Federal Court of Australia

Construction, Forestry and Maritime Employees Union v AMK Images Pty Ltd (in liq) (No 3) [2025] FCA 1012

ORDERS

THE COURT ORDERS THAT:

1.    The first respondent pay pecuniary penalties totalling $92,500 to the Commonwealth of Australia within 90 days.

2.    The second respondent pay pecuniary penalties totalling $18,500 to the Commonwealth of Australia within 90 days.

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

REASONS FOR JUDGMENT

GOODMAN J:

A.    Introduction

1    On 18 December 2024, I allowed an appeal from a decision of a judge of the Federal Circuit and Family Court of Australia (Division 2) concerning the imposition of penalties on the first respondent (AMK Images) and its director, the second respondent (Mr Gavran) for contraventions of ss 45, 323(1) and 536(1) of the Fair Work Act 2009 (Cth) (FW Act). My reasons for doing so were published as Construction, Forestry and Maritime Employees Union v AMK Images Pty Ltd (in liq) (No 2) [2024] FCA 1457 (AMK Images (No 2)).

2    Subsequently, and to give effect to the agreement of the active parties that I undertake the re-exercise of the discretion to impose penalties under s 546 of the FW Act on the papers, I made orders for the filing of written submissions concerning the re-exercise of the discretion to order the payment of pecuniary penalties; and for the question of what penalties ought be imposed to be determined on the papers by reference to the evidence filed by the parties and received by the Court below in respect of penalty, the transcript of all submissions before the Court below, and the submissions to be filed.

3    The appellant Union filed written submissions. No written submissions were received on behalf of the first respondent which, as noted in AMK Images (No 2) at [2], is in liquidation. No written submissions were received from or on behalf of Mr Gavran.

B.    Salient facts

4    The evidence that was before the primary judge, including a statement of agreed facts, establishes the following salient facts.

5    AMK Images was a company that provided painting services to builders and construction companies. It employed up to 15 painting trade workers at any particular time.

6    At all material times, Mr Gavran was a director of AMK Images. From early 2020, he was its sole director.

7    Mr Jayson Cocos was a Filipino citizen who came to Australia under a Temporary Skills Shortage visa to work for AMK Images. A term of Mr Cocos’s visa was that he could only work for AMK Images. At that time, AMK Images had a significant amount of work and was under pressure to employ additional workers.

8    Mr Gavran signed a written offer of employment addressed to Mr Cocos. Mr Cocos counter-signed that offer. Mr Cocos obtained employment with AMK Images so that he could send money back to his family in the Philippines. He was their primary provider. He also had no prior experience working in Australia.

9    That contract so formed provided, relevantly, that: (1) AMK Images was required, as Mr Cocos’s business sponsor, to guarantee to the Department of Home Affairs that it would comply with Australian industrial relations laws, including the provision of at least Award rate wages to Mr Cocos; and (2) Mr Cocos’s employment would be regulated by the Building and Construction General On-Site Award 2010 (2010 Award).

10    The contract also referred to the 2010 Award as an instrument setting out the terms and conditions of Mr Cocos’s employment.

11    Between 2 January 2019 and 23 September 2022 (relevant period), AMK Images was the employer of Mr Cocos. AMK Images employed Mr Cocos on a full-time basis.

12    Mr Gavran had active managerial control of AMK Images during the relevant period. He knew that an Award applied to Mr Cocos’s employment but did not know the contents of the specific Award. Mr Cocos advised Mr Gavran of the hours he was working, and Mr Gavran knew the amount that Mr Cocos was being remunerated.

13    During the relevant period, Mr Cocos:

(1)    started and finished work each day on job sites;

(2)    frequently worked more than 38 hours per week;

(3)    performed work as a painter under the contract and was eligible to be a member of the Union during some or all of that period;

(4)    was reliant upon AMK Images and Mr Gavran to tell him about his rights as an employee and ensure those rights were protected. In this regard Mr Cocos did not know what his rights were or where to find out about them; and

(5)    understood that if he lost his employment with AMK Images, he would lose his visa and have to return to the Philippines.

14    From 1 March 2021 and continuing until the end of the relevant period, the 2010 Award was replaced by the Building and Construction General On-site Award 2020 (the 2020 Award). The 2020 Award applied to Mr Cocos’s employment from 1 March 2021.

15    During the whole of the relevant period, AMK Images did not:

(1)    provide Mr Cocos with copies of the National Employment Standards (NES) or the Award, as required by cl 5 of the 2010 Award and cl 3.3 of the 2020 Award;

(2)    pay meal allowances to Mr Cocos, as required by cl 20.2 of the 2010 Award and cl 21.2 of the 2020 Award;

(3)    pay Mr Cocos’s wages on a regular, weekly schedule, as required by cl 31.3 of the 2010 Award and cl 20.3 of the 2020 Award; or

(4)    provide Mr Cocos with payslips, as required by s 536(1) of the FW Act.

16    Between 1 July 2021 and 23 September 2022, AMK Images did not pay travel allowances to Mr Cocos, as required by cl 26.1 of the 2020 Award.

17    Between 21 January 2022 and 30 September 2022, AMK Images made deductions to Mr Cocos’s wages for rental accommodation which were not agreed to in writing.

18    On the termination of Mr Cocos’s employment, AMK Images did not make a redundancy payment to Mr Cocos, as required by cl 41.3 of the 2020 Award.

C.    CONSIDERATION

C.1    Statutory context

19    Before the primary judge AMK Images consented to the making of declarations that it had contravened ss 45, 323(1) and 536(1) of the FW Act.

20    As I noted in AMK Images (No 2) at [75] to [77]:

(1)    Mr Gavran admitted that he was involved in all seven of the contraventions in respect of which AMK Images admitted liability;

(2)    s 550(1) of the FW Act provides that “[a] person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision”; and

(3)    it follows that Mr Gavran is to be taken, by reason of his involvement in the contraventions by AMK Images, to have contravened the same provisions.

21    Thus, both AMK Images and Mr Gavran admitted contraventions of ss 45, 323(1) and 536(1) of the FW Act. Those sections are identified in s 539 of the FW Act as civil remedy provisions. 

22    For each of these sections, column 4 of the table in s 539(2) of the FW Act identifies a maximum penalty of 60 penalty units. I note with respect to each of these provisions that if the contraventions are “serious contraventions” within the meaning of s 557A of the FW Act, then the maximum penalties are 600 penalty units. However, there is no contention in this proceeding that any of the contraventions are “serious contraventions” as defined.

23    Section 546 of the FW Act provides for the imposition of pecuniary penalties for contraventions of provisions identified as civil remedy provisions in that Act. It provides in so far as is presently relevant:

546     Pecuniary penalty orders

(1)     The Federal Court … may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.

…

Determining amount of pecuniary penalty

(2)     Subject to this section, the pecuniary penalty must not be more than:

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

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

…

24    Also relevant are:

(1)    s 556 of the FW Act which provides:

556      Civil double jeopardy

If a person is ordered to pay a pecuniary penalty under a civil remedy provision in relation to particular conduct, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of a law of the Commonwealth in relation to that conduct.

(2)    s 557 of the FW Act which provides, in so far as is presently relevant:

557     Course of conduct

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

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

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

(2)     The civil remedy provisions are the following:

…

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

…

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

…

(o)     subsections 536(1) … (which deal with employer obligations in relation to pay slips);

…

C.2    Relevant principles

25    The approach to be taken in deciding what penalty is appropriate was explained by the High Court of Australia in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 274 CLR 450. In Pattinson, the plurality (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ) explained that civil penalties, in contrast to punishments imposed by the criminal justice system, are imposed primarily, if not solely, for the purpose of deterrence (specific and general): Pattinson at 457 ([9] to [10]) and 459 to 460 ([15] to [17]). The penalty must be sufficiently high that it is not considered to be an acceptable cost of doing business, but should not exceed what is necessary to achieve the object of deterrence: Pattinson at 457 [10], 460 [17] and 475 [66].

26    A penalty is not to be fixed by reference to its proportionality to the seriousness of the contravening conduct, because that reflects an objective of retribution that is not an objective of a civil penalty regime. Rather, the Court is required to ensure that the penalty imposed is “proportionate” in the sense that it strikes a reasonable balance between deterrence and oppressive severity in the particular case: Pattinson at 457 [10], 467 to 469 ([40] to [43]) and 470 [46].

27    In determining what is reasonably necessary to achieve specific and general deterrence, relevant considerations may include those set out in Pattinson at 460 [18], being those identified by French J in Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR ¶41-076 at 52,152 to 52,153. See also Australian Competition and Consumer Commission v Employsure Pty Ltd [2023] FCAFC 5; (2023) 407 ALR 302 at 314 [50] (Rares, Stewart and Abraham JJ). Those factors concern both the character of the contravention and the character of the contravenor: Pattinson at 460 to 461 [19]. However, such factors are not to be regarded as a rigid catalogue or checklist: Pattinson at 460 to 461 ([19]). The Court’s discretion with respect to penalties is broad but is to be exercised judicially, that is fairly and reasonably having regard to the subject matter, scope and purpose of the Act: Pattinson at 467 to 468 [40]. The task is to determine the appropriate penalty in the particular case: Pattinson at 460 to 461 [19].

28    In determining an appropriate penalty, the Court should have regard to the prescribed statutory maximum penalty: Pattinson at 472 ([53] to [55]); Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at 372 [31] (Gleeson CJ, Gummow, Hayne and Callinan JJ). However, the maximum penalty is but one “yardstick that ordinarily must be applied” among other factors: Pattinson at 472 [54].

29    The concepts of totality, parity and course of conduct may also be useful analytical tools in assessing what may be considered reasonably necessary to deter further contraventions: Pattinson at 469 to 470 [45].

C.3    The effect of AMK Images being in liquidation

30    As noted above, AMK Images is in liquidation. On 11 September 2024, I granted leave to the Union to proceed against AMK Images: Construction, Forestry and Maritime Employees Union v AMK Images Pty Ltd (in liq) [2024] FCA 1057.

31    The fact that AMK Images is in liquidation is not of itself an impediment to the making of a pecuniary penalty order. Obviously, specific deterrence of AMK Images is not relevant. However, a pecuniary penalty order may in an appropriate case reflect the Court’s disapproval of the contraventions and of the seriousness with which the contraventions are regarded, for the purpose of achieving general deterrence: Australian Competition and Consumer Commission v SIP Australia Pty Limited [2003] FCA 336; (2003) ATPR ¶41-937 at 47,077 [59] (Goldberg J); Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liquidation) [2007] FCAFC 146; (2007) 161 FCR 513 at 519 to 520 ([19] to [21]) (Moore, Dowsett and Greenwood JJ); Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 7) [2016] FCA 484 at [20] to [28] (Yates J); Australian Securities and Investments Commission v DOD Bookkeeping Pty Ltd (in liq), in the matter of DOD Bookkeeping Pty Ltd (in liq) (No 2) [2025] FCA 395 at [24] (Goodman J). The present case is one in which it is appropriate to impose a penalty upon AMK Images, notwithstanding that it will likely not be paid as AMK Images is in liquidation, for the purpose of deterring others minded to engage in similar contraventions.

C.4    Sections 556 and 557 of the FW Act

32    I start by considering the groups of contraventions in respect of which penalties are to be imposed. In this regard:

(1)    I do not consider that the five contraventions of s 45 of the FW Act arose out of the same course of conduct, for the reasons set out in AMK Images (No 2) at [63] to [64]. Thus, it is not appropriate to apply s 557 of the FW Act;

(2)    the numerous contraventions of s 323(1) of the FW Act, in the case of each of AMK Images and Mr Gavran, were committed by the same person and arose out of the same course of conduct by that person. As such, those contraventions should be treated as a single contravention in accordance with s 557 of the FW Act; and

(3)    the numerous contraventions of ss 536(1) of the FW Act, in the case of each of AMK Images and Mr Gavran, were also committed by the same person and arose out of the same course of conduct by that person. As such, those contraventions should be treated as a single contravention in accordance with s 557 of the FW Act.

33    Thus, for each of AMK Images and Mr Gavran there are seven contraventions for which penalties are to be imposed.

34    I have considered s 556 of the FW Act and have formed the view that it has no application.

C.5    Factors relevant to the exercise of the discretion

35    In the present case, the following factors inform the exercise of the discretion.

C.5.1    The nature and extent of the contravening conduct and the circumstances in which it took place

36    An overview of the contravening conduct and the circumstances in which it took place is set out at [5] to [18] above.

C.5.1.1    Contraventions of s 45 of the FW Act

37    Section 45 of the FW Act provided:

45     Contravening a modern award

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

38    Each of the 2010 Award and the 2020 Award is a modern award.

39    There are five admitted contraventions of the Awards.

40    First, AMK Images contravened cl 5 of the 2010 Award and cl 3.3 of the 2020 Award by failing to provide Mr Cocos with copies of: (1) the Award; and (2) the NES. The evidence establishes that Mr Cocos: (1) was reliant upon AMK Images and Mr Gavran to tell him about his rights as an employee and ensure those rights were protected. In this regard Mr Cocos did not know what his rights were or where to find out about them; and (2) had no prior experience working in Australia. Thus, the provision of these documents – as required by the Awards – was necessary for Mr Cocos to understand his rights and entitlements, and the contravention resulted in Mr Cocos being deprived of important knowledge about his basic employment rights.

41    Secondly, AMK Images contravened cl 31.3 of the 2010 Award and cl 20.3 of the 2020 Award by failing to pay Mr Cocos’s wages on a regular, weekly schedule throughout the relevant period. As the Union submitted, payment of wages on a regular weekly schedule is critical in order to ensure that employees are remunerated regularly for their labour; and this is particularly important for employees such as Mr Cocos who are not high-income earners and are reliant upon their wages to sustain themselves and their dependents.

42    Thirdly, AMK Images contravened cl 20.2 of the 2010 Award and cl 21.2 of the 2020 Award by failing to pay meal allowances to Mr Cocos throughout the relevant period. The failure to pay meal allowances throughout the course of Mr Cocos’s employment had the result that he was not afforded amounts to pay for meals when he worked overtime during the course of that employment.

43    Fourthly, AMK Images contravened cl 26.1 of the 2020 Award between 1 July 2021 and 23 September 2022 by failing to pay travel allowances to Mr Cocos. The failure to pay travel allowances had the result that Mr Cocos was not paid for his time in travelling to and from job sites.

44    Finally, AMK Images contravened cl 41.3 of the 2020 Award by failing to make a redundancy payment to Mr Cocos on the termination of his employment. The failure to make this payment had the result that Mr Cocos was deprived of an entitlement designed to ensure that he had an amount to tide him over between jobs. As noted earlier, Mr Cocos was not a high income earner and was reliant upon his wages.

C.5.1.2    Contraventions of s 323(1) of the FW Act

45    I turn now to the contravention of s 323(1) of the FW Act. That section provided in so far as is presently relevant:

323     Method and frequency of payment

(1)     An employer must pay an employee amounts payable to the employee in relation to the performance of work:

(a)     in full (except as provided by section 324);

...

Note 1: This subsection is a civil remedy provision (see Part 4-1).

46    As noted above, for the period 21 January 2022 to 30 September 2022, AMK Images made deductions from Mr Cocos’s wages for the payment of rent. As there was no written agreement authorising such a deduction (see s 324(1) of the FW Act), the making of those deductions was contrary to s 323(1)(a) of the FW Act.

C.5.1.3    Contraventions of s 536(1) of the FW Act

47    I turn next to the contraventions of s 536(1) of the FW Act. That section provided in so far as is presently relevant:

536     Employer obligations in relation to pay slips

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

Note 1: This subsection is a civil remedy provision (see Part 4-1).

…

(2)    The pay slip must:

…

(b)    include any information prescribed by the regulations;

…

48    Regulation 3.46 of the Fair Work Regulations 2009 (Cth) described the information which must be included in pay slips, including the gross amount of the payment; the net amount of the payment; any amount paid to the employee that is a bonus, loading, allowance, penalty rate, incentive-based payment or other separately identifiable entitlement; if an amount is deducted from the gross amount of the payment, then the name, or the name and number, of the fund or account into which the deduction was paid; if the employee is paid at an hourly rate of pay, then: (a) the rate of pay for the employee’s ordinary hours (however described); (b) the number of hours in that period for which the employee was employed at that rate; and (c) the amount of the payment made at that rate; and if the employer is required to make superannuation contributions for the benefit of the employee, then certain details relating to such contributions.

49    At no point during the relevant period did AMK Images provide to Mr Cocos a payslip in accordance with s 536(1) of the FW Act.

50    In Shergill v Singh (No 2) [2024] FCA 261 at [28], Justice Raper stated, in terms which are apposite to the present case:

… It is obvious that vulnerable low paid workers will be disproportionately affected by comparison to higher paid workers where they are not paid in a timely way, and are not provided with transparent pay records, in the form of pay slips which, by operation of r 3.46 of the Fair Work Regulations 2009 (Cth) are required to stipulate essential information including, but not limited to, the hours worked, the pay received, leave accrued and any amount paid that is said to be a bonus, loading, allowance, penalty rate or other separately identifiable entitlement to verify that minimal entitlements are being honoured. At first blush it might appear that a payslip contravention is minor. That may be the case where it happens once. However, the requirement that an employer provide payslips is an essential part of a functioning industrial system. An employee does not have access to his or her employer’s records. An employee needs to understand the basis upon which he or she is being paid in a timely way so as to be able to raise discrepancies when they arise. The need is obvious also in the case for foreign nationals, like Ms Shergill. The failure to make and maintain employee entitlement records undermines the ability of employees and also workplace inspectors to ensure compliance: Fair Work Ombudsman v Orwill Pty Ltd & Ors [2011] FMCA 730 at [21]: Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd & Anor [2012] FMCA 258 at [67]; Fair Work Building Inspectorate v Foxville Projects Group Pty Ltd [2015] FCA 492 at [35].

(emphasis in original)

C.5.2    The loss and damage caused

51    I was not directed to evidence of the loss and damage caused by the various contraventions. Some of the impact of the contraventions is intangible. However: (1) the primary judge noted that the total underpayments were estimated to be $45,000; (2) in June 2023, AMK Images paid Mr Cocos the sum of $17,000; and (3) the primary judge made orders reflecting the agreement reached between the parties, requiring AMK Images to pay Mr Cocos an amount of $29,375.08.

C.5.3    The size and financial position of the respondents

52    As noted above, during the relevant period, AMK Images employed up to 15 workers; and it is now in liquidation. There is otherwise no evidence as to the size or financial position of AMK Images or as to Mr Gavran’s financial position.

C.5.4    Whether the contraventions arose out of conduct of senior management or at a lower level

53    As noted above, Mr Gavran was a director (and from early 2020 the sole director) of AMK Images and in active managerial control of AMK Images. He was the controlling mind of AMK Images and its most senior officer. He has also admitted to involvement in each of the contraventions.

C.5.5    Prior contraventions

54    There is no suggestion that AMK Images and Mr Gavran have any prior history of contraventions of the FW Act.

C.5.6    Deliberateness of the contraventions

55    I am not satisfied that the contraventions were deliberate or flagrant. Rather, it appears that the contraventions were a result of Mr Gavran failing to become familiar with the Awards despite the contractual obligations assumed by AMK Images (see [9] above).

C.5.7    The length of the contraventions

56    All of the contraventions occurred over a lengthy period of time, and most occurred over the whole of the relevant period (which spanned almost four years).

C.5.8    Co-operation and contrition

57    As noted in AMK Images (No 2) at [5]ff, AMK Images and Mr Gavran defended the proceeding until the morning of the first of three days allocated for the hearing. There followed an adjournment until the third of the three allocated days at which time the hearing proceeded on the basis of, inter alia, an agreed statement of facts, which included admissions as to contraventions discussed above.

58    There is some evidence of co-operation and contrition in the payment and the agreement referred to at [51] above.

C.5.9    Maximum penalty

59    Each of the contraventions carried a maximum penalty of 300 penalty units for AMK Images and 60 penalty units for Mr Gavran. During the relevant period a penalty unit had a value of $210 prior to 1 July 2020 and $222 thereafter.

C.6    Penalties on AMK Images

60    Taking all of the above matters into account, the appropriate penalties for AMK Images are:

(1)    for the contravention of s 45 of the FW Act by reason of its failure to provide copies of the Awards and the NES to Mr Cocos – $15,000;

(2)    for the contravention of s 45 of the FW Act by reason of its failure to pay Mr Cocos’s wages on a regular weekly schedule – $12,500;

(3)    for the contravention of s 45 of the FW Act by reason of its failure to pay meal allowances to Mr Cocos – $12,500;

(4)    for the contravention of s 45 of the FW Act by reason of its failure to pay travel allowances to Mr Cocos after 1 July 2021 – $12,500;

(5)    for the contravention of s 45 of the FW Act by reason of its failure to make a redundancy payment to Mr Cocos – $12,500;

(6)    for the contravention of s 323(1) of the FW Act by reason of its making of deductions from Mr Cocos’s wages in the absence of written authorisation of those deductions, as required by s 324 of the FW Act – $12,500; and

(7)    for the contravention of s 536(1) of the FW Act by reason of its failure to provide Mr Cocos with payslips – $15,000.

C.7    Penalties on Mr Gavran

61    Taking all of the above matters into account, the appropriate penalties for Mr Gavran are:

(1)    for the contravention of s 45 of the FW Act by reason of the failure of AMK Images to provide copies of the Awards and the NES to Mr Cocos – $3,000;

(2)    for the contravention of s 45 of the FW Act by reason of the failure of AMK Images to pay Mr Cocos’s wages on a regular weekly schedule – $2,500;

(3)    for the contravention of s 45 of the FW Act by reason of the failure of AMK Images to pay meal allowances to Mr Cocos – $2,500;

(4)    for the contravention of s 45 of the FW Act by reason of the failure of AMK Images to pay travel allowances to Mr Cocos after 1 July 2021 – $2,500;

(5)    for the contravention of s 45 of the FW Act by reason of the failure of AMK Images to make a redundancy payment to Mr Cocos – $2,500;

(6)    for the contravention of s 323(1) of the FW Act by reason of AMK Images making of deductions from Mr Cocos’s wages in the absence of written authorisation of those deductions, as required by s 324 of the FW Act – $2,500; and

(7)    for the contravention of s 536(1) of the FW Act by reason of the failure of AMK Images to provide Mr Cocos with payslips – $3,000.

C.8    Principle of totality

62    It is appropriate to have regard to the totality principle to ensure that the penalty to be imposed does not exceed that which is reasonably necessary for deterrence: Pattinson at 469 to 470 [45]; Employsure at 314 [52]. I have done so and am satisfied that the penalties set out above are appropriate and proportionate to the conduct of AMK Images and Mr Gavran viewed as a whole and do not exceed that which is reasonably necessary for deterrence, without being excessive or oppressive.

D.    CONCLUSION

63    For the reasons set out above, orders should be made imposing pecuniary penalties totalling $92,500 on AMK Images and $18,500 on Mr Gavran. I will make orders accordingly.

Associate:

Dated:    27 August 2025