Federal Court of Australia

Fair Work Ombudsman v Mai [2025] FCA 421

ORDERS

THE COURT DECLARES THAT:

1.    The first respondent contravened the following civil remedy provisions:

(a)    s 45 of the Fair Work Act 2009 (Cth) (FW Act), by failing to pay 26 of the 36 people named in Column A of the table in order 3 below (Employees) the minimum rate of pay prescribed by cl 20.1 of the Restaurant Industry Award 2010 (Restaurant Award 2010) and cl 18.1 of the Restaurant Industry Award 2020 (Restaurant Award 2020);

(b)    s 45 of the FW Act, by failing to pay five Employees the minimum junior rate of pay prescribed by cl 20.3(a) of the Restaurant Award 2010 and cl 18.2(a) of the Restaurant Award 2020;

(c)    s 45 of the FW Act, by failing to pay 31 Employees the casual loading prescribed by cl 13.1 of the Restaurant Award 2010 and cl 11.1 of the Restaurant Award 2020;

(d)    s 45 of the FW Act, by failing to pay 28 Employees the Saturday penalty rate prescribed by cl 34.1 of the Restaurant Award 2010 and cl 24.2 of the Restaurant Award 2020;

(e)    s 45 of the FW Act, by failing to pay 13 Employees the Sunday penalty rate prescribed by cl 34.1 of the Restaurant Award 2010 and cl 24.2 of the Restaurant Award 2020;

(f)    s 45 of the FW Act, by failing to pay 24 Employees the public holiday penalty rate prescribed by cl 34.1 of the Restaurant Award 2010 and cl 24.2 of the Restaurant Award 2020;

(g)    s 45 of the FW Act, by failing to pay four Employees the applicable rates for the first two hours of overtime worked on weekdays, hours of overtime after the first two hours worked on weekdays, the first two hours of overtime worked on Saturdays, hours of overtime after the first two hours worked on Saturdays, and hours of overtime worked on Sundays, prescribed by cl 33.2 of the Restaurant Award 2010 and cl 23.4 of the Restaurant Award 2020;

(h)    s 45 of the FW Act, by failing to pay 20 Employees the rate applicable to hours worked after not providing a meal break, as prescribed by cll 32.5 and 32.6 of the Restaurant Award 2010 and cll 16.5 and 16.6 of the Restaurant Award 2020;

(i)    s 45 of the FW Act, by failing to pay 10 Employees the minimum rate of pay prescribed by cl 17 of the Fast Food Industry Award 2010 (Fast Food Award);

(j)    s 45 of the FW Act, by failing to pay 10 Employees the casual loading prescribed by cl 13.1 of the Fast Food Award;

(k)    s 45 of the FW Act, by failing to pay nine Employees the Saturday penalty rate prescribed by cl 25.5 of the Fast Food Award;

(l)    s 45 of the FW Act, by failing to pay eight Employees the Sunday penalty rate prescribed by cl 25.5 of the Fast Food Award;

(m)    s 45 of the FW Act, by failing to pay six Employees the public holiday penalty rate prescribed by cll 30.3 (until 3 October 2019) and 30.4 (from 4 October 2019) of the Fast Food Award;

(n)    s 45 of the FW Act, by failing to pay four Employees the applicable rates for the first two hours of overtime worked on days other than Sundays, hours of overtime after the first two hours worked on days other than Sundays, hours of overtime worked on Sundays and hours of overtime worked on public holidays, prescribed by cl 26.1(b) of the Fast Food Award;

(o)    s 323(1) of the FW Act, on or around 19 August 2020, 21 September 2020 and another unspecified date, by failing to pay in full amounts payable to three Employees in relation to the performance of work;

(p)    s 325(1) of the FW Act, on or around 20 May 2020, 11 August 2020, 31 October 2020 and 4 February 2021, by unreasonably requiring four Employees to spend, or pay to the first respondent and/or the second respondent, an amount of their money, or the whole or any part of an amount payable to them in relation to the performance of work, in circumstances where the requirement was unreasonable, and the payment was directly or indirectly for the benefit of the first respondent and/or the second respondent;

(q)    s 325(1) of the FW Act, by unreasonably requiring Quac Huy Quach to pay to the first respondent an amount of his money, or the whole or any part of an amount payable to him, in relation to the performance of work, in circumstances where the requirement was unreasonable, and the payment was directly or indirectly for the benefit of the first respondent;

(r)    s 535(1) of the FW Act, by failing to keep each of the following records prescribed by the Fair Work Regulations 2009 (Cth) (FW Regulations):

(i)    records specifying an employee’s name for 39 employees of the first respondent, as required by reg 3.32(b) of the FW Regulations;

(ii)    records specifying deductions made from the gross amounts paid to three Employees, as required by reg 3.33(1)(c) of the FW Regulations;

(iii)    records specifying the entitlement of 31 Employees to be paid casual loading in accordance with cl 13.1 of the Restaurant Award 2010 and cl 11.1 of the Restaurant Award 2020, as required by reg 3.33(3)(c) of the FW Regulations;

(iv)    records specifying the entitlement of 10 Employees to be paid casual loading in accordance with cl 13.1 of the Fast Food Award, as required by reg 3.33(3)(c) of the FW Regulations;

(v)    records specifying the entitlement of 29 Employees to be paid Saturday, Sunday, public holiday and overtime penalty rates in accordance with cll 34.1 and 33.2 of the Restaurant Award 2010 and cll 24.2 and 23.4 of the Restaurant Award 2020, as required by reg 3.33(3)(d) of the FW Regulations;

(vi)    records specifying the entitlement of 10 Employees to be paid Saturday, Sunday, public holiday and overtime penalty rates in accordance with cll 25.5, 26.1(b), 30.3 (until 3 October 2019) and 30.4 (from 4 October 2019) of the Fast Food Award, as required by reg 3.33(3)(d) of the FW Regulations;

(vii)    records specifying the entitlement of 20 Employees to be paid a monetary allowance for hours worked after a meal break was required to be provided to them in accordance with cll 32.5 and 32.6 of the Restaurant Award 2010 and cll 16.5 and 16.6 of the Restaurant Award 2020, as required by reg 3.33(3)(e) of the FW Regulations; and

(viii)    records specifying either the number of overtime hours worked by seven Employees or when those seven Employees started and ceased working overtime, as required by reg 3.34 of the FW Regulations;

(s)    s 536(1) of the FW Act, by failing to give a pay slip within one working day of paying an amount to the Employees for the performance of work in respect of each Employee in each fortnightly pay period;

(t)    s 535(4) of the FW Act, by making and keeping each of the records identified at paragraphs 140 to 146 of the statement of agreed facts and admissions filed by the parties in these proceedings on 6 June 2024, being records required to be made and kept for the purposes of regs 3.33(1)(a), 3.33(1)(b) and 3.33(2) of the FW Regulations, knowing that each of the records was false or misleading;

(u)    s 536(3) of the FW Act, by giving pay slips to:

(i)    Hai Lam for the periods 13 to 26 August 2018 and 8 to 21 April 2019;

(ii)    Thi Ngoc Linh Pham for the periods 8 to 21 April 2019 and 6 to 19 May 2019; and

(iii)    Qunyh Anh Luong for the period 1 to 13 July 2019,

knowing that the pay slips were false or misleading; and

(v)    s 718A of the FW Act, on three separate occasions, on 28 October 2021, 10 November 2021 and 8 December 2021, by producing the records identified at paragraphs 140(a), (b) and (c), 145 and 146 of the statement of agreed facts and admissions, to a Fair Work Inspector exercising powers under the FW Act, knowing that each of the records was false or misleading.

2.    The second respondent was involved, within the meaning of s 550(2) of the FW Act in each of the first respondent’s contraventions of the civil remedy provisions as set out in:

(a)    paragraphs (a) to (g) of declaration 1 above;

(b)    paragraphs (i) to (n) of declaration 1 above; and

(c)    paragraph (p) of declaration 1 above.

3.    Each of the first respondent’s contraventions set out in:

(a)    paragraphs (a) to (g) of declaration 1 above;

(b)    paragraphs (i) to (n) of declaration 1 above; and

(c)    paragraph (t) of declaration 1 above.

was a serious contravention within the meaning of s 557A of the FW Act.

4.    The second respondent was involved, within the meaning of s 557A(5A) of the FW Act, in each of the first respondent’s serious contraventions as set out in:

(a)    paragraphs (a) to (g) of declaration 1 above; and

(b)    paragraphs (i) to (n) of declaration 1 above.

THE COURT ORDERS THAT:

Rectification of underpayments and interest

1.    Pursuant to ss 545(2)(b) and 559(1) of the FW Act, within 28 days of the making of these orders, the first respondent pay the applicant the amount of $407,546.45 (Underpayment Amount), being compensation for economic loss suffered by the Employees because of the contraventions referred to in the declarations above, or such other amounts as remain outstanding at that time.

2.    Pursuant to ss 547(2) and 559(1) of the FW Act, within 28 days of the making of these orders, the first respondent pay the applicant interest on the Underpayment Amount at the applicable pre-judgment interest rate, calculated by applying the rates identified in [2.2(a)-(b)] of the General Practice Note, Interest on judgments (GPN-INT).

3.    Pursuant to s 545(1) of the FW Act and s 23 of the Federal Court of Australia Act 1976 (Cth) (FCA Act), within 90 days of receipt of the amount and interest pursuant to orders 1 and 2 above or any part of those amounts, the applicant seek to locate and pay:

(a)    if the applicant receives those amounts in full—each amount set out in column B of the table below to the corresponding Employee named in column A, plus interest on those amounts at the applicable pre-judgment interest rate, less any amount that Employee has already been paid by the first respondent; or

(b)    if the applicant receives part of those amounts—the amount received multiplied by the percentage in column C of the table below to the corresponding Employee named in column A, less any amount that Employee has already been paid by the first respondent.

4.    Pursuant to s 545(1) of the FW Act and s 23 of the FCA Act, if the applicant is unable to locate and pay any of the Employees specified in order 3 above within the time specified in that paragraph, the applicant pay to a person the amount specified in order 3 above for that Employee if:

(a)    the person makes a claim for the amount in accordance with the form prescribed by the FW Regulations for the purpose of s 559(3) of the FW Act; and

(b)    the applicant is satisfied that the person is entitled to the amount.

5.    Pursuant to s 545(1) of the FW Act and s 23 of the FCA Act, if a person is paid an amount in accordance with order 4 above, the applicant also pay that person any interest on the amount that would be payable to the relevant Employee under s 559(3A) of the FW Act if the amount were paid to the Employee under s 559(3) of the FW Act.

Superannuation payments

6.    Pursuant to s 545(2) of the FW Act, within 28 days of this order, the first respondent make superannuation contributions on behalf of each of the Employees to their nominated superannuation fund:

(a)    in respect of the ordinary time earnings component of any payment made pursuant to the orders above at the superannuation guarantee charge rate prescribed by applicable superannuation legislation as at the date of these orders; and/or

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

Pecuniary penalties

7.    Pursuant to s 546(1) of the FW Act, the first respondent pay pecuniary penalties totalling $265,000 for the contraventions identified in declaration 1 above.

8.    Pursuant to s 546(1) of the FW Act, the second respondent pay pecuniary penalties totalling $130,000 for the contraventions identified in declaration 2 above.

9.    Pursuant to s 546(3) of the FW Act, the pecuniary penalties ordered to be paid by the first respondent and the second respondent be paid to the Consolidated Revenue Fund of the Commonwealth within 90 days of the making of these orders.

Ancillary

10.    The parties have liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.

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

REASONS FOR JUDGMENT

MCDONALD J

Introduction

1    During the period to which these proceedings relate, the first respondent, Viet Quoc Mai, as trustee for the Viet Quoc Mai Family Trust, operated a business comprising Vietnamese eateries at two locations in Adelaide – a restaurant in James Place (restaurant), and a stall in the Market Plaza One Stop Shopping Centre food court (stall) – and employed at least 36 employees. The second respondent, Huong Le, is Mr Mai’s wife. She was a manager of the business and was involved in its operation.

2    In these proceedings, the applicant, the Fair Work Ombudsman (FWO), seeks declarations that, during the period between January 2018 and December 2021, Mr Mai contravened multiple provisions of the Fair Work Act 2009 (Cth) (FW Act), and that certain of Mr Mai’s contraventions were serious contraventions within the meaning of s 557A of the FW Act. The FWO also seeks declarations that Ms Le was involved in some of Mr Mai’s contraventions and serious contraventions within the meaning of s 550(2) of the FW Act. The FWO seeks orders for the payment of amounts in compensation for loss suffered by Mr Mai’s employees, the repayment of interest and superannuation, and the payment of pecuniary penalties pursuant to s 546(1) of the FW Act.

3    By the time of the hearing, the respondents had accepted that they had each committed the multiple contraventions of the FW Act which are described below. They further accept that many of those contraventions constitute serious contraventions within the meaning of s 557A of the FW Act. Subject to certain issues concerning the operation of s 557 of the FW Act (addressed at [86]-[133] below), the parties have also reached agreement as to the declarations that should be made and the orders that should be made in relation to the payment of compensation for loss suffered by the employees.

4    The respondents also accept that it is appropriate that the Court impose civil penalties on both of them for their contraventions of the FW Act. The issue remaining between the parties concerns the quantum of the civil penalties that should be imposed. For the reasons that follow, I will order that penalties be imposed totalling the amounts set out in the orders at the beginning of these reasons.

Factual background

5    The following facts, which I find proved, are agreed by the parties and are set out in the statement of agreed facts and admissions, as well as at [5]-[14] of the FWO’s written submissions. Those paragraphs are adopted by the respondents in their written submissions.

6    During the period from 29 January 2018 to 5 September 2021 (assessment period), Mr Mai employed at least 31 persons as employees at the restaurant, under the Restaurant Industry Award 2010 (Restaurant Award 2010) until 29 May 2020 and the Restaurant Industry Award 2020 (Restaurant Award 2020) from 29 May 2020 onwards (restaurant employees). Ten persons (some of whom were also counted in the group of 31 restaurant employees) were employed under the Fast Food Industry Award 2010 (Fast Food Award) as employees at the stall (fast food employees). Five employees have been identified as being under 20 years of age during the period of their employment (junior employees).

7    Mr Mai developed a system for paying each of the employees of the business (Payment System) which involved a combination of electronic funds transfer, paid at arbitrary hourly rates, in respect of some hours worked, and cash payments, paid at a different arbitrary rate, for all remaining hours. When remunerating employees via electronic funds transfer, Mr Mai paid a flat hourly rate, generally between $21.69 and $26.49, but sometimes as low as $16.00 or as high as $26.90, that he determined for each employee per fortnight. The payments were for an arbitrary number of hours that was also determined by him. In relation to the remaining hours worked by each employee, Mr Mai made cash payments at a flat hourly rate of $15.00.

8    On 6 June 2015, Mr Mai created, and thereafter maintained and edited, a spreadsheet titled “timesheet.xls” in which he recorded the following data:

(a)    the number of hours worked by each employee per fortnight;

(b)    the number of hours for which he determined each employee would be paid via electronic funds transfer per fortnight;

(c)    the number of hours in excess of the hours for which electronic payment had been made for which Mr Mai determined each employee would be paid in cash per fortnight;

(d)    the amount to be paid to each employee via electronic funds transfer (calculated by multiplying the number of hours at (b) above by the hourly rate Mr Mai determined that that employee would be paid for hours remunerated via electronic funds transfer);

(e)    the amount to be paid to each employee in cash (calculated by multiplying the number of hours at (c) above by the hourly rate Mr Mai determined that that employee would be paid in cash); and

(f)    the total amount each employee would be paid each fortnight (being the sum of the amounts at (d) and (e) above).

9    For each fortnightly pay period, Mr Mai paid each of the employees an amount which he had determined they should be paid via electronic funds transfer minus an amount for tax, from the bank account of the business to the bank account of each of the employees. He then paid, or arranged for Ms Le to pay, to each of the employees the amount that he had determined that each of them should be paid in cash, by extracting money from the cash register at the restaurant or the stall, or handing the employee a bag or envelope containing cash.

10    Mr Mai did not generate pay slips for any of the employees unless a request was made by a particular employee that one be provided.

11    On 14 April 2021, Fair Work Inspectors appointed under s 700 of the FW Act conducted a site visit at the restaurant. As a result of the site visit, Mr Mai became aware that the FWO was investigating the business.

12    Following the site visit, Mr Mai searched for the minimum rate to which each of the employees was entitled by reference to the Fast Food Award. He began paying each of the employees an hourly rate of between $26.49 and $26.90 when paying them via electronic funds transfer. Otherwise, however, Mr Mai continued paying the employees in accordance with the Payment System described at [7]-[9] above; he continued paying certain amounts in cash and he continued failing to pay employees any penalties or higher rates for hours worked on weekends or public holidays.

Admitted contraventions

13    The following summary of admitted contraventions is based on the statement of agreed facts and admissions. The contraventions described are admitted by the respondents and agreed between the parties.

Failure to pay minimum rates

14    During the assessment period, Mr Mai failed to pay 26 adult employees of the restaurant amounts sufficient to meet the minimum rate to which they were entitled for all ordinary hours worked by them on Monday to Friday pursuant to cl 20.1 of the Restaurant Award 2010 and cl 18.1 of the Restaurant Award 2020. The total of these underpayments was $94,081.76.

15    Clause 20.3(a) of the Restaurant Award 2010 and cl 18.2(a) of the Restaurant Award 2020 each required Mr Mai to pay junior employees a percentage of the adult minimum entitlements depending on their age; relevantly, 70% for 18-year-old employees, and 85% for 19-year-old employees. Mr Mai failed to pay each of the five junior employees the minimum rate to which they were entitled. In total, the junior employees were underpaid $3,144.19.

16    During the assessment period, Mr Mai failed to pay the fast food employees amounts sufficient to meet the minimum rate to which they were entitled for all ordinary hours worked pursuant to cl 17 of the Fast Food Award. Mr Mai underpaid the fast food employees $69,118.18 in total.

17    In failing to pay each of the restaurant employees and fast food employees the minimum rates required by the respective awards, Mr Mai contravened s 45 of the FW Act.

Failure to pay casual loading

18    During the assessment period, cl 13.1 of the Restaurant Award 2010 and cl 11.1 of the Restaurant Award 2020 required Mr Mai to pay each of the restaurant employees casual loading of 25% on top of the minimum rates for all ordinary hours worked. By reason of his failure to pay their entitlement to casual loading under the awards, the restaurant employees were underpaid an additional amount of $85,580.74 in total by Mr Mai.

19    Clause 13.1 of the Fast Food Award similarly required Mr Mai to pay each of the fast food employees a loading of 25% of the minimum rate to which they were entitled for all ordinary hours worked. In respect of their entitlement to casual loading under the award, Mr Mai underpaid the fast food employees an additional $39,163.18 in total.

20    The failure by Mr Mai to pay the restaurant employees and fast food employees amounts sufficient to meet their entitlements under the respective awards amount to contraventions of s 45 of the FW Act.

Failure to pay Saturday, Sunday and public holiday penalty rates

21    During the assessment period, pursuant to cl 34.1 of the Restaurant Award 2010 and cl 24.2 of the Restaurant Award 2020, Mr Mai was required to pay the restaurant employees 150% of the minimum rate to which they were entitled for hours worked on Saturdays or Sundays, and 250% of the minimum rate to which they were entitled for hours worked on public holidays.

22    Clause 25.5(b)(ii) of the Fast Food Award required that Mr Mai pay the fast food employees, as casual employees, a 50% loading for hours worked on Saturdays. The rate of the loading which cl 25.5(c) of the Fast Food Award required Mr Mai to pay the fast food employees for hours worked on Sundays varied over the assessment period. Between 29 January 2018 and 30 June 2018 it was 70% of the minimum rate payable to casual employees; between 1 July 2018 and 30 June 2019 it was 60%; and from 1 July 2019 it was 50%. For hours worked on public holidays, Mr Mai was required by cl 30.3 (until 3 October 2019) and then by cl 30.4 (from 4 October 2019) of the Fast Food Award to pay the fast food employees a loading of 150% of the minimum rate to which they were entitled.

23    Mr Mai underpaid 28 of the restaurant employees a total of $49,440.76 in respect of the Saturday rate to which they were entitled. He underpaid 13 restaurant employees a total of $7,939.08 in respect of the Sunday rate to which they were entitled. Further, Mr Mai underpaid 24 restaurant employees a total of $9,151.51 in respect of the rate to which they were entitled for hours worked on public holidays.

24    With respect to the fast food employees, Mr Mai underpaid a total of $20,212.13 in respect of ordinary hours worked on Saturdays. He further underpaid eight of the fast food employees a total of $7,502.11 in respect of hours worked on Sundays. In respect of hours worked on public holidays, Mr Mai underpaid six of the fast food employees a total of $2,971.92.

25    The failure to pay the restaurant employees and fast food employees wages sufficient to meet the minimum Saturday, Sunday and public holiday rates required by the respective awards amounted to contraventions of s 45 of the FW Act.

Failure to pay overtime

26    During the assessment period, pursuant to cl 33.2 of the Restaurant Award 2010 and cl 23.4 of the Restaurant Award 2020, Mr Mai was required to pay each of the restaurant employees:

(a)    150% of the minimum rate to which they were entitled for the first two hours of overtime worked on Monday to Friday;

(b)    200% of the minimum rate to which they were entitled for hours of overtime worked after two hours on Monday to Friday;

(c)    175% of the minimum rate to which they were entitled for the first two hours of overtime worked on Saturdays;

(d)    200% of the minimum rate to which they were entitled for hours of overtime worked after two hours on Saturdays; and

(e)    200% of the minimum rate to which they were entitled for hours of overtime worked on Sundays.

27    Mr Mai failed to pay three restaurant employees a total of $179.17 for the first two hours of overtime worked on Monday to Friday, and failed to pay three restaurant employees a total of $325.21 for overtime worked after two hours on Monday to Friday. He further underpaid four restaurant employees a total of $564.96 for the first two hours of overtime worked on Saturdays, and underpaid three restaurant employees a total of $1,112.58 for overtime worked after two hours on Saturdays. One restaurant employee was underpaid $423.15 in respect of hours of overtime worked on Sundays.

28    During the assessment period, pursuant to cl 26.1(b) of the Fast Food Award, Mr Mai was required to pay the fast food employees:

(a)    175% of the minimum rate to which they were entitled, including casual loading, for the first two hours of overtime worked on Monday to Saturday;

(b)    225% of the minimum rate to which they were entitled, including casual loading, for hours of overtime worked after two hours on Monday to Saturday;

(c)    225% of the minimum rate to which they were entitled for hours of overtime worked on Sundays; and

(d)    275% of the minimum rate to which they were entitled for hours of overtime worked on public holidays.

29    Mr Mai failed to pay three fast food employees a total of $1,179.81 for the first two hours of overtime worked on Monday to Saturday, and three fast food employees a total of $2,563.66 for overtime worked after two hours on Monday to Saturday. He further underpaid three fast food employees a total of $924.95 in respect of hours of overtime worked on Sundays, and underpaid one fast food employee a total of $404.10 for hours of overtime worked on public holidays.

Failure to provide a meal break

30    During the assessment period, Mr Mai was required to provide an unpaid meal break of at least 30 minutes to restaurant employees who worked between five and ten hours in one shift. If an employee were rostered to take an unpaid meal break later than five hours after starting work, Mr Mai was required to provide one additional 20-minute paid meal break. In addition to those meal break entitlements, Mr Mai was required to provide restaurant employees working more than ten hours in a shift with two further 20-minute rest breaks.

31    If Mr Mai did not provide restaurant employees with an unpaid meal break at the rostered time, or if no meal break was rostered, then cll 32.5 and 32.6 of the Restaurant Award 2010 and cll 16.5 and 16.6 of the Restaurant Award 2020 required that he pay those employees 50% of the minimum rate to which they were entitled, in addition to their other entitlements, from the time when the meal break was due to be taken or, if no meal break was rostered, from the end of six hours after starting work, until each of the employees was allowed to take the break, or until the end of the shift. The parties were in agreement as to the effect of the relevant clauses of the awards in the event that no meal breaks were rostered.

32    Mr Mai underpaid 20 restaurant employees a total of $19,683.50 in respect of the rate that they were entitled to be paid for hours worked after a meal break was required to be provided. These underpayments amounted to contraventions of s 45 of the FW Act.

Contraventions involving deductions from wages and requiring employees to spend or pay money for the benefit of the respondents

33    Section 323(1)(a) of the FW Act required that Mr Mai pay his employees amounts payable to them for the performance of work in full, except in circumstances where s 324 permitted that a deduction be made from the amount payable.

34    On three occasions, Mr Mai made deductions from amounts payable to employees. First, on or around 19 August 2020, Mr Mai deducted $10 from an employee’s pay for allegedly incorrectly charging a customer. Secondly, on or around 21 September 2020, after an employee allegedly failed to properly close a refrigerator door, Mr Mai deducted an amount from that employee’s pay for that period. Lastly, Mr Mai deducted amounts from another employee’s cash payment after the employee allegedly broke a door.

35    The deductions made by Mr Mai to the three employees’ pay were neither authorised in writing by the relevant employees, nor made for their benefit. Further, none of the deductions was authorised by the employees in accordance with the relevant enterprise agreement, any modern award or order of the Fair Work Commission, nor was any deduction authorised by any law of the Commonwealth or of South Australia, nor by any court order. Accordingly, the deductions were not authorised by s 324 of the FW Act. The making of the deductions by Mr Mai amounted to contraventions of s 323(1)(a) of the FW Act.

36    Section 325(1) of the FW Act prohibited Mr Mai from directly or indirectly requiring an employee to spend, or pay to him or anyone else, an amount of their money or the money payable to them in relation to the performance of work, if requiring such a payment was unreasonable in the circumstances or if the payment required by Mr Mai was for his benefit or for the benefit of a party related to him.

37    During the assessment period, Ms Le maintained a demerit system for employees which involved marking strikes against employees’ names on a “strike board” – a piece of paper that was displayed at the restaurant – as a form of punishment for mistakes made by employees in the course of their work. When a sixth strike was marked against an employee’s name on the strike board, Ms Le or Mr Mai would require that employee to purchase food and/or beverages from nearby stores for Ms Le, Mr Mai and/or other employees working at that time (strike board system).

38    As a result of the strike board system, Ms Le (on behalf of Mr Mai) required employees to spend an amount of their own money or money payable to them in relation to the performance of work, as follows:

(1)    On or around 20 May 2020, two employees were required to purchase roast duck for Ms Le and other employees.

(2)    On or around 11 August 2020, an employee was required to purchase food and/or beverages for Ms Le and other employees.

(3)    On or around 31 October 2020, an employee was required to purchase bubble teas for Ms Le and other employees who were working at the restaurant on that Saturday and on the following Monday.

(4)    On 4 February 2021, an employee was required to transfer $50.40 to Ms Le’s personal bank account for the purchase of bubble teas for Ms Le and other employees.

39    The parties agree that the purchases and payments required by Ms Le to be made by employees under the strike board system were unreasonable in the circumstances and afforded no benefit to the employees who were required to make the purchases and payments. Further, the purchases and payments were, directly or indirectly, for the benefit of Mr Mai, the employer, and/or Ms Le, a party related to the employer. By unreasonably requiring employees to make purchases or payments after accruing six strikes on the strike board, Mr Mai contravened s 325(1) of the FW Act.

40    On another occasion, Mr Mai contravened s 325(1) of the FW Act by unreasonably requiring an employee to pay him an amount of the employee’s money directly or indirectly for the benefit of Mr Mai. After receiving an email from a Fair Work Inspector attaching a letter regarding the outcome of the FWO’s investigation that set out, among other things, the requirement for Mr Mai to pay the employees certain amounts, Mr Mai arranged for funds to be transferred to an employee who would then withdraw the money in cash and give it back to Mr Mai.

41    On or about 7 January 2024, Mr Mai transferred $5,000 to the bank account of the employee’s wife, with the description “back pay Mr Viet”, and sent by email to the employee a pay slip that included the description, “BACK PAY INSTALLMENTS”. On or about 21 January 2024, Mr Mai transferred a further $5,000 to the employee’s wife’s bank account with the description “back pay huy”, and sent by email to the employee a pay slip that included the description, “BACK PAY INSTALLMENTS”. The employee withdrew $10,000 in cash between 15 January and 1 February 2024 and made three cash payments on 23 January, 31 January and 2 February 2024 of $5,000, $3,000 and $2,000, respectively, either to an employee working at the stall for Mr Mai to collect later, or directly to Mr Mai.

42    On 7 February 2024, after being notified that the FWO was investigating a suspected further contravention of s 325(1) of the FW Act, Mr Mai returned the $10,000 to the employee whom he had required to withdraw that money.

43    By reason of all the contraventions described above, Mr Mai underpaid his employees by failing to pay them a total of $407,546.45 due to them over the period of just over three years and seven months constituting the assessment period.

Failure to keep prescribed records

44    Mr Mai was required by s 535(1) of the FW Act to keep for seven years the following employee records in relation to each of the employees, in accordance with the Fair Work Regulations 2009 (Cth) (FW Regulations):

(a)    each employee’s name (reg 3.32(b));

(b)    any deductions made from each employee’s gross pay (reg 3.33(1)(c));

(c)    the casual loading that each employee was entitled to be paid (reg 3.33(3)(c));

(d)    the loading, penalty rates, and/or separately identifiable entitlement that each employee was entitled to be paid for hours worked on Saturdays, Sundays, public holidays, overtime and after a meal break was not provided as required (reg 3.33(3)(c)-(e)); and

(e)    the number of hours of overtime worked by each employee, or when each employee started and ceased working hours of overtime (reg 3.34).

45    During the period from 29 January 2018 to 8 December 2021 (contravention period), Mr Mai failed to make and keep records of the names of at least 39 of the employees; the deductions he made from the gross pay of three of the employees; the casual loading and rates that the employees were entitled to be paid for hours worked on Saturdays, Sundays, public holidays, for overtime, and where no meal break was provided; and the number of hours of overtime the employees worked each week, or when each employee started and ceased working hours of overtime. In failing to make and keep these records in compliance with regs 3.32(b), 3.33(1)(c), 3.33(3)(c)-(e), and 3.34 of the FW Regulations, Mr Mai contravened s 535(1) of the FW Act.

Failure to provide pay slips

46    Section 536(1) of the FW Act required Mr Mai to give a pay slip to each employee within one working day of paying an amount to that employee in relation to the performance of work. During the assessment period, Mr Mai contravened s 536(1) by failing to provide employees with pay slips within one working day of paying them for the performance of work in each fortnightly pay period. He did not provide them with pay slips at all, except when he provided certain employees with false or misleading pay slips as described at [55]-[56] below.

Making and keeping knowingly false or misleading records

47    Section 535(4) of the FW Act prohibited Mr Mai from making or keeping a record for the purpose of s 535 which he knew was false or misleading.

48    During the contravention period, Mr Mai made and kept a number of Excel spreadsheets containing data relating to different groups of employees and different periods of time. On or around 19 April 2021, Mr Mai’s accountant, at the direction and on behalf of Mr Mai, made 86 pay records, in the form of pay slips relating to 16 employees, based on the information contained in one of the spreadsheets previously created by Mr Mai (pay records). On two further occasions, on or around 28 October and 10 November 2021, Mr Mai caused further records, in the form of pay slips, to be made in relation to employees.

49    These pay records that were made and kept by Mr Mai were required to be made and kept for the purposes of s 535(1) of the FW Act under regs 3.33(1)(a), 3.33(1)(b) and 3.33(2) of the FW Regulations, since they recorded the hourly rate of remuneration and the gross and net amounts purportedly paid to each employee included in the reports, as well as the hours worked by each of them.

50    Each of the pay records was false or misleading as the hours that each employee was recorded as having worked and the amounts purportedly paid to each employee were false or misleading.

51    The deficiencies in the pay records in respect of the hours recorded as having been worked by each employee were that they did not include the hours of work for which each employee was paid in cash; some of the records of hours worked by the employees were incorrect; and there were inconsistencies between the number of hours recorded in the pay records as having been worked by a particular employee in particular periods. The deficiencies in the pay records in respect of the amounts recorded as having been paid to each employee were that they failed to include the payments made in cash; some of the records of amounts paid to the employees were incorrect; and there were inconsistencies between the amounts recorded in the pay records as having been paid to a particular employee in particular periods.

52    Further, some of the pay records recorded an hourly rate of remuneration higher than that which was in fact paid to employees by electronic funds transfer, as well as a number of hours worked that was lower than the number of hours in fact worked by the employees. Some of the pay records recorded hours worked by employees that were not in fact worked, and payments made to employees that were not in fact made.

53    Mr Mai knew that each of the pay records was false or misleading. As the person who made and kept the pay records or caused them to be made and kept, Mr Mai knew that the employees were paid in accordance with the Payment System which included payments in cash at a particular rate for certain hours worked. Mr Mai knew that the pay records did not record the true number of hours worked by the employees as they only recorded the hours for which employees were paid by electronic funds transfer, and did not record the true rate and amounts paid to employees for hours worked for which they were paid in cash. He also knew that, in some instances, the pay records recorded hours that were not in fact worked and payments that were not in fact made.

54    By making and keeping the false or misleading records which he knew were false or misleading, Mr Mai contravened s 535(4) of the FW Act.

Knowingly issuing false or misleading pay slips

55    Mr Mai contravened s 536(3) of the FW Act by providing to three employees pay slips that he knew to be false or misleading.

56    Each of the relevant pay slips was provided to the employee concerned at their request, and related to periods worked by them in 2018 or 2019. They were false or misleading because they did not take into account the amounts paid to the employees in cash, and did not reflect the hours worked by them for which they were paid in cash, nor the rate paid to them for the hours worked for which they were paid in cash. The pay slips therefore did not reflect the true gross or net amounts paid to the employees (contrary to reg 3.46(1)(e) and (f)), the true rate paid to them for ordinary hours worked (contrary to reg 3.46(3)(a)), nor the true number of hours worked by them (contrary to reg 3.46(3)(b)).

Producing false or misleading documents

57    On 16 September 2021, a Fair Work Inspector exercised the power in ss 706(1) and 712 of the FW Act by giving Mr Mai a notice requiring him to produce by 26 October 2021 records or documents including all records and documents evidencing or recording hours worked by the employees, and any monies paid to them. The Fair Work Inspector informed Mr Mai that any production by him of false or misleading records could result in him being liable for a civil remedy under the FW Act.

58    In response to the notice to produce, Mr Mai’s accountant, acting on Mr Mai’s behalf, produced various spreadsheets and pay slips to the Fair Work Inspector. Each of the records produced by Mr Mai (through his accountant) was false or misleading, and Mr Mai knew that each of them was false or misleading. The pay slips produced by Mr Mai purported to be pay slips given to the employees for the purposes of s 536 of the FW Act, when they had not in fact been given to the employees but had, instead, been made and kept for the purpose of misleading the FWO as to the amounts that had been paid to each employee and Mr Mai’s practice of not providing payslips to employees unless requested to do so.

59    By producing the false or misleading records to the Fair Work Inspector, knowing that they were false or misleading, Mr Mai contravened s 718A of the FW Act.

Certain contraventions by Mr Mai were “serious contraventions”

60    Mr Mai accepts that each of the contraventions by him which involved the non-payment or underpayment of rates and loadings to which employees were entitled under the awards was a serious contravention within the meaning of s 557A of the FW Act (as then in force). That is so because each of those contraventions was a knowing contravention on Mr Mai’s part and his conduct was part of a systematic pattern of conduct relating to one or more of the employees. Further, each of the contraventions in relation to the making or keeping of false or misleading records was a serious contravention for the same reasons.

Involvement and accessorial liability of Ms Le in certain contraventions

61    Ms Le was involved in the contraventions by Mr Mai relating to underpayment of employees and the contraventions involving making deductions from wages and requiring employees to spend or pay money for the benefit of the respondents. The parties agree that Ms Le aided, abetted, counselled, or procured, or was knowingly concerned in or a party to those two groups of conventions within the meaning of s 550(2) of the FW Act.

62    Ms Le was an intentional participant in the contraventions involving the underpayment of employees. Ms Le engaged in the following conduct which amounted to participation by her in those contraventions, namely:

(a)    she interviewed employees and engaged them on a casual basis;

(b)    she managed, supervised and directed employees in the performance of their duties;

(c)    she required employees to work on weekdays, Saturdays, Sundays, public holidays and to work overtime;

(d)    she communicated with the employees about their hours of work, rates of pay and payments;

(e)    she managed disputes raised by employees about the hours they worked, the rates they were paid and payments; and

(f)    she participated in the Payment System and gave the employees cash payments from time to time.

63    Ms Le engaged in this conduct knowing the rates of pay that were paid to employees, and knowing that:

(a)    modern awards, which fixed minimum rates, loadings, penalty rates and overtime rates, applied to the employment of each of the employees;

(b)    the employees were engaged as casual employees (including because from time to time she offered employment to employees, on a casual basis);

(c)    the employees worked on particular days (including because she supervised them and rostered them to work on particular days);

(d)    there were weeks in which some of the employees worked more than 38 hours;

(e)    there were shifts in which some of the employees worked more than 11 hours;

(f)    the employees were paid in accordance with the Payment System, which involved the payment of different rates in respect of hours for which payments were made by electronic funds transfer and hours for which payments were made in cash; and

(g)    the rates reflected in the payments made by electronic funds transfer, the rates reflected in the cash payments, and the total amounts paid to the employees were all insufficient to cover the employees’ entitlements to minimum rates, casual loading, penalty rates and overtime rates.

64    Ms Le was also an intentional participant in the contraventions by Mr Mai which involved making deductions from wages and requiring employees to spend or pay money for the benefit of the respondents. Ms Le knowingly participated in those contraventions in that, in her role as one of the managers of the business, she knowingly enforced and maintained the strike board system, including by personally:

(a)    issuing strikes to employees;

(b)    requiring employees to spend their own money, or amounts payable to them in relation to the performance of work, directly or indirectly for Mr Mai’s benefit or for her own benefit; and

(c)    receiving funds into her bank account from an employee for the purchase of drinks for herself and other employees.

Several contraventions by Ms Le were “serious contraventions”

65    Ms Le accepts that she was involved in each of the contraventions of award provisions by Mr Mai and that each of those contraventions was a “serious contravention” within the meaning of s 557A of the FW Act. That is so because:

(a)    for the reasons briefly identified at [60] above, they were serious contraventions by Mr Mai; and

(b)    Ms Le knew that Mr Mai’s contraventions were knowing contraventions and knew that his conduct was part of a systematic pattern of conduct relating to one or more of the employees.

Repayment of amounts owing to employees

66    The Court was informed at the hearing that all of the employees who remain current employees of Mr Mai had been paid the amounts that had been owing to them as a result of contraventions by the respondents. The total amount of the repayments made to employees to that point in time was $89,867.97. Further amounts totalling $317,678.48 remained outstanding to other employees. In order to ensure that the employees are compensated for amounts which they have been underpaid, the parties jointly propose orders that require Mr Mai to make payment to the FWO of the total amount of the underpayments or such other amount as remains outstanding at the time when the orders are made, plus interest on the total amount of the underpayment, and that then require the FWO to pay the employees amounts outstanding to them insofar as the FWO recovers them from the respondents. I am satisfied that those agreed orders reflect an appropriate way to order the payment of compensation to the employees.

Legal principles relevant to assessment of penalties

67    There was no dispute between the parties as to the applicable legal principles and the steps in the process to be undertaken in fixing civil penalties.

68    In Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450; [2022] HCA 13 (Pattinson) at 457 [9], 459 [15], Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ emphasised the centrality of deterrence in fixing pecuniary penalties under the FW Act. They stated at 457 [9]:

Under the civil penalty regime provided by [the FW Act], the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act.

69    Accordingly, the principal object of a pecuniary penalty is to put a price on contravention sufficiently high to deter repetition by the specific contravener and generally to deter others who might be tempted to contravene the FW Act: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68; [2017] FCAFC 113 (ABCC v CFMEU) at 88 [98]. Penalties should not be greater than is necessary to achieve the object of deterrence, and should be fixed at a level that strikes a reasonable balance between deterrence and oppressive severity: Pattinson at 467-8 [40]-[41].

70    Factors that may be relevant to the assessment of “a penalty of appropriate deterrent value” in the context of contraventions of the FW Act include (a) the nature and extent of the contravening conduct; (b) the amount of loss or damage caused; (c) the circumstances in which the conduct took place; (d) the size of the contravening company or business enterprise; (e) the deliberateness of the contravention and the period over which it extended; and (f) whether the contravening person has shown a disposition to co-operate with the authorities responsible for the enforcement of the FW Act in relation to the contravention: Basi v Namitha Nakul Pty Ltd (No 2) [2023] FCA 671 at [30]. A list of potentially relevant factors such as these is not, however, to be regarded as a “rigid catalogue of matters for attention” or “a legal checklist”. The Court must determine what is an “appropriate” penalty in the circumstances of the particular case: Pattinson at 460-1 [19].

71    A convenient summary of the approach of the Court in determining penalties appears in the judgment of Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd (trading as New Shanghai Charlestown) (2017) 275 IR 148; [2017] FCA 1301 (NSH North) at 163-4 [36]. That process, as summarised by the FWO and agreed by the respondents in this case, involves the following steps, namely:

(a)    identifying the separate contraventions;

(b)    considering whether any of the identified contraventions constitute a single course of conduct within the meaning of s 557(1) of the FW Act;

(c)    considering whether there should be adjustment to ensure that, to the extent two or more of the contraventions overlap, there is no double penalty imposed and that the penalty imposed is an appropriate response to the conduct of the relevant respondent;

(d)    considering the appropriate penalty for each contravention or “course of conduct” that is to be treated as a single contravention by reason of s 557(1) of the FW Act; and

(e)    assessing whether the overall total of the penalties is an appropriate response to the conduct constituting the contraventions.

72    The maximum penalties for contraventions of the FW Act are defined by reference to “penalty units”: see Crimes Act 1914 (Cth), s 4AA. At the start of the period in which the contraventions occurred, the value of a penalty unit was $210. On 1 July 2020, that value increased to $222. The parties accept that it is appropriate to treat the higher value as defining the relevant maximum penalties, but to bear in mind, when fixing the penalties, that a lower maximum penalty applied for part of the period in which the contraventions occurred: see, eg, Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 at [394]-[401].

73    The FWO made submissions which included what were described as “recommended” penalties. These were presented in tabular form, with the FWO identifying what was submitted to be the appropriate penalty for each group of contraventions which the parties agree s 557(1) of the FW Act requires be “taken to be” a single contravention and, in the case of contraventions to which s 557(1) does not apply, for each individual contravention. The total of these individual “recommended” penalties was, in the case of the contraventions committed by Mr Mai, $974,500, and in the case of the contraventions committed by Ms Le, $470,000.

74    From these figures, the FWO accepts, there should be a deduction of 25% to reflect co-operation on the part of the respondents since the commencement of the proceedings, resulting in totals of $730,875 for Mr Mai and $352,500 for Ms Le. The FWO accepts that a further reduction should then be applied to reflect the principle of totality. The FWO ultimately seeks the imposition of penalties totalling $500,000 on Mr Mai and $300,000 on Ms Le.

75    The respondents submit that the penalties sought by the FWO are too high. They submit that, in the circumstances of their case, the Court should not impose any single penalty at a level that is greater than 50% of the maximum penalty available for that contravention. In support of this submission, the respondents refer to Fair Work Ombudsman v Sushi Bay Pty Ltd (in liq) (No 3) [2024] FCA 869 (Sushi Bay). They point out that the penalties imposed in that case ranged between 10% and 75% of the maximum available penalties for each contravention, and point to a number of features of the present case that indicate that lower penalties are warranted. I accept that Sushi Bay involved contraventions that, while bearing some similarity to the facts of the present case, were considerably more serious. However, it is not as simple or mathematical as a comparison of the penalties imposed as a percentage of the available maximum penalties. The total penalties imposed in Sushi Bay were very substantial in monetary terms: $3.2 million, $5.8 million $2.4 million and $2.3 million on the related corporate respondents, and $1.6 million on the individual respondent. Some individual penalties sought by the FWO for particular contraventions in this case are high as a percentage of the available maximum for those particular contraventions. However, the total of the penalties sought by the FWO and the percentage of the total available maximum penalties that they represent are considerably lower than the penalties imposed in Sushi Bay. A direct comparison with the penalties imposed in that case is not especially informative.

76    While I generally accept the respondents’ submission that penalties which are lower, in total, than those sought by the FWO are adequate to serve the requirements of deterrence in this case, I do not accept the submission that no individual penalty should exceed 50% of the available maximum. Certain conduct of the respondents in this case is particularly serious, indicates a real need for personal as well as general deterrence, and warrants a penalty that does exceed 50% of the available maximum penalty available. Further, in light of the way I consider it appropriate to group the contraventions (as to which see [137]-[139] below), the penalty nominally attributed to a single contravention will reflect the level of penalty that I consider appropriate to respond to all the similar contraventions making up the relevant “group”, and in some cases this will exceed 50% of the maximum penalty applicable to a single contravention. However, the total of all the penalties, taking into account the overlap in the conduct giving rise to the various contraventions, will be much less than 50% of the total of the maximum available penalties (as both parties accept is appropriate in this case).

Identification of separate contraventions

77    In this case, there are a great many individual contraventions of civil penalty provisions. It would be tedious to set out all of the individual contraventions in these reasons. To do so would serve little purpose, given that the parties are in agreement as to what those contraventions are, and they are identified in detail in the statement of agreed facts and admissions and the tables annexed thereto. The general nature of each of the contraventions, the number of each kind of contravention, and the total of the monetary amounts involved in those contraventions arising from the non-payment or underpayment of employees are described above.

Contraventions that constitute a single “course of conduct” under s 557(1) of the FW Act

78    The parties are also largely in agreement in relation to the second step of considering whether particular identified contraventions of similar kinds constitute a single “course of conduct” for the purpose of s 557(1) of the FW Act. The effect of s 557(1) is that contraventions “of a civil penalty provision” which were committed by the same person and which arose out of a single course of conduct are “taken to constitute a single contravention”. This means that the maximum penalty applicable in respect of all the contraventions of the same civil penalty provision that constitute the one course of conduct is the maximum penalty that would be applicable for a single contravention.

79    But for the effect of s 557(1) of the FW Act, each individual contravention of a provision of an award in respect of each individual employee would be treated as constituting a separate contravention of a civil penalty provision.

80    The FWO’s submissions proceeded on the basis that the Restaurant Award 2020 was a “variation” of the Restaurant Award 2010, and that contraventions of the two awards that arose from breaching the same obligations should not be treated as contraventions of separate civil penalty provisions. That is, the FWO’s submissions accepted that, where the contraventions arose out of a single course of conduct, contraventions of substantially identical obligations under the Restaurant Award 2010 and the Restaurant Award 2020 should all be “taken to constitute a single contravention” of a single civil penalty provision for the purposes of s 557(1) of the FW Act. The respondents agreed with this approach, which was, if anything, favourable to them. In light of the parties’ agreement on this issue, I consider it appropriate to proceed on this basis, without deciding whether it is strictly correct. In any case, if the contraventions of identical obligations under the Restaurant Award 2010 and the Restaurant Award 2020 were not properly taken to be a single contravention by operation of s 557(1) of the FW Act, I would group them together and treat them as wholly overlapping at the third stage of consideration set out at [71(c)] above.

81    In this case, even after the operation of s 557(1) of the FW Act has been taken into account, there remain many contraventions, because the conduct of Mr Mai’s business involved his contravening a large number of distinct provisions of the three awards, the FW Act and the FW Regulations. Moreover, because many of those contraventions were committed knowingly and systematically, they were “serious contraventions” attracting a maximum penalty ten times that which would otherwise be applicable. The result is that the total of the available maximum penalties is very great.

82    It has been said that it will usually be necessary to identify the total of the maximum penalties available, because what is required is that there be “some reasonable relationship between the theoretical maximum and the final penalty imposed”: Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25; [2016] FCAFC 181 at 61 [156]. However, in Pattinson at 457 [10], it was observed that “[t]hat relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of … the deterrence of future contraventions of a like kind by the contravenor and by others”. Just as it may be appropriate to impose the maximum available penalty in some cases even where the conduct involved was not the most serious example of misconduct, it may be appropriate to impose penalties totalling only a relatively small proportion of the maximum available, if the total of the maximum available penalties is very large and a penalty that is small relative to the theoretical maximum will, in all the circumstances of the case, adequately serve the purposes of general and personal deterrence of future contraventions of a like kind.

83    The submissions of the FWO identified maximum penalties as applicable to particular groups of contraventions by Mr Mai which the FWO accepts ought to be treated as arising from the same “course of conduct”. Based on the FWO’s submission, after applying s 557(1), the theoretical total of the available maximum penalties applicable to the contraventions committed by Mr Mai, would be some $4,022,520. On the same basis, the total of the available maximum penalties applicable in relation to the contraventions in which Ms Le was involved would be $1,917,960.

84    The respondents generally agree with and adopt the FWO’s submissions as to which contraventions should be treated as a single contravention for the purposes of s 557(1). Issues relating to the provisions of the awards that concern the payment of overtime rates and the making and keeping of false records are addressed at [86]-[133] below.

85    As has already been noted, the FWO ultimately submits that penalties of $500,000 for Mr Mai and $300,000 for Ms Le would be appropriate (after taking into account reductions for co-operation and totality), so on any view, the penalty to be imposed in this case will only represent a relatively small proportion of the total available maximum, even though there are several features of some of the contraventions in this case that characterise them as serious.

Identification of number of contraventions in relation to failure to pay overtime rates

86    As explained at [26] and [28] above, cl 33.2 of the Restaurant Award 2010, cl 23.4 of the Restaurant Award 2020, and cl 26.1(b) of the Fast Food Award prescribe overtime rates that vary depending on the day of the week and whether the hours are the first two hours of overtime worked on a particular day. The declarations that were initially jointly proposed by the parties identified the failure of Mr Mai to pay employees for overtime hours at each applicable rate as a separate contravention of s 45 of the FW Act.

87    On reflection, it appeared to me that that may not be correct because, in each of the relevant awards, the several obligations to pay overtime are imposed by a single term of the award, albeit that that term prescribes different rates depending on the day of the week on which the overtime hours are worked and (in some cases) whether they are the first two hours of overtime worked on a particular day. A question therefore arose as to whether the failure to pay employees the overtime rate applicable on, for example, a Saturday should be regarded as a different contravention of a civil penalty provision from the failure to pay employees the overtime rate applicable on, for example, a Sunday.

88    This issue was raised with the parties by way of correspondence after the completion of the hearing. The parties sought to provide further written submissions. The FWO submits that each obligation to pay a different overtime rate should be regarded as, in substance, a distinct term of the award, and that the position initially agreed between the parties was correct. The respondents submit that the correct approach was to treat the overtime contraventions as constituting a single contravention of the overtime provisions of the Fast Food Award and a single contravention of the overtime provisions of the restaurant awards. In order to resolve the difference that has now emerged between the parties on this issue, it is necessary to give consideration to the overtime provisions in each of the relevant awards, the relevant provisions of the FW Act, and the authorities that identify the correct approach to identifying what constitutes a “contravention” of a civil penalty provision.

89    Section 539(1) of the FW Act provides that certain identified provisions, set out in s 539(2), are civil remedy provisions. Section 539(2) provides that, for each civil remedy provision, certain persons may apply to certain courts for orders in relation to contraventions of the provision. Section 545(1) provides:

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.

90    In this case, many of the contraventions are identified as contraventions of s 45 of the FW Act, which provides that “[a] person must not contravene a term of a modern award”. The contraventions by Mr Mai, and the contraventions in which Ms Le was involved, include contraventions in respect of multiple employees, of multiple provisions of the Restaurant Award 2010, the Restaurant Award 2020, and the Fast Food Award.

91    In Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153; [2014] FCAFC 62 (Rocky Holdings) at 158-64 [12]-[27], it was explained that the substance of a contravention of s 45 of the FW Act is the contravention of a term of a modern award and so, for the purpose of the FW Act, each contravention of a different “term of a modern award” is to be regarded as a distinct contravention of a civil penalty provision, even though the civil penalty provision that is contravened in each case may be the same provision of the FW Act.

92    The significance of this conclusion is in connection with the operation of s 557(1) of the FW Act, which provides:

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.

93    Section 45 of the FW Act is one of the provisions referred to in s 557(2).

94    As can be seen, s 557(1) operates only where there are two or more contraventions of a civil penalty provision – that is, two or more contraventions of the same “civil penalty provision”. It requires all contraventions of the same provision, by the same person, arising out of the same course of conduct, to be treated as a single contravention. It therefore becomes important to ascertain whether two alleged contraventions are contraventions of the same provision. If s 557(1) were read literally, all contraventions of any of the terms of a modern award would be contraventions of the same civil penalty provision, because every contravention of a term of a modern award amounts to a contravention of s 45 of the FW Act. However, that literal interpretation of s 557 was rejected by the Full Court in Rocky Holdings. Instead, the Court held that “this must mean the substance, not the mere existence, of the identified civil penalty provisions” and that “the substance” of the identified provision relevantly focussed attention on contravention of a particular “term” of a modern award: Rocky Holdings at 159-60 [13]-[14], 160-3 [17]-[23].

95    The Full Court in Rocky Holdings at 159 [13] accepted that the effect of s 557(1) of the FW Act, in relation to contraventions of s 45, was that “2 or more contraventions of [a term of an award] are … taken to constitute a single contravention”. That much is clear and must be treated as settled. However, Rocky Holdings itself does not provide any guidance in determining what amounts to a single “term of an award”.

96    The language of a “term of an award” is found in s 45 of the FW Act. In context, it must refer to a provision of an award that imposes an obligation that is capable of being contravened. In Rocky Holdings, the Full Court accepted that s 557 of the FW Act was not intended to operate differently from its predecessors, s 178 of the Industrial Relations Act 1988 (Cth) and s 719 of the Workplace Relations Act 1996 (Cth). The Full Court referred to Gibbs v City of Altona (1992) 37 FCR 216 (Gibbs) and Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (No 2) (2012) 64 AILR 101-608; [2012] FCA 408 (Ramsey (No 2)) as cases illustrating the operation of those predecessor provisions.

97    The FWO relies on the following explanation, from the judgment of Gray J in Gibbs at 223, in support of its submission that Mr Mai’s failure to pay overtime at each of the different rates provided for in the applicable awards amounted to contraventions of multiple “terms” of the awards:

The object of s 178(2) [of the Industrial Relations Act] appears to be that a party bound by an award and pursuing a course of conduct involving repeated acts or omissions, which would ordinarily be regarded as giving rise to a series of separate breaches, should not be punished separately for each of those breaches. If such a party has pursued a course of conduct which gives rise to breaches of several different obligations, there is no reason why it should be treated as immune in respect of its breach of one obligation, merely because it has acted in breach of another. This reasoning leads to the conclusion that each separate obligation found in an award is to be regarded as a “term”, for the purposes of s 178 of the Act. The ascertainment of what is a term should depend not on matters of form, such as how the award maker has chosen to designate by numbers or letters the various provisions of an award, but on matters of substance, namely the different obligations which can be spelt out. For these reasons, I incline to the view that each separate obligation imposed by an award is to be regarded as a “term”, for the purposes of s 178 of the Act. If the different terms impose cumulative obligations or obligations that substantially overlap, it is possible to take into account the substance of the matter by imposing no penalty, or a nominal penalty, in respect of breaches of some terms, but a substantial penalty in respect of others.

(Emphasis added.)

98    I accept that this general approach is correct in principle and, in particular, that the identification of a relevant “term” of an award should not depend purely on the form chosen by the drafter of the award provisions. However, this does not itself provide a clear answer to the question of what should be regarded as, “in substance”, a single “obligation” or “term”. In Gibbs, Gray J (at 223) treated requirements to hold discussions with a union and to provide particular kinds of information to the union as distinct obligations. Even though they were related (and one was “in a sense … consequent upon” the other), it is evident that the two requirements imposed obligations of a substantively different character.

99    The concept of a single “obligation” imposed by an award may seem simple in theory, but will not always be straightforward in practice. For example, a term of an award may impose on an employer what appears to be a single legal obligation, but compliance with that single obligation may require the employer to pay different amounts or rates depending on circumstances defined by the award.

100    The question in this case is whether a requirement, imposed by an award, to pay for overtime hours worked at differential rates depending on when the overtime hours are worked, should be treated as a single obligation or term, or as multiple obligations or terms.

101    I will consider this issue first in the context of considering the provisions of the Fast Food Award, before considering the provisions of the Restaurant Award 2010 and the Restaurant Award 2020. Clause 13.2 of the Fast Food Award states that, when a casual employee works overtime, they must be paid the overtime rates in cll 26.1(b) and 26.4.

102    Clause 26 of the Fast Food Award is entitled “Overtime”. Clause 26.1 states:

(a) The rate of overtime for full time and part-time employees shall be 150% of the ordinary hourly rate for the first two hours on any one day and at the rate of 200% of the ordinary hourly rate after two hours, except on a Sunday which shall be paid for at the rate of 200% of the ordinary hourly rate and on a Public Holiday which shall be paid for at the rate of 250% of the ordinary hourly rate.

(b) The rate of overtime for casual employees shall be 175% of the ordinary hourly rate for the first two hours on any one day and 225% of the ordinary hourly rate after two hours, except on a Sunday which shall be 225% of the ordinary hourly rate and 275% on a Public Holiday.

NOTE: The overtime rates for casual employees have been calculated by adding the casual loading prescribed by clause 13.1 to the overtime rates for full-time and part-time employees prescribed by clause 26.1(a).

103    Clause 26.3 states:

A casual employee shall be paid overtime for all work in excess of:

(a) 38 hours per week or, where the casual employee works in accordance with a roster, in excess of 38 hours per week averaged over the course of the roster cycle; or

(b) eleven hours on any one day.

104    Having regard to the structure of cl 26.3, and the existence of cl 26.2 which states when a full-time or part-time employee “shall be paid overtime”, the better view would seem to be that cl 26.3, rather than cl 13.2, is the provision that imposes the obligation to pay overtime.

105    The respondents contend that this should be characterised as a single legal obligation to pay overtime. On this view, cl 26.1(b) of the Fast Food Award serves to identify the rates that are required to be paid in order for the employer to comply with the single legal obligation imposed by cl 26.3. However, on the view for which the FWO contends, cll 13.2 and 26.1(b) are to be viewed as operating together to create four distinct legal obligations that apply in respect of casual employees – an obligation to pay 175% of the ordinary hourly rate for the first two hours of overtime worked on days other than Sundays or public holidays; an obligation to pay 225% of the ordinary hourly rate for the remaining hours of overtime worked on those days; an obligation to pay 225% of the ordinary hourly rate for hours of overtime worked on Sundays; and an obligation to pay 275% of the ordinary hourly rate for hours of overtime worked on public holidays. (The matter is potentially more complicated than that because, as the note to cl 26.1 indicates, the rates set out in cl 26.1(b) also incorporate the casual loading, the payment of which is a separate and distinct obligation, imposed by cl 13.1 of the Fast Food Award. This additional complication can be put to one side, however.)

106    The general principle that terms of an award or obligations imposed by an award should be identified as a matter of substance and not merely form, while sound in principle, is not easy to apply in practice. For example, should cl 26.1(b) of the Fast Food Award be regarded “in substance” as imposing a single obligation to pay 225% of the ordinary hourly rate for hours after the first two hours of overtime worked “on any one day” or “on a Sunday”, even though, as a matter of “form”, it treats them separately? I doubt there is one “correct” answer to that question.

107    In any case, it is too simplistic to suggest that the difference between these two ways of characterising the terms or obligations imposed by the award is merely a difference between form and substance, and that dividing obligations into the smallest possible divisions better reflects the “substance” of the obligations. The resolution of this issue does not require a choice between “form” and “substance” but, rather, concerns the level of generality at which the substance of the relevant term or obligation should be described or defined. The terms of ss 45, 539 and 557 of the FW Act provide no direct guidance on that question.

108    Taken to its logical conclusion, the approach for which the FWO contends would lead to surprising and arbitrary conclusions. For example, it would seem to mean that, for a business that employed several employees under an award that prescribed multiple classification levels, the failure to pay the employees classified at one level at the rate applicable to that level would constitute a single contravention; and the failure to pay another group of employees classified at a different level at the rate applicable to that level would be a separate and distinct contravention. Yet that is not the approach that has been taken by the FWO in the present case. Thus, for example, the FWO seeks a single declaration that Mr Mai contravened s 45 of the FW Act by failing to pay 26 employees the minimum rate of pay prescribed by cl 20.1 of the Restaurant Award 2010 and cl 18.1 of the Restaurant Award 2020 – but the particular “minimum rate” at which those 26 employees were entitled to be paid depended on their individual classification levels. If the same approach that is urged by the FWO in relation to overtime were applied universally to obligations imposed by awards, an obligation to pay employees classified as “Food & Beverage Attendant Grade 1” at the minimum rate prescribed for that classification would have to be regarded as a separate and distinct obligation, in substance, from the obligation to pay employees classified as “Food & Beverage Attendant Grade 2” at the minimum rate prescribed for that classification. That would be a surprising result and the effect would be to vastly increase the total maximum penalties in many cases.

109    The approach to the overtime provisions for which the FWO contends appears to me to be inconsistent with the approach applied by Buchanan J in Ramsey, which was also referred to with approval by the Full Court in Rocky Holdings. In Ramsey (No 2), Buchanan J explained the nature of the contraventions (at [2], [4]):

Eleven employees were involved. Ten of those employees had not been provided with the required notice of termination of employment. Ten employees had not been paid severance pay as required. Eight employees had not been paid accrued annual leave on termination of employment as required. The applicant has contended therefore that there were 28 identifiable breaches of obligations arising directly or indirectly under the [Workplace Relations Act 1996 (Cth) (WR Act)] and that a penalty should be fixed for each one and imposed on each of the respondents. However, s 719(2) of the WR Act provides that where two or more breaches of an “applicable provision” under the WR Act, which includes a term of an award, arise out of the same course of conduct, they are to be treated as a single breach. On one view, the failure to make any of the required payments arose from a single course of conduct. They all arose from a determination by the respondents that no payment would be made upon the termination of employment of any of the employees, or the employees as a group. However, this approach gives insufficient attention to the separate legal character of the three forms of obligation earlier identified. I am satisfied that each of those forms of obligation requires separate recognition. …

It follows that there are three matters which require a penalty to be assessed: failure to provide the requisite notice of termination of employment to ten employees; failure to pay severance pay to ten employees; and failure to pay accrued annual leave on termination of employment to eight employees. The maximum penalty available in each case is $33,000 in the case of a corporation and $6,600 in the case of an individual.

(Emphasis added.)

110    The effect of this reasoning was that 28 contraventions were treated as involving contraventions of three distinct “terms” of an award. Justice Buchanan in this passage referred to “the separate legal character” of the “three forms of obligation” – namely the obligation to give notice of termination, the obligation to pay severance pay, and the obligation to pay accrued annual leave. Those were, as Buchanan J said, three obligations each bearing a distinct “legal character”. The distinct obligations referred to by Gray J in Gibbs could be described in similar terms, even though they were related obligations imposed by a single numbered provision of an award.

111    In order to understand the nature of the three distinct terms or obligations to which Buchanan J referred, it is necessary to consider his Honour’s earlier decision in Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (2011) 198 FCR 174; [2011] FCA 1176, in which the application of those terms to the employees in question was explained. Regarding the obligation to give notice or payment in lieu of notice, Buchanan J said (at 206 [134]) that “[a]ll but three of the complainant employees were entitled to 10 days notice under the Award and two … were entitled to 15 days notice having regard to their age (over 45 years)”. It is evident that the relevant award prescribed different notice periods for different employees, depending on their age at the date of termination. Although the content of the obligation was different as regards the two classes of employees, it was treated as one obligation or term with a single “legal character”.

112    Likewise, in relation to the obligation concerning severance pay, Buchanan J said (at 206 [135]):

Most (nine) of the complainant employees were in employment with Ramsey Food Processing, after 17 October 2006, for more than two but less than three years. Under cl 10.3.1 of the Award, those employees were, if entitled to severance pay, entitled to be paid a further six weeks pay on termination. Two employees … were each employed for more than one but less than two years. They were, if entitled to severance pay, entitled to be paid a further four weeks pay.

Again, the relevant term or obligation was treated as, in substance, a single legal obligation to pay employees severance pay, even though the content of that obligation and, in particular, the way the amount payable was to be calculated, varied according to the circumstances.

113    Applying a similar approach to the overtime provisions of the Fast Food Award, in my view, cl 26.1(b) should be regarded as a single “term” of the Fast Food Award, such that its contravention is “in substance” a single contravention of a civil provision in the sense explained in Rocky Holdings at 158-64 [12]-[27]. I accept that the Fast Food Award should be characterised as imposing a single substantive legal obligation to pay overtime rates for overtime hours worked by casual employees, albeit that the content of the obligation in respect of particular hours of overtime depends on when those hours are worked.

114    The FWO relied on two recent decisions of Katzmann J, Sushi Bay and Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No 4) [2024] FCA 341 (DTF World Square), which were said to “confirm the correct approach is to treat each separate term of the relevant overtime clauses as a distinct contravention of an award provision”. In both cases, Katzmann J made declarations that are consistent with the approach for which the FWO contends in this case. However, in neither case was this issue specifically identified and there was no consideration of the alternative approaches. In those circumstances, I do not regard Sushi Bay or DTF World Square as authority contrary to the approach that I consider appropriate.

115    It follows that the contraventions arising from the failure of Mr Mai to pay overtime rates to the employees would all constitute a contravention of a single award provision and, under s 557 of the FW Act, are to be treated as a single contravention. That single contravention is a “serious contravention” for the purposes of s 557A because Mr Mai knowingly contravened the provision, in that he knew that the award required the payment of overtime rates, that employees were required to work overtime, and that he did not pay overtime rates. Consequently, the maximum penalty for that single contravention is $133,200.

116    Each of the other “overtime” provisions of the various awards takes a different form. Clause 13.5 of the Restaurant Award 2010 states that “[a]ll time worked in excess of the hours prescribed in clause 13.2 will be overtime and paid for at the rates prescribed in clause 33.2—Overtime rates”. Clause 33.2 of the Restaurant Award 2010 then states:

33.2 Overtime rates

The overtime rate payable to an employee depends on the time at which the overtime is worked.

(a) Monday to Friday: 150% of the employee’s ordinary base rate of pay for the first two hours of overtime then 200% of the employee’s ordinary base rate of pay for the rest of the overtime.

(b) Between midnight Friday and midnight Saturday: 175% of the employee’s ordinary base rate of pay for the first two hours of overtime then 200% of the employee’s ordinary base rate of pay for the rest of the overtime.

(c) Between midnight Saturday and midnight Sunday: 200% of the employee’s ordinary base rate of pay for all time worked.

(d) On a rostered day off: 200% of the employee’s ordinary base rate of pay for all time worked. The employee must be paid for at least four hours even if the employee works for less than four hours.

117    As with cl 26.1(b) of the Fast Food Award, cl 33.2 of the Restaurant Award 2010 is a single provision which is concerned with a single kind of legal obligation – the payment of prescribed rates for hours of overtime worked – albeit that the obligation imposed is to pay overtime at a rate that varies according to the circumstances. The contraventions arising from Mr Mai failing to pay overtime rates to employees working at the restaurant when the Restaurant Award 2010 applied therefore all constitute contravention of a single award provision.

118    Clause 23.1 of the Restaurant Award 2020 relevantly provides:

23.1 Requirement to pay overtime rates

…

(c)    An employer must pay a casual employee at overtime rates in the circumstances specified in clause 11.5 (Casual employment).

119    Clause 23.4 then states:

23.4 Overtime rate

The overtime rate mentioned in clauses 23.1, and 23.2(c) is the relevant percentage specified in column 2 of Table 7—Overtime rates (depending on when the overtime was worked as specified in column 1) of the employee’s minimum hourly rate.

Table 7—Overtime rates

120    Whether it is cl 23.1 or cl 23.4 of the Restaurant Award 2020 that is to be regarded as the provision which creates the relevant obligation, the contraventions arising from Mr Mai’s failure to pay overtime rates to employees working at the restaurant when that award applied all constitute a contravention of a single award provision. Again, in my view, the relevant legal obligation that has been contravened should be characterised at the level of an obligation to pay overtime rates in respect of hours of overtime worked, even though the rate that Mr Mai was required to pay differed according to the day on which the hours were worked and the number of hours of overtime worked.

121    As noted at [80] above, the parties agree that like contraventions of the Restaurant Award 2010 and the Restaurant Award 2020 should be treated as a single contravention. It follows that all contraventions of the overtime provisions of the restaurant awards should be treated as a single contravention for the purposes of identifying the maximum penalty in accordance with s 557 of the FW Act. Again, that single contravention is a “serious contravention” under s 557A for the same reasons as in relation to the Fast Food Award, so the maximum penalty for that single contravention is, again, $133,200.

122    For these reasons, I will make a single declaration that Mr Mai contravened s 45 of the FW Act by failing to pay four of the employees at the various rates for hours of overtime worked prescribed by cl 33.2 of the Restaurant Award 2010 and cl 23.4 of the Restaurant Award 2020, and another single declaration that he contravened s 45 of the FW Act by failing to pay four of the employees the various applicable rates for overtime worked prescribed by cl 26.1(b) of the Fast Food Award.

123    The FWO submits that the making of separate declarations in respect of each of the separate contraventions of the overtime provisions of the awards is “appropriate to reflect the overall conduct of the Respondents, including for educative and deterrence purposes, as well as clearly to mark the conduct in the event of any future non-compliance”. These purposes can still be served by making a single declaration in respect of the contravention of the overtime provisions of the Fast Food Award and a single declaration in respect of the restaurant awards, while framing the two declarations in terms that make clear the nature of the contravening conduct.

124    The declarations relating to Ms Le’s involvement in those contraventions by Mr Mai will also reflect these conclusions – that is, she was involved in a single contravention of the overtime provisions of the Fast Food Award by Mr Mai and another single contravention of the overtime provisions of the restaurant awards. The agreed facts in relation to Ms Le establish that she knew that Mr Mai’s contraventions of the overtime provisions were knowing contraventions and also knew that his conduct was part of a systematic pattern of conduct relating to one or more of the employees. It follows that the overtime-related contraventions by Ms Le were also serious contraventions pursuant to s 557A(5A) of the FW Act, and the maximum penalty applicable to each of her two contraventions was also $133,200.

125    The FWO accepts that, even if its submission about the number of separate award terms relating to overtime were accepted, it would nevertheless be appropriate, when fixing penalties, to take into account the fact that all the overtime contraventions are of a similar kind and arose from a single course of conduct. Although the theoretically available maximum penalties would be higher had I accepted the FWO’s submission regarding the number of separate terms, the substance of the contravening conduct is the same and the total penalties which I would impose would not be different.

Identification of number of contraventions arising from making and keeping knowingly false records

126    In relation to the contraventions that relate to making and keeping knowingly false records, the respondents submit that s 557 of the FW Act applies to those contraventions, such that they are to be treated as a single contravention for the purpose of determining the maximum applicable penalty. This submission is made specifically in relation to three records, consisting of three versions of the same spreadsheet.

127    In response to this submission, the FWO concedes that the contraventions arising from the making and keeping of those three records are “properly captured by the course of conduct of [Mr Mai] regularly making and keeping false and misleading records throughout the Contravention Period, as part of his usual business practices”. The FWO further accepts that all of the “ten different false and misleading records” form “part of this course of conduct”.

128    The FWO’s submission is that s 557(1) of the FW Act applies “such that a single contravention arises from the failure to keep each separate category of record”. The FWO acknowledges the more general “course of conduct principle” as relevant, but submits that it is “no more than an analytical tool that can assist in the determination of an appropriate penalty and does not operate to limit the penalty to the statutory maximum for a single contravention in respect of each course of conduct”: Pattinson at 469˗70 [45]. The FWO submits:

… The records encompass multiple different types of record, different time periods and different numbers of employees. As admitted in paragraph 148 of the [statement of agreed facts and admissions], the records are false in numerous respects, including that they did not include the Cash Hours, incorrectly recorded hours worked, and recorded hours not worked and payments not made. Given the scope of contravening conduct involved in the ten contraventions which are now acknowledged to form part of the course of conduct, the FWO submits that a penalty fixed by reference to the maximum for a single contravention would be an inadequate response and would not achieve the deterrence objectives.

The FWO submits that a total penalty of $150,000 is appropriate for this course of conduct, given the number of contraventions, the extent of the falsity and the length of time over which the records were made and kept. …

129    I accept as accurate the FWO’s description of the nature of the records and the respects in which they are false. However, I do not accept the FWO’s submission regarding the application of s 557(1) of the FW Act in respect of the contraventions involving the making and keeping of false or misleading records.

130    All of the admitted contraventions relating to record keeping are contraventions of s 535(4) of the FW Act. As I understand it, the FWO submits that the effect of s 557(1) is that a separate maximum penalty is available in respect of each different “category” of record. However, s 535(4) does not distinguish between records in different categories; it simply provides that “an employer must not make or keep a record for the purposes of [s 535] that the employer knows is false or misleading”. An employer who knowingly makes or keeps a record that is false or misleading contravenes s 535(4). Section 535(4) is one of the civil penalty provisions referred to in s 557(2). The effect of 557(1) is that multiple contraventions of that civil penalty provision are taken to constitute a single contravention, if the circumstances specified in s 557(1) are met.

131    All of the records the subject of these contraventions were created as part of an ongoing practice by Mr Mai of creating false or misleading records that deliberately concealed the cash payments made to employees in the course of his business and otherwise incorrectly recorded the hours worked and payments made and due to employees in significant respects. Once it is accepted that the creation of all the records occurred as part of a single “course of conduct” on the part of Mr Mai (as the FWO correctly concedes), it follows that s 557(1) of the FW Act requires that all contraventions of the same civil penalty provision that arose out of that course of conduct be taken to constitute a single contravention.

132    For these reasons, s 557(1) requires that I treat all of the contraventions of s 535(4) of the FW Act as a single contravention for the purposes of imposing penalties. It is a serious contravention within the meaning of s 557A(1) of the FW Act. I accept that the contravention demands the imposition of a substantial penalty, but I do not accept the FWO’s submission that a penalty fixed by reference to the maximum penalty of $133,200 would not be an “adequate response” to the conduct. The objects of imposing civil penalties, including the objects of deterrence, will be adequately served by imposing a single penalty amounting to a substantial proportion of that maximum penalty.

133    Even if s 557(1) did not require that all the contraventions of s 535(4) of the FW Act be treated as a single contravention for the purpose of establishing the total available maximum penalty, I would have regarded it as appropriate to group the contraventions relating to the making and keeping of false or misleading records having regard to the general “course of conduct” principle, and I would have imposed the same total penalty in respect of these contraventions.

Adjustment to ensure “overlapping” contraventions do not involve double punishment and penalty is an appropriate response to contravening conduct

134    The nature of the system that Mr Mai established and operated meant that essentially the same conduct on his part in creating that system has resulted in the contravention by him of multiple award provisions, including various provisions which imposed similar (though not necessarily identical) obligations.

135    For example, Mr Mai systematically failed to pay employees the minimum rates he was required to pay them, whether the employees were junior employees or adults, and whether they worked at the restaurant or at the stall. That was essentially a consequence of his decisions to make payments for some hours of work by electronic funds transfer at various rates chosen by him in respect of different employees, some of which were below the minimum rates fixed by the relevant awards, and of his decisions to make payment for some hours of work at a flat rate of $15 per hour, which was well below any of the applicable minimum rates. The implementation of this system resulted in each of the relevant employees being paid total amounts below the minimum entitlements. And, because it was the result of deliberate and systemic conduct by Mr Mai, each of those contraventions is a “serious contravention”, attracting an available maximum penalty of $133,200.

136    The contraventions in this case include contraventions of similar provisions appearing in the awards that were applicable to employees working at the restaurant and in the award applicable to employees working at the stall. The fact that the business operated by Mr Mai had two components, such that employees were covered by both the restaurant awards and the Fast Food Award, is to some extent fortuitous, particularly given that the system established by Mr Mai does not appear to have differentiated between them. The FWO’s submissions correctly recognised that there was “a degree of overlap of contraventions” because Mr Mai adopted the same general system in relation to all employees, whether they were working at the restaurant or the stall. The FWO nevertheless submits:

Separate penalties for the failure to pay similar entitlements under each of the Fast Food [Award] and [the restaurant awards] are appropriate in circumstances where the different instruments applied to the Restaurant and Stall and the Respondents and the employees worked under different environments.

137    In fixing penalties, I consider it appropriate to group together contraventions where they arose out of the adoption of the same basic system and where the norms that were contravened are similar in nature. I will then identify a provisional penalty for those contraventions, as grouped, and assign that penalty to one of the contraventions in the group, and will impose no additional penalty specifically referable to the other contraventions in that group. In the circumstances of this case, that approach will make it easier to avoid the risk of double-counting the wrongdoing of the same general kind arising from the same course of conduct, while also still appropriately recognising that the system put in place by Mr Mai resulted in his contravening several different kinds of obligations. This should tend to make the provisional penalties identified more meaningful, as better reflecting the level of penalty appropriate to each group or kind of contravention. It may also mean that the eventual reduction having regard to the principle of totality may be smaller than it otherwise might have been. This approach – imposing a single penalty against only one representative contravention where there are multiple contraventions of the same general kind – is one that is proposed by the FWO in this case, albeit that I have considered it appropriate to apply it more broadly than the FWO submits it should be applied.

138    Although it is convenient and appropriate to approach the matter in this way in the present case, I remain conscious that, except insofar as s 557(1) of the FW Act applies, the informal grouping of contraventions that arise from a single course of conduct and which involve contraventions of similar kinds of prohibitions does not convert the separate contraventions into one contravention or constrain the Court to the maximum penalty applicable to a single contravention: see, eg, Australian Competition and Consumer Commission v Murray Goulburn Co-Operative Co Ltd [2018] FCA 1964 at [29].

139    Having regard to these matters, I will further informally group the contraventions as follows:

(1)    The contraventions involving payment below the minimum rates, and the contraventions involving payment below the minimum junior rates, should be grouped together. They are of the same essential kind and arise from the system adopted by Mr Mai.

(2)    The contraventions involving failure to pay the casual loading are a separate category. The system established by Mr Mai took no account of the obligation to pay casual loading. Given that all the employees concerned were casual employees, and the failure to pay casual loading as required arose from the same system of Mr Mai fixing rates of pay at a level that did not meet the minimum requirements of the awards, it is appropriate to recognise a degree of overlap with the first group and I have taken this into account in fixing a provisional penalty for this group of contraventions.

(3)    The contraventions consisting of the failure to pay penalty rates, whether relating to Saturdays, Sundays or public holidays, should be grouped together. The system established by Mr Mai failed to take into account any obligation to pay penalty rates at all, and the particular days on which employees worked and for which they were not paid penalty rates simply reflects the days on which they worked. Again, these contraventions arose from the system of Mr Mai paying hourly rates fixed by him without regard to when the hours were worked, and in fixing penalties for this group, I will take into account that there is some degree of overlap with the first group.

(4)    Similarly, each of the contraventions consisting of failure to pay overtime rates should be grouped together, even though there were distinct obligations relating to overtime rates under the restaurant awards and the Fast Food Award. As with the other underpayment contraventions, these contraventions arose from the system put in place by Mr Mai, which ignored all obligations to pay overtime rates.

(5)    The instances of providing false or misleading pay slips should be grouped together and the FWO seeks only a single penalty in respect of them. While they were provided at discrete points in time in response to requests from three different employees, and the parties agree that they are not to be treated as a single contravention by operation of s 557 of the FW Act, the FWO accepts that each pay slip was false in a similar manner in that they all failed to record the payments that had been made in cash.

(6)    The FWO also accepts that the unlawful deduction contraventions should all be grouped together, and seeks a single penalty in respect of them. They affected different employees and occurred at different times but reflected a single practice of making deductions from employees’ pay when it was perceived that the employees had caused loss to the business.

(7)    The contraventions relating to the failure to keep particular kinds of records are separate and distinct contraventions from those relating to the failure to pay casual loading, penalty rates and overtime. However, the contraventions constituted by the failure to make a record of the applicable casual loading, penalty rates and hours of overtime are closely related to, and arise from the same system that resulted in, Mr Mai’s failure to pay the casual loading, penalty rates and overtime. I will bear this in mind when fixing penalties for the failure to keep records of these kinds.

Consideration of matters relevant to assessment of penalties for identified contraventions

140    In this section of my reasons, I shall identify my views in relation to various matters that are relevant to the assessment of penalties in accordance with the structure I have discussed above, with a focus on issues joined between the parties.

Size of business enterprise, respondents’ background and financial position, and effect of penalties on respondents

141    The respondents both came to Australia with their families as refugees from Vietnam. They arrived in Australia when they were young children. They do not have formal qualifications or training. Both have been working since they were young, in the retail and hospitality industries. They married when Mr Mai was 19 years old and Ms Le was 18. They have three children.

142    The uncontradicted evidence of Mr Mai and Ms Le establishes that, after operating a Vietnamese noodle shop in the northern suburbs of Adelaide in conjunction with their families for some years, they established the Mr Viet business in James Place in 2017. They subsequently leased the premises at which they operated the stall, using the larger kitchen to service the business at both locations. Mr Mai and Ms Le were assisted by their parents to set up the business and to staff it in its early years. After a while, they began hiring casual employees who were not members of their families. Mr Mai says that their business practices were influenced by the guidance of their parents, friends and culture. I accept that to be the case, and I take it into account as providing some explanation as to how they came to engage in the conduct in contravention of civil penalty provisions of the FW Act and FW Regulations. However, I do not regard this as a very significant mitigating consideration, given that (as they now admit) Mr Mai and Ms Le were aware that there were legal requirements that applied to the payment and conditions of employees, which they deliberately failed to observe, even after Mr Mai became aware of the FWO’s investigation and checked what the requirements were.

143    In June 2024, the respondents closed the part of their business that involved the operation of the stall. Mr Mai deposes that that part of the business had been unprofitable for a sustained period and they were unable to find a purchaser for it. The uncontradicted evidence of Mr Mai is that the business made a net profit of around $91,000 in the year ending 30 June 2023 and around $119,000 in the year ending 30 June 2024. The respondents submit that the future profit-making capacity of the business was prospectively decreased by reason of the closure of the stall but I am not prepared to assume that that will be the case, given that that part of the business was discontinued because it was unprofitable. In any case, the recent profit figures give a sufficient general sense of the size of the business.

144    The size of the respondents’ business is relevant to assessing the level of penalty that will be required to have a meaningful general deterrent effect: see, eg, Hansen v Mt Martha Community Learning Centre Inc (No 2) [2015] FCA 1283 (Hansen) at [5]. The penalty imposed on the respondents should operate to deter persons who operate comparable businesses who may be tempted to engage in similar conduct. I accept that general deterrence requires the imposition of substantial penalties in this case; so much was accepted by the respondents as well.

145    The ongoing operation of the restaurant is the respondents’ only substantial continuing source of income. They continue to operate that business with six staff, including Mr Mai and Ms Le. The evidence is that, in the months leading up to the hearing, Ms Le was being paid a salary of $2,000 per fortnight and Mr Mai was foregoing any salary. The respondents intend to continue to operate the business. I accept that it is a small family-owned business.

146    In June 2024, recognising that they would be required to make substantial payments to rectify underpayments to employees, and were likely to be required to pay significant pecuniary penalties, the respondents sold their family home to a company owned by Mr Mai’s sister. She is currently allowing them to continue to live in the property while paying rent at a discounted rate. The evidence relied upon by the respondents indicates that, as a result of the sale of the property, and after discharging their mortgage, they have cash assets of just over $420,000. In addition, the respondents jointly own an undeveloped block of land in which they have equity of around $370,000.

147    The respondents’ financial position, and their capacity to pay the penalties imposed, is relevant to the determination of penalty: see, eg, Hansen at [6], referring to Printing and Kindred Industries Union v Vista Paper Products Pty Ltd (1994) 127 ALR 673 at 686. The specific deterrent value of a given penalty will bear some relationship to the financial capacity of the person. I accept that, generally speaking, the objective of general deterrence should be given greater weight than considerations relating to the respondents’ capacity to pay the penalties imposed: see, eg, Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70 (Mornington Inn) at 403 [69] (Stone and Buchanan JJ). However, the financial capacity of a person can have some relevance to considerations of general deterrence, because the penalties should be apt to deter other potential contraveners who are in a generally similar position to the respondents, and because penalties may have a general deterrent effect not only by reference to the “headline” dollar-amount but also when their size relative to the financial circumstances of the respondents is appreciated. In short, when fixing penalties, I will take into account the capacity of the respondents to pay, albeit that this is not a controlling consideration.

148    I accept the respondents’ submission that, as husband and wife sharing joint finances, the penalties imposed on each of them will not operate in isolation from one another. While it is appropriate to impose separate penalties on each of the respondents for their respective contraventions of the FW Act and FW Regulations, I will take into account that the practical reality is that the penalties are likely to be paid out of the same source of funds, and will impact on the respondents as a couple. I consider that this circumstance bears on the assessment of what is required to operate as a deterrent and is most appropriately dealt with as part of the ultimate assessment of totality. Accordingly, I will take this consideration into account at that stage, rather than at the point of assessing nominal penalties to be imposed in respect of each group of contraventions.

Respondents’ prior history – no contraventions

149    The respondents have no prior history of contraventions of the FW Act, or any criminal convictions. I take into account in their favour that they have not previously been dealt with by a court for unlawful conduct.

Contrition, co-operation and corrective action

150    The parties’ agreed position is that the respondents have co-operated to some degree and have engaged in corrective action since late 2023. By way of brief summary:

(a)    after the commencement of the proceedings, the respondents made full admissions to the contraventions alleged by the FWO, saving the significant time and expense that would have been associated with a contested hearing on liability;

(b)    the respondents have made rectification of some of the underpayments to some of the employees, and have provided the FWO with contact details for other employees so that the FWO may contact those employees to arrange for them to receive the payments due to them;

(c)    the respondents have expressed their intention to further rectify the underpayments by paying money to the Commonwealth if and when they are ordered to do so; and

(d)    after being contacted by a lawyer employed by the FWO, Mr Mai acknowledged his conduct in requiring Mr Quach to repay amounts that had ostensibly been paid to him to rectify underpayments, and repaid those amounts to Mr Quach within two months.

151    The respondents’ contrition and co-operation will be reflected in a reduction to the total penalties to be imposed, as jointly submitted by the parties: see [179]-[182] below.

152    It is submitted for the respondents that they co-operated with the FWO’s investigation, including by giving voluntary interviews, and “provided full and frank admissions at the earliest possible time during these proceedings”. This is said to indicate a lesser need for personal deterrence in this case. I accept that, once proceedings were commenced, the respondents did promptly make formal admissions to all of the alleged contraventions. I also accept, as the respondents submit, that they have now taken steps to educate themselves as to Mr Mai’s legal obligations as an employer and to put in place systems to ensure compliance with those obligations. I accept that they presently have a genuine intention to comply with their legal obligations in the future.

153    Although the respondents have co-operated admirably with the FWO since the commencement of the proceedings, and have taken appropriate steps to arrange for reimbursement of employees who have been underpaid, they did so only when it must have been apparent to them that the imposition of significant penalties was inevitable and that it was in their interests to co-operate, and to be seen to co-operate, as fully as possible. There is no basis to suppose that the systemic underpayment of employees would have stopped had the FWO investigation not intervened. I find that Mr Mai would have continued to pay employees in the same manner that he had been, and to keep incomplete and false records in relation to his employees, the hours they had worked and their remuneration.

154    Although they co-operated with the FWO investigation in some respects, the significance that can be attached to that co-operation is somewhat limited when regard is had to the fact that Mr Mai actively sought to mislead the FWO investigation by producing false records to a Fair Work Inspector on three separate occasions. Mr Mai’s repeated dishonest attempts to conceal contraventions and to mislead the FWO investigation leave me with a concern that he is a person who is prepared to act dishonestly when he thinks it will be to his benefit. While I am prepared to accept that the respondents’ more recent co-operation reflects a better understanding of the importance of complying with employment laws, and genuine contrition on their part, in my view there remains a need for personal deterrence in the fixing of penalties in this case.

155    I accept the respondents’ submissions that they will have suffered some damage to their reputations as business owners and in the community as a result of the publication of information about the present proceedings, and will likely suffer further damage to their reputations. I further accept Ms Le’s uncontradicted evidence as to the effect of this publication on the respondents’ children and on the respondents’ wellbeing. I accept that these effects are likely to have a real personal deterrent effect on the respondents and have taken this into account in considering the extent to which penalties are necessary to give effect to the object of personal deterrence.

Vulnerability of employees

156    The evidence and submissions of the FWO emphasised that employees in the café and restaurant sector are generally at higher risk of being denied employment-related entitlements. Employees in these industries include a relatively high number of low paid, young, low educated and migrant workers. Migrant workers as a group have been recognised as particularly vulnerable to exploitation: see, eg, DTF World Square at [37]. The following observations of Bromwich J in NSH North at 192 [134] are all relevant to the present case:

… there are problems in the hospitality industry which render general deterrence of substantial and continuing importance in fixing civil penalties for the contraventions in this case. The existence and prevalence of such conduct usefully informs the exercise of the Court’s discretion. Evidence indicating a substantial problem with compliance can readily be seen to be a significant and weighty consideration, particularly where the question of general deterrence arises in the context of a growing industry with a reasonably vulnerable workforce characterised by youth, transience (reflected also in the high proportion of workers who are visa holders), language difficulties and a high proportion of casual staff. These features of the workforce commonly mean that employees are in a weak bargaining position and have limited ability to complain or seek rectification. The temptations and opportunity to exploit such a workforce require penalties of a scale that will help to deter both the present respondents and other employers from engaging in behaviour of the kind that has taken place in this case, with a particular emphasis on underpayment, record keeping and not creating or using false or misleading records.

157    Most of the employees who were underpaid in the present case were from backgrounds where English was not their first language, and were visa holders. As the FWO’s submissions pointed out, there are also negative flow-on effects of underpaying workers, and in particular migrant workers: other workers are “undercut” on wages and job opportunities, and law-abiding employers are put at a competitive disadvantage. I accept the FWO’s submission that the conduct of the respondents, and especially Mr Mai, demonstrates that they were able to exploit the employer/employee relationship, and the power dynamic favouring the employer in the circumstances of this business, in a range of ways that were unlawful and that operated to the detriment of the employees. There is a need to set penalties at a sufficient level to operate as a deterrent to similar employers in the restaurant and fast food industries whose employees may tend to be vulnerable to exploitation and who may be unwilling or unable to complain.

Nature, extent and circumstances of some groups of contraventions

Failure to pay minimum rates

158    The respondents accept that the method of determining and making payments to employees, described at [7]-[9] above, was deliberately adopted by Mr Mai and was known to both respondents to result in employees being paid less than the amounts to which they were entitled.

159    The way Mr Mai decided which rates should be applied to which employees, how many hours should be paid at the higher rate and which should be paid in cash at the rate of $15 per hour when implementing the Payment System is not explained, and appears to have been somewhat arbitrary. At all times since the respondents’ business has been in operation, $15 was well below the minimum rates payable under the awards and was below the national minimum wage rate. Moreover, the rate of $15 an hour is well below even the rate which Mr Mai says he believed was the award rate during the contravention period.

160    The use of this method was continued for an extended period of time – at least three years and eight months. It was not changed until some time after the FWO began its investigation and the respondents became aware of the investigation. Moreover, as explained further below when discussing the contraventions relating to the keeping of false or misleading records and the production of false records to the FWO, Mr Mai took deliberate steps to disguise these underpayments. The underpayment of employees was deliberate, calculated, and dishonest.

161    Significant numbers of restaurant employees were adversely affected by Mr Mai’s failure to pay the applicable minimum rates of pay – 26 in the case of ordinary rates of pay and a further five in the case of junior rates. The total amount of the underpayments to restaurant employees resulting from Mr Mai paying them less than the relevant applicable minimum rates (including junior rates) is $97,225.95. The amounts of underpayments to individual restaurant employees resulting from Mr Mai’s failure to pay applicable minimum rates ranged up to more than $9,000. Additionally, ten stall employees were paid less than the amount required by applying the applicable minimum rate. The total amounts of the underpayments to stall employees was $69,118.18, with one of the stall employees being paid as much as $15,320.63 below the amount that was required to pay them in accordance with the minimum rate.

162    Mr Mai’s conduct in establishing the Payment System and making payments in accordance with it, amounted to a serious, deliberate, systemic and sustained contravention of basic provisions of the awards, resulting in substantial loss to employees. General deterrence is a strong consideration in this case. Moreover, for the reasons already explained above, I consider that personal deterrence remains relevant.

163    Similarly, Ms Le was aware of the Payment System and the fact that it had these characteristics, and actively participated in the management of the business, and in the contraventions, with that knowledge. The same is true of Ms Le’s involvement in all of the contraventions arising from failure to pay the casual loading, penalties and overtime rates under the relevant awards.

Failure to pay casual loading

164    The failure to pay casual loading also arose from the adoption of the Payment System based on the payment of two different hourly rates, as described above. The Payment System did not reflect the requirements of the awards to pay casual loading at all. Again, this was a serious, systemic and deliberate failure to comply with basic provisions of the applicable awards. As noted above, I have taken into account (to the respondents’ benefit) that these contraventions are related to the same conduct as the contraventions arising from the failure to pay minimum rates, in that they arose from the same system, but the imposition of some separate punishment is appropriate, reflecting the failure of that system to take account of the obligation to pay casual loading.

165    In total, restaurant employees were underpaid some $85,580.74 referable to the failure to pay the casual loading, and stall employees were underpaid $39,163.18 on that basis. Again, these are very significant amounts that were withheld from vulnerable employees. They were amounts that were required to be paid to compensate for the absence of the job security, and other legal entitlements, of permanent full-time or part-time employees.

Failure to pay Saturday, Sunday and public holiday penalty rates

166    The failure of Mr Mai to pay employees the penalty rates applicable under the respective awards for hours worked on Saturdays, Sundays and public holidays arose from the system he had established, coupled with the fact that he required employees to work on those days and made no adjustments to the rates of pay to reflect this. Again, Mr Mai knew that the Payment System he adopted was calculated to result in the underpayment of employees. The failure to pay Saturday, Sunday and public holiday penalty rates was deliberate and systemic.

167    In total, restaurant employees were underpaid $66,531.35 as a result of the failure of Mr Mai to pay Saturday, Sunday and public holiday penalty rates. Stall employees were underpaid $30,686.16 in total as a result of the failure of Mr Mai to comply with the requirements to pay penalty rates under the Fast Food Award.

Failure to pay overtime

168    As with the other underpayment contraventions, the contraventions relating to overtime arose substantially from the decision of Mr Mai to implement a system of payment which ignored the requirements of the applicable awards to pay differential rates of pay for employees, irrespective of whether some of the hours they were required to work were overtime.

169    In the context of the total underpayments in this case, the contraventions arising from the failure to pay overtime rates were relatively minor, due to the fact that most employees were not required to work overtime, and the total number of overtime hours worked by employees was not great. While an appropriate deterrent penalty should be imposed, the level of the penalty that is required to deter contraventions of this kind can be regarded as lower than in the case of the other underpayment contraventions, given that it was less common for the respondents to require employees to work overtime without appropriate remuneration and the financial benefit to the respondents from these underpayments was less significant. In saying this, I do not mean to downplay the importance of employers identifying and paying the correct rates for overtime, or the impact of the underpayments on the affected employees.

170    In relation to restaurant employees, the total amount of the underpayments attributable to the failure to pay overtime was $2,605.07, and four different restaurant employees appear to have been affected. In relation to stall employees, the total amount of the underpayments relating to the failure to pay the various overtime rates was $5,072.52 and, again, four different employees were affected.

Failure to provide meal break and payment in lieu of meal break

171    Mr Mai did not provide restaurant employees with meal breaks at all, as was required by the Restaurant Award 2010 and the Restaurant Award 2020. The effect was that each time a restaurant employee worked a shift in which a meal break should have been provided, they became entitled to payment of an extra 50% of the employee’s ordinary hourly rate for each additional hour worked. The consequence was that 20 restaurant employees were underpaid a total of $19.683.50 between them.

Contraventions involving creation of false records and deception of Fair Work Inspector

172    An especially serious aspect of the conduct of Mr Mai in the present case concerns his conduct in creating records which he knew to be false, and presenting some of that false information to a Fair Work Inspector. This was a deliberate and dishonest course of conduct, designed to prevent the FWO from detecting the contraventions and discovering their extent. Mr Mai repeatedly produced records which he had deliberately falsified. Moreover, his failure to keep accurate records has meant that it is quite possible that the full extent of underpayments to employees has not been discovered.

173    Particularly concerning is the conduct of Mr Mai in representing to the FWO that he had paid one of his employees $10,000 which that employee was owed. This conduct is described at [40]-[41] above. Mr Mai made payments to the employee and provided evidence to the FWO to demonstrate that the payments had been made. However, Mr Mai also requested that the employee withdraw all of that money and repay it to Mr Mai. This was a calculated and dishonest course of conduct that was designed to mislead the FWO into believing that payments had been made when, in substance, they had not been. More disgracefully still, it involved Mr Mai taking advantage of his dominant position to require an employee to participate in a dishonest scheme for the benefit of Mr Mai and to the detriment of the employee.

174    These aspects of Mr Mai’s conduct demand the imposition of penalties that reflect the need for both general deterrence and personal deterrence for Mr Mai. I take into account that Mr Mai was not deterred from acting dishonestly even when he knew that he was actively under investigation by the FWO.

Assessing Ms Le’s involvement in Mr Mai’s contraventions

175    The statement of agreed facts and admissions indicates that the Payment System, including the payment of cash at a lower rate for some hours worked by employees, was devised by Mr Mai. The employees’ rates of pay were fixed by him. However, Ms Le was aware of the system and played a significant role in its implementation. She participated in the management of the business and direction of employees, and engaged employees on behalf of the business in the knowledge that the Payment System would be applied to them. Based on the statement of agreed facts and admissions, it appears that she should be treated as a little less culpable than Mr Mai in relation to the contraventions arising out of the adoption and implementation of the Payment System. In relation to those contraventions, I consider it appropriate to impose penalties on Ms Le amounting to 80% of the penalties to be imposed on Mr Mai.

176    In relation to the contravention involving the implementation of the strike board system it is apparent that Ms Le played a key role in the implementation of that system, enforced it and benefited from it. I consider it appropriate to impose the same penalty on Ms Le and Mr Mai in relation to that conduct.

Conclusions as to penalties that should be imposed, before final adjustment for totality

177    Taking into account all the matters discussed above, I consider it appropriate – subject to the further steps of making reductions in recognition of co-operation and totality – to identify nominal penalties to be imposed on Mr Mai as indicated in the following table:

178    In relation to the contraventions in which Ms Le was involved, and again subject to reductions in recognition of co-operation and totality, I consider that penalties in the following amounts are appropriate:

Reduction of penalties in recognition of co-operation

179    The provisional penalties I have identified to this point add up to totals of $436,700 for Mr Mai and $219,400 for Ms Le.

180    The parties are in agreement that it is appropriate to apply a discount of 25%, reflecting the extent of the respondents’ co-operation since the commencement of the proceedings. I accept that the respondents have been co-operative since the proceedings were commenced. The nature, and the limits, of that co-operation have been described at [150]-[154] above.

181    It is necessary to recall that the respondents’ admissions and co-operation occurred only after legal proceedings were commenced. Before that, Mr Mai had initially responded to the FWO’s investigation not only unco-operatively but obstructively, including by making, keeping and providing a Fair Work Inspector with false or misleading records, by instructing employees to lie to Fair Work Inspectors about their rates of pay and the method of payment, and even by prevailing upon one employee to repay, in cash, amounts that had ostensibly been paid to him to rectify underpayments. Those steps, which have been described in greater detail above, were designed to obscure the true position and mislead the investigation. Some of that unco-operative conduct itself involved contraventions of the FW Act and so is reflected in the penalties imposed for those contraventions.

182    I am satisfied that it is appropriate to apply a reduction of 25% to the provisional penalties identified above in recognition of the respondents’ co-operation. Doing so produces a revised total of $327,525 in penalties for Mr Mai and $164,550 for Ms Le.

Totality

183    The totality principle requires that the Court conduct a final check of the penalties to be imposed, considered as a whole. If the cumulative total of the penalties would be too low or too high, the final penalties can be altered to ensure that they are just and appropriate overall.

184    In Australian Competition and Consumer Commission v Employsure Pty Ltd (2023) 407 ALR 302; [2023] FCAFC 5, Rares, Stewart and Abraham JJ explained (at 314 [52]):

[The] course of conduct concept is separate from the principle of totality which requires the Court to make a “final check” of the penalties to be imposed on a wrongdoer, considered as a whole, to ensure that the total penalty does not exceed what is proper for the entire contravening conduct: Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 at 53, citing Mill v The Queen (1988) 166 CLR 59. …

See also Mornington Inn at 397 [42]-[43] (Stone and Buchanan JJ).

185    In this case, both parties submit that a further reduction for totality is appropriate, notwithstanding that the provisional penalties identified already take into account that there is a degree of overlap between the contraventions because many of them arose from what could be described as one overarching course of conduct – in particular the Payment System described at [7]-[9] above. I note, however, that the FWO’s submission that a further reduction for totality was appropriate was made in circumstances where it submitted that substantially higher penalties should apply to the contraventions of both Mr Mai and Ms Le.

186    As discussed at [148] above, a significant consideration is that Mr Mai and Ms Le live as husband and wife, and share their financial resources. The penalties will effectively be paid from the same pool of money. I consider that this is relevant to assessing the level of penalty that can be regarded as necessary for personal deterrence and, assuming it can be understood by others that it has been taken into account in fixing the penalties, it is also relevant to general deterrence, and should be taken into consideration in applying a reduction for totality.

187    I would reduce the total of the penalties to be imposed on Mr Mai to $265,000 and the total of the penalties to be imposed on Ms Le to $130,000. Although the final reduction of penalties having regard to totality is sometimes described in terms of a further percentage reduction, I do not consider that to be an especially useful way to consider the totality principle in the present case. That said, I note that in both cases the reduction I would apply amounts to around 19% to 21% of the total of the provisional penalties (after the reductions to reflect co-operation in the proceedings).

188    Standing back and considering the matter, I am satisfied that civil penalties fixed in these amounts will operate to provide a very significant personal deterrent to Mr Mai and Ms Le against engagement in conduct of a similar kind in the future. I am also satisfied that these amounts are sufficient to provide an appropriate level of general deterrence. The “headline” figures are not as high as those sought by the FWO, but it should be understood that they are significant penalties having regard to the size of the business and the financial position of the respondents. It is also relevant to note that the total of the penalties to be imposed on the respondents exceeds the value of the assets apparently presently available to them to meet those penalties.

Individual penalties

189    In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 413, White J concluded that s 546 of the FW Act did not allow the Court to impose a single penalty in respect of multiple contraventions of the FW Act, except in the circumstances provided for in s 557. His Honour said of s 546 (at [50]):

The terminology of subs (1) suggests that, when the Court is satisfied that a person has contravened a civil remedy provision, it is to exercise a discretionary judgment as to whether to order the payment of a pecuniary penalty. It indicates, however, that when the Court decides to impose a pecuniary penalty it does so in respect of the particular contravention which the Court has found established. That is to say, each contravention is to have its own penalty. This impression is confirmed by the terms of subs (2) which fixes the maximum penalty which may be imposed by reference to that applicable to an individual contravention.

190    In light of these observations, White J concluded (at [63]-[64]):

… In the civil penalty context, the totality principle may lead to the moderation of the penalties imposed for some or all of the contraventions and, when there are numerous contraventions, perhaps to no penalty at all being imposed for some. …

… the totality principle does not authorise the imposition of a single penalty. Instead, its application makes it appropriate for the Court to moderate the penalties which would otherwise have been imposed.

191    The imposition of separate penalties for each contravention may not be necessary where the parties agree on a penalty or where they accept that the imposition of a single penalty covering multiple contraventions is appropriate: see ABCC v CFMEU at 100 [149]. In this case, it is appropriate to provide an indication of the individual penalties to be imposed for each contravention.

192    I have identified individual nominal penalties, before making reductions to reflect co-operation and totality, in the tables set out at [177] and [178] above. The overall effect of the reductions for co-operation and totality is to reduce the total of those penalties by 39.3% in the case of Mr Mai, and by 40.7% in the case of Ms Le. Although it is a somewhat blunt approach, it is convenient to impose final individual penalties applicable to each contravention by reducing each of the originally identified nominal penalties by those percentages.

193    I will not reproduce the tables again with the revised figures, but to the extent that it is necessary to determine individual penalties for each contravention (or course of conduct that is taken to be a single contravention by reason of s 557 of the FW Act) I should be understood as imposing individual penalties:

(a)    on Mr Mai in amounts equivalent to the amounts set out in the table at [177] above, reduced by 39.3%; and

(b)    on Ms Le in amounts equivalent to the amounts set out in the table at [178] above, reduced by 40.7%.

Conclusion

194    Mr Mai should be required to pay pecuniary penalties totalling $265,000 for his contraventions of the FW Act. Ms Le should be required to pay pecuniary penalties totalling $130,000 for her involvement in the contraventions of the FW Act by Mr Mai. I will make the declarations and orders set out at the beginning of these reasons.

Associate:

Dated:    1 May 2025