FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Blue Sky Kids Land Pty Ltd (in liq) (No 4) [2024] FCA 1475

ORDERS

THE COURT ORDERS THAT:

Superannuation contributions

1.    Pursuant to section 545(2)(b) of the Fair Work Act 2009 (Cth) (FW Act):

(a)    by 17 January 2025, as compensation for the failure to make superannuation contributions in respect of the wages paid to Xibing Cen, Xing Yang, and Tzu Fong Yu in contravention of s 45 of the FW Act and cl 22.2 of the General Retail Industry Award 2010 (2010 Award), the first respondent and the third respondent make superannuation contributions on behalf of each of Xibing Cen, Xing Yang and Tzu Fong Yu in the following amounts to their nominated superannuation funds or, if no fund is nominated, one of the funds mentioned in cl 20.4 of the General Retail Industry Award 2020 (2020 Award):

(i)    $2,252.42 on behalf of Xibing Cen;

(ii)    $3,381.34 on behalf of Xing Yang; and

(iii)    $1,262.65 on behalf of Tzu Fong Yu;

(b)    by 17 January 2025, as compensation for the failure to make superannuation contributions in respect of the ordinary time earnings component of the entitlements to casual loadings and Saturday, Sunday and public holiday penalty rates not paid to Xibing Cen, Xing Yang, Tzu Fong Yu and Jin Zhang (the Employees) in contravention of s 45 of the FW Act and cll 13.2, 29.4(b), 29.4(c) and 29.4(d) of the 2010 Award, the first respondent, the third respondent and the fourth respondent make superannuation contributions in the following amounts to the Employees’ nominated superannuation funds or, if no fund is nominated, one of the funds mentioned in cl 20.4 of the 2020 Award:

(i)    $1,678.76 on behalf of Xibing Cen;

(ii)    $1,916.33 on behalf of Xing Yang;

(iii)    $736.36 on behalf of Tzu Fong Yu; and

(iv)    $2,173.21 on behalf of Jin Zhang;

(c)    by 17 January 2025, as compensation for the failure to make superannuation contributions in respect of the ordinary time earnings component of the amounts of the minimum weekly wages not paid to the Employees in contravention of s 45 of the FW Act and cl 17 of the 2010 Award, the first respondent and the third respondent make superannuation contributions in the following amounts to the Employees’ nominated superannuation funds or, if no fund is nominated, one of the funds mentioned in cl 20.4 of the 2020 Award:

(i)    $1,501.68 on behalf of Xibing Cen;

(ii)    $1,645.28 on behalf of Xing Yang;

(iii)    $955.04 on behalf of Tzu Fong Yu; and

(iv)    $3,017.92 on behalf of Jin Zhang;

(d)    by 17 January 2025, as compensation for its failure to make superannuation contributions in respect of the ordinary time earnings component of the amount not paid to Xing Yang in lieu of notice in contravention of ss 44(1) and 117 of the FW Act, the first respondent make a superannuation contribution on her behalf in the amount of $258.79 to her nominated superannuation fund or, if no fund is nominated, one of the funds mentioned in cl 20.4 of the 2020 Award.

Pecuniary penalties

2.    Pursuant to s 546(1) of the FW Act, for their respective contraventions:

(a)    the first respondent pay a penalty of $4,299,000;

(b)    the second respondent pay a penalty of $44,100;

(c)    the third respondent pay a penalty of $760,000; and

(d)    the fourth respondent pay a penalty of $43,000.

3.    Pursuant to s 546(3) of the FW Act, by 17 January 2025 the respondents pay the penalties to the Consolidated Revenue Fund of the Commonwealth.

Other orders

4.    The applicant have liberty to apply on seven days’ notice in the event of non-compliance with any of the above orders.

THE COURT NOTES THAT:

Where more than one respondent is liable to pay compensation, the liability of the respondents is joint and several.

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

REASONS FOR JUDGMENT

KATZMANN J:

Introduction

1    Blue Sky Kids Land Pty Ltd (BSKL) and Q Fay Trading Company Pty Ltd (Q Fay) are related companies presently in liquidation. After an extensive investigation, the Fair Work Ombudsman determined that BSKL had contravened numerous civil remedy provisions of the Fair Work Act 2009 (Cth) (FW Act) over a period of more than seven years. She brought proceedings in this Court against the company and its two directors who were also directors of Q Fay, Guo Dong Gu (also known as Nathan Gu) and his wife Fei Rong Yang (also known as Fei or Fay Yang), whom she alleged were involved in those contraventions, seeking various forms of relief including declarations, compensation and pecuniary penalties. For abundant caution she also named Q Fay as a respondent to the proceeding because of claims, which proved to be false, that it (and not BSKL) was the employer of two of the employees who were the victims of some of the contraventions. The liquidators elected not to contest the case. Mr Gu appeared in person and, with the leave of the Court, also appeared for Ms Yang.

2    The Ombudsman succeeded on almost all her claims. On 17 July 2024 I published my judgment on liability and dealt with all but one part of the Ombudsman’s claim for compensation, made declarations reflecting my findings, and ordered that the Ombudsman provide short minutes of order giving effect to those findings: Fair Work Ombudsman v Blue Sky Kids Land Pty Ltd (in liq) (No 3) [2024] FCA 785 (Liability Judgment or LJ). I also fixed a timetable for the filing and service of affidavits and submissions on the two remaining questions. One of those questions is the question of penalties. The other relates to orders the Ombudsman sought requiring Mr Gu and Ms Yang to make superannuation contributions on behalf of the four employees. This judgment is concerned with those questions. Familiarity with the Liability Judgment is assumed.

3    On 4 September 2024 the remaining questions were listed for hearing on 12 and 13 December 2024 following correspondence about suitable dates between the Registry on the one hand and the Ombudsman and Mr Gu on the other. Mr Gu raised no objection to the dates.

4    In late August 2024 the Ombudsman filed four affidavits and submissions and a further affidavit the day before the hearing. On 30 August 2024 I made orders in accordance with the short minutes of order submitted by the Ombudsman as contemplated by the July order.

5    The affidavits were affirmed by Kristen Larni Ball, a sales assistant employed by two companies at three BSKL stores from 22 June 2020 until 24 November 2021; Antonio Fiorenza, a senior lawyer with the Office of the Fair Work Ombudsman (FWO) who provided two affidavits; Stuart Liljeqvist, a Fair Work Inspector who has had primary carriage of the Ombudsman’s investigation into the respondents since 2017 and provided evidence in the earlier part of the proceeding, and another affirmed by Edward Martin Hoare, another Fair Work Inspector and team leader in the FWO. All five affidavits were read at the hearing.

6    Mr Fiorenza’s second affidavit referred to correspondence sent by the Ombudsman to Mr Gu and Ms Yang since September 2023 when their lawyers filed a notice of ceasing to act, the service of the four affidavits and submissions on all respondents together with a notice under s 67 of the Evidence Act 1995 (Cth) of her intention to adduce evidence of previous representations, the failure of Mr Gu and Ms Yang to respond to any of the Ombudsman’s correspondence, and the futile attempts to reach them by phone or email. The affidavit also reveals that Mr Gu left Australia on 19 July 2024, returned on 23 September 2024, departed again on 21 November 2024 and has not returned, but that Ms Yang is currently in Australia.

7    Based on that evidence and the failure to notify the Court of any changes in the addresses for service, I was satisfied that the respondents had received copies of the Liability Judgment and the August orders, were aware that any submissions had to be filed in accordance with the timetable and had been informed of the dates for hearing of the remaining questions. Despite that, none of the respondents filed any submissions and neither Mr Gu nor Ms Yang appeared at the hearing (in person or by video link) or notified the Court that they would not be appearing.

The question of penalties

8    Section 546(1) of the FW Act gives the Court the power to order a person to pay a pecuniary penalty that the Court considers appropriate if it is satisfied that the person contravened a civil remedy provision.

9    The maximum penalty for each contravention is expressed in terms of “penalty units”, as defined by s 4AA of the Crimes Act 1914 (Cth): FW Act, s 12. At the commencement of the contravention period in May 2011, the value of a penalty unit was $110. The amount increased to $170 on 28 December 2012, to $180 on 1 July 2015, and to $210 from 1 July 2017.

10    The maximum penalty in the case of an individual is the maximum number of penalty units referred to in the relevant item in column 4 of the table in s 539(2) of the FW Act and five times that amount in the case of a body corporate: FW Act, s 546(2). The maximum number of penalty units for a serious contravention (as defined in s 557A) is 600. For most of the other contraventions, it is 60. The exceptions are those contraventions of ss 535(1) and 536(1) (relating respectively to record-keeping and pay slips) that occurred before 15 September 2017. In both those cases the maximum at the time was 30 penalty units.

11    I have discussed the principles to be applied in fixing penalties in many cases, most recently in Fair Work Ombudsman v Sushi Bay Pty Ltd (in liq) (No 3) [2024] FCA 869 at [11]–[21]. In short, those principles, drawn from the High Court’s judgment in Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450 and the authorities referred to there, are as follows.

12    First, as the primary, if not sole, purpose of imposing a civil penalty is to deter further contraventions, a civil penalty must be fixed with a view to ensuring that the amount is not regarded by the contravener or others as an acceptable cost of doing business.

13    Second, there must be a reasonable relationship between the theoretical maximum and the amount imposed and that relationship is established where the amount imposed does not exceed the amount reasonably necessary to achieve the deterrent purpose.

14    Third, a civil penalty should be fixed at a level that strikes a reasonable balance between deterrence and oppressive severity.

15    Fourth, in determining an appropriate penalty, a number of factors will generally be relevant. Those factors include: the nature, gravity and extent of the contravening conduct and the circumstances in which it took place; the nature and extent of loss or damage; whether the conduct was deliberate rather than accidental or inadvertent; the period over which the conduct extended; whether senior management was involved; whether the contraventions are truly distinct or arose out of a single course of conduct; whether the contravener has previously engaged in similar conduct; the size of the contravening company; the existence and extent of any contrition and corrective action; whether the company has a corporate culture conducive to compliance; whether the contravener cooperated with enforcement authorities; and the need to ensure compliance with minimum standards by provision of an effective means for investigating and enforcing employee entitlements.

16    Fifth, concepts familiar to criminal sentencing such as totality, parity and course of conduct principles may assist in determining the amount of a civil penalty that is reasonably necessary to achieve the statutory purpose.

17    Like the determination of a sentence in a criminal case, an appropriate figure is determined by a process known as “instinctive synthesis” in which, through an evaluative exercise, due account is taken of all the relevant factors: Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) (2018) 260 FCR 68 at [55] (Allsop CJ, Davies and Wigney JJ).

18    Informed by those principles, a court is required to identify the separate contraventions; consider whether some of the contraventions constitute a single course of conduct; if there is an overlap between two or more contraventions, consider whether there should be an adjustment to ensure that the contravener is not being penalised twice for the same conduct; fix penalties for each contravention and, if relevant, each group of contraventions; and finally assess whether the overall penalty is an appropriate response to the contravening conduct: Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301; 275 IR 148 at [36] (Bromwich J). That is the approach I have followed in this case.

The individual contraventions

19    The individual contraventions are identified in the declarations. For convenience, the declarations in their amended form are annexed to these reasons and marked “A”.

20    The contraventions include contraventions of s 45 of the FW Act consisting of contraventions of a number of provisions of the General Retail Industry Award 2010 (Award) and contraventions of s 44 of the FW Act consisting of contraventions of the National Employment Standards (NES) in Pts 2-1 and 2-2 of the FW Act respectively; contraventions of several general protections provisions in Pt 3-1; multiple contraventions of Pt 3-6 including failing to make and/or keep certain records and to include certain information in such records as were made and kept contrary to the requirement in the Fair Work Regulations 2009 (Cth) (FW Regulations); and multiple contraventions of Pt 5-2 by intentionally hindering and obstructing Fair Work inspectors in the exercise of their powers and functions, failing to produce a raft of documents to Fair Work inspectors in response to statutory notices to produce, and producing to a Fair Work inspector payroll records and time sheets knowing, or being reckless as to whether, they were false or misleading.

21    Some of the contraventions are “serious contraventions” within the meaning of that term in s 557A of the Act in that they were committed knowingly and the contravening conduct was part of a systematic pattern of conduct relating to one or more persons.

The number of contraventions after the application of the course of conduct principles and to avoid double jeopardy

22    Section 556, headed “Civil Double Jeopardy”, provides that if a person is ordered to pay a pecuniary penalty “in relation to particular conduct”, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of a law of the Commonwealth in relation to that conduct. It has no application in relation to multiple contraventions of the same provision of the FW Act: Australian Building and Construction Commissioner v Huddy (No 2) [2017] FCA 1088 at [61] (White J) approved in Fair Work Ombudsman v Ho [2024] FCAFC 111 at [49] (Raper, Shariff and Dowling JJ). That is the province of s 557.

23    Section 557 of the FW Act relevantly provides that:

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

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

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

(2)    The civil remedy provisions are the following:

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

(b)    section 45 (which deals with contraventions of modern awards);

…

(g)    subsection 323(1) (which deals with methods and frequency of payment);

…

(n)    subsections 535(1), (2) and (4) (which deal with employer obligations in relation to employee records);

(o)    subsections 536(1), (2) and (3) (which deal with employer obligations in relation to pay slips);

…

(s)    any other civil remedy provisions prescribed by the regulations.

(3)    Subsection (1) does not apply to a contravention of a civil remedy provision that is committed by a person after a court has imposed a pecuniary penalty on the person for an earlier contravention of the provision.

24    The object of s 557 is to ensure that a contravener is not penalised twice for what is essentially the same wrongdoing: Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 (North, Flick and Jagot JJ). Its effect is that, save in relation to a contravention for which a court has previously imposed a pecuniary penalty for an earlier contravention of the same provision, two or more contraventions of any of these provisions are taken to be a single contravention if they were committed by the same person and arose out of a course of conduct in which that person engaged. As the Full Court confirmed in Rocky Holdings, when the section speaks of two or more contraventions of s 44 (which deals with contraventions of the National Employment Standards (NES)) or s 45 (which deals with contraventions of an award), it is referring to multiple contraventions of a particular provision of the NES and multiple contraventions of a particular clause in an award.

25    For the purposes of s 557, cl 18(2) of Schedule 1 to the Act provides that conduct engaged in before 15 September 2017 (the date the serious contraventions provisions came into force), is to be treated as a separate contravention from conduct engaged in after that date. Nevertheless, cl 18(3) provides that:

[A] court may still consider a contravention of a civil remedy provision (whether or not the provision is referred to in subsection 557(2)) by a person that occurred before the commencement [date] for the purposes of determining whether a person’s conduct was part of a systematic pattern of conduct referred to in paragraph 557A(1)(b).

26    The Ombudsman accepted that the effect of these provisions in the present case is as follows.

27    First, multiple contraventions of the following clauses of the Award are to be treated as a single contravention: cl 17 (failing to pay minimum weekly wages); cl 13.2 (failing to pay casual loadings); cl 29.4(b) (failing to pay Saturday penalty rates); cl 29.4(c) (failing to pay Sunday penalty rates); cl 29.4(d) (failing to pay public holiday penalty rates); cl 29.2 (failing to pay overtime rates); cl 22.2 (failing to make superannuation contributions); and cl 23 (failing to pay employees weekly or fortnightly or on a regular pay day).

28    Second, multiple contraventions of a particular record-keeping requirement in the Regulations are to be treated as a single contravention.

29    Third, multiple contraventions of the requirement to provide pay slips are to be treated as a single contravention.

30    Thus, the Ombudsman submitted that, for the purpose of determining penalty, penalties should be imposed on BSKL for:

(1)    eight contraventions of s 45 (contraventions of various provisions in the Award);

(2)    one contravention of s 44(1) (failure to pay Ms Yang in lieu of notice on termination of her employment as a full-time employee contrary to s 117(2));

(3)    one contravention of s 44(1) (failure to pay Ms Yang accrued annual leave and annual leave loading on termination contrary to s 90(2));

(4)    one contravention of s 323(1) (failure to pay Ms Cen within one month of 24 July 2017);

(5)    10 contraventions of s 535(1) (failure to make and keep records of rates of remuneration; details of entitlements to casual loadings, Saturday, Sunday and public holiday penalty rates; and prescribed information with respect to superannuation contributions);

(6)    three contraventions of s 535(2) (failure to include certain information in employee records);

(7)    four contraventions of s 535(4) (failure to make or keep employment records relating to start dates, net wages and hours of work knowing them to be false or misleading);

(8)    a single contravention of s 536(1) (failure to provide pay slips);

(9)    two contraventions of s 707A (intentionally hindering or obstructing Fair Work inspectors by directing the closure of the Woden store and intentionally obstructing FWI Liljeqvist by directing Ms Yu to destroy the Woden timesheets);

(10)    five contraventions of s 712(3) (failure to produce particular documents in response to five separate notices to produce); and

(11)    four contraventions of s 718A (producing to FWI Liljeqvist on at least four separate occasions various documents knowing, or being reckless as to whether, the documents were false or misleading).

31    The Ombudsman also submitted that for its contraventions of s 718A Q Fay should receive a single penalty.

32    I accept the Ombudsman’s submissions.

33    The Ombudsman acknowledged that she was precluded by s 556 from seeking penalties for both the contraventions of s 340(1) and s 358 since those contraventions arose from the same “particular conduct”, namely the threat to dismiss Ms Zhang. That acknowledgment was appropriate for the reasons I gave in Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liq) (No 8) [2024] FCA 483 at [180]–[197] and the authorities discussed there. The Ombudsman elected to seek a penalty for the contravention of s 340(1), which was arguably the more serious of the two contraventions. Nonetheless, in assessing the amount of the penalty for that contravention, the Court may have regard to the conduct involved in the two contraventions in considering the gravity of the conduct: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Quest Apartments Case) (No 2) [2018] FCA 163; 358 ALR 725 at [25]–[28] (Tracey J) See also Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276 at [86] (Ryan J).

34    The common law also recognises “that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality”: Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 269 ALR 1; 194 IR 461 at [39] (Middleton and Gordon JJ). Unlike s 557, however, a court is not obliged to use the principle because the fixing of a penalty, like the determination of a sentence, requires the exercise of a discretion in which various matters are to be weighed, “not the formulation of adjustable rules or benchmarks”: Cahill at [42] (Middleton and Gordon JJ, citing Royer v Western Australia [2009] WASCA 139; 197 A Crim R 319 at [28] per Owen JA).

35    The Ombudsman did not submit that there was any role for the common law principle in the present case after effect is given to ss 556 and 557. That said, from the outset the Ombudsman grouped together multiple contraventions of s 718A occurring on the same day as a single contravention to reflect that principle. I do not consider the Ombudsman’s proposed figures for the other contraventions would result in any of the respondents being penalised twice for the same wrongdoing.

The relevant considerations

36    The respondents’ contraventions were many and varied. The nature of them is apparent from the declarations. They took place over a number of years. All of them were deliberate and all were serious, some more serious than others. What is more, the contraventions occurred in circumstances in which the respondents either knew or were wilfully blind to their legal obligations, as I explained at length at LJ[815]–[863] and LJ[868]-[889] when considering the involvement of Mr Gu and Fei Yang in the contraventions by the other respondents.

37    Although the case concerned conduct in relation to only four employees (Xing Yang, Xibing Cen, Jin Zhang and Tzu Fong Yu) (the Employees), there is no reason to think that the contravening conduct was confined to them. Unchallenged evidence was given of statements made by Fei Yang to both Ms Cen and Ms Yu when they were hired in 2016 and 2017 respectively, that the company paid “low” wages and by Fei Yang to Ms Yu in early February 2017 that the starting rate was “$10 per hour”, which was less than half the minimum hourly rate for casual employees under the Award.

38    The Employees were underpaid a total of $131,920.42, none of which has been repaid. In proportion to their total entitlements, the underpayments to each of them were substantial. As the Ombudsman pointed out in her submissions and the below table clearly shows, during their employment with BSKL the four Employees received less than half of the minimum amounts the Award prescribed:

39    BSKL underpaid them by a further amount of $9,633.84 by not making superannuation contributions on their behalf. Of course, the real loss to the Employees is even greater because of the consequential loss of interest on the superannuation that would have accrued if the contributions had been made.

40    Furthermore, BSKL failed to pay Xing Yang her accrued untaken annual leave entitlements resulting in an additional loss to her of $9,093.63 plus $1,589.31 in annual leave loading.

41    Xing Yang gave unchallenged evidence about the impact on her and her family of the underpayment contraventions on her and her family. She deposed:

Because I was paid such low wages while working at BSKL, I could not afford to take any holidays with my family. Because I was not paid annual leave, if I did not work, I would not get paid, so I could not take much time off. I’ve been in Australia for 10 years but I have never travelled to see any other parts of Australia. In order to pay for our bills and for the mortgage, my husband had to work extra hours at work and do overtime. He worked all the time and I rarely saw him when I worked at BSKL.

42    Ms Zhang deposed that the low wages she was paid and the loss of her job meant that she and her husband have struggled to meet their mortgage repayments and have had to defer starting a family.

43    Ms Cen deposed that the low wages had a negative effect on the lives of her and her husband because they could not afford to play golf or eat at restaurants.

44    None of the four Employees was an Australian citizen. Each of them was a recent migrant. One of them, Ms Cen, was a temporary visa holder at the relevant time. It is notorious that foreign workers, particularly temporary visa holders, are particularly susceptible to exploitation.

45    Annexed to FWI Liljevist’s August 2024 affidavit was a report of the Australian Senate’s Economics References Committee entitled “Systemic, sustained and shameful – Unlawful underpayment of employees’ remuneration”, published in March 2022 following its inquiry into the causes, extent and effects of unlawful non-payment or underpayment of employee remuneration and measures that can be taken to address them. The Committee noted (at [2.10]) that migrant workers were commonly underpaid, experiencing “wage theft”, and cited with apparent approval the following passage from the Annual Report for 2017-18 of the Fair Work Ombudsman and Registered Organisations Commission Entity:

The over-representation of migrant workers in our disputes potentially reflects their unique situation: being new to the Australian labour market, not having baseline knowledge about workplace rights and entitlements, and potentially experiencing language and cultural barriers. Some migrant workers may also be reluctant to speak with public officials and may be concerned about their visa status if they raise issues. These factors can make migrant workers particularly vulnerable to exploitative practices from unscrupulous employers.

46    In a report published by the Grattan Institute in May 2023 entitled “Short-changed: How to stop the exploitation of migrant workers in Australia”, also annexed to FWI Liljeqvist’s affidavit, the authors observed that exploitation of migrant workers is “widespread” and it not only hurts those workers but “it also weakens the bargaining power of Australian workers, harms businesses that do the right thing, damages our global reputation, and undermines confidence in our migration program”.

47    The persistent failure to pay minimum wages contrary to cl 17 of the Award and the record-keeping and pay slip contraventions of ss 535(1) and 536(1) were committed knowingly and as part of a systematic pattern of conduct such that, to the extent that they occurred on or after 15 September 2017 they were “serious contraventions” (LJ[793]). There is also a history of non-compliance which first came to the attention of the workplace regulator only two years after BSKL’s incorporation.

48    Mr Gu was told by a workplace inspector of the then regulator (WI Yuen), as early as October 2006, that it was necessary to include in the employment records the name of the relevant award or other industrial instrument and on both the pay slips and employment records the name of the superannuation fund (LJ[47]–[49]). The pay slip obligations in force at the time were virtually identical to those imposed by the FW Act and Regulations and the record-keeping obligations were substantially the same (LJ [792]). Mr Gu knew from his discussions with WI Yuen at the time that pay slips in a particular format were required to be issued to all employees within one day after they were paid and he entered into a compliance undertaking to keep records and provide pay slips which satisfied the requirements under the Workplace Relations Act 1996 (Cth) (LJ[792]). Moreover Mr Gu admitted in cross-examination that the inspector who visited his store in 2006 explained to him how to create a pay slip and the importance of providing them to employees (LJ[792]).

49    In April 2011, after the FW Act had come into force Mr Gu received a letter from the Ombudsman (addressed to BSKL) drawing his attention to the changes to the law introduced by the Act and advising him of where and how he could find out information about them (LJ[51]). Similarly, in December 2011 Fei Yang received a letter from the Ombudsman drawing her attention to the Award after a complaint had been made by another employee about a failure to pay base hourly award rates (LJ[780]). In May 2012 Mr Gu was notified in writing of the requirement in s 323 of the Act to pay employees in full and of the minimum rates for casual employees under the Award (LJ[55]-[56]), information he apparently chose to ignore. And in July 2017 Mr Gu was informed by BSKL’s accountants (in both English and Chinese) of the recent increases to the national minimum wage and the minimum weekly wage for casual employees covered by the Award (LJ[782]). Still the Award contraventions continued.

50    Senior management was involved in most of the contraventions. Throughout the period of the contravening conduct, Mr Gu and his wife were directors of BSKL and Q Fay and were intimately involved in the running of those companies. I found that Mr Gu was involved in the majority of the contraventions and Fei Yang in a number of the Award contraventions and that both contravened s 707A by hindering or obstructing Fair Work inspectors in the performance of their functions or duties under the Act.

51    There was no contrition and minimal corrective action. Neither was there a corporate culture conducive to compliance. If anything, the opposite is true. As I observed at LJ[789], BSKL not only failed to create and maintain a culture conducive to compliance but it encouraged, if not directed, non-compliance. The respondents provided token cooperation with the Ombudsman’s investigation. Indeed, in important respects the respondents obstructed the investigation, the effect of which was to prolong its course, increase its costs and delay the making of orders.

52    Mr Gu lied to Fair Work inspectors in January 2018 about the ownership and management of the Woden store (LJ[76]–[77]). Early the following month or thereabouts Fei Yang instructed Ms Yu to lie about the matter to Fair Work inspectors if they came to the store (LJ[79]-[81]). Mr Gu also lied to the Fair Work inspectors about invariably providing pay slips to employees (LJ[259]). The respondents also hindered and obstructed the investigation by their piecemeal production of some documents and their failure to produce other documents, by instructing Ms Yu to destroy the Woden store records, and by directing staff to close the Woden store early knowing the inspectors were on their way there. And in response to the fourth notice to produce issued to BSKL, a statement was provided which I found to be replete with falsehoods (LJ[89]–[98]).

53    In addition, Mr Gu threatened to dismiss Ms Zhang because she had cooperated with the investigation by agreeing, as was her right, to participate in an interview with a Fair Work inspector.

54    Little is known about the size of the contravening companies. At the time of the contraventions BSKL operated a number of stores in the Sydney metropolitan and outer metropolitan areas, in Newcastle, Parramatta, Liverpool and the Australian Capital Territory and employed staff in each of them. BSKL and Q Fay also employed staff in a warehouse in the Sydney suburb of Villawood. During the period of the contravening conduct BSKL was not a “small business employer” within the meaning of that term in the FW Act in that it employed more than 15 employees (FW Act, s 23). Nor would it have been regarded as a small business by the Australian Bureau of Statistics (ABS), which defines small businesses as those employing fewer than 20 employees (Australian Small Business and Family Enterprise Ombudsman, Number of small businesses in Australia https://www.asbfeo.gov.au/small-business-data-portal/number-small-businesses-australia, viewed 13 December 2024). Rather, it would be regarded at least by the ABS as a “medium business”. There is insufficient evidence about Q Fay to enable me to express an opinion about the size of its business at the time of the contraventions.

55    Both BSKL and Q Fay have been in liquidation since March 2020. The latest report from the liquidators indicates that they have minimal assets and the Ombudsman concedes that it is unlikely that anything will be recovered from them. Apart from outstanding employee entitlements, BSKL has unspecified liabilities to both secured and unsecured creditors in excess of $270,000 and Q Fay has unsecured liabilities in excess of $280,000.

56    On the other hand, evidence adduced by the Ombudsman shows that the Blue Sky Kids Land business has continued despite the liquidation, operating some 11 stores in New South Wales under the Blue Sky Kids Land name.

57    Documents produced on subpoena annexed to Mr Fiorenza’s first affidavit show that on 3 April 2020, three weeks after BSKL went into liquidation, Mr Gu purported to sell the Blue Sky Kids Land businesses at Westfield Liverpool, Mt Druitt and Parramatta to Starrays Tex Pty Ltd for $18,000.

58    Those documents also show that Mr Gu borrowed a total of more than $370,000 from Starrays and another company, Akidso Pty Ltd: $120,000 from Starrays on 5 June 2020, which he agreed to repay in full with interest within five years; $50,000 from Akidso on 11 December 2020 which he agreed to repay in full with interest by 11 December 2023; $121,250 from Akidso on 11 October 2021 which he agreed to repay in full with interest by 11 April 2024; and $80,000 from Akidso on 11 September 2023 which he agreed to repay in full with interest by 11 September 2025. It is difficult to know what to make of this evidence.

59    In about July 2021 a complaint was made to the FWO by Kristen Ball, who was employed at three of the Blue Sky Kids Land stores from 22 June 2020 (three months after BSKL went into voluntary liquidation and more than nine months after this proceeding was launched) until 24 November 2021. Ms Ball was employed by Starrays Tex Pty Ltd up until 28 March 2021 and thereafter by Akidso Pty Ltd. Her evidence, read with other documents annexed to Mr Fiorenza’s second affidavit, show that during this period Mr Gu and Fei Yang were employed by Starrays and Akdiso performing the same or similar roles they had performed for BSKL. Ms Ball complained that she had not received her full annual leave entitlements and that she had been stood down “because of stress leave”. Compliance notices issued in December 2021 to Starrays and Akidso disclose that during the period between 22 June 2020 and 25 June 2021 several contraventions had taken place affecting both Ms Ball and another employee, Tenille O’Reilly. They were contraventions of cl 17.1 of the General Retail Industry Award 2020 (2020 Award) (and hence s 45 of the FW Act) for failing to pay them the minimum hourly rate specified for the ordinary hours worked; cl 29.4(c) of the Award and cl 22.1(a) of the 2020 Award for failing to pay Saturday penalty rates; cl 22.1(a) of the 2020 Award for failing to pay Ms O’Reilly Sunday penalty rates; s 116 of the FW Act by failing to pay the two employees for public holidays; and s 90 of the Act by failing to pay Ms Ball during a period of paid annual leave an additional payment for her ordinary hours of work in accordance with cl 28.3 of the Award and failing to pay both employees for all untaken annual leave on termination.

60    This evidence suggests that, even while this proceeding was on foot, Mr Gu and Fei Yang were continuing to underpay staff.

Quantum

61    Having regard to the fact that the corporate respondents are in liquidation with minimal assets and substantial liabilities and therefore unlikely to resume trading, the Ombudsman concedes that there is no need for specific deterrence in the case of either of them. That is to say, there is no need to impose penalties on them in order to deter them from reoffending, so to speak. But she contends, correctly, that general deterrence “looms large”. As she put it, “an appropriate penalty will be one that deters others from committing contraventions of a like kind, including similar forms of exploitation of migrant workers in Australian workplaces” and which “sends a strong signal to the community that this kind of conduct is not an acceptable model for operating a business”.

62    In the case of Mr Gu and Fei Yang, there is a need for both specific and general deterrence having regard to the nature and gravity of the contraventions in which they were involved; the circumstances in which and the lengthy period of time over which they occurred; the absence of contrition or corrective action; the various ways in which they actively obstructed the investigation, their continuing involvement in the BSKL business in managerial roles albeit as employees of other companies after this proceeding was commenced; and the real risk that they will continue to reoffend when in a position to do so.

63    In a schedule to her written submissions on penalty, the Ombudsman set out in tabular form her contentions about the penalties that should be imposed for each of the contraventions. A revised version upon which the Ombudsman ultimately relied, which takes into account the effect of ss 556 and 557 of the FW Act, are annexed to these reasons as “B”, “C”, “D” and “E”. Annexure B relates to BSKL, Annexure C to Q Fay, Annexure D to Mr Gu and Annexure E to Fei Yang.

64    There are some typographical errors in two of the tables. They appear in items 9 and 10 of the BSKL table (Annexure B) and item 20 of the Gu table (Annexure D). In items 9 and 10 of the BSKL table the penalty unit is incorrectly recorded as $210 when the correct figure was $180. The calculation is based on $180, which was the operative penalty unit at the time of those contraventions. In item 20 of the Gu table the maximum penalty is incorrectly recorded as $5,100 instead of $5,400. Again, however, the calculation is based on the correct amount. It also appears that the theoretical maximum in Mr Gu’s case is understated by $55,800.

65    For the reasons given above and in the absence of any argument to the contrary, for the most part I am satisfied that the penalties sought in the revised table are appropriate. As counsel carefully explained in oral argument, the percentages of the maximum proposed by the Ombudsman take into account, and give appropriate weight to, all the relevant factors and are fixed having regard to the statutory purpose. My qualification is necessary because of the approach taken to the contraventions covering two periods in which the penalty units differed in value.

66    The Ombudsman’s approach was to calculate the proposed penalties using the most recent penalty unit value, even when most, and on occasions almost all, the contravening conduct occurred in a period when a lower value applied.

67    Where contraventions span a period in which penalty units increased, the higher amount should apply but the Court can take account of the fact that for part of the period a lower amount applied: Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No 4) [2024] FCA 341 at [8] and the cases referred to there. As Halley J said in Basi v Namitha Nakul Pty Ltd (No 2) [2023] FCA 671 at [81], while agreeing with this approach:

Any attempt to apply a proportionate allocation between two or more periods would likely provide an illusory level of precision. It would be dependent on the acceptance of a series of implicit assumptions as to the relative seriousness and extent of the conduct giving rise to the contravention in each period. Moreover, it might well be said that higher penalty units applicable at the conclusion of the conduct, provide the best measure of the legislative assessment of the penalties necessary to achieve specific and general deterrence given the continuation of the conduct into that period.

68    In my opinion there should be some adjustment to the figures to allow for the fact that for most of the period the lower figure applied.

69    Therefore for the contraventions of s 45 in item 1(a) of the table relating to BSKL, I would impose a penalty of $46,000; for the contraventions in item 2, $48,000; item 3, $30,000; item 4, $40,000; item 5, $30,000; item 7, $35,000; and item 8, $17,500. For the contraventions of s 535(1) the subject of item 14(a), $14,000; item 15(a), $8,500; item 16, $7.000; and those items 17(a), 18(a), 19(a) and 20(a), $14,000 in each case. For the contraventions the subject of item 23(a), I would impose a penalty of $11,000 and for the contraventions the subject of item 36(a) I would impose a penalty of $20,000.

70    Corresponding adjustments need to be made to the figures relating to the contraventions Mr Gu and Fei Yang are taken to have committed which cut across two periods with differing penalty values. With respect to those items I would reduce the Ombudsman’s figures as follows.

71    For Mr Gu, for each of the contraventions the subject of items 2(a) and 3, I would impose a penalty of $9,000 rather than $10,080. For the contraventions the subject of items 4 and 6, I would impose a penalty of $5,800, rather than $6,300. For the contraventions the subject of item 5, I would impose a penalty of $8,000 rather than $8,820. For the contraventions the subject of item 8, I would impose a penalty of $7,000 rather than $7,560. For the contraventions the subject of item 9, I would impose a penalty of $3,400 rather than $3,780. For the contraventions the subject of item 13(a), I would impose a penalty of $3,000 rather than $3,150. For the contraventions the subject of item 14(a), I would impose a penalty of $1,700 rather than $1,890. For the contraventions the subject of item 15, I would impose a penalty of $1,400 rather than $2,040. For each of the contraventions the subject of items 16(a), 17(a), 18(a) and 19(a), I would impose a penalty of $3,000 rather than $3,150. For the contraventions the subject of item 22(a), I would impose a penalty of $2,300 rather than $2,520. And for the contraventions of s 536(1), the subject of item 35(a), I would impose a penalty of $4,000 rather than $4,410.

72    For Fei Yang, I would impose a penalty of $9,000 rather than $10,080 for the contraventions the subject of item 2; $5,800 rather than $6,300 for the contraventions the subject of items 3 and 5; and $8,000 rather than $8,820 for the contraventions the subject of item 4.

73    That means that the raw total of the penalties for the contraventions by BSKL is $4,299,150, the raw total for Mr Gu is $854,700 and the raw total for Fei Yang is $43,720.

74    Finally, it is necessary to consider the questions of parity and totality. In the sentencing context, the parity principle requires that like “offenders” be treated in a like manner but allows for a different sentence to reflect a different degree of culpability and/or different circumstances: Green v The Queen (2011) 244 CLR 462 at [28]-[29] (French CJ, Crennan and Kiefel JJ). The totality principle requires that the Court carry out a final check to ensure that the aggregate sum does not exceed that which is proper for the entire contravening conduct: Australian Competition and Consumer Commission v Employsure Pty Ltd [2023] FCAFC 5; 407 ALR 302; 164 ACSR 103 at [52] (Rares, Stewart and Abraham JJ).

75    In the absence of any argument to the contrary, I do not consider that the parity principle requires any adjustment to the Ombudsman’s figures for Mr Gu or Fei Yang. Both were directors of the company, playing an active role in its management and operations and Fei Yang is as culpable as her husband for the contraventions in which they are both taken to have engaged.

76    I would round the total figure for BSKL down to $4,299,000, which – like the raw figure – represents 49% of the theoretical maximum, but I would go no further. That is because that sum appropriately reflects the nature and gravity of the contraventions and would serve to deter other companies from behaving in a similar fashion. As I observed in Sushi Bay at [67], the need for general deterrence is neither defeated nor diminished by the fact that a contravener is unable to pay a penalty.

77    The penalty for Q Fay’s single contravention is $44,100, which is 70% of the maximum amount and the same percentage the Ombudsman applied to BSKL’s contraventions of the same civil remedy provision. It is an appropriate sum. No adjustment is called for.

78    I accept that a relatively modest penalty might operate as a deterrent for a person of limited means, especially one who has not previously been found to have contravened the Act. The Ombudsman submitted that Mr Gu and Fei Yang had the capacity to pay substantial penalties pointing to documents annexed to FWI Liljeqvist’s August 2024 affidavit which show that on 8 December 2023 Mr Gu sold a property he owned to Xiaoying Gu for $600,000 and that Mr Gu and Fei Yang sold a property they jointly owned also to Ms Gu for $480,000. An ASIC search reveals that Ms Gu has been the sole director of Akidso since the company was first registered on 11 March 2020. The evidence does not reveal what, if any, familial relationship Ms Gu has to Mr Gu and Fei Yang.

79    But the evidence does not permit me to form any opinion about the financial position of either Mr Gu or Fei Yang. In the absence of full and frank disclosure of their income, assets and liabilities, neither the fact that Mr Gu borrowed money from Starrays and Akidso nor the fact that he and his wife sold properties to the sole director of Akidso can be given any weight. In any case, any financial difficulties they might have are irrelevant to the objective of general deterrence.

80    The Ombudsman proposed a small reduction in Mr Gu’s case to $760,000, representing 44% of the theoretical maximum, which is an appropriate figure. The Ombudsman proposed no reduction in the raw total for Ms Yang, but I would round down the raw total for Ms Yang to $43,000 representing 57% of the theoretical maximum.

81    It follows that I will order that BSKL pay a total penalty of $4,299,000; Q Fay $44,100; Mr Gu $760,000; and Ms Fei Yang $43,000.

The question of superannuation

82    The Employees should be compensated for the losses they have incurred as a result of the failure of BSKL to make superannuation contributions on their behalf. The difficulty is in framing a suitable order.

83    In para 10 of the Second Further Amended Originating Application (2FAOA), the Ombudsman sought an order pursuant to s 545(2)(b) of the FW Act that within 28 days of the Court’s order BSKL, Mr Gu and Fei Yang “jointly and severally … make superannuation contributions on behalf of Xing Yang, Ms Cen, Ms Zhang and Ms Yu to their nominated superannuation funds” as follows:

(a)    $6,986.41 in outstanding contributions arising from the contraventions set out in paragraph 1(g) above, made up of:

(i)    $3,381.34 for the benefit of Xing Yang;

(ii)    $2,252.42 for the benefit of Xibing Cen; and

(iii)    [deleted];

(iv)    $1,262.65 for the benefit of Tzu Fong Yu; and

(b)    in relation to [the other sums owing because of the other contraventions of the Act]:

(i)    in respect of the ordinary time earnings component of any payment [of those sums] at the superannuation guarantee charge rate prescribed by applicable superannuation legislation in force as at the date the Court’s orders are made; and/or

(ii)    the amount of any relevant superannuation guarantee charge under the Superannuation Guarantee (Administration) Act 1992 (Cth).

84    The total amount in para 10(a) in the previous iteration of the originating application and the statement of claim was $9,633.84. It included what originally appeared in para (a)(iii), namely, an amount of $2,737.43 for the benefit of Jin Zhang. The reduction of the total to $6,986.41 and the deletion of the amount originally appearing in para (a)(iii), reflect the fact that Mr Gu submitted evidence that superannuation payments had been made to Ms Zhang, albeit well after they should have been made, in excess of the amount the Ombudsman claimed and the Ombudsman’s acceptance that the amount paid should be deducted from the original figure. For obvious reasons, the belated payment of superannuation into Ms Zhang’s superannuation account included no superannuation contributions on the shortfall in the ordinary time earnings component of the wages that were not paid to her because of the contraventions I found of cll 13.2, 17, 29.4(b), 29.4(c), and 29.4(d) of the Award.

85    In para 11 of 2FAOA the Ombudsman sought an order pursuant to s 545(2)(b) that, within 28 days of the Court’s order, BSKL make contributions on behalf of Xing Yang to her nominated superannuation fund in relation to the sum of $12,933.30, being the outstanding underpayment arising from the contraventions of s 44(1) (the failure to pay her accrued annual leave and annual leave loading contrary to s 90(2) and the failure to provide payment in lieu of notice on the termination of her full-time employment contrary to s 117) as follows:

(a)    in respect of the ordinary time earnings component of any payment made pursuant to paragraph 7 above, at the superannuation guarantee charge rate prescribed by applicable superannuation legislation in force as at the date the Court’s orders are made; and/or

(b)    in the amount of any relevant superannuation guarantee charge under the Superannuation Guarantee (Administration) Act 1992 (Cth).

86    The contraventions set out in para 10(a) of 2FAOA relate to the failure to make superannuation contributions on the wages actually paid to the Employees. While the order proposed in (b) is not entirely clear, it is evident from her submissions that by that order the Ombudsman sought the payment by the relevant respondents of the amount of BSKL’s “individual superannuation guarantee shortfall” for the Employees within the meaning of that term in s 19 of the Superannuation Guarantee (Administration) Act 1992 (Cth) (Administration Act). That is an amount of money calculated in accordance with a formula set out in s 19(1). In most cases the formula involves multiplying the total salary or wages paid to the employee for a quarter and any sacrificed salary or wages for that quarter by a “charge percentage” contained in a table in s 19(2). Section 5 of the Superannuation Guarantee Charge Act 1992 (Cth) (Charge Act) imposes a charge on any superannuation guarantee shortfall of an employer for a quarter. Where an employer makes a contribution for the benefit of an employee (other than by salary sacrifice), the charge percentage for the employee for a quarter is reduced by the application of a formula involving dividing the amount of the contribution by the “ordinary time earnings” for the quarter (plus any sacrificed ordinary time earnings) multiplied by 100: Administration Act, s 23(2). In this case, “ordinary time earnings” include casual loadings and weekend and public holiday penalty rates but not overtime penalty rates because overtime is not “ordinary time”.

87    As the High Court explained in Roy Morgan Research Ltd v Federal Commissioner of Taxation (2011) 244 CLR 97, which involved an unsuccessful constitutional challenge to the Administration Act and the Charge Act, at [3]:

Broadly speaking, the effect of the legislation under challenge is that if, as specified in the Administration Act, an employer fails to provide to all employees a prescribed minimum level of superannuation then any shortfall represented by failure to meet that minimum level in full, becomes the Charge. This impost is levied on the employer by the Charge Act. The amount of the Charge is a debt due to the Commonwealth and payable to the respondent, the Commissioner of Taxation: Taxation Administration Act 1953 (Cth), Sch 1, s 255-5. The Charge includes a component for interest and an administration cost. The result is to supply an incentive to employers to make contributions to superannuation for their employees without incurring a liability to the Commissioner for the Charge.

88    As the Ombudsman submitted, the obligation to pay superannuation (or to pay the superannuation guarantee charge) arises at the time salary or wages are paid to an employee. Neither the Administration Act nor the Charge Act requires an employer to make superannuation contributions for the benefit of any employee. That obligation is imposed by cl 22 of the Award. At the time the superannuation contributions should have been made for the benefit of the Employees, the charge percentage was 9.5%. It has risen several times since then. The current percentage is 11.5%. It will apply until 30 June 2025 after which time it will rise to 12%.

89    Having regard to the concerns I expressed in the Liability Judgment about the form of the superannuation orders, the Ombudsman proposed a variation of the form.

90    No substantive change has been made to the first of the proposed superannuation orders, which deals with superannuation on wages paid to Xing Yang, Ms Cen and Ms Yu. The changes affect the other proposed orders which are concerned with payment of superannuation contributions on wages that should have been, but were not, paid.

91    Sadly, the form of the orders remains unsatisfactory.

92    First, the orders as currently formulated require the respondents “jointly and severally” to make the contributions. While the obligations of the respondents are joint and several, it is both unnecessary and potentially confusing to make an order in those terms. On one view, at least, it would overcompensate the Employees to require the respondents to make the contributions “jointly and severally”.

93    Second, the latest proposed orders do not quantify the amounts of the contributions. Instead, they include an observation about what those amounts would be if the contributions are made before 30 June 2025 when the superannuation guarantee charge rises again.

94    Third, there is no evidence about whether any of the Employees has a nominated superannuation fund.

95    For these reasons I will not make the orders in the form proposed by the Ombudsman.

96    To overcome the first problem (except in the case of the Ombudsman’s proposed order 1(d), which is only directed to BSKL), I will not include the phrase “jointly and severally” but add a note to the orders to reflect the fact that, where they are taken to have engaged in the particular contraventions to which those orders relate, they are jointly and severally liable to compensate the Employees for the losses that result from them.

97    To overcome the second problem, as the purpose of these orders is to compensate the Employees, not to enforce compliance with the superannuation legislation, I will simply order the payment of the discrete amounts which reflect the figures that would be payable if the contributions are made before 30 June 2025.

98    To overcome the third problem, I will enable the contributions to be paid into either the Employees’ nominated superannuation funds or one of the superannuation funds mentioned in cl 20.4 of the current award (which corresponds to cl 22.4 of the Award).

99    The Ombudsman originally sought interest on the unpaid superannuation contributions but deleted the claim in 2FAOA. In those circumstances, I will make no order for pre-judgment interest on any of these sums.

One other thing

100    Section 570 of the FW Act limits the powers the Court would otherwise have to award costs for or against a party. The Ombudsman did not seek costs. Accordingly, I will make no order as to costs.

Associate:

Dated:    20 December 2024

SCHEDULE OF PARTIES

ANNEXURE A

DECLARATIONS

1.    During various periods from 19 October 2015 until 9 June 2018 inclusive, the First Respondent contravened the following civil remedy provisions of the Fair Work Act 2009 (Cth) (FW Act) and the Fair Work Regulations 2009 (Cth) (FW Regulations) (all capitalised terms, not otherwise defined below are defined in the reasons for judgment and the glossary of select terms that follow).

(a)    s 45 of the FW Act, by failing to pay each of Xibing Cen, Xing Yang, Tzu Fong Yu and Jin Zhang (the Employees) the minimum rate of pay in contravention of cl 17 of the General Retail Industry Award 2010 (Award);

(b)    s 45 of the FW Act by failing to pay each of the Employees casual loadings, in contravention of cl 13.2 of the Award;

(c)    s 45 of the FW Act by failing to pay each of the Employees Saturday penalty rates, in contravention of cl 29.4(b) of the Award;

(d)    s 45 of the FW Act by failing to pay each of the Employees Sunday penalty rates, in contravention of cl 29.4(c) of the Award;

(e)    s 45 of the FW Act by failing to pay each of Xibing Cen, Xing Yang and Jin Zhang public holiday penalty rates, in contravention of cl 29.4(d) of the Award;

(f)    s 45 of the FW Act by failing to pay Xibing Cen and Tzu Fong Yu overtime rates, in contravention of cl 29.2 of the Award;

(g)    s 45 of the FW Act by failing to pay superannuation contributions on behalf of each of the Employees, in contravention of cl 22.2 of the Award;

(h)    s 45 of the FW Act, by failing to pay each of the Employees weekly, fortnightly or on a regular pay day, in contravention of cl 23 of the Award;

(i)    s 44(1) of the FW Act by failing to pay Xing Yang her accrued untaken annual leave entitlements, in contravention of s 90(2) of the Act;

(j)    s 44(1) of the FW Act by failing to give Xing Yang notice of termination or payment in lieu, when her full-time employment was terminated on 18 October 2015, contrary to s 117 of the Act;

(k)    s 323(1) of the FW Act, by failing to pay Xibing Cen at least monthly in June and July 2017;

(l)    s 340(1)(a)(ii) of the FW Act, by threatening to dismiss Jin Zhang from her employment because, or for reasons which included that, she exercised a workplace right to participate in an interview with a Fair Work Inspector;

(m)    s 358 of the FW Act, by threatening to dismiss Jin Zhang from her employment, in order to engage her as an independent contractor to perform the same, or substantially the same, work under a contract for services;

(n)    s 535(1) of the FW Act, by failing to:

(i)    make and keep for seven years records of the rate of remuneration paid to each of the Employees, as prescribed by reg 3.33(1)(a);

(ii)    make and keep for seven years records that specify the basis on which it became liable to make superannuation contributions to the Employees, including a record of any election made by the employees as to the funds to which contributions were to be made and the date of any relevant election, as prescribed by reg 3.37(1)(e);

(iii)    make and keep for seven years records of the gross and net amounts paid to Xing Yang for the period from May 2011 to December 2012 inclusive, as prescribed by reg 3.33(1)(b);

(iv)    make or keep records of the entitlement to casual loading for each of the Employees, as prescribed by reg 3.33(3)(c);

(v)    make and keep records of the entitlement to Saturday, Sunday and public holiday penalty rates of each of the Employees, as prescribed by reg 3.33(3)(d);

(vi)    apart from the Xing Yang Timesheets, make and keep records of the hours worked by Xing Yang for the period from 19 October 2015 to 26 June 2016, as prescribed by reg 3.33(2);

(vii)    apart from the Tzu Fong Yu Timesheets, keep records for seven years of the hours worked by Tzu Fong Yu, as prescribed by reg 3.33(2);

(viii)    make or keep records of the overtime hours worked by each of Xibing Cen and Tzu Fong Yu or the times they started and finished working overtime hours, as prescribed by reg 3.34;

(o)    s 535(4) of the FW Act, by making or keeping the following employment details forms, payroll documents and timesheets, knowing them to be false or misleading: the Xing Yang Employment Details Form 1, Xing Yang Employment Details Form 2, Xing Yang Payroll Register Document, Xibing Cen Payroll Register Document 1, Xibing Cen Payroll Register Document 2, the Xibing Cen Timesheets 2 and the Jin Zhang Payroll Register Document 1;

(p)    s 535(2) of the FW Act, by failing to include the following information in employee records:

(i)    the correct date on which Xing Yang’s employment began, as prescribed by reg 3.32(e);

(ii)    the correct net amounts paid to Xing Yang in the period from 6 February 2017 to 11 June 2017, as prescribed by reg 3.33(1)(b);

(iii)    the correct net amounts paid to Xibing Cen in the period from 27 November 2017 to 24 December 2017, as prescribed by reg 3.33(1)(b);

(iv)    the correct net amounts paid to Jin Zhang in the period from 7 August 2017 to 26 November 2017, and from 18 December 2017 to 7 January 2018, as prescribed by reg 3.33(1)(b); and

(v)    the correct hours worked by Xibing Cen in the period from 11 December 2017 to 28 January 2018, as prescribed by reg 3.33(2).

(q)    s 536(1) of the FW Act, by failing to give pay slips to each of the Employees in the form prescribed by the FW Regulations or which included the information prescribed by the Regulations, within one day of making payment to them in relation to the performance of work or at all;

(r)    s 707A of the FW Act, in that on 18 January 2018 it intentionally hindered or obstructed Fair Work Inspectors Stuart Liljeqvist and Dale Woods in the exercise of their powers or functions, when it directed that BSKL’s Woden store be closed;

(s)    s 707A of the FW Act, in that it intentionally obstructed Fair Work Inspector Liljeqvist in the exercise of his powers or functions, when in January 2018 it directed Tzu Fong Yu to destroy the Woden Timesheets;

(t)    s 712(3) of the FW Act, by failing to produce the Xing Yang Timesheets and the Xing Yang Payroll Register Documents 2, in compliance with the First BSKL NTP issued by Fair Work Inspector Liljeqvist on 23 January 2018;

(u)    s 712(3) of the FW Act, by failing to produce the Xibing Cen Timesheets 3, the Tzu Fong Yu Payroll Register Document and the Jin Zhang Timesheets 2 (to the extent that they related to periods after 1 December 2017), in compliance with the Second BSKL NTP issued by Fair Work Inspector Liljeqvist on 23 January 2018;

(v)    s 712(3) of the FW Act, by failing to produce the Jin Zhang Timesheets 2 in compliance with the Third BSKL NTP issued by Fair Work Inspector Liljeqvist on 12 June 2018;

(w)    s 712(3) of the FW Act, by failing to produce the Tzu Fong Yu Timesheets and the Tzu Fong Yu Payroll Register Document in compliance with the Fourth BSKL NTP issued by Fair Work Inspector Liljeqvist on 12 June 2018;

(x)    s 712(3) of the FW Act, by failing to produce the Xibing Cen Timesheets 3 in compliance with the Fifth BSKL NTP issued by Fair Work Inspector Liljeqvist on 21 June 2018; and

(y)    s 718A of the FW Act, in that between on or about 8 February 2018 to 4 July 2018 it produced each of the following documents to Fair Work Inspector Liljeqvist, who was exercising powers or performing functions under the FW Act, knowing, or being reckless as to whether, each of the documents was false or misleading: the Xing Yang Employment Details Form 1, the Xing Yang Employment Details Form 2, the Xing Yang Payroll Register Document, the Xibing Cen Payroll Register Document 1, the Xibing Cen Payroll Register Document 2, the Xibing Cen Timesheets 2, the North Rocks Timesheets and the Jin Zhang Timesheets.

2.    Each of the First Respondent’s contraventions set out in declarations 1(a), (n) and (q), insofar as they occurred on or after 15 September 2017 were serious contraventions within the meaning of s 557A of the FW Act.

3.    The Second Respondent contravened ss 535(4) and 718A of the FW Act, in that on 12 March 2018, in response to the First Q Fay NTP, it produced each of the Jin Zhang Payroll Register Document 1 and the Baulkham Hills Timesheets to Fair Work Inspector Liljeqvist, when they were false or misleading and when it knew, or was reckless as to whether, they were false or misleading.

4.    The Third Respondent:

(a)    contravened s 707A of the FW Act by intentionally hindering or obstructing Fair Work Inspectors Stuart Liljeqvist and Dale Woods on 18 January 2018 in the exercise of their powers or functions, when, knowing the inspectors were proposing to visit the Woden store, he directed Xiaoying Jin to close the store well before the end of trading hours;

(b)    was involved, within the meaning of s 550(2) of the FW Act, in the First Respondent’s contraventions as set out in 1(a), (b), (c), (d), (e), (f), (g), (h), (k), (l), (m), (n), (o), (p), (q), (t), (u), (v), (w), (x) and (y) above; and

(c)    was involved, within the meaning of s 557A(5A) of the FW Act, in the First Respondent’s serious contraventions as set out in 1(a), (n) and (q) above and 2 above; and

(d)    was involved, within the meaning of s 550(2) of the FW Act, in the Second Respondent’s contraventions set out in 3 above.

5.    The Fourth Respondent:

(a)    contravened s 707A of the FW Act, in that in January 2018 she intentionally obstructed Fair Work Inspector Stuart Liljeqvist in the exercise of his powers or functions by directing Tzu Fong Yu to destroy the Woden Timesheets; and

(b)    was involved, within the meaning of s 550(2) of the FW Act, in the First Respondent’s contraventions as set out in 1 (b), (c), (d), (e) and (f) above.

ANNEXURE B

Relevant penalty unit values under section 12 of the FW Act and section 4AA of the Crimes Act 1914 (Cth)

First Respondent (Blue Sky Kids Land Pty Ltd (ACN 108 233 709) (in liquidation))

ANNEXURE C

Relevant penalty unit values under section 12 of the FW Act and section 4AA of the Crimes Act 1914 (Cth)

Second Respondent (Q Fay Trading Company Pty Ltd (ACN 147 861 569) (in liquidation))

ANNEXURE D

Relevant penalty unit values under section 12 of the FW Act and section 4AA of the Crimes Act 1914 (Cth)

Third Respondent (Guo Dong Gu)