Fair Work Ombudsman v Yenida Pty Ltd & Anor [2018] FCCA 1342 (24 May 2018)

Last Updated: 25 May 2018

FEDERAL CIRCUIT COURT OF AUSTRALIA

REPRESENTATION

THE COURT DECLARES THAT:

(1) The First Respondent contravened s.351 of the Fair Work Act 2009 (Cth) (‘FW Act’), by taking adverse action against Kien Hoong Loh, by:

• (a) discriminating between Mr Loh and other employees of the First Respondent because of:
  • (i) his race; and
  • (ii) his national extraction;
• (b) injuring Mr Loh in his employment because of
  • (i) his race; and
    • (ii) his national extraction.

(2) The First Respondent contravened s.351 of the FW Act, by taking adverse action against Kah Yoon Low, by:

• (a) discriminating between Ms Low and other employees of the First Respondent because of:
  • (i) her race; and
  • (ii) her national extraction;
• (b) injuring Ms Low in her employment because of :
  • (i) her race;
    • (ii) her national extraction.

(3) The Second Respondent was involved in the contraventions specified in Declaration 1 above, within the meaning of s.550 of the FW Act.

(4) The Second Respondent was involved in the contraventions specified in Declaration 2 above, within the meaning of s.550 of the FW Act.

THE COURT ORDERS THAT:

(1) Pursuant to s.546(1) of the FW Act, penalties of $176,005 be imposed against the First Respondent for the contraventions declared at paragraph 2 of the Court’s Orders of 26 September 2017 (‘Orders’) and the contraventions at paragraphs 1 and 2 above.

(2) Pursuant to s.546(1) of the FW Act, penalties of $35,099 be imposed against the Second Respondent for the contraventions declared at paragraph 3 of the Orders and the contraventions at paragraphs 3 and 4 above.

(3) Pursuant to ss.546(1) and 546(3) of the FW Act, penalties be paid to the Commonwealth within 28 days of the Court’s orders.

(4) The Applicant have liberty to apply on seven days notice in the event that any of the preceding orders are not complied with.

LNG 24 of 2015

Applicant

And

First Respondent

And

Second Respondent

REASONS FOR JUDGMENT

Introduction

1. This application concerns contraventions of the Fair Work Act 2009 (Cth) (‘FW Act’) and the Fair Work (Transitional Provision and Consequential Amendments) Act 2009 (‘Transitional Act’) by the first respondent, Yenida Pty Ltd (‘Yenida’), and the second respondent, Mr Chang Yen Chang (‘Mr Chang’), a director and company secretary of Yenida.
2. Yenida operated the Scamander Beach Resort Hotel (‘the Hotel’), in Scamander, a small town on the east coast of Tasmania. Mr Chang was the general manager of the Hotel and was responsible for the management of employees and decisions regarding the terms and conditions of their employment. Mr Chang was also responsible for ensuring Yenida complied with its legal obligations under the FW Act and the Transitional Act.
3. Penalties are being sought by the applicant, the Fair Work Ombudsman (‘FWO’), for contraventions regarding 17 employees.
4. The contraventions regarding the following 15 employees (the ‘Audit Employees’) were admitted by the respondents:
   • Christine Byrne
   • Sonia Cymbalak
   • Annette Earley
   • Mary Gavaghan
   • Lynette Harrison
   • Megan Jacobi
   • Susan Lea
   • Sarah McKimmie
   • Jacqueline Midson
   • Virginia Moore
   • Craig O’Shea
   • Eldene O’Shea
   • Tadgh Riley
   • Sharon Street
   • Darlene Wright
5. All of the Audit Employees are of Caucasian race and Australian national extraction. Each was employed on a casual basis. In summary, the contraventions regarding the Audit Employees relate to the failure to pay them the following during the period 31 December 2012 to 31 August 2014:
   • (a) minimum hourly rates of pay (three employees);
   • (b) amounts sufficient to meet the required casual loading rate (15 employees);
   • (c) the required rates for Saturday work (14 employees);
   • (d) the required rates for Sunday work (12 employees);
   • (e) the required rates for public holidays (12 employees);
   • (f) the required rates for evening loading (two employees);
   • (g) the required rates for early morning loading (one employee);
   • (h) for minimum engagement of two hours (eleven employees);
   • (i) loading for shifts worked in excess of six hours when no meal breaks provided (10 employees); and
   • (j) for higher duties (one employee).
6. The total of the underpayments to the 15 Audit Employees was $26,488.65. Declarations in respect of the admitted contraventions were made on 26 September 2017.
7. The penalties sought by the FWO in respect of the two other employees, Mr Kien Hoong Loh, also known as Peter, (‘Mr Loh’) and Ms Kah Yoon Low (‘Ms Low’), are in relation to both admitted contraventions and disputed contraventions. The disputed contraventions relate to breaches of s.351 of the FW Act, for which judgment was delivered in favour of the FWO on 26 September 2017 in the decision Fair Work Ombudsman v Yenida Pty Ltd & Anor [2017] FCCA 2299 (‘Liability Decision’).
8. Both Mr Loh and Ms Low are Malaysian nationals of Chinese descent.
9. In regard to Mr Loh, during the period 1 January 2010 to 20 April 2014, Yenida admitted that it failed to pay him:
   • (a) amounts sufficient to meet his entitlement for hours worked on a public holiday;
   • (b) overtime worked on a weekday;
   • (c) overtime worked on a weekend;
   • (d) evening loading; and
   • (e) a broken shift allowance.
10. It was agreed in the Statement of Agreed Facts filed 3 March 2017 (‘SOAF’) that the underpayments in respect of Mr Loh amounted to a total of $21,124.84. After deductions it was agreed he was entitled to be paid $17,327.74. These figures were incorrectly calculated in the Statement of Agreed Facts.
11. On 1 March 2018, I requested that the parties address the Court about several issues, including the correct value of the agreed underpayment amount in respect of Mr Loh. It was agreed that the correct value of the underpayments was $20,550.62 before deductions. It was further agreed that, following deductions, the correct amount to be paid to Mr Loh was $16,753.52.
12. Yenida failed to complete rosters, and to make and keep records, regarding Mr Loh.
13. In relation to the disputed contraventions of s.351 of the FW Act, I found that Yenida took adverse action against Mr Loh by discriminating between him and other employees and by injuring him because of his Chinese race and Malaysian national extraction by:
    • (a) paying him an annual salary which did not change to reflect the number of hours or days he worked;
    • (b) employing him to work six days per week;
    • (c) making no records of his hours; and
    • (d) not paying his award entitlements, and not allowing him a reasonable work life balance.
14. In regard to Ms Low, during the period 7 September 2009 to 17 January 2010, Yenida admitted that it failed to pay her:
    • (a) entitlement to a minimum hourly rate of pay;
    • (b) amounts sufficient to meet her entitlement to casual loading;
    • (c) amounts sufficient to meet her entitlement for hours worked on a Saturday;
    • (d) amounts sufficient to meet her entitlement for hours worked on a Sunday;
    • (e) amounts sufficient to meet her entitlement for hours worked on a public holiday; and
    • (f) evening loading.
15. The underpayments in respect of Ms Low amounted to a total of $8,775.57.
16. Yenida also failed to make and keep records regarding Ms Low.
17. In relation to the disputed contraventions of s.351 of the FW Act, I found that Yenida took adverse action against Ms Low by discriminating between her and other employees and injuring her because of her Chinese race and Malaysian national extraction by:
    • (a) paying her a fixed rate of pay on a weekly basis that did not change to reflect the number of days or hours she worked.
    • (b) failing to pay her any penalty rates;
    • (c) not recording her hours; and
    • (d) rostering her to work six days per week.^[1]
18. In respect of all 17 employees, Yenida admitted that it failed to provide them with pay slips within one working day of payment.
19. Mr Chang was involved in all of Yenida’s contraventions within the meaning of s.550(2) of the FW Act.
20. All of the underpayments in respect of all 17 employees have been rectified.
21. The declarations for the adverse action contraventions were not made when the Liability Decision was delivered because I had not heard any submissions from the respondents about their form. At the penalty hearing, the parties proposed by consent the declarations to be made, as set out in Annexure A of the FWO’s submissions. It appears that the declarations have been drafted in accordance with the grouping agreed for this hearing. I intend to make declarations which convey the essence of the contravening conduct in accordance with the Liability Decision.

Penalty Hearing

22. Both parties prepared written submissions and also made oral submissions.
23. The form of relief sought by the FWO is that the respondents pay pecuniary penalties to the Commonwealth pursuant to ss.546(1) and (3) of the FW Act.

Approach to determination of penalty

24. The parties essentially agreed upon the approach to be taken in determining the appropriate penalties.^[2] The main difference between their approaches was that the FWO’s involved four steps, whilst the respondent’s involved five steps.

The Respondents

25. The respondents submitted that a five step approach should be taken, relying on the decision of Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 (‘NSH North’).
26. It was submitted that the key difference between the four step process taken by the FWO and the five step process is that the five step process involves an extra step (the respondent’s third step) after s.557 grouping. This extra step requires the Court to consider whether there is a double penalty being imposed for what amounts to the same contravening conduct. It was submitted by the respondents that the penalties imposed by the Court should be an appropriate response to what Yenida and Mr Chang did.^[3] The respondents highlighted in their submissions that:
    • This task is distinct from and in addition to the final application of the “totality principle”: Mornington Inn Pty Ltd (ACN 116 830 703) v Jordan [2008] FCAFC 70; (2008) 168 FCR 383... per Stone and Buchanan JJ at [41]-[46].^[4]
27. Counsel for the respondents submitted that their third step therefore requires the extent to which two or more contraventions have common elements to be taken into account when considering the appropriate penalty in all the circumstances of each contravention.^[5]

The Applicant

28. In her oral submissions, Counsel for the FWO submitted that the FWO did not take issue in respect of the respondents’ description of the step process, explaining that the difference is a matter of different language used for similar concepts.

The Appropriate Approach

29. In the recent decision of Fair Work Ombudsman v Siner Enterprises Pty Ltd & Anor (No 2) [2018] FCCA 589 (‘Siner’) Judge Lucev helpfully summarised the approach that has been developed to determining penalties:
    • A set of principles as steps in the process of determining a quantum of penalty has been developed as follows:
    • a.) first, the Court identifies the separate contraventions involved. Each contravention of, in turn each separate obligation imposed by, the FW Act is a separate contravention of a civil remedy provision for the purposes of s.539(2) of the FW Act: Gibbs v The Mayor, Councillors & Citizens of the City of Altona [1992] FCA 553; (1992) 37 FCR 216; (1992) 42 IR 255; (1992) 34 AILR 369, FCR at 223 per Gray J (“Gibbs”); McIver v Healey [2008] FCA 425; (2008) 60 AILR 100-850 at [16] per Marshall J; Rocky Holdings Pty Ltd & Anor v Fair Work Ombudsman [2014] FCAFC 62; (2014) 221 FCR 153; (2014) 243 IR 244 (“Rocky Holdings”);
    • b.) second, the Court should consider whether the extent to which the contraventions so identified in the first step constitute a “course of conduct,” and thus ought to be treated as a single contravention within the meaning and operation of s.557 of the FW Act: FW Act, s.557(1);
    • c.) third, to the extent that two or more contraventions have common elements, the Court may take this into account in considering the appropriateness in all the circumstances of the quantum of penalty for the contraventions. That reflects the basic principle that a contravener should not be penalised more than once for what, in a practical sense, amounts to the same contravening conduct, such that the penalties imposed by the Court should be an appropriate but fair response to the contravention of statutory obligations: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560; (2008) 246 ALR 35; (2008) 60 AILR 100-809 at [46] per Graham J (“Australian Ophthalmic Supplies”);
    • d.) fourth, the Court, having identified the relevant factors arising from the first three steps, must fix appropriate penalties for each contravention having regard to all of the circumstances of the case, and the basic nature and purpose of imposing a penalty set out in Ponzio v B & P Caelli Constructions Pty Ltd and Ors [2007] FCAFC 65; (2007) 158 FCR 543; (2009) 162 IR 444; (2009) 59 AILR 100-669 at [93] per Lander J (“Caelli Constructions”):
      • (i) as punishment, proportionate to the offence and according to prevailing standards;
      • (ii) as personal or specific deterrence, having assessed the risk of reoffending; and
      • (iii) for rehabilitation; and
    • e.) fifth, having fixed appropriate penalties for the contraventions, the Court should take a final look at the aggregate penalty, to determine whether it is an appropriate response to the contravening conduct: Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 at [30] per Tracey J (“Kelly”); Australian Ophthalmic Supplies at [23] per Gray J, [71] per Graham J and [102] per Buchanan J. The Court should apply an “instinctive synthesis” (often referred to in the applicable case law as the "totality principle'') in making this assessment: Australian Ophthalmic Supplies at [27] per Gray J and [55] and [78] per Graham J.^[6]
30. I will follow this approach taken by Lucev J in Siner [2018] FCCA 589 in determining the penalties in this matter.

Step 1: The Contraventions

31. A summary of the contraventions are as follows:

Breaches of s.45 of the FW Act

32. Yenida contravened s.45 of the FW Act as a result of contravening the following clauses of the Hospitality Industry (General) Award 2010 (‘Hospitality Award’):
    1. Clause 13.1 by failing to pay amounts sufficient to meet Ms Low’s entitlement to casual loading and by failing to pay all of the Audit Employees amounts sufficient to meet the required casual loading;
    2. Clause 13.2, by failing to pay Christine Byrne, Sonia Cymbalak, Annette Earley, Mary Gavaghan, Lynette Harrison, Megan Jacobi, Susan Lea, Jacqueline Midson, Virginia Moore, Craig O’Shea and Darlene Wright, for at least a minimum of two hours for each engagement;
    100. Clause 20, by failing to pay amounts to meet Ms Low’s entitlement to a minimum hourly rate of pay, and by failing to pay Lynette Harrison, Susan Lea and Sarah McKimmie the required minimum hourly rate;
    4. Clause 21.3(a) by failing to pay Mr Loh a broken shift allowance;
    5. Clause 25.1, by failing to pay Jacqueline Midson amounts sufficient to meet the required rate of pay when an employee is performing higher duties;
    6. Clause 30.1, by failing to complete rosters for Mr Loh as required;
    7. Clause 31.4, by failing to pay Christine Byrne, Annette Earley, Mary Gavaghan, Megan Jacobi, Sarah McKimmie, Jaqueline Midson, Virginia Moore, Craig O’Shea, Sharon Street and Darlene Wright, the required loading for shifts worked in excess of six hours where no meal breaks are provided;
    8. Clause 32.1, by failing to pay Mr Loh and Ms Low amounts sufficient to meet their entitlements for hours worked on a public holiday, and by failing to pay amounts sufficient to meet the required minimum hourly rate of pay for work performed on a public holiday by Christine Byrne, Annette Earley, Mary Gavaghan, Lynette Harrison, Megan Jacobi, Susan Lea, Sarah McKimmie, Jacqueline Midson, Virginia Moore, Craig O’Shea, Sharon Street and Darlene Wright;
    9. Clause 32.1, by failing to pay Ms Low amounts sufficient to meet her entitlement for hours worked on a Saturday, and by failing to pay amounts sufficient to meet the required minimum hourly rate of pay for work performed on a Saturday by Christine Byrne, Sonia Cymbalak, Annette Earley, Mary Gavaghan, Lynette Harrison, Megan Jacobi, Susan Lea, Sarah McKimmie, Virginia Moore, Craig O’Shea, Eldene O’Shea, Tadgh Riley, Sharon Street and Darlene Wright;
    10. Clause 32.1, by failing to pay by failing to pay Ms Low amounts sufficient to meet her entitlement for hours worked on a Sunday, and by failing to pay amounts sufficient to meet the required minimum hourly rate of pay for work performed on a Sunday by Christine Byrne, Annette Early, Mary Gavaghan, Megan Jacobi, Susan Lea, Sarah McKimmie, Jacqueline Midson, Virginia Moore, Craig O’Shea, Eldene O’Shea, Sharon Street and Darlene Wright;
    11. Clause 33.3(a)(i) by failing to pay amounts sufficient to meet Mr Loh's entitlement for overtime worked on a weekday;
    50. Clause 33.3(a)(ii) by failing to pay amounts sufficient to meet Mr Loh's entitlement for overtime worked on a weekend;
    13. Clause A.5.2 by failing to pay Ms Low evening loading;
    14. Clauses A.6.4 and A.7.3 by failing to pay Mr Loh an evening loading, and by failing to pay Annette Earley and Sarah McKimmie the required evening loading; and
    15. Clauses A.6.4 and A.7.3 by failing to pay Annette Earley the required early morning loading.

Breaches of s.351 of the FW Act

33. Yenida contravened s.351 of the FW Act by taking adverse action against Mr Loh:
    • (a) by discriminating between him and other employees of Yenida:
      • (i) because of his race; and
      • (ii) because of his national extraction;
    • (b) by injuring him in his employment
      • (i) because of his race; and
        • (ii) because of his national extraction.
34. Yenida contravened s.351 of the FW Act by taking adverse action against Ms Low:
    • (a) by discriminating between her and other employees of Yenida:
      • (i) because of her race; and
        • (ii) because of her national extraction;
    • (b) by injuring her in her employment:
      • (i) because of her race; and
        • (ii) because of her national extraction.

Breach of s.535 of the FW Act

35. Yenida contravened s.535 of the FW Act by failing to make and keep records of the kind prescribed by reg.3.34 of the Fair Work Regulations 2009 (Cth) for Mr Loh and reg.3.33(2) for Ms Low.

Breach of s.536 of the FW Act

36. Yenida contravened s.536 of the FW Act by failing to provide pay slips to Mr Loh, Ms Low and all of the Audit Employees within one working day of payment.

Breaches of item 5 of schedule 16 of the Transitional Act

37. Yenida contravened item 5 of schedule 16 of the Transitional Act as a result of contravening the Australian Pay and Classification Scale derived from the Hospitality Industry – Accommodation, Hotels, Resorts and Gaming Award 1998 (‘Pre-Modern Award’) by:
    1. Failing to pay Ms Low amounts to meet her entitlement to a minimum hourly rate of pay; and
    2. Failing to pay amounts sufficient to meet Ms Low’s entitlement to casual loading.

Breaches of item 2(1) of schedule 16 of the Transitional Act

38. Yenida contravened item 2(1) of schedule 16 of the Transitional Act as a result of contravening the following clauses of the Pre-Modern Award:
    1. Clause 15.2.2(a) by failing to pay Ms Low evening loading;
    2. Clause 15.2.2(b) by failing to pay amounts sufficient to meet Ms Low’s entitlement for hours worked on a Saturday;
    100. Clause 15.2.2(c) by failing to pay amounts sufficient to meet Ms Low’s entitlement for hours worked on a Sunday; and
    4. Clause 15.2.2(d) by failing to pay amounts sufficient to meet Ms Low’s entitlement for hours worked on a public holiday.

Mr Chang’s Involvement

39. Mr Chang was involved, within the meaning of s.550 of the FW Act, in all of the above contraventions.

Step 2: Course of Conduct

40. Section 557(1) of the FW Act provides:
    • 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.
41. Subsection (2) refers to the relevant civil remedy provisions, which include ss.45, 535 and 536 of the FW Act.
42. The FWO prepared a table, annexed to these reasons, ^[7] in which it grouped the courses of conduct pursuant to s.557 of the FW Act under the heading ‘Contravention.’ The respondents agreed with the groupings proposed by the FWO set out in its table,^[8] but submitted that there needs to be further consideration given to the quantum of penalties when considering double punishment and step three factors.
43. I accept the submission of the FWO that the respondents are entitled to the benefit of s.557(1), such that repeated contraventions of the same terms of the Hospitality Award which affected the 15 Audit Employees may be treated as one contravention of each term in respect of these employees. Repeated contraventions in respect of the failure to issue payslips to all employees in the prescribed time can also be treated as a single contravention.^[9]
44. I agree with the submission of the FWO that the respondents are not entitled to the benefit of s.557 to group the contraventions of the same term of the Award which relate to Mr Loh, Ms Low and the Audit employees. I agree that the treatment of Mr Loh, Ms Low and the Audit Employees arose due to separate and distinct decisions of the respondents and the contraventions relating to each of them should not be grouped.

Step 3: Common Elements

45. The FWO has included, in addition to the statutory course of conduct provision groupings made under s.557 of the FW Act, a second stage of grouping (under the heading ‘Group’). Counsel for the FWO explained in her oral submissions that this further grouping is a consideration of the common elements of two or more contraventions, so that double punishment does not occur for ‘substantially similar conduct.’^[10]
46. Counsel for the FWO pointed out that sufficient weight should be given to the different nature and consequences of each type of contravention when considering whether to group them together. Counsel referred to GPS [2017] FCA 557 at [423]- [428] and also pointed out that it may not be open to courts to impose a single penalty for a number of different types of contraventions, referring to Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113 [128]-[129].
47. Counsel for both parties cited the following passage from [46] of Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 (‘Australian Ophthalmic Supplies’) (quoting Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 at [40]) as authority:
    • To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts.

48. The above passage has been interpreted in many decisions to mean that multiple contraventions which share common elements can effectively be treated as a single contravention, with one penalty imposed, the maximum of which is equivalent to the maximum of a single contravention. It appears from their submissions, including their table, that this is the approach the FWO has taken. The FWO did however acknowledge that their approach ‘would not be the appropriate course in all matters;’ and went on to say that ‘however the overlap in factual circumstances is substantial in this case.’^[11]

49. The FWO’s grouping for common elements can be summarised as follows:

50. The FWO also sought to group the contraventions in relation to Ms Low which spanned the Transitional Act and the FW Act.
51. Counsel for the respondents made it clear in her oral submissions that that the respondents did not propose one penalty covering the adverse action and underpayment contraventions combined for each Mr Loh and Ms Low.
52. However, counsel for the respondents submitted that the conduct of the respondents in respect of the adverse action contraventions should be:
    • grouped so that there is one penalty for Mr Loh and Ms Low combined. Or alternatively, when your Honour is assessing the separate penalties... that’s part of the assessment process that your Honour goes through which is the five step process... ... and reduces the combined penalty to reflect that.^[12]
53. I consider that whilst the conduct was of the same character or type towards each Mr Loh and Ms Low, I accept the submission of the FWO that the conduct arose from different decisions, made at different times. I am not persuaded that there should be one penalty for Mr Loh and Ms Low combined, or that the penalties in respect of each should be further adjusted as submitted by the respondents.
54. In GPS,^[13] Katzmann J highlighted the potential danger of grouping contraventions by common elements in a way that means one penalty is imposed for multiple contraventions, explaining it means that the court would not be engaging specifically with the contravention of each statutory norm:
    • In reliance on what was said in Pearce at [40], in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 at [93] Buchanan J endorsed the grouping by a federal magistrate of 22 contraventions into categories and the fixing of penalties for the categories “to accommodate ‘some degree of overlap’”.
    • The Court should certainly have regard to common elements in contraventions so as not to penalise a respondent twice for the same conduct. It seems to me, however, with the greatest respect, that grouping contraventions in such a way as to impose one penalty for multiple contraventions is wrong. As Jessup J observed in General Manager of the Fair Work Commission v Thomson (No 4) [2015] FCA 1433 at [10], “by taking [such an approach], the court would be failing to engage directly and specifically with the consequences of the contravention of each statutory norm”. Moreover, it is inconsistent with Pearce.^[14]
55. Her Honour cited Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171 in which the Full Court applied the law as it was explained by Owen JA in Royer v Western Australia [2009] WASCA 139 and cited what his Honour said at [22], [24]-[25]:
    • At its heart, the one transaction principle recognises that, where there is an interrelationship between the legal and factual elements of two or more offences with which an offender has been charged, care needs to be taken so that the offender is not punished twice (or more often) for what is essentially the same criminality. The interrelationship may be legal, in the sense that it arises from the elements of the crimes. It may also be factual, because of a temporal or geographical link or the presence of other circumstances compelling the conclusion that the crimes arise out of substantially the same act, omission or occurrences....
    • Because of the wide variety of circumstances in which the principle can arise it is not always easy to reconcile the way it has been applied in individual cases. But what can be detected in each case is an examination of the closeness of the interrelationship and the danger of double jeopardy in so far as punishment (not criminal liability) is concerned. In this respect, I think it is worth repeating what Wells J said in Attorney-General v Tichy (1982) 30 SASR 84, 92-93...
    • It is both impracticable and undesirable to attempt to lay down comprehensive principles according to which a sentencing judge may determine, in every case, whether sentences should be ordered to be served concurrently or consecutively. According to an inflexible Draconian logic, all sentences should be consecutive, because every offence, as a separate case of criminal liability, would justify the exaction of a separate penalty. But such a logic could never hold. When an accused is on trial it is part of the procedural privilege to which he is entitled that he should be made aware of precisely what charges he is to meet. But the practice and principles of sentencing owe little to such procedure; what is fitting is that a convicted prisoner should be sentenced, not simply and indiscriminately for every act that can be singled out and brought within the compass of a technically identifiable conviction, but for what, viewing the circumstances broadly and reasonably, can be characterised as his criminal conduct. Sometimes, a single act of criminal conduct will comprise two or more technically identified crimes. Sometimes, two or more technically identified crimes will comprise two or more courses of criminal conduct that, reasonably characterized, are really separate invasions of the community’s right to peace and order, notwithstanding that they are historically interdependent; the courses of criminal conduct may coincide with the technical offences or they may not. Sometimes, the process of characterization rests upon an analysis of fact and degree leading to two possible answers, each of which, in the hands of the trial judge, could be made to work justice. The practice of imposing either concurrent or consecutive sentences cannot avoid creating anomalies, or apparent anomalies, from time to time. What must be done is to use the various tools of analysis to mould a just sentence for the conduct of which the prisoner has been guilty. Where there are truly two or more incursions into criminal conduct, consecutive sentences will generally be appropriate. Where, whatever the number of technically identifiable offences committed, the prisoner was truly engaged upon one multi-faceted course of criminal conduct, the judge is likely to find concurrent sentences just and convenient...
56. Of considerable relevance to this case is the following passage from Owen JA:
    • There will be instances in which it is obvious that the interrelationship of multiple offences is so intimate that they can only be said to arise from a single course of criminal conduct. In those instances injustice can only be avoided by imposing concurrent terms. Not to do so would inevitably result in the offender being punished more than once for the same criminality.

57. As discussed above, the FWO submitted that their approach ‘would not be the appropriate course in all matters...however the overlap in factual circumstances is substantial in this case.’^[15]

58. I agree that the overlap in factual circumstances is substantial in relation to some of the contraventions. I agree that the interrelationship of the multiple adverse action contraventions is so intimate that they can only be said to arise from a single course of conduct, and that the same situation arises in relation to the contraventions of mirror provisions of the FW Act and Transitional Act regarding Ms Low.
59. I intend to follow the method agreed by the parties in relation to these contraventions, rather than impose an individual penalty for each. I consider that it would be artificial to impose an individual penalty for each offence in these circumstances.

Adverse Action Group

60. I consider that there is substantial overlap between the two s.351 offences regarding discrimination taken against Mr Loh because of his Malaysian national extraction and his Chinese race. Both offences involved the same discrimination, which is detailed in [13] above.
61. In regard to the discrimination because of Mr Loh’s national extraction, I found that Mr Chang decided to recruit employees from Malaysia, in part because he knew a Malaysian would accept working six days a week and he knew that it was usual in Malaysia to work six or seven days. I did not accept Mr Chang’s denial that there was no connection between Mr Loh coming from Malaysia and accepting working long hours on six days per week. Mr Loh negotiated his terms and conditions of employment and accepted the terms without an understanding of workplace laws in Australia. He was vulnerable and dependent on his employment with Yenida to remain in Australia.
62. In regard to the discrimination because of Mr Loh’s race, the evidence in the liability proceedings was that for Chinese, there is a culture of helping out your family and working hard for them. Mr Chang thought because he and Mr Loh were Chinese, they were on the same wavelength. I did not accept Mr Chang’s denial that he referred to Mr Loh and Ms Low as family to put pressure on them to work hard for him.
63. As with the discrimination contraventions, there is substantial overlap between the two s.351 offences regarding the injury of Mr Loh in his employment. The relevant injury for both offences was the same: the non-payment of award entitlements.
64. As highlighted previously, there is also a significant overlap between the two discrimination and two injury offences regarding Mr Loh. One of the forms of discrimination found in the Liability Decision was that, unlike other employees, Mr Loh was paid an annual salary that did not change to reflect the number of hours, or the days, he worked. Unlike the others, he was not paid separately identifiable amounts in addition to his ordinary rate of pay for hours worked on a Saturday, Sunday, public holiday, or after 7:00 p.m. on a weekday (penalty rates). This meant that Mr Loh was not paid his award entitlements, which was the injury found in the Liability Decision.
65. The overlap between the four offences will be taken into account in the fixation of the penalty for that group.
66. The same overlap between offences arises in respect of the four adverse action contraventions regarding Ms Low. The discrimination was the same for both discrimination offences and the injury was the same for both injury offences (see [17] above). The discrimination and injury contraventions also overlapped. One of the grounds of discrimination found was that Yenida discriminated between Ms Low and other employees of Yenida by paying her a fixed weekly rate of pay that did not change to reflect the number of days of hours she worked. Unlike other employees, Ms Low was not paid any casual loading, Saturday rates, Sunday and public holiday rates, or weekend evening loadings (penalty rates). This meant that Ms Low was injured by not being paid her award entitlements.
67. In regard to the discrimination of Ms Low because of her national extraction, it was found that Mr Chang discriminated against her because he thought a Malaysian would work longer hours for less pay. Mr Chang did not accept that she was capable of complaining without external advice, demonstrating his knowledge of her vulnerability. I did not accept Mr Chang’s evidence that he would have treated an Australian employee in the same way as Ms Low.
68. In respect of the offence of discrimination on the grounds of Ms Low’s Chinese race, as with Mr Loh, Mr Chang used the term ‘family’ to put pressure on her to work hard.
69. As with Mr Loh, the overlap between the four s.351 offences concerning Ms Low will be taken into account in the fixation of the penalty for that group.
70. The respondents submitted that the Court needs to take into account that the injury and discrimination pleaded and found by the Court relating to each of Mr Loh and Ms Low were largely the underpayments, for which separate civil penalty payments are also sought. I accept the respondents’ submission that the punishment of the respondents for the underpayment contraventions needs to be considered when determining the penalties for the unlawful conduct in taking adverse action against Mr Loh and Ms Low, so that double punishment does not occur.

Contraventions which span the Fair Work Act and Transitional Act Group

71. In respect of the underpayment contraventions regarding Ms Low, they span two legislative periods. I accept that the contraventions arose from the same conduct during each legislative period. I consider that they are so intimately linked that they can only be considered one course of conduct, and will impose one penalty for each pair of contraventions of mirror provisions.

Remaining Groups as Proposed

72. As shown in [49] above, the FWO also proposed two more groups of contraventions, namely overtime and record-keeping.
73. In relation to the contraventions regarding weekday and weekend overtime, I consider that they overlap, but not to the extent that they can only be said to arise from a single course of conduct. They are different in that they applied to different days and involved different rates. Weekday overtime attracted a loading of 150% of the employee’s normal rate of pay for the first two hours of overtime, and twice their normal rate of pay (200%) for overtime worked after that two hours. In contrast, weekend overtime attracted a loading of 200% of the employee’s normal rate of pay for any overtime hours worked.
74. I consider that the appropriate method for fixing penalties in relation to these two contraventions is that used by Katzmann J in GPS [2017] FCA 557 (as discussed above), namely to impose a penalty for each contravention, but take into account the overlap when determining their quantum.
75. In respect of the record keeping contraventions regarding Mr Loh and Ms Low, the FWO submitted that:
    • There should really be a line...between the record keeping of the hours for Mr Loh and Ms Low, in the sense that they are two – strictly speaking, under section 557, they are two separate courses of conduct... but the Ombudsman had proposed that they be grouped together as one penalty for the purposes of the maximum penalty calculation.
76. These submissions were confusing. Contraventions of s.535 are capable of being grouped under s.557 of the FW Act. Further, the FWO did not seem to argue how two separate courses of conduct could be grouped.
77. I consider that the record keeping contraventions regarding Mr Loh and Ms Low were separate courses of conduct, and as such they should not be grouped under s.557 or otherwise.

Further Submissions

78. The respondents further submitted that the underpayment contraventions regarding Mr Loh and Ms Low arose from a single decision to pay them a salary or weekly wage, so there should therefore be a further adjustment to the penalties to recognise this.
79. In respect of Mr Loh, the underpayments did not occur because a salary was offered and the relevant award entitlements were overlooked by inadvertence or recklessness and it was a ‘set and forget’ situation (as submitted by Mr Chang during the liability hearing). They arose because a deliberate decision was made by Mr Chang, on behalf of Yenida, not to pay Mr Loh overtime and penalties. Mr Chang knew that Mr Loh was entitled to the relevant award entitlements, that overtime was payable for work over 38 hours per week, and that he worked between 33 and 57 hours per week.^[16] Mr Loh’s 2007 contract included an entitlement to a day off in lieu if he was required to work on a gazetted Australian public holiday. This was not included in either version of the 25 August 2010 contract, both contracts stating that ‘[t]he employee may be required to work on gazetted public holidays’. Clauses for overtime and penalty rates were included in the amended version of Mr Loh’s 25 August 2010 contract.
80. Regarding Ms Low, Mr Chang knew that she was entitled to the relevant award entitlements. He offered her a salary calculated on an award rate for 24 hours per week, even though he knew that she worked between 35 and 51 hours per week.^[17] She was not paid award entitlements.
81. The respondents submitted that some of the contraventions concerning Saturday and Sunday penalties, although separate contraventions, essentially arise from the same course of conduct and the penalties imposed should reflect that. They cited GPS [2017] FCA 557 in which Katzmann J determined that they involve very similar conduct and the Sunday contravention penalty was reduced. Like the weekday and weekend overtime contraventions regarding Mr Loh, I consider that the Saturday and Sunday contraventions overlap, but not to the extent that they can only be said to arise from a single course of conduct. They are different in that they applied to different days and involved different rates. I will therefore impose a penalty on each contravention, but take the overlap into account when determining the quantum of each penalty.

Step 4: Factors relevant to penalty

82. The FWO relied on the decision of Kelly v Fitzpatrick [2007] FCA 1080 (‘Kelly’), in which Tracey J cited, with approval, Mowbray FM (as he then was) in Mason v Harrington Corporation Pty Limited.^[18] Mowbray FM identified a non-exhaustive list of factors relevant to the imposition of penalty, which were summarised and adopted by Tracey J as follows:
    • the nature and extent of the conduct which led to the breaches;
    • the circumstances in which that conduct took place;
    • the nature and extent of any loss or damage sustained as a result of the breaches;
    • whether there had been similar previous conduct by the respondent;
    • whether the breaches were properly distinct or arose out of one course of conduct;
    • the size of the business enterprise involved;
    • whether or not the breaches were deliberate;
    • whether senior management was involved in the breaches;
    • whether the party committing the breach had exhibited contrition;
    • whether the party committing the breach had taken corrective action ;
    • whether the party committing the breach had cooperated with the enforcement authorities;
    • the need to ensure compliance with minimum standards by provision of an effective means investigation and enforcement of employee entitlements and
    • the need for specific and general deterrence. ^[19]
83. The submissions of the parties address these considerations.
84. This list is a guide and does not restrict the discretion of the court.^[20]

The nature, extent and circumstances of the contravening conduct regarding Mr Loh and Ms Low

85. The respondents do not dispute that the contravening conduct in respect of Mr Loh and Ms Low was objectively serious.
86. The FWO provided the following summary of my findings in the Liability Decision, regarding the context in which the contraventions occurred, at [22] of their submissions:
    • (a) Mr Chang decided to recruit employees from Malaysia, at least in part because he knew a Malaysian would accept working six days a week;
    • (b) Mr Loh negotiated his terms and conditions of employment, and Ms Low accepted the terms proposed by Mr Chang, without an understanding of workplace laws in Australia;
    • (c) Mr Loh and Ms Low were “vulnerable and dependent” on Mr Loh’s employment with Yenida to remain in Australia;
    • (d) Mr Loh did not want to raise his workplace entitlements because he thought if he did so, it would be bad for his visa and his application for permanent residency;
    • (e) Ms Low and Mr Loh had observed how angry Mr Chang had become after Mr Winoto had raised matters in relation to his workplace entitlements, and were aware that Mr Winoto had been dismissed several days after he raised issues of underpayments and days in lieu;
    • (f) Mr Chang was influenced by the Chinese cultural connection between him and Mr Loh and Ms Low in respect of his decisions about their employment and used the term “family” towards them to put pressure on them to work hard for him while he regarded them as staff;
    • (g) Mr Chang did not think Mr Loh or Ms Low were capable of complaining about their employment conditions without external advice.
87. The FWO submitted that both Mr Loh and Ms Low were vulnerable in the workplace and this was exploited by the respondents. It was submitted that this is an aggravating factor in the consideration of penalty. The FWO cited three decisions in support of this submission: Fair Work Ombudsman v Crystal Carwash Café Pty Ltd (No 2) [2014] FCA 827, Fair Work Ombudsman v Yogurberry World Square Pty Ltd [2016] FCA 1290, and Fair Work Ombudsman v Kentwood Industries Pty Ltd (No 2) [2010] FCA 1156. These cases all involved employees who were from overseas and/or of non-English backgrounds, and who spoke little, or no, English
88. Mr Loh and Ms Low could both speak English at a reasonable level, but Mr Loh explained that he sometimes has difficulty understanding more complicated words. Ms Low’s reading and writing of English was also at a reasonable level. Mr Loh explained that his ‘reading and writing skills are more limited’, with writing causing him the most difficulty. It was for this reason that Ms Low did any writing for Mr Loh, including his paperwork, and he read it afterwards to check it. He deposed that:
    • Between July 2007 and April 2014, I recall Yen asking me to sign or witness various documents. I generally signed any paperwork he asked without reading it. He normally explained to me in general terms what the document was. Some of the documents simply required me to be a witness, such as childcare forms for his daughter. Other documents I understood to relate to my visa applications. I relied on Yen's explanation of the documents and did not read them. I just signed what I was asked to sign.
    • For example, at one stage in my first year of employment Yen said to me that the government wanted to increase my salary. Yen gave me some documents to sign for this. I was happy that my salary was increasing. I did not question the fact that I was asked to sign these additional documents. I do not recall precisely when this conversation occurred but it was prior to Kah Yoon arriving in Tasmania.^[21]
89. I consider that the contravening conduct against Mr Loh and Ms Low was objectively serious. They were vulnerable employees and the respondents took advantage of this.
90. Unlike other employees of Yenida, including the Audit Employees, Yenida did not require Mr Loh or Ms Low to complete time sheets. The failure to keep records of Mr Loh’s and Ms Low’s hours demonstrates a complete disregard of Yenida’s obligations to them. I refer to the decision of Fair Work Ombudsman v Blue Impression Pty Ltd and Others (No 2) [2017] FCCA 2797 in which Judge O’Sullivan said at [42]:
    • The Courts have recognised that proper record keeping “is the bedrock of compliance” with workplace laws: Fair Work Ombudsman v ACN 052 182 180 Pty Ltd & Anor [2013] FCCA 688 at [20] and Fair Work Ombudsman v Soleimani & Anor [2014] FCCA 2380 at [55].
91. One of the objects of s.3 of the FW Act is to maintain an effective safety net and ensure effective enforcement. I accept the submission of the FWO that the failure to keep records meant that the capacity of the FWO to monitor and enforce compliance with minimum employment standards was hindered.

Nature and extent of loss or damage

Mr Loh and Ms Low

92. From 2010 Mr Loh’s annual salary was between $45,240 and $46,280. This was not sufficient to meet his entitlements under the Award. I accept the submission of the FWO that the financial loss for Mr Loh, of an underpayment of $16,905 for overtime was not insignificant. Although Mr Loh’s 2010 contract provided for overtime to be paid, he was not paid overtime. Mr Loh worked six days per week for many years, which did not allow for a reasonable work life balance.^[22]
93. The respondents submitted that the Court should take into account that if the board and lodging had been accounted for as part of Mr Loh’s salary package, as allowed by the Award, this would have had a substantial effect on the quantum of the underpayment.^[23] The FWO submitted that the respondents cannot ‘retrospectively try and fix up... contraventions’ which have been agreed, nor can they ‘pick and choose which obligations they may choose to offset or not.’ I agree with this, but consider that when determining the amount of the penalties that I should take into account that Mr Loh and Ms Low had the financial benefit of not having to pay for board and accommodation throughout their employment.
94. Mr Loh was paid a set salary. This meant that, depending on the number and type of hours he worked, he was sometimes paid more, or less, than what he was entitled to under the Award. The respondents submitted that because there were weeks where he received more than his entitlement under the Award, this should be taken into account.^[24] This is because those payments partially compensated him for the weeks when he was underpaid.
95. Counsel for the FWO did not make any submission about this until she was asked at the mention on 1 March 2018. It was submitted that the FWO did not agree with the calculations of Mr Powles, but did not give any details. It was submitted that the respondents are not entitled to off-set any overpayments against the underpayments and to dispute liability, which was admitted. Counsel for the respondents replied that liability was not being debated. Rather this factor should be taken into account as to the extent of the contraventions. There is some force in the respondents’ submission and I consider that this should be taken into account.
96. Ms Low was paid $594.66 for the first week of her employment, $451 for the second week, and $446 per week for the rest of her employment. This was also not sufficient to meet her entitlements under the relevant awards. I accept the submission of the FWO that Ms Low was paid approximately half of her minimum award entitlements.^[25] Over a period of four months, the underpayment to her was $8,775. Ms Low found the workload too much and left her employment.
97. The respondents submitted that the quantum of the underpayments is relevant to the appropriate penalty that should be imposed, NSH North [2017] FCA 1301 at [43]. For example, the underpayment to Mr Loh for public holiday hours during the assessment period was $1,628.14.^[26] The penalty being sought by the FWO is between $22,950 and $27,540. Similarly, the underpayment in respect of broken shift allowance was $259.28,^[27] and the penalty being sought is between $4,590 and $9,180. In respect of Ms Low, the underpayment for public holiday penalty rates was $521.98.^[28] The penalty being sought by the FWO is between $17,820 and $20,790. I agree that the amount of the underpayment should be taken into account.

The nature, extent and damage of the contravening conduct regarding the Audit Employees

98. All of the Audit Employees were employed on a casual basis. They were all Australian nationals and of Caucasian descent. 11 of them worked for Yenida for the whole audit period, which was from 31 December 2012 until 31 August 2014.
99. The other 4 Audit Employees worked for short periods. Ms Cymbalak worked from 4 August 2014 to 31 August 2014. Mr O’Shea worked from 24 December 2013 to 5 January 2014. Ms Midson worked from 31 December 2012 to 3 February 2013 and also worked a shift on 19 April 2014. Mr Riley worked from 14 July 2014 to 31 August 2014.^[29]
100. The total underpayments owing to the Audit Employees ranged between $47.17 (for Ms Cymbalak) and $5,338.64 (for Ms Street).
101. The respondents do not dispute that the contravening conduct in respect of the Audit Employees is serious, but pointed out that 10 of the 15 employees’ total underpayments were under $1,900, and eight were under $1,000.
102. The underpayments for casual loading were the most significant. The amounts of the underpayments formulated from Schedule C in the Amended Statement of Claim are:

CASUAL LOADING

SATURDAY LOADING

SUNDAY LOADING

PUBLIC HOLIDAY LOADING

MINIMUM ENGAGEMENT

DELAYED MEAL BREAK LOADING

EVENING LOADING

EARLY MORNING LOADING

BASE RATE

HIGHER DUTIES

Similar previous conduct

103. The respondents have not previously been the subject of proceedings for contraventions of workplace laws.

Size of the respondents’ business

104. The size of its business or financial position does not excuse an employer from complying with the law in relation to the employment of its employees.^[30] However, as submitted by the FWO, the financial circumstances of the respondents may be a relevant consideration in determining the appropriate penalty.^[31]
105. The Hotel was a family owned and operated business. Mr Chang was a director, secretary and general manager of Yenida. His wife was the other director.
106. Yenida owned and operated the Hotel between 15 November 2005 and 24 December 2014, when it was sold. Mr Chang was a director, secretary and general manager of Yenida. His wife was the other director. Mr Chang worked in the business, from early in the day until night. His wife also worked in the business. They earned wages of $80,000 per annum each in the 2009 financial year; $119,630 each in the 2010 financial year; $103,000 each in the 2011 financial year; and $142,000 each in the 2012 financial year. There is no profit and loss statement before 2009 or for the 2013 financial year. It is not clear from the 2014 profit and loss statement what the extent of their incomes were in 2014.
107. Mr Chang relied on his father’s help from Sydney, but was responsible for ensuring legal obligations were complied with. He was a member of the Australian Hotels Association, from which he received updates outlining rates of pay. Mr Chang knew that the Pre-Modern Award and the Hospitality Award applied to Yenida and its employees. I found that he knew the relevant awards applied to Mr Loh and Ms Low.
108. Yenida employed around 20 people, but based on hours it employed an equivalent of five or six full-time employees. Although it was one of the largest employers in Scamander, Scamander is a regional area with not many employers.^[32] I consider that it was a small business.
109. In his November 2017 affidavit, Mr Chang deposed that the Hotel was never particularly profitable. In 2010, the turnover was $1,379,320 with an operating profit of $150,348; in 2011 the turnover was $1,116,387 with an operating profit of $34,232; and in 2012 turnover was down to $1,038,808 with an operating loss of $49,681. ^[33] In 2014, the turnover was $877,905 with a ‘loss before tax of $1,413’.
110. Yenida currently has liabilities and no significant assets.^[34] Mr Chang deposed that his parents have lent him money to rectify the employee underpayments.
111. Mr Chang deposed that Yenida has no capacity to pay penalties or legal fees. He further deposed that whatever penalty Yenida is asked to pay will be paid by him in his personal capacity, along with his own penalty as a director of Yenida. He deposed that he will be required to borrow funds for both payments.
112. Mr Chang is a director of Xingshen Pty Ltd, which is a trustee of a discretionary investment trust. He is also the secretary of Towrang Holdings Pty Ltd, of which his parents are the directors and shareholders. The company operates a business, Motel Parkhaven.^[35]
113. Mr Chang currently assists his father in the management of the Motel. He deposed that he does not receive income, but in return his parents have assisted his family and are meeting some of their ongoing living expenses. His family lives in a granny flat on his parents’ property rent free and his parents are paying his daughter’s school fees.
114. He deposed that he has a few personal assets, including a Volvo worth $4,000, a boat and trailer worth $12,000 and a share portfolio worth $30,000. He further deposed that:
     • The original purchase of SBRH by Yenida in 2005 had been financed by my father’s company, Xingshen Pty Ltd. The up-front proceeds of sale in 2014 all went directly back to Xingshen Pty Ltd, in satisfaction of the principal borrowings, as well as unpaid interest.
     • The purchaser, Tascu Pty Ltd, was provided with $300,000.00 vendor finance. 50% of the interest, has been paid directly to Xingshen by me. The principal, when received, is also due to be paid to Xingshen.
     • 50% of the interest has been retained by me as income to live off over the last 3 years. That is an amount of approximately $650 per month.
115. Although Mr Chang deposed that he annexed to his affidavit his income tax returns for the past three years, he has annexed tax return summaries from the Australian Taxation Office. These summaries indicate low taxable incomes for the past three years.
116. FWI Desmond annexed to her affidavit, affirmed on 19 October 2017, two title searches indicating that Mr Chang is the registered proprietor of Lots 3 and 4 of plan 1217946 in Terrey Hills. The titles are dated 21 April 2016.
117. In Mr Chang’s affidavit affirmed 23 November 2017, he deposed that he is the registered proprietor of a property at 5 Booralie Road Terrey Hills, certificate of title folio 340/752017. He deposed that he holds this land on trust for his father and executed a trust deed on 29 May 1997. He did not refer to or give an explanation about Lots 3 and 4 of which he is the registered proprietor.
118. Counsel for the FWO submitted that the respondents failed to provide relevant documentation, meaning the Court does not have a complete picture of the income potentially earned by Mr Chang.
119. Many of the transactions detailed in Mr Chang’s affidavits are not reflected in the documents provided. For example, a balance sheet for 2014/2015 was not provided to reflect a $179,000 payment to the Australian Taxation Office and a payment of $220,000 to Mr Chang’s father. Mr Chang also did not provide bank statements or underlying documents related to his income tax.
120. The FWO submitted that, in order to understand the incapacity to pay argument, it is necessary to understand the financial position of Mr Chang’s family, due to the interrelated nature of their financial transactions. Yenida received loans from Xinsheng Pty Ltd and from Toorang Holdings Pty Ltd. As noted by the FWO, the directors, shareholders and office holders of Toorang Holdings Pty Ltd are related. The legal fees and underpayments appear to have been met by Xinsheng Pty Ltd or by Mr Chang’s parents personally.
121. I agree with the submission of the FWO that the financial position of Mr Chang is unclear. The extent of his financial circumstances cannot be determined from his evidence. I give little weight to this consideration in setting penalty.
122. Counsel for the respondents explained that the respondents do not submit that they are incapable of paying. They submitted that the financial information was included for the purposes of the totality principle, which requires the Court to assess whether the final penalties to be imposed are crushing or oppressive. In that respect, it was submitted that the asset pool of Mr Chang and the profits of Yenida are relevant.
123. In response, the FWO submitted that the financial situation of the respondents should not reduce the penalty when considering the totality principle. Counsel for the FWO cited the decision of Fair Work Ombudsman v Promoting U Pty Ltd & Anor,^[36] in which Judge Burchardt noted that it is inappropriate for the totality principle to operate to ensure that penalties are imposed in insignificant amounts, to meet the respondents’ capacity to pay.
124. In the decision of Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254 Merkel J found at [9] that:
     • a contravening company’s capacity to pay a penalty is of less relevance than the objective of general deterrence because that objective is not concerned with whether the penalties imposed have been paid. Rather, it involves a penalty being fixed that will deter others from engaging in similar contravening conduct in the future. Thus, general deterrence will depend more on the expected quantum of the penalty for the offending conduct, rather than on a past defender’s capacity to pay a previous penalty... The penalties in relation to the individuals may need to be tempered by personal considerations.
125. It was noted by Bromwich J in NSH North,^[37] that this principle was summarised and endorsed by Heerey J in Jordan v Mornington Inn Pty Ltd [2007] FCA 1384, was later endorsed by the Full Court in Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383 (‘Mornington Inn’), and has been applied many times since then.
126. I consider that more weight should be given to general deterrence than to any lack of capacity of Yenida to pay any penalty.
127. In respect of financial position, the respondents submitted that the Court should consider when assessing appropriate penalty, that Mr Chang will bear the penalties impose on Yenida.
128. Counsel for the respondents submitted that the connection between Yenida and Mr Chang should be taken into account when determining the appropriate penalty, as recognised in NSH North,^[38] and Fair Work Ombudsman v Rainbow Paradise Preschool & Anor.^[39] It was submitted that there will be double punishment if high penalties are imposed on both Yenida and Mr Chang.
129. It was submitted by counsel for the respondents that Mr Chang was the mind of Yenida and that it was his conduct that caused Yenida to contravene the Award. Apart from Mr Chang’s wife, there were no other parties involved. In NSH North,^[40] Bromwich J stated that:
     • if a sole director and shareholder chooses to avail himself of the advantages of a corporate structure, there is a limit to which he can seek to rely upon the disadvantages of that structure, in circumstances where it has been the primary vehicle by which serious contraventions of workplace laws have occurred.^[41]
130. His Honour took into account the relationship in the circumstances of that case, but found that it should have a limited effect on the ultimate penalty. In the decision of Fair Work Ombudsman v Ramsay Food Processing Pty Ltd (No 2),^[42] Buchanan J said:
     • ...The present legislative scheme fixes quite different (and much lower) penalties for individuals than for corporations. The culpability of each respondent must be assessed individually and in the context set by the maximum penalty prescribed in each case.^[43]
131. Both Yenida and Mr Chang have been involved in the contravening conduct. I do not accept the submission that double punishment will occur if penalties are imposed on both.

Whether the breaches were deliberate

Audit Employees

132. The FWO does not submit that the contraventions affecting the Audit Employees were deliberate.^[44] The respondents submit that the quantum of the underpayment in respect of each Audit Employee leads to the view that it was not deliberate.^[45] I accept that these contraventions were not deliberate.

Mr Loh and Ms Low

133. Having regard to my findings in the Liability Decision, the respondents made a deliberate decision to treat Mr Loh and Ms Low differently to other employees.^[46] Mr Chang was well aware of his obligations to pay them their entitlements under the relevant awards. They were taken advantage of, coming from Malaysia and being of Chinese descent.

Involvement of senior management

134. Mr Chang was directly involved in the determinations of Mr Loh’s, Ms Low’s, and the Audit Employees’ entitlements.

Contrition, Cooperation and Corrective Action

135. The FWO acknowledges that the respondents cooperated ‘to a degree’ in the investigation by the FWO, providing employment records and participating in an interview. Save for the Court’s finding that Mr Chang, on behalf of Yenida, attempted to conceal the extent of the hours worked by Mr Loh and Ms Low by not providing records which demonstrated these hours, I consider that there was co-operation by the respondents in the investigation.
136. Both parties cited Mornington Inn. In this decision the Full Court of the Federal Court stated:
     • A conventional consideration in assessing a discount in a criminal case for a plea of guilty is the stage in the proceedings at which the plea is entered. Normally, the maximum discount on this factor, sometimes thought to be 25%, is reserved for a plea made at the first reasonable opportunity although, as was indicated in Cameron 209 CLR 339 at [23]-[24] there is no obligation to make an early plea to a charge which wrongly particularises the substance to which the charge relates.

As Branson J has pointed out (see Alfred v Walter Construction Group Ltd [2005] FCA 497) the rationale for providing a discount for an early plea of guilty in a criminal case does not apply neatly to a case, such as the present, where a civil penalty is sought and the case proceeds on pleadings. Nevertheless, in our view, it should be accepted, for the same reasons as given in Cameron 209 CLR 339, that a discount should not be available simply because a respondent has spared the community the cost of a contested trial. Rather, the benefit of such a discount should be reserved for cases where it can be fairly said that an admission of liability: (a) has indicated an acceptance of wrongdoing and a suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate the course of justice. ^[47]

137. On 1 May 2015, Yenida admitted all of the contraventions concerning the Audit Employees, save for the minimum wage entitlement payable to Ms McKimmie. It accepted responsibility for the amount of the underpayment within two months of receiving the contravention notice issued 24 March 2015. Mr Chang deposed that he telephoned 10 of the Audit Employees in 2016 to explain the rectification payments and to apologise to them. He tried, but could not, contact all the other employees. He did not contact one employee, with whom he did not have a good working relationship as he did not believe the contact would be welcome.
138. The respondents admitted at an early stage the rostering and record keeping contraventions affecting Mr Loh and Ms Low and the contraventions affecting the Audit Employees.^[48] The FWO submitted that a discount of 20 per cent is appropriate to apply to these contraventions.^[49] The respondents submitted that a discount of 25-30 per cent is appropriate.
139. Yenida rectified the underpayments to the Audit Employees as soon as the quantum was confirmed by the FWO, without a court order. Mr Chang accepted responsibility for his actions in the contraventions.^[50]
140. I consider that a discount of 25 per cent is appropriate to recognise the admissions and co-operation.
141. In respect of Mr Loh and Ms Low, the contraventions concerning underpayments were admitted, but the quantum was disputed. It was submitted by the respondents that there was no obligation to admit the particulars where those particulars were incorrect. The underpayments eventually agreed upon were significantly lower than what had been initially advised.
142. The quantum of the underpayments claimed by the FWO in the contravention notices issued 24 March 2015 totalled $81,662.79 for Mr Loh and $11,787.06 for Ms Low. The respondents took issue with the method of calculation used by the FWO in reaching these figures. The FWO required further information from the respondents to amend the calculations.
143. On 22 June 2015, the FWO revised the underpayments to Mr Loh from $81,662.79 to $52,298.28 and for Ms Low from $11,787.06 to $10,406.69.^[51]
144. Further amendments were made in the Amended Statement of Claim when Mr Chang provided further documents that included rosters he had for Mr Loh, which he deliberately had not provided earlier.
145. On 3 March 2017 an Agreed Statement of Facts further revised the underpayments to Mr Loh to $19,782.78 and to Ms Low to $8,775.57. The outstanding matter in respect of Ms McKimmie was also agreed. Payment of the amounts owing to Mr Loh and Ms Low were finalised on 29 July 2017.^[52] It was submitted by the respondents that the rectification of the underpayments could not have been made earlier, as agreement as to the quantum of the underpayments was only reached in the week before the hearing.
146. In reply, the FWO submitted that the amendments were made because the only document the FWO had initially to determine Mr Loh’s hours was the contract indicating hours of 51 per week. Mr Chang did not consider that reflected the hours that Mr Loh worked in the assessment period, so the FWO took that into account and considered the kitchen hand rosters, as suggested by Mr Chang, to determine the finishing hours. It was conceded that later on when the Hotel was less busy, Mr Loh started later than 11:00am, which was the original contract commencement time.
147. The FWO acknowledges that these admissions significantly reduced the length and expense of the liability hearing and submitted that a discount of 10% should apply to these contraventions.^[53]The respondents submit that a 25 – 30% discount is appropriate.^[54] No apology was given to Mr Loh or to Ms Low. Taking into account the above considerations, I am of the view that a discount of 15 per cent for the underpayments is appropriate.
148. As it was entitled to do, Yenida vigorously defended the contravention allegations against Mr Loh and Ms Low regarding s.351 of the FW Act. The respondents’ submissions regarding penalty do not indicate any acceptance of the unlawfulness which the Court has found. Mr Chang deposed that he has found it difficult to accept the decision, but he is working through this with his wife and counsellor. I accept the submission of the FWO that the respondents are not entitled to the benefit of a discount for the adverse action contraventions.^[55]
149. As soon as the pay slip contravention was identified by FWI Desmond to Mr Chang, this was remedied immediately.^[56] Having regard to the circumstances discussed above, I consider that a discount of 25% is appropriate for this contravention.

Enforcement of compliance with minimum standards

150. The objects of the FW Act include the maintenance of an effective safety net of minimum terms and conditions, and effective enforcement mechanisms.^[57]
151. The substantial penalties set by the legislature and awarded by courts for employers failing to comply with minimum award obligations, reinforce the importance placed on compliance with minimum standards.

Deterrence

152. I accept the submission of Counsel for the respondents that the need for specific deterrence is low in respect of Yenida which is no longer trading. It ceased trading after the Hotel was sold in 2014. However, in Kelly,^[58] Tracey J said that where specific deterrence does not loom large as a consideration in determining penalty, it does not follow that the need for general deterrence may be disregarded.^[59] His Honour cited the decision of Community and Public Sector Union v Telstra Corporation Ltd [2001] FCA 1364; (2001) 108 IR 228:

• Deterrence
• The respondents have expressed contrition and have put in place mechanisms which are designed to ensure that there will be no repetition of the breaches which have led to the present proceeding. Specific deterrence does not, therefore, loom large as a consideration in determining penalty. It does not follow that the need for general deterrence may be disregarded. As Finkelstein J said in Community and Public Sector Union v Telstra Corporation Ltd [2001] FCA 1364; (2001) 108 IR 228 at 231:
  • “even if there be no need for specific deterrence, there will be occasions when general deterrence must take priority, and in that case a penalty should be imposed to mark the law’s disapproval of the conduct in question, and to act as a warning to others not to engage in similar conduct ...”
• No less than large corporate employers, small businesses have an obligation to meet minimum employment standards and their employees, rightly, have an expectation that this will occur. When it does not it will, normally, be necessary to mark the failure by imposing an appropriate monetary sanction. Such a sanction “must be imposed at a meaningful level”: see Australian Competition and Consumer Commission v ABB Transmission & Distribution Ltd [2001] FCA 383; [2001] ATPR 41-815 at [13]. ^[60]

153. In the decision of Ponzio v B & P Caelli Constructions,^[61] Lander J said:
     • There are three purposes at least for imposing a penalty: punishment; deterrence; and rehabilitation. The punishment must be proportionate to the offence and in accordance with the prevailing standards of punishment: R v Hunter (1984) 36 SASR 101 at 103. Therefore the circumstances of the offence or contravention are especially important. The penalty must recognise the need for deterrence, both personal and general. In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217. In some cases, although hardly in this type of contravention, rehabilitation is an important factor. ^[62]
154. Mr Chang is currently a manager of a motel where there are two employees. He deposed that he has educated himself about award obligations. He also gave evidence that he is unlikely to own a business again. There was no evidence of current compliance by him in respect of his management of the motel. The FWO submitted that little weight should be given to his statements that he has educated himself, and that the risk for future non–compliance has not reduced. I agree with the submission that Mr Chang has the capacity to be involved in contraventions in the future, so there is a need for a penalty to be set which will be sufficient in deterring him from further contraventions.
155. In respect of general deterrence, the FWO relied on the decision of Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20, and submitted that a penalty should be imposed at a level that is likely to act as a deterrent in preventing similar contraventions by like-minded individuals or organisations.^[63]
156. The FWO also relied on the observation pointed out by Gray J in Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union,^[64] namely that the hospitality industry is notorious for non-compliance with standards imposed by industrial laws, and is an industry in which enforcement of those standards has proved very difficult.
157. The FWO relied on research undertaken by FWO employees regarding workplace complaints and data relating to the accommodation and food industry.^[65] This research and data establishes that there is a problem with compliance in the industry: in 2015-2016 and 2016-2017, between 23.5 and 31 per cent of complaints received were from 457 visa workers, the most frequent allegation being that they were not being paid for all hours worked. This demonstrates why general deterrence is an important consideration in fixing penalties, as it assists in ensuring other employers in the hospitality industry, as well as employers of visa workers in other industries, are compliant, particularly in relation to underpayment and record keeping contraventions. The respondents did not make any submissions about this evidence.
158. I also accept the submission of the FWO that general deterrence has an ‘important role’ to play in the area of anti-discrimination, ‘in part because discrimination is often difficult to prove even when the adverse action or the effect of the discrimination is obvious.’^[66]

Totality and Appropriate Penalty

159. The FW Act describes the maximum penalties that may be imposed by the Court for contraventions by reference to penalty units, the dollar value of which is set by s.4AA of the Crimes Act 1914 (Cth).^[67] From 1 July 2009 to 27 December 2012, 1 penalty unit equated to $110. From 28 December 2012 to 30 July 2015, 1 penalty unit equated to $170. The applicable rate has been held to be that in force at the time of the contravention.^[68]
160. The contraventions affecting Ms Low occurred prior to the increase in the value of a penalty unit. The contraventions affecting the Audit Employees occurred after the increase.
161. The contraventions affecting Mr Loh, and the payslip contravention affecting all of the employees, continued over a period of time when the value of a penalty unit increased from $110 to $170. The FWO submitted that for the contraventions that occurred over a period of time when different penalty rates applied, it is appropriate for the Court to apply the higher penalty unit rate, that is, the applicable penalty unit value when the course of conduct ended.^[69]
162. It was submitted that, in imposing a penalty in such circumstances, it is appropriate for the Court to take into account that the lower penalty unit applied for part of the course of conduct.^[70] The FWO noted that the contraventions in respect of Mr Loh spanned from January 2010 to April 2014, being 24 months prior to the penalty unit increase, and 18 months after the increase. The payslip contravention in respect of all employees spanned from September 2009 to April 2014, being approximately 27 months prior to the penalty unit increase, and 18 months after the increase.
163. The FWO cited the decision of Katzmann J in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 (‘GPS’), in which the above approach was taken. In that decision her Honour took into account in the determination of penalty the fact that the lower penalty amount applied for part of the period of the contraventions.
164. This approach was not disputed by the respondents in their submissions. I accept that this approach is appropriate.

Maximum Penalties

165. Section 546(2) of the FW Act provides:
     • Determining amount of pecuniary penalty
     • (2) The pecuniary penalty must not be more than:
     • (a) if the person is an individual—the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or
     • (b) if the person is a body corporate—5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).
166. All of the contraventions in this matter (except those of s.535 and 536 of the FW Act) attracted a maximum number of 60 penalty units each between September 2009 and April 2014. It can therefore be summarised that the contraventions (excluding those of s.535 and 536 of the FW Act) which occurred:
     1. solely before 28 December 2012 attract a maximum penalty of $33,000 for Yenida and $6,600 for Mr Chang.
     2. solely on or after 28 December 2012 attract a maximum penalty of $51,000 for Yenida and $10,200 for Mr Chang.
     100. both before and on or after 28 December 2012 attract a maximum penalty of $51,000 for Yenida and $10,200 for Mr Chang. However, the fact that the contraventions partly occurred prior to the penalty unit value increase on 28 December 2012 will be taken into account when determining an appropriate penalty.
167. Contraventions of ss.535 and 536 of the FW Act attracted a maximum number of 30 penalty units each between September 2009 and April 2014. It can therefore be summarised that the contraventions of ss.535 and 536 which occurred:
     1. solely before 28 December 2012 attract a maximum penalty of $16,500 for Yenida and $3,300 for Mr Chang.
     2. solely on or after 28 December 2012 attract a maximum penalty of $25,500 for Yenida and $5,100 for Mr Chang.
     100. both before and on or after 28 December 2012 attract a maximum penalty of $25,500 for Yenida and $5,100 for Mr Chang. However, the fact that the contraventions partly occurred prior to the penalty unit value increase on 28 December 2012 will be taken into account when determining an appropriate penalty.
168. With the grouping proposed by the FWO, the maximum penalties that could be imposed are $1,098,000 on Yenida and $219,600 on Mr Chang.
169. The FWO submitted that the appropriate aggregate penalties, applying various discount rates, fall within the following ranges:

(a) Total for Yenida: $331,980-$339,000; and

(b) Total for Mr Chang: $66,396-$79,800.

170. The FWO did not seek penalties to be imposed for five groups of contraventions in recognition of their minimal impact, due to the small amount of underpayments and the contravention affecting only one or two employees. The five contraventions relate to minimum rates-audit employees, evening loading, early morning loading, higher duties allowance, and rostering-Mr Loh. The respondents agreed with this submission.
171. The respondents submitted that the appropriate overall penalty should be twice the quantum of the underpayments. The respondents did not make any submissions about the ranges proposed by the FWO in its table.
172. The FWO submitted that whilst the penalty imposed must not be crushing or oppressive, it must bear relativity to the seriousness of the conduct engaged in by the respondents. It was submitted that it is open to the Court to reduce the total penalty imposed against the respondents in accordance with the totality principle.^[71]
173. In Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 338, Mortimer J said at [43]-[44]:
     • The maximum penalties prescribed by Parliament are the legislative choice made about the outer limit of appropriate punishment for a particular contravention. However in a case where there are multiple contraventions to which the “one course of conduct” and totality principles must be applied, the maximum penalty specified for each single contravention may not be especially informative as to what represents a just outcome. At most the maximums set encourage the Court to ask itself whether the contravention as found is of “the worst” kind. In Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 478, Mason CJ, Brennan, Dawson and Toohey JJ said:
       • The second subsidiary principle material to this case is that the maximum penalty prescribed for an offence is intended for cases falling within the worst category of cases for which that penalty is prescribed. That does not mean that a lesser penalty must be imposed if it be possible to envisage a worse case; ingenuity can always conjure up a case of greater heinousness. A sentence which imposes the maximum penalty offends this principle only if the case is recognizably outside the worst category.
       • (Citations omitted.)
     • The process of arriving at an appropriate penalty will remain one affected by what has been described as “instinctive synthesis”: Fair Work Ombudsman v Skilled Offshore (Australia) Pty Ltd [2015] FCA 275 at [19] per Gilmour J, referring to Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8 at [27] per Gray J and [55] per Graham J, who in turn refer respectively to Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 at [37] per Gleeson CJ, Gummow, Hayne and Callinan JJ (approving Wong v The Queen (2001) 207 CLR 584; [2001] HCA 64 at [74]- [76] per Gaudron, Gummow and Hayne JJ) and at [84] per McHugh J. However it is described, the aim is, as the authorities to which I have referred at [31] to [34] above suggest, to mould a just and proportionate sentence or, in this case, a just and proportionate penalty.
174. When determining the appropriate penalties to be imposed on Yenida and Mr Chang, I have taken into account the matters discussed above in these reasons. I consider the appropriate penalties to be:

Audit Employees

175. I impose the following penalties:

In breach of s.45:

Contravention A1: Failing to pay the required minimum hourly rate

176. This contravention related to 3 employees of a total underpayment amounting to $162.22.
177. The FWO sought no penalty for this contravention. I accept that this is appropriate.

Contravention A2: Failing to pay amounts sufficient to meet the required casual loading

178. This contravention concerned the 15 Audit Employees and the total amount of underpayments was $13,195.42.
179. I impose a penalty of $15,300 for Yenida and $3,060 for Mr Chang.

Contravention A3: Failing to pay amounts sufficient to meet the required minimum hourly rate of pay for work performed on a Saturday

Contravention A4: Failing to pay amounts sufficient to meet required minimum hourly rate of pay for work performed on a Sunday

180. There is some overlap between these two contraventions.
181. Contravention A3 affected 14 employees and the total amount of the underpayment was $2,138.01. Contravention A4 affected 12 employees and the total amount of the underpayment was $2,166.82.
182. I impose penalties of $7,650 for Yenida and $1,530 for Mr Chang for contravention A3 and $3,825 for Yenida and $765 for Mr Chang for contravention A4.

Contravention A5: Failing to pay amounts sufficient to meet required minimum hourly rate of pay for work performed on a public holiday

183. This contravention affected 12 employees and the total amount of the underpayment was $1,264.72.
184. I impose penalties of $7,650 for Yenida and $1,530 for Mr Chang.

Contravention A6: Failing to pay the required evening loading

185. This affected two employees in the total sum of $9.81 No penalty was sought by the FWO. I consider this is appropriate.

Contravention A7: Failing to pay the required early morning loading

186. This contravention affected one employee in the total sum of $6.29. No penalty was sought by the FWO. I consider this is appropriate.

Contravention A8: Failing to pay for at least a minimum of two hours for each engagement

187. This contravention affected eleven employees and the total underpayment was $2,158.71. For nine employees, the amounts were under $100 and ranged from $5.47 to $75.18. For one employee, the amount was $239.43, and for one employee it was $1,675.83.
188. I impose penalties of $9,560 for Yenida and $1,912 for Mr Chang.

Contravention A9: Failing to pay the required loading for shifts worked in excess of six hours when no meal breaks are provided (Delayed meal break penalty)

189. This contravention affected 10 employees and the total underpayment was $5,347.24. For seven employees, the underpayment was under $100 and ranged from $7.67 to $45.75. However, for one employee, the amount was $2,256.60, for one employee it was $1,962.97 and for another employee it was $661.57.
190. I impose penalties of $11,475 for Yenida and $2,295 for Mr Chang.

Contravention A10: Failing to pay amounts sufficient to meet the required rate of pay when an employee is performing higher duties

191. This contravention affected one employee and the total underpayment was $40.42. No penalty was sought by the FWO. I consider this is appropriate.

Mr Loh:

In breach of s.45 of the FW Act:

Contravention KHL1: Failing to pay amounts sufficient to meet his entitlement for hours worked on a public holiday.

192. The underpayment was $1,628.14.
193. I impose penalties of $8,670 for Yenida and $1,734 for Mr Chang.

Contravention KHL2: Failing to pay amounts sufficient to meet his entitlement for overtime worked on a weekday

Contravention KHL3. Failing to pay amounts sufficient to meet his entitlement for overtime worked on a weekend

194. The underpayment for KHL2 was $321.71 and the underpayment for KHL3 was $16,584.09. There is overlap between these contraventions.
195. I impose penalties of $25,000 for Yenida and $4,000 for Mr Chang for contravention KHL3.
196. I impose a penalty of $500 for Yenida and $100 for Mr Chang for KHL2, having regard to the overlap and the small amount of the underpayment.

Contravention KHL4: Failing to pay an evening loading

197. The underpayment was $1,757.40.
198. I impose penalties of $8,670 for Yenida and $1,734 for Mr Chang.

Contravention KHL5: Failing to pay a broken shift allowance

199. The underpayment was $259.28
200. I impose penalties of $2,000 for Yenida and $400 for Mr Chang.

Contravention KHL6: Failing to complete rosters for Mr Loh

201. The FWO did not seek a penalty for this contravention because the impact of this has been addressed by the penalty sought for overtime and record keeping contraventions. I accept this is appropriate.

In breach of s.351 of the FW Act:

Contravention KHL7: Yenida contravened s.351 of the FW Act by taking adverse action against Mr Loh by discriminating between him and other employees of Yenida because of his race.

Contravention KHL8: Yenida contravened s.351 of the FW Act by taking adverse action against Mr Loh by discriminating between him and other employees of Yenida because of his national extraction.

Contravention KHL9: Yenida contravened s.351 of the FW Act by taking adverse action against Mr Loh by injuring him in his employment because of his race.

Contravention KHL10:Yenida contravened s.351 of the FW Act by taking adverse action against Mr Loh by injuring him in his employment because of his national extraction.

202. The FWO sought one penalty for these four offences and proposed an amount of 70-80% of the maximum of $35,700-$40,800.
203. Whilst it is serious to take adverse action against an employee on the grounds of race or on the grounds of national extraction, I do not accept that the penalty sought by the FWO is appropriate on the scale of seriousness for the respondents, having regard to all the circumstances. I consider the unlawful conduct by the respondents regarding Mr Loh does not fall within the worst category of cases. The penalties imposed should be an appropriate response to what the respondents did.
204. I take into account that the respondents have been punished in respect of the underpayment contraventions, but recognise that the conduct has occurred because of Mr Loh’s race and national extraction.
205. As discussed previously, I consider that these four contraventions are so intimately linked that they can only be said to arise from a single course of conduct. As such, I consider that the offences should be grouped and a single penalty imposed in order to avoid double punishment.
206. I impose penalties of $6,000 for Yenida and $2,200 for Mr Chang.

In breach of s.535 of the FW Act

Contravention KHL11: Failing to make and keep records of the kind prescribed by reg.3.34 of the Fair Work Regulations 2009 (Cth)

207. The FWO sought a penalty range of 80-90 per cent of the maximum of $16,320-$18,360 in respect of Mr Loh and Ms Low, having grouped the separate contraventions for common elements. I have not grouped the contraventions as discussed at [75]-[77] above.
208. The maximum penalty in respect of Mr Loh is $25,500 for Yenida and $5,100 for Mr Chang for accessorial liability. I take into account that the contravention spanned two legislative periods.
209. I impose penalties of $12,000 for Yenida and $2,000 for Mr Chang.

Ms Low

210. The contraventions for the underpayments regarding Ms Low span two legislative periods. I accept that the mirror contraventions of each act can only be said to arise from the same course of conduct. In order to avoid double punishment, I will impose one penalty for each pair of mirror contraventions.

In breach of item 5 of schedule 16 of the Transitional Act and s.45 of the FW Act:

Contravention KYL1: Failing to pay amounts to meet her entitlement to a minimum hourly rate of pay under the FW Act

Contravention KYL2: Failing to pay amounts to meet her entitlement to a minimum hourly rate of pay under the Transitional Act

211. The underpayment under both of these contraventions combined was $2,559.57.
212. I impose penalties of $11,220 for Yenida and $2,244 for Mr Chang.

Contravention KYL3: Failing to pay amounts sufficient to meet her entitlement to casual loading under the FW Act

Contravention KYL4: Failing to pay amounts sufficient to meet her entitlement to casual loading under the Transitional Act

213. The underpayment under both of these contraventions combined was $2,156.85.
214. I impose penalties of $11,220 for Yenida and $2,244 for Mr Chang.

In breach of item 2(1) of schedule 16 of the Transitional Act and s.45 of the FW Act:

Contravention KYL5: Failing to pay amounts sufficient to meet her entitlement for hours worked on a Saturday under the FW Act

Contravention KYL6: Failing to pay amounts sufficient to meet her entitlement for hours worked on a Saturday under the Transitional Act

Contravention KYL7: Failing to pay amounts sufficient to meet her entitlement for hours worked on a Sunday under the FW Act

Contravention KYL8: Failing to pay amounts sufficient to meet her entitlement for hours worked on a Sunday under the Transitional Act

215. The underpayment under KYL5 and KYL6 combined was $1,535.93 and the underpayment under KYL7 and KYL8 combined was $1,692.31.
216. There is some overlap between these two groups of two contraventions. As such, I impose penalties of $11,220 for Yenida and $2,224 for Mr Chang for contraventions KYL5 and KYL6 combined and $5,610 for Yenida and $1,122 for Mr Chang for contraventions KYL7 and KYL8 combined.

Contravention KYL9: Failing to pay amounts sufficient to meet her entitlement for hours worked on a public holiday under the FW Act

Contravention KYL10: Failing to pay amounts sufficient to meet her for entitlement hours worked on a public holiday under the Transitional Act

217. The underpayment under both of these contraventions combined was $521.98.
218. I impose penalties of $2,805 for Yenida and $560 for Mr Chang.

Contravention KYL11: Failing to pay evening loading under the FW Act

Contravention KYL12: Failing to pay evening loading under the Transitional Act

219. The underpayment under both of these contraventions combined was $308.93
220. I impose penalties of $2,805 for Yenida and $560 for Mr Chang.

In breach of s.351 of the FW Act:

Contravention KYL13: Yenida contravened s.351 of the FW Act by taking adverse action against Ms Low by discriminating between her and other employees of Yenida because of her race.

Contravention KY14: Yenida contravened s.351 of the FW Act by taking adverse action against Ms Low by discriminating between her and other employees of Yenida because of her national extraction.

Contravention KYL15: Yenida contravened s.351 of the FW Act by taking adverse action against Ms Low by injuring her in her employment because of her race.

Contravention KYL16: Yenida contravened s.351 of the FW Act by taking adverse action against Ms Low by injuring her in her employment because of her national extraction.

221. The FWO sought one penalty for four contraventions and proposed an amount of 70-80% of the maximum of $23,100-$26,400.
222. As with Mr Loh, I consider the unlawful conduct regarding Ms Low does not fall within the worst category cases.
223. There is overlap with the underpayment contraventions for which the respondents have been punished.
224. As discussed the four contraventions should be regarded as arising from a single course of conduct and should be grouped and a single penalty imposed in order to avoid double punishment.
225. I impose penalties of $3,000 for Yenida and $600 for Mr Chang.

In breach of s.535 of the FW Act

Contravention KYL17: Failing to make and keep records of the kind prescribed by reg.3.33(2) of the Fair Work Regulations 2009 (Cth)

226. The maximum penalty in respect of Ms Low is $16,500 for Yenida and $3,300 for Mr Chang.
227. I impose penalties of $6,000 for Yenida and $1,500 for Mr Chang.

All Employees

In breach of s.356(1) of the FW Act

Contravention AE1: Failing to provide payslips to employees within one working day of payment

228. Contraventions of s.356(1) were proved in respect of all employees. For Ms Low, this contravention occurred before 28 December 2012 and for Mr Loh it continued across two periods. All employees were paid on a weekly basis and received payslips from Yenida on an irregular basis, approximately monthly.^[72]
229. I impose penalties of $3,825 for Yenida and $765 for Mr Chang.

Step 5: Totality

230. The totality principle requires the Court to do ‘a final check... to ensure that a final, total or aggregate, penalty is not unjust or out of proportion to the circumstances of the case.’^[73] The Court should apply an ‘instinctive synthesis’ in making this assessment.^[74]
231. So as to ensure that the aggregate of the penalties imposed is such as not to be oppressive or crushing, the orthodox approach adopted by Tracey J in Kelly [2007] FCA 1080 was to determine the appropriate penalties for each contravention of the statutory norm. The aggregate figure is then considered with a view to ensuring it is an appropriate response to the conduct which led to the breaches.
232. I do not consider that the aggregate of the penalties imposed is crushing or oppressive. I consider that the aggregate is an appropriate response to the respondents’ conduct.

I certify that the preceding two hundred and thirty two (232) paragraphs are a true copy of the reasons for judgment of Judge Baker



Date: 24 May 2018

Annexure A

^[1] Liability Decision [2017] FCCA 2299, 237, 238, [241]-[242].

^[2] See Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [6]; Respondent's Outline of Submissions on Penalty filed 23 November 2017 [12].

^[3] Respondent's Outline of Submissions on Penalty filed 23 November 2017 [15], quoting Australian Ophthalmic Supplies [2008] FCAFC 8 [46] (Graham J).

^[4] Ibid footnote 9.

^[5] Ibid [15], footnote 8.

^[6] Siner [2018] FCCA 589 [11].

^[7] See Annexure A.

^[8] Respondent's Outline of Submissions on Penalty filed 23 November 2017 [14].

^[9] Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [7]-[8].

^[10] Ibid [10].

^[11] Ibid [10]-[12], footnote 10.

^[12] Transcript of Proceedings, 1 March 2018, 19; See also Respondent's Outline of Submissions on Penalty filed 23 November 2017 [18].

^[13] [2017] FCA 557.

^[14] GPS [2017] FCA 557 [422]-[423].

^[15] Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [10]-[12], footnote 10.

^[16] See Liability Decision [2017] FCCA 2299 [272]-[309].

^[17] Ibid [333]-[359].

^[18] [2007] FMCA 7.

^[19] Kelly [2007] FCA 1080 [14].

^[20] Australian Ophthalmic Supplies [2008] FCAFC 8 [91].

^[21] Affidavit of Kien Hoong Loh affirmed 24 October 2016 [65]-[66].

^[22] Liability Decision [2017] FCCA 2299 [218].

^[23] Respondent's Outline of Submissions on Penalty filed 23 November 2017 [27]; Affidavit of Brian Powles affirmed 23 November 2017 [10]-[12].

^[24] Respondent's Outline of Submissions on Penalty filed 23 November 2017 [27]; Affidavit of Brian Powles affirmed 23 November 2017 [9].

^[25] Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [25].

^[26] Statement of Agreed Facts filed 3 March 2017 [53].

^[27] Ibid [77].

^[28] Ibid [113].

^[29] Amended Statement of Claim filed 20 May 2016 [25]; Further Amended Defence of the First Respondent filed 15 September 2016 [25]; Further Amended Defence of the Second Respondent filed 15 September 2016 [25].

^[30] Kelly [2007] FCA 1080 [28].

^[31] Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [51], citing Hansen v Mt Martha Community Learning Centre Inc (No 2) [2015] FCA 1283 [5].

^[32] Respondent's Outline of Submissions on Penalty filed 23 November 2017 [30].

^[33] Affidavit of Chang Yen Chang affirmed 20 December 2015.

^[34] Affidavit of Chang Yen Chang affirmed 23 November 2017, Annexure YC-13.

^[35] See Affidavit of Kristen Desmond filed 24 October 2017, Annexure KD-10.

^[36] [2012] FMCA 58.

^[37] [2017] FCA 1301 [106].

^[38] Ibid [159].

^[39] [2015] FCCA 1652 [171].

^[40] [2017] FCA 1301.

^[41] Ibid [160].

^[42] [2012] FCA 408.

^[43] Ibid [8].

^[44] Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [34].

^[45] Respondent's Outline of Submissions on Penalty filed 23 November 2017 [32].

^[46] Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [32]-[33].

^[47] Mornington Inn [2008] FCAFC 70; (2008) 168 FCR 383 [75]-[76].

^[48] Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [48].

^[49] Ibid.

^[50] Affidavit of Chang Yen Chang affirmed 23 November 2017, Annexure YC22.

^[51] Respondent's Outline of Submissions on Penalty filed 23 November 2017 [4]-[6].

^[52] Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [44].

^[53] Ibid [48].

^[54] Respondent's Outline of Submissions on Penalty filed 23 November 2017 [46].

^[55] Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [47].

^[56] Respondent's Outline of Submissions on Penalty filed 23 November 2017 [38], footnote 24.

^[57] FW Act s.3(b).

^[58] [2007] FCA 1080.

^[59]Kelly [2007] FCA 1080 [28].

^[60] Ibid.

^[61] [2007] FCAFC 65; (2007) 158 FCR 543.

^[62] Ibid [93].

^[63] Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [37].

^[64] [2008] FCAFC 170 [37].

^[65] Affidavit of Kristen Desmond affirmed 19 October 2017 [14]-[17].

^[66] Sayed v Construction, Forestry Mining and Energy Union (No 2) [2015] FCA 338 [57].

^[67] FW Act s.539(2).

^[68] Murrihy v Betezy.com.au Pty Ltd and Another (No 2) [2013] FCA 1146.

^[69] GPS [2017] FCA 557.

^[70] Ibid [401].

^[71] Applicant’s Outline of Submissions on Penalty filed 24 October 2017 [59].

^[72] Amended Statement of Claim filed 20 May 2016 [198]-[200]; Further Amended Defence of the First

Respondent filed 15 September 2016 [198]-[200]; Further Amended Defence of the Second Respondent filed 15 September 2016 [198]-[200].

^[73] Mornington Inn [2008] FCAFC 70; (2008) 168 FCR 383 [42].

^[74] Australian Ophthalmic Supplies [2008] FCAFC 8 [27], [78].