Industrial Magistrates Court of Western Australia

Jillian Dixon (the claimant), an industrial inspector with the Department of Mines, Industry Regulation and Safety, brought proceedings against Kahraman Karakuyu and Done Karakuyu (the respondents), proprietors of Newroz Kebab & Turkish Bakery (Newroz) in East Perth. Findings on liability were made by the Court in respect of the respondent’s failure to keep employment records in accordance with the requirements of s 49D(2) of the Industrial Relations Act 1979 (WA) (IR Act), as well as numerous breaches of the Restaurant, Tearoom and Catering Workers’ Award (award). It was found that the respondents:

• contravened the requirements under s 49D(2) to keep employment records on 738 separate occasions between 19 December 2016 and 31 December 2018 (records contraventions); and
• during the same period, breached the award 392 times (award breaches) which resulted in Mr Zeyrek being underpaid, in respect of which the Court ordered the respondents to pay the sum of $102,483.74 (underpayment amount).

The claimant submitted that the respondent had engaged in ‘wage theft’, involving the systematic and deliberate underpayment of a vulnerable worker in the hospitality industry. Noting the number of contraventions, the objective seriousness of these contraventions and the need for general deterrence, particularly in response to the reported prevalence of wage theft in the hospitality industry, the claimant submitted a penalty in the upper range to be appropriate. 

The respondents submitted that Newroz operated mainly as a family business, with most work performed by family members, and they were not involved in the day-to-day operations. They argued that any contraventions were due to carelessness or ignorance, not intentional or deliberate actions, and that they believed they were treating Mr. Zeyrek fairly and lawfully. Additionally, they contended that there was no need for specific deterrence as they no longer operate a business or employ anyone.

The Industrial Magistrate considered the parties’ submissions alongside the various findings made in the liability decision and applied established principles to determine the appropriate penalties. The records contraventions and award breaches were dealt with separately.

Records Contraventions

When applying the principles set out in Callan v Smith [2021] WAIRC 00216, the Court noted that a maximum aggregated penalty for each of the records contraventions would be very large. His Honour concluded that if the more appropriate penalty of $1,500 for each contravention was imposed, a total aggregate penalty in this amount would not be a just and proportionate response. Having regard to the ‘one transaction principle’, the records contraventions were grouped together to set a theoretical maximum penalty by reference to the pattern of conduct that was committed week to week. This was to ensure that the aggregate penalty to be imposed was neither crushing nor oppressive and that there would be no double penalty. Given this, the Industrial Magistrate imposed a penalty of $1,500 for each of the 106 pay periods that fell during the contravention period, equating to a theoretical aggregate penalty of $159,000.

Due to the respondents having admitted the records contraventions, the Industrial Magistrate considered a 20% reduction to this amount appropriate. The totality principle was also applied to reduce the amount by a further 40%. This resulted in a total penalty of $76,320 for the records contraventions.

Award Breaches

The Industrial Magistrate noted that the award breaches committed by the respondents were serious, for which the Court should impose stiff penalties. However, when applying the principles in Callan v Smith, the total theoretical maximum penalty for the award breaches would also be very large. His Honour considered that a penalty of $300 per award breach, resulting in an overall theoretical aggregate penalty of $117,600, be appropriate.

Although committed as part of a single, continuous course of conduct, the amounts of the underpayments were such that His Honour did not consider it appropriate to apply the one transaction principle by grouping the award breaches together to reduce the penalty amount. A 20% reduction was however given due to the effort the respondents had made towards rectifying the underpayment amount. The totality principle was also applied, resulting in a further 40% reduction to ensure the total penalty to be imposed for the award breaches was just, appropriate and a proportionate response to the conduct the respondents engaged in. Therefore, a total penalty of $56,448 was imposed for the award breaches.

The sum of the penalties imposed for both the records contraventions and award breaches totalled $132,768, to be paid to the claimant under s 83F of the IR Act. The full decision on penalty can be read here.

Pre-trial conferences (PTC) are compulsory, private meetings between parties, facilitated by a Clerk of the Court. They give parties an opportunity to discuss and settle the case. The respondents allege that, on 20 June 2024 they reached a binding settlement agreement (BSA) with the claimant and sought to enforce it. The claimant denied a binding agreement between the parties was reached, and the following was put to the Industrial Magistrate as a preliminary issue:

(a) On 20 June 2024 at a PTC, did the parties reach a BSA with immediate effect?

(b) If a BSA with immediate effect was reached, what were the terms of the BSA? 

(c) If a BSA with immediate effect was reached, was it enforceable or void? 

(d) What is the effect of the determinations or outcomes of the issues in (a), (b) and (c) above on the claimant’s claim?

The preliminary issue was heard in June 2025. The respondents bore the burden of proving the preliminary issue on the balance of probabilities. Each named party at the time of the PTC, and the claimant’s lawyer at the time, gave evidence about what occurred during, and after the PTC.  

The Industrial Magistrate adopted principles approved by the Victorian Court of Appeal in Sully v Englisch [2022] VSCA 184. Whether a BSA exists is determined objectively, having regard to the parties’ intentions. Whether parties intend to form an agreement is a question of fact, determined in light of all the surrounding circumstances.

After recounting each witness’s evidence, the Industrial Magistrate found that the that a BSA was reached at the PTC. 

The PTC lasted over three hours. First, the Clerk addressed the parties in a joint session on the purposes of PTCs, and there was an exchange between each party’s lawyers about the claim and response. After this, the parties split into private sessions and the Clerk shuttled between each room to convey settlement offers and counteroffers. The claimant’s evidence of what occurred during the private sessions differed from his former lawyer’s, and the respondents’. While the claimant argued that his lawyer did not leave their private session room, each respondent and the claimant’s former lawyer gave consistent evidence that the lawyer entered the respondents’ private session room and conveyed the claimant’s acceptance of their offer. There was no evidence that the claimant’s lawyer did not have authority, or acted outside their instructions, when conveying the claimant’s acceptance. The evidence given by the claimant’s former lawyer was not challenged and they were not cross-examined at the hearing.  

The BSA’s terms required the respondent to make a monetary payment to the claimant. After which, the claimant was required to discontinue the claim. This and other ancillary terms (which were also discussed at the PTC) would then be reduced to a written deed of settlement to be produced by the respondent’s lawyers and provided to the claimant’s representative to be confirmed and executed. Based on the evidence, these ancillary terms were uncontroversial, and included such terms like full and final settlement, non-disparagement and confidentiality. 

The Industrial Magistrate held that a reasonable person observing the PTC would have concluded that the parties entered into a binding agreement. As the claimant accepted the respondents’ offer, the BSA remained enforceable. Having determined the first three parts of the preliminary issue, the Industrial Magistrate held that the claimant was precluded from prosecuting the claim. 

The full decision can be read here.  

The claimant, who worked as a Chef de Partie at Fiona Stanley Hospital (FSH) for just under 10 years, brought a claim to the Industrial Magistrates Court (Court) alleging a contravention of the Long Service Leave Act 1958 (WA) (LSL Act). The claimant claimed that at the end of her employment she was entitled to a payment for untaken long service leave in the amount of $14,171.45. The claimant also sought interest on judgment, an order for a pecuniary penalty, and costs.

Initially, the claimant was employed by Serco Australia Pty Ltd (Serco) for approximately seven years commencing in September 2014, then from August 2021 she was employed by the respondent, South Metropolitan Health Service as Agent for the State of Western Australia (SMHS) until she resigned in May 2024. Her role with FSH was the same under both employers, and both parties agreed that the WA Health System – HSUWA – PACTS Industrial Agreement 2022 (HSUWA Pacts Agreement 2022) applied to the claimant’s employment. 

The claimant argued that, as provided under the LSL Act, she was entitled to a pro-rata payment on termination of her employment in lieu of taking long service leave as she claimed she had performed at least 7 years of continuous service. From the claimant’s perspective, her employment with Serco and the SMHS was continuous service for the purposes of the LSL Act and its transmission of business provisions. 

The respondent denied this claim, asserting that, by operation of section 4A(4) of the LSL Act, the claimant is not entitled to long service leave under the LSL Act because the HSUWA Pacts Agreement 2022 provided for her long service leave entitlement. Under the HSUWA Pacts Agreement 2022, accrued and untaken long service leave is payable after 10 years of continuous service.  Further, the respondent held the position that even if the LSL Act applied when her employment ended, the claimant’s service to FSH did not meet the continuous service and transmission of business provisions of the LSL Act and her employment period with SMHS was less than 7 years.

The central issue the Industrial Magistrate had to determine was whether the LSL Act applied to the claimant, and specifically how section 4A(4) should be interpreted. Section 4A(4) of the LSL Act provides that the LSL Act does not apply to an employee who has a separate entitlement to take long service leave or be paid on termination that is at least equivalent to the entitlement under the LSL Act. The Industrial Magistrate had to compare the long service leave entitlement provided by the LSL Act against the entitlement provided under the HSUWA Pacts Agreement 2022 to evaluate if the agreement provided at least equivalent long service leave.

The parties held opposing views as to how the Court should approach this comparison of the two instruments and their respective entitlements. The claimant argued that section 4A(4) of the LSL Act compromises two composite parts to be compared, the entitlement to take long service leave and the entitlement to be paid on termination for long service accrued but not taken. The respondent argued that the LSL Act should not be interpreted to provide for two separate entitlements but rather one comprehensive benefit is defined by the LSL Act and that one benefit should be ‘globally’ evaluated against the benefit provided for under the HSUWA Pacts Agreement 2022.

The Industrial Magistrate examined and applied the principles of statutory construction and determined that section 4A(4) of the LSL Act does not require a comparison of the component parts making up a long service leave entitlement.  Ultimately, the Industrial Magistrate found that the HSUWA Pacts Agreement 2022 provides for an entitlement to long service leave that is overall more favourable than the entitlement under the LSL Act. As such, the LSL Act was found not to apply to the claimant and consequently the Industrial Magistrate dismissed the claim. The full reasons for decision can be read here.