’s commission of the Accessorial Contraventions, such that they, too, are taken to have contravened the same statutory injunctions.

104    That involvement, though, does not—indeed cannot—inure in the form of failures to pay what the Award required that the Relevant Employees be paid. The relevant statutory obligation—that is to say the obligation not to contravene the Award (FW Act, s 45)—fell uniquely upon PES as the Relevant Employees’ employer. Polytrade’s, Ms Ho’s and Mr Cheng’s involvement in PES’s Accessorial Contraventions necessarily involved different conduct—that is to say, different acts or omissions—engaged in by each of them; and engaged in in ways and with states of knowledge that sufficed to invoke the application of s 550(1) of the FW Act and, thereby, associate them with PES’s wrongdoing.

105    Identifying what that conduct was has proved an unfortunately difficult exercise. I say so in criticism of all of the parties equally: of the applicant, who has failed to plead with requisite clarity that which was said to suffice to constitute each of Polytrade, Ms Ho and Mr Cheng as accessories to PES’s Accessorial Contraventions; and of those respondents, who apparently took no steps to require that clarity, and very few if any to identify by evidence that which might so suffice.

106    The court has been left in an unenviable position. The accessorial respondents accept—and, on the strength of their admissions, I have found—that they were each involved in the conduct by which PES committed the Accessorial Contraventions. But, insofar as involves the setting of appropriate penalties for those contraventions, the court’s task has been made intolerably difficult for want of clarity as to what the accessorial respondents actually did or didn’t do. That conduct (constituted by acts or omissions) is plainly central to the task: how, it might rhetorically be asked, can the court fashion penalties appropriate for conduct engaged in in contravention of the FW Act unless or until it knows what that conduct actually was?

107    It is generous to observe that it would have been better had the parties turned their minds more sharply to that question. As Thawley J put it in Whitby v ZG Operations Australia Pty Ltd (No 2) [2019] FCA 201, [29]:

A pleading that a person is “knowingly concerned” in a contravention is a serious one, akin to a pleading of dishonesty — see:  Stefanovski v Digital Central Australia (Assets) Pty Ltd [2018] FCAFC 31 at [70].  A pleading that a person was knowingly concerned in a contravention, exposing them to personal liability and seeking the imposition of civil penalties, should be drafted with some considerable care.  It should plead the material facts said to establish that the person was knowingly concerned in the contravention.  This includes an express identification of the elements of the contravention and an express pleading that the person had knowledge of each of the essential elements constituting the contravention.  It should identify the material facts said to establish knowledge or from which such knowledge is to be inferred.  The pleading should generally also identify the material facts said to constitute the relevant acts or omissions of the person which are relied upon as establishing any practical connection with or link to the contraventions (Whitby at [234], [235]) which are contended to establish the person was “knowingly concerned” within the meaning of s 550(2)(c).

(emphasis added)

108    That did not here occur. Instead, the court is left to trawl through—and to attempt to make some sense of—the allegations contained in the applicant’s amended statement of claim (which, of course, each of the accessorial respondents has baldly conceded). As will shortly be seen, the matters of relevance are alleged very much without the precision that this court is entitled to expect of litigants in civil penalty proceedings; and, in particular, of an officer of the Commonwealth.

109    The analysis that follows is best undertaken by reference to the individual respondents: Polytrade, Ms Ho and Mr Cheng. For reasons that might become apparent, I shall begin with Ms Ho.

The conduct of Ms Ho

110    The amended statement of claim pleads that Ms Ho “…had a practical connection with” and “...was an active participant in” PES’s Accessorial Contraventions. In each case, that is said to arise “[b]y reason of the matters alleged at paragraph 4 above”.

111    Paragraph 4 of the amended statement of claim pleads as follows, namely:

4.     The Third Respondent, Ms Pui Shan Christine Ho (Ms Ho), is and was at all relevant times:

(a)     a natural person capable of being sued;

(b)     the wife of the Fourth Respondent, Mr Man Sang Cheng (Mr Cheng);

(c)     the sole director, secretary and shareholder of PES;

(d)     a 10% shareholder of Polytrade;

(e)     a person performing the role of Chief Financial Officer of PES;

(f)     a person responsible on behalf of PES for:

(i)     processing and approving the payroll for employees of PES, including for the Employees;

(ii)     processing and approving invoices for the business expenses of PES;

(g)     the person who executed the Contractor Agreement on behalf of PES;

(h)     a person responsible, in a practical sense, for ensuring that PES complied with its legal obligations under the FW Act;

(i)     an “official” of PES for the purposes of section 793 of the FW Act; and

(j)     by reason of section 793(1) of the FW Act, a person whose conduct engaged in on behalf of PES within the scope of her actual or apparent authority, is taken to be conduct by PES for the purposes of the FW Act.

112    One searches in vain for the identification there of conduct that might suffice to establish the practical connection and active participation later asserted. Perhaps—indeed, most likely—each inured, somehow, in Ms Ho’s responsibilities (see subparagraphs 4(f) and (h)) or in the discharge of her role as PES’s Chief Financial Officer (see 4(e)), or some combination of both.

113    I shall come back to that. The amended statement of claim also makes a series of allegations about the state of Ms Ho’s knowledge at relevant times. Specifically, it is said (and, of course, Ms Ho admits) that she knew:

(1)    that the Award applied to the employment of the Relevant Employees;

(2)    alternatively, that an award so applied;

(3)    the hours that each of the Relevant Employees worked;

(4)    the nature of the work so performed; and

(5)    the amounts that PES paid in respect of that work.

114    The amended statement of claim then contains a confoundingly imprecise plea about Ms Ho’s knowledge, advanced “[f]urther and in the alternative” to what is set out above: namely, that Ms Ho “…knew of the system which produced the outcomes constituting the underpayment of the Employees’ Award entitlements”.

115    It is tempting to say more about that but it isn’t necessary to. The allegations going to the state of Ms Ho’s knowledge culminate in the following, namely that Ms Ho “…knew that the amounts paid to [the Relevant] Employees were insufficient to satisfy the minimum Award entitlements of the [Relevant] Employees”.

116    Those allegations about the state of Ms Ho’s knowledge are all conceded and the result is plain enough: Ms Ho can be taken to have known each of the elements of the Accessorial Contraventions that PES committed. There is no controversy that that is so.

117    The amended statement of claim then proceeds (or purports) to tie the constituent elements of accessorial liability together. It is alleged that, by reason of the state of her knowledge (on the one hand) and her having “…had a practical connection with” or having been “…an active participant in” PES’s Accessorial Contraventions (on the other), Ms Ho was “…knowingly concerned in and a party to” each of the Accessorial Contraventions and, thus, is taken by s 550(1) to have herself committed them.

118    What, though, was it that she relevantly did or did not do?

119    Asked that very question during the hearing, counsel for the applicant suggested that Ms Ho’s conduct lay in her processing of PES’s payroll: in other words, in her approval of the making of payments to the Relevant Employees that were (and that she knew to be) insufficient to satisfy what the Award required that they be paid. Faced with the prospect that that might constitute a single course of conduct in respect of which s 557(1) of the FW Act might operate (such that the resultant statutory contraventions should, as that section requires in given circumstances, be “taken to constitute a single contravention”), he retreated from that proposition and suggested, instead, that Ms Ho’s conduct assumed the form of separate omissions. Specifically, it was suggested that Ms Ho was obliged to but did not ensure that the Relevant Employees were paid what the Award required that they be paid; and that each of PES’s Award contraventions was the product of a discrete omission on Ms Ho’s part, which should sound as a discrete species of conduct, each sufficient to attract the imposition of a discrete penalty.

120    Counsel for Ms Ho submitted that her client’s conduct lay in “pressing the button” by which PES’s payroll was finalised, following which the Relevant Employees were paid. That, she said, constituted a single course of conduct; and if, contrary to her primary submission, the court were minded to impose upon Ms Ho a penalty or penalties for her transgressions, it should do so mindful of the operation of s 557(1) of the FW Act (or otherwise consistently with the so-called “course of conduct” principle).

121    With the possible exception of paragraph 4(g) (above, [111]), the amended statement of claim does not identify any specific conduct—that is, any acts or omissions—in which Ms Ho engaged sufficiently so as to implicate her as an accessory to PES’s Accessorial Contraventions. Instead, it pleads what she was responsible for doing and what the state of her knowledge was, and that she had a practical connection with and was an active participant in PES’s Accessorial Contraventions. What the court is meant to do with all of that was, it is fair to say, not satisfactorily explained.

122    Instead, the applicant sought to rely upon the reasoning of this court in Fair Work Ombudsman v Lohr (2018) 158 ALD 457 (Bromwich J; hereafter, “Lohr”). There, the court upheld an appeal from the judgment of (what was then) the Federal Circuit Court of Australia. The primary judgment there concerned, as this one does, the imposition of pecuniary penalties under the FW Act for breaches of an award. The primary judge had determined that the employer had committed 12 statutory contraventions; but, insofar as concerned an alleged accessory, Mr Lohr, proceeded to treat them as a single contravention. The primary judge reasoned as follows, namely:

139.    As I have already found, the application of s 557(1) of the FW Act results in old SSG having engaged in 12 contraventions of s 45 and Mr Lohr’s being involved in those contraventions. The source of the contraventions, however, is the same. It consists in Mr Lohr concluding that paying employees a flat rate of $25 an hour would be sufficient to discharge old SSG’s obligations under whatever award applied to its employees. The acts constituting each of the 12 contraventions were also the same, namely, paying amounts calculated solely by reference to the $25 per hour rate without Mr Lohr making any attempt to calculate the precise amounts for which each old SSG Employee became entitled, depending on the day and time of day that employee performed work. For these reasons, I am of the opinion that old SSG’s 12 contraventions should be treated as one contravention; and I propose, therefore, to assess the penalty for Mr Lohr’s involvement in old SSG’s 12 contraventions of s 45 of the FW Act as if they constituted one contravention.

123    On appeal to this court, it was said that his Honour erred in that:

…s 557 of the Act is the express statutory manifestation of the one transaction or course of conduct principle. By enacting s 557 Parliament has determined how multiple contraventions arising from a course of conduct are to be treated. Having applied s 557 of the Act it was not open for the Primary Judge to further consolidate the 12 contraventions into one contravention by applying that principle, in effect, again.

124    That submission was accepted. Referring to the judgment of the full court in Rocky Holdings, Bromwich J reasoned (at [34]) that:

…Despite important factual differences between this case and Rocky Holdings, the Full Court’s decision in that case compels this outcome. Even if s 557 allows for the continued application of the course of conduct principle, which may be doubted, the application of s 557 to the facts of this case meant that there was no remaining work for the course of conduct principle to do. The fact of flat rates of pay cannot operate to deny the multiplicity of contraventions that this approach was found by his Honour to have produced. His Honour therefore erred in further consolidating the number of contraventions from 12 to one, noting, as already observed, that the FWO was content to proceed upon the basis of nine contraventions. These grounds of appeal must therefore succeed…

125    The applicant advances Lohr as authority for the proposition that an accessory who is implicated in multiple award contraventions cannot, by operation of the “course of conduct” principle or s 557(1) of the FW Act, be penalised as though guilty of only a single contravention. It is said that Lohr is binding upon this court; and, given that it involved the exercise of the court’s appellate jurisdiction, would remain so for present purposes even were I to form the view that it is plainly wrong.

126    No authority was cited to substantiate that last proposition but it doesn’t much matter. Respectfully, I discern no error in the reasoning to which Bromwich J was attracted. Lohr concerned the sequential application of both s 557(1) and the so-called “course of conduct” principle. The primary judge reasoned that the employer’s award contraventions—which were already consolidated by operation of s 557(1) of the FW Act—all arose from a decision to pay a flat rate of pay and, therefore, should be treated as one contravention upon operation of the “course of conduct” principle. Such reasoning, as Bromwich J noted (correctly, in my respectful view), is impossible to reconcile with what this court said in Rocky Holdings. Regardless, neither Bromwich J nor the primary judge was moved (or had occasion) to consider the specific accessorial conduct of Mr Lohr. Lohr is of limited, if any, assistance presently.

127    If Ms Ho’s accessorial conduct lay solely in the approval and processing of PES’s payroll, then her submission regarding the operation of s 557(1) of the FW Act would have much to commend it. It would be in those positive acts—the approval and processing of PES’s payroll—that she would be understood to have been “knowingly concerned in and a party to each of PES’[s Accessorial C]ontraventions”. On any view, those acts would qualify as having arisen out of a course of conduct for the purposes of s 557(1); and it would necessarily follow that Ms Ho’s contraventions would, by operation of that section, be “taken to constitute a single contravention” for penalty-setting purposes.

128    If, however, Ms Ho was subject to discrete obligations to ensure that PES complied with each of the Award obligations by which it failed to abide, then it might be said that her failure, in each regard, should sound as a discrete omission on her part: in other words, that she should be understood to have engaged in eight discrete courses of conduct, each comprising of separate omissions. If that were so, s 557(1) would not apply and it would be open to the court to impose penalties for each discrete contravention.

129    Might it be said, then, that that latter analysis should be preferred in light of what appears at paragraph 4(h) of the amended statement of claim (and its admission by Ms Ho)? Admittedly with some hesitation, I do not think that it can. That Ms Ho was “…responsible…for ensuring that PES complied with its legal obligations under the FW Act” is plainly significant. Given that PES did not, in point of fact, comply with those obligations, it must be the case that Ms Ho failed to discharge that responsibility: in other words, that she should be understood, by that failure (or those failures), to have engaged in conduct in the form of an omission (or omissions). But the omission was, in each case, the same: it subsisted in Ms Ho’s failure to ensure that which she was responsible for ensuring (namely, that PES complied with its legal obligations under the FW Act—specifically, with its obligation under s 45 not to contravene the terms of the Award).

130    The position of Ms Ho thus differs to that of PES. The Award imposed upon PES multiple obligations. For the purposes of s 45 of the FW Act, the contravention of its terms lay not in positive acts but in omissions: specifically and in each case, in the failure to make the payments that each individual requirement of the Award compelled. A failure to make one species of payment sufficed to constitute one omission; a failure to make another sufficed to constitute another; and so on. The conduct—that is to say, the omission—by which each of PES’s contraventions was constituted was, in each case, different. Hence, there are multiple, discrete contraventions of s 45 of the FW Act that attract multiple, discrete penalties.

131    The same cannot be said of Ms Ho. The Award did not bind Ms Ho and s 45 of the FW Act did not compel her to abide by its terms. There is only one (presently relevant) obligation that the amended statement of claim and the admissions made in response to it attach to her: namely, an obligation to “ensure that PES complied with its legal obligations under the FW Act”. Plainly, she failed (by omission) to discharge that obligation on multiple occasions; but each occasion involved the same conduct (that is, the same omission).

132    That understood, s 557(1) is applicable. Although she must be understood to have engaged (indeed, I have found that she did engage) in multiple contraventions of s 45—specifically, in each of the eight Accessorial Contraventions—they must, for the purposes of pt 4-1 of the FW Act (and, in particular, s 546), be “…taken to constitute a single contravention”.

133    That conclusion, it must be accepted, is open to criticism at a policy level. Why should the court impose separate penalties against an employer in respect of multiple award breaches; but not do the same in respect of the accessory from whose action or inaction those breaches can fairly be said to have flowed?

134    That question, of course, has a simple answer: the court is not concerned to deal in matters of policy. The principles governing accessorial liability and the imposition of penalties for individual courses of conduct—both under the FW Act and generally—are well-settled. The analysis above involves an orthodox application of them; albeit completed against the backdrop of a highly unorthodox pleading and factual landscape.

135    There is another observation to be made. It was open to the applicant to allege—indeed, she ought to have alleged (if it were the case)—that Ms Ho’s liability as an accessory arose as a product of different conduct as concerned each contravention. Given what appears to have been Ms Ho’s wholesale capitulation to the case advanced against her, it does not (within reason) seem much of a stretch to think that she would have admitted whatever was so alleged. Had the applicant pleaded her case sensitive to the prerequisites of accessorial liability, it may well have been that the entirety of the analysis in this section would have been unnecessary and the penalties to be imposed upon Ms Ho might well have been significantly higher than they will be.

The conduct of Polytrade

136    The amended statement of claim contains, in respect of Polytrade, allegations that bear more than a passing resemblance to those made in respect of Ms Ho. It is prudent to map them out at the same level of detail.

137    As with Ms Ho, the amended statement of claim pleads that Polytrade “…had a practical connection with” and “…was an active participant in” PES’s Accessorial Contraventions. In each case, that is said to arise “[b]y reason of the matters alleged in paragraph 3 above”.

138    Paragraph 3 of the amended statement of claim pleads as follows, namely:

3.     The Second Respondent, Polytrade, is and was at all relevant times:

(a)     a corporation incorporated under the Corporations Act 2001 (Cth);

(b)     capable of being sued in its corporate name;

(c)     the operator of a waste recycling business at various locations, including:

(i)     the Dandenong Site; and

(ii)     the Hallam Site.; and

(d)    a corporation whose registered office and principal place of business address was at the Dandenong Site.

139    Again, one searches in vain for the identification there of any conduct that might suffice to establish the practical connection and active participation that is asserted. It appears to be put that Polytrade’s connection and participation arises as a function of the fact that it operated the two sites at which the Relevant Employees were engaged. Regardless, Polytrade admits the connection and participation that is alleged against it.

140    The amended statement of claim also makes a series of allegations about the state of Polytrade’s knowledge at relevant times (established, as it must be in the case of a body corporate, via the knowledge of its officers). Specifically, it is said (and, again, Polytrade admits) that it knew:

(1)    that the Award applied to the employment of the Relevant Employees;

(2)    alternatively, that an award so applied;

(3)    the hours that each of the Relevant Employees worked;

(4)    the nature of the work so performed; and

(5)    the amounts that PES paid in respect of that work.

141    The amended statement of claim then repeats, in respect of Polytrade, the suggestion of knowledge about “…the system which produced the outcomes constituting the underpayment of the Employees’ Award entitlements” (see above, [114]) and that Polytrade “…knew that the amounts paid to [the Relevant] Employees were insufficient to the [sic] minimum Award entitlements of the [Relevant] Employees”. Again, those allegations about the state of Polytrade’s knowledge are all conceded and, again, the result is plain enough: Polytrade can be taken to have known, through the agency of its officials, each of the elements of PES’s Accessorial Contraventions. Again, there is no controversy that that is so.

142    As with Ms Ho, the amended statement of claim then attempts to establish Polytrade’s accessorial liability. It is alleged that, by reason of the state of its knowledge (on the one hand) and its having “…had a practical connection with” or having been “…an active participant in” PES’s Accessorial Contraventions (on the other), Polytrade was “…knowingly concerned in and a party to” each of the Accessorial Contraventions and, thus, is taken by s 550(1) to have itself committed them. It is clear from that plea (and the admission made in respect of it) that Polytrade did (or did not do) something sufficient to implicate it in PES’s Accessorial Contraventions.

143    What that thing was (or wasn’t) is unclear. Was it the same conduct for each contravention? Was it different? Were they positive acts? Were they omissions? Those questions are left regrettably unexplored by the pleadings and the evidence.

144    There is, though, an added dimension to the case advanced against and by Polytrade. Unlike Ms Ho, no submission was advanced to suggest that Polytrade’s conduct in committing each of the Accessorial Contraventions should be understood to have arisen from a single course of conduct. Indeed, Polytrade appeared to accept precisely the opposite: as well as pressing for some “grouping” of what were said to be related contraventions, it sought to answer the applicant’s proposed penalties not by suggesting that its contraventions all arose from a single course of conduct (and should, therefore and by operation of s 557(1) of the FW Act, be treated as a single contravention for penalty purposes); but via the more conventional route of suggesting that what the applicant proposed was higher than what was appropriate.

145    Although I do so with considerable hesitation, the court is entitled, I think, to presume that Polytrade would not have advanced that position—that is, would not have submitted that it is appropriate for the court to level multiple penalties upon it—unless it were the case that its contraventions were the product of discrete acts or omissions. It would, I think, be an unusual (although not necessarily wrong) outcome for the court to ignore or look beyond the submissions of a respondent facing the imposition of pecuniary penalties and instead prefer an outcome more favourable than that which is urged.

146    Accordingly, I proceed on the basis that neither s 557(1) nor the so-called “course of conduct” principle applies to Polytrade’s involvement in the Accessorial Contraventions.

147    Nonetheless, I cannot overstate how unfortunate the present state of affairs is. The applicant is well known for pursuing not merely employers who contravene their Award obligations; but also their officers and, in some cases, their clients on the basis that they were accessorily involved in those contraventions. The policy rationale that underpins that strategy is not difficult to understand: the applicant is charged with ensuring that employers abide by their important award obligations and a good way to bring about a broad culture of compliance is to incentivise, upon threat of penalty, those who have a measure of influence or control over what employers do.

148    Although it’s not the place of the court to say, that appears to be an unremarkable and legitimate policy stance for the applicant to assume. But good policy does not excuse bad execution. If the applicant has a proper basis upon which to accuse people of being accessories to award contraventions committed by others, she needs to articulate the material facts that establish it, as clearly and as precisely as the orthodox conventions of pleading require. Pleadings of the kind with which the court is currently confronted are not nearly sufficient.

The conduct of Mr Cheng

149    The matters alleged against Mr Cheng are materially similar to what is alleged against Polytrade. Of present significance is paragraph 5 of the amended statement of claim, which alleges as follows:

5.     The Fourth Respondent, Mr Cheng, is and was at all relevant times:

(a)     also known as “Louie”;

(b)     a natural person capable of being sued;

(c)     the husband of Ms Ho;

(d)     the sole director and secretary of Polytrade;

(e)     a 90% shareholder of Polytrade;

(f)     a person responsible for overseeing the recruitment of employees working in Polytrade’s business, including employees of PES at the Dandenong Site and Hallam Site;

(g)     a person who worked at the Dandenong Site;

(h)     a person responsible, in a practical sense, for determining the rate of pay to be paid to the Employees;

(i)     the person who executed the Contractor Agreement on behalf of Polytrade;

(j)     a person responsible, in a practical sense, for ensuring that Polytrade complied with its legal obligations under the FW Act;

(k)     an “official” of Polytrade for the purposes of section 793 of the FW Act;

(l)     by reason of section 793(1) of the FW Act, a person whose conduct engaged in on behalf of Polytrade within the scope of his actual or apparent authority, is taken to be conduct by Polytrade for the purposes of the FW Act; and

(m)     by reason of section 793(2) of the FW Act, a person whose state of mind was the state of mind of Polytrade for the purposes of the FW Act.

150    Paragraph 5(h) (and the admission made in respect of it) seems to be significant. The court can, it would seem, deduce that Mr Cheng not only was responsible for determining what the Relevant Employees were to be paid; but, also, that he did so. Perhaps it was by that conduct that he should be understood to have involved himself in PES’s Accessorial Contraventions (or at least one of them).

151    In other respects, the pleading against Mr Cheng follows the familiar path mapped out above as against Polytrade and Ms Ho. As with them (and excepting what is acknowledged above about paragraph 5(h)), it is impossible to discern, from what is pleaded and admitted, the conduct—that is, the act(s) or omission(s)—in which Mr Cheng engaged as an accessory to PES’s Accessorial Contraventions. All that is clear is that there was some conduct (whether in the form of acts or omissions); and, combined with the admitted state of his knowledge, that it was sufficient to constitute him as an accessory.

152    Mr Cheng’s submissions in response to the penalties proposed by the applicant mirrored Polytrade’s. He, too, did not suggest that the conduct that sufficed to involve him in the Accessorial Contraventions was all engaged in as part of a single course, such that s 557(1) of the FW Act or the so-called “course of conduct” principle should apply. Instead, he answers what is proposed in the same way that Polytrade does: namely, by suggesting that appropriate penalties should be set at levels below what the applicant proposes.

153    I will, then, take the same approach with respect to Mr Cheng as is outlined above in respect of Polytrade: namely, I will proceed to determine the imposition of penalties against him on the basis that the conduct that sufficed to involve him in the Accessorial Contraventions was not engaged in as part of a single course.

Penalty to be imposed upon Ms Ho

154    Ms Ho was involved in each of the Accessorial Contraventions (and is, therefore, to be taken to have herself committed each of them) in that, as PES’s Chief Financial Officer, she either processed and approved PES’s payroll in the ways that led to the Relevant Employees’ not receiving what they were entitled under the Award to receive, or otherwise failed (or omitted) to ensure that PES complied with its legal obligations under the FW Act. As is outlined above, all of her contraventions arose from the same course of conduct and, by operation of s 557(1) of the FW Act, they are to be treated under pt 4-1 as though a single contravention.

155    Ms Ho’s conduct was troubling, to say the least. On the strength of her admissions, it is open to (and I do) find that she contravened s 45 knowingly; in other words, that she was knowingly complicit in what PES did (the specifics of which have already been recited).

156    It is not clear what role she had in remediating PES’s contraventions or in ensuring that they are not repeated. Regardless, what is clear is that she showed an equivalent degree of cooperation (which the applicant acknowledges), and I accept that she possesses an equivalent acceptance that her conduct was wrong.

157    As with the other respondents, the needs of specific deterrence do not loom as largely in respect of Ms Ho as they might in other matters. Ms Ho is no longer (or will soon no longer be) involved in “commercial operations generally”. She deposed to the “process [having] taken its toll on [her]” and to having no desire to ever “have the burden of such responsibilities again”. As with the other respondents, she has not previously been found to have contravened a civil remedy provision of the FW Act.

158    Plainly, however, the court must strive to impose upon Ms Ho a penalty sufficient to deter others in positions similar to hers from doing (or failing to do) as she did. Those who are charged with ensuring that employers comply with their obligations under the FW Act have an important responsibility that they must diligently discharge. I consider that a pecuniary penalty set at 70% of the maximum available—or $8,820.00—is appropriate for Ms Ho. That is a steep penalty to impose upon a cooperative and accepting first-time contravenor; but, given that she knew that the underpayments would occur or were occurring and chose to do (or not do) as she did regardless, it is especially important that the penalty should reflect the seriousness of her conduct.

159    It is not lost on me that the penalty that I will impose upon Ms Ho might have been higher had her statutory transgressions been characterised as “serious contravention[s]” under s 557A of the FW Act. The court is authorised to impose, in respect of such contraventions, penalties ten times what is otherwise available. Perhaps, in this matter, there was good reason not to invite the court to make findings of that kind and I should not wish to be understood as expressing a view that any such invitation would have been accepted. Nonetheless, s 557A of the FW Act emerges as a potential avenue by which the court might be asked to impose greater penalties upon an accessory who, by operation of s 557(1) of the FW Act, is to be penalised for fewer contraventions than a primary wrongdoer.

160    Plainly, those observations may be reserved for consideration in a matter that calls for it.

Penalties to be imposed upon Polytrade and Mr Cheng

161    By their submissions, each of the applicant, Polytrade and Mr Cheng accepts that the penalties that are to be imposed upon Polytrade should be imposed at the same levels upon Mr Cheng (accounting, of course, for the different maximum amounts that the court is authorised to impose). I accept that that is appropriate and will proceed on that basis.

162    As with Ms Ho, each of Polytrade and Mr Cheng must be understood to have been knowingly complicit in what PES did. Precisely how, of course, remains unclear; but, whatever it was, it was done (or not done) with knowledge that the Relevant Employees would be paid less than what the Award entitled them to be paid.

163    At the risk of labouring the point, the absence of any clarity about the conduct by which Polytrade and Mr Cheng were involved in PES’s Accessorial Contraventions leaves the court in a difficult position. Knowledge is one thing (and, here, is established); but, although their quantum might be appropriately informed, penalties are not imposed in respect of what was known. They are imposed in respect of what was done (or not done) and nobody has been able to tell me what that was. What seems adequately clear (particularly in the absence of any suggestion of agency) is that, whatever it was, Polytrade’s and Mr Cheng’s conduct was not conduct in which they engaged for or on behalf of the Relevant Employees’ employer, PES.

164    Whatever Polytrade’s and Mr Cheng’s conduct was, I am satisfied on the strength of the admissions and submissions that it was serious enough to warrant the imposition of significant penalties. As with Ms Ho, Polytrade and Mr Cheng must be understood to have been “active participant[s]” in PES’s Accessorial Contraventions, and to have done what they each did knowing that PES’s conduct would result in the Relevant Employees’ underpayment.

165    Against that, it may be noted—as has been in respect of the other respondents—that Polytrade’s and Mr Cheng’s approach to the present matter and, more generally, to the importance of remediating and addressing the underpayments that occurred has been positive. Additionally, given that they are no longer in business (or, at least, not in the business of waste recycling), the needs of specific deterrence do not loom as largely in respect of them as they sometimes do (although so to acknowledge is not to downplay those needs entirely). It must also be borne in mind that neither has previously been found to have contravened a civil remedy provision of the FW Act.

166    By her submissions, the applicant urges the court to impose upon each of Polytrade and Mr Cheng penalties set at the same level as those that she proposes should be imposed upon PES. Ordinarily, I would require some persuasion that that should be appropriate. By nature, accessorial liability—and, in particular, liability that is a function of being knowingly concerned in or party to the conduct of a primary wrongdoer for whom the accessory does not act as an agent—is purely derivative and attaches to conduct that may generally be regarded as less obnoxious than that from which primary liability arises. But that general proposition need not always be the case, particularly given the element of knowledge that attends accessorial liability.

167    I am satisfied that it is appropriate to impose upon each of Polytrade and Mr Cheng penalties for each of the Accessorial Contraventions that are set at the same level as that which I will impose upon PES. I am guided to that state of satisfaction by the same (or equivalent) considerations as guided my assessment of those (PES’s) penalties. I am also satisfied, again for reasons equivalent to those already identified, that there should be no occasion to further “group” any of those contraventions in the ways for which Polytrade and Mr Cheng contend.

168    By way of summary, then, I am satisfied that the following penalties are appropriate to be imposed upon Polytrade and Mr Cheng, namely:

(1)    for their involvement in PES’s failure to pay Award rates of pay for ordinary hours of work (above, [39(1)]), penalties set at 20% of the statutory maximum (that is, $63,000.00 for Polytrade and $12,600 for Mr Cheng);

(2)    for their involvement in PES’s failures to pay casual loadings (above, [39(2)] and [39(3)]), penalties set at 30% and 20% of the maximum (respectively);

(3)    for their involvement in PES’s failure to pay weekday night shift loadings (above, [39(4)]), penalties set at 30% of the maximum;

(4)    for their involvement in PES’s failure to pay weekday overtime rates (above, [39(5)]), penalties set at 40% of the maximum;

(5)    for their involvement in PES’s failure to pay weekend overtime rates (above, [39(6)] and [39(7)]), penalties set (in each case) at 30% of the maximum; and

(6)    for their involvement in PES’s failure to pay public holiday overtime rates (above, [39(8)]), penalties set (in each case) at 20% of the maximum.

169    That equates to penalty amounts as follows, namely:

170    As with PES, the “totality principle” requires that, before levying multiple penalties, the court should consider whether the total of what is proposed is proportionate to the whole of the wrongdoing in respect of which it is to be imposed. Again, I am satisfied that the amounts set out above are proportionate to the wrongdoing in which Polytrade and Mr Cheng were involved. They must pay heavy prices for it: not merely to ensure that they are brought to account for what they did; but also to serve as a warning to others who might be minded to be similarly involved in egregious Award underpayments. I am satisfied that the imposition upon Polytrade and Mr Cheng of penalties totalling $138,600.00 and $27,720.00, respectively, will achieve that end.

Conclusions

171    I will make orders imposing upon the respondents penalties totalling the amounts set out above in respect of each of them. The amounts so imposed will be made payable to the Commonwealth within 28 days. Section 570 of the FW Act operates to preclude the making of any order for costs and, in any event, none has been sought. None will be made.

Associate:

Dated:    11 August 2023

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