2021 WAIRC 00603
WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT


CITATION : 2021 WAIRC 00603

CORAM
: INDUSTRIAL MAGISTRATE J. HAWKINS

HEARD
:
FRIDAY, 20 AUGUST 2021

DELIVERED : WEDNESDAY, 1 DECEMBER 2021

FILE NO. : M 24 OF 2021

BETWEEN
:
HAYLEY LOUISE NEVILLE, DEPARTMENT OF MINES, INDUSTRY REGULATION AND SAFETY
CLAIMANT

AND

WEI ZHU TRADING AS SHINING QUICK CUTZ
RESPONDENT

CatchWords : INDUSTRIAL LAW – Assessment of Penalty – contraventions of the Hairdressers Award 1989 (WA) and s 83(4)(a)(ii) of the Industrial Relations Act 1979 (WA).
Legislation : Industrial Relations Act 1979 (WA)
Instruments : Hairdressers Award 1989 (WA)
Case(s) referred
to in reasons: : Melrose Farm Pty Ltd t/as Milesaway Tours v Milward [2008] WASCA 175
Construction, Forestry, Mining and Energy Union v Carl Anthony Perrot and Sandra Lee Perrot trading as C & S Perrott [2003] WAIRC 7370
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Callan v Smith [2021] WAIRC 216
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14
Result : Penalties imposed – cost orders made
REPRESENTATION:

CLAIMANT : MR R. ANDRETICH (OF COUNSEL) FROM STATE SOLICITOR’S OFFICE
RESPONDENT : NO APPEARANCE

REASONS FOR DECISION
Introduction
1 The Claimant’s originating claim dated 22 January 2021 sought orders against the Respondent, Wei Zhu (Mr Zhu) trading as Shining Quick Cutz, pursuant to the Industrial Relations Act 1979 (WA) (IR Act).
2 At all material times the Claimant was a public servant employed by the Department of Mines, Industry Regulations and Safety (DMIRS).
3 Mr Zhu was a sole trader, who operated a hairdressing business which traded at various locations within the Perth metropolitan area under the trading name of Shining Quick Cutz. Mr Zhu employed Tzu-Ning Chang (Ms Chang) and Suk Kee Wan (Ms Wan).
4 The Claimant alleged that Mr Zhu had breached the Hairdressers Award 1989 (WA) (the Award) in failing to maintain proper records and for failing to pay Ms Chang and Ms Wan their lawful entitlements pursuant to the Award during their periods of employment.
5 Ms Chang was employed as a part-time senior hairdresser from 7 March 2016 to 24 December 2017.
6 Ms Wan was employed as a full-time senior hairdresser from 26 January 2015 to 30 June 2018.
7 In respect to Ms Chang, the Claimant alleged that Mr Zhu underpaid her by $23,944.35 by contravening the Award on 242 occasions. The contravention and underpayments were as follows:
‘(a) clause 11(1)(b)(ii) [of the Award] (minimum wage for ordinary hours) on 58 separate occasions with total underpayments of $14,440.77;
(b) clause 8(2)(a) [of the Award] (overtime) on one occasion with an underpayment of $339.95;
(c) clause 8(2)(b) [of the Award] (work performed on a holiday) on one occasion totalling an underpayment of $518.39;
(d) clause 8(2)(e) [of the Award] (work performed on Sundays) on 14 separate occasions totalling an underpayment of $3795.51;
(e) clause 9(1)(c) [of the Award] (work within ordinary time on Easter eve) on one occasion with an underpayment of $183.22;
(f) clause 16(3) [of the Award] (late night trading meal allowance) on 44 separate occasions with total underpayments of $552.20;
(g) clause 17(1)(d) and (e) [of the Award] (time and wages record) on 61 separate occasions;
(h) clause 22(4) [of the Award] (tool allowance) on 61 separate occasions with total underpayments of $506.30; and’ Originating Claim lodged 22 January 2021 [50].

(i) clause 10(4) of the Award (annual leave on termination) on one occasion with a total underpayment of $3,608.01.
8 In summary in respect of Ms Wan, the Claimant alleged that Mr Zhu underpaid her $53,414.73 by contravening the Award on 400 separate occasions. The contraventions and underpayments were as follows:
‘(a) clause 11(1)(b)(i) [of the Award] (minimum wage for ordinary hours) on 29 separate occasions with total underpayments of $2,766.10;
(b) clause 8(2)(a) [of the Award] (overtime) on 42 separate occasions with total underpayments of $9,589.68;
(c) clause 8(2)(b) [of the Award] (work performed on a holiday) on 13 occasions with total underpayments of $6,080.39;
(d) clause 8(2)(e) [of the Award] (work performed on Sundays) on 78 occasions with total underpayments of $19,171.41;
(e) clause 9(1)(c) [of the Award] (work within ordinary time on Easter eve) on one occasion (4 April 2015) totalling $157.15;
(f) clause 16(3) [of the Award] (late night trading meal allowance) on 59 separate occasions with total underpayments of $740.45;
(g) clause 17(1)(d) and (e) [of the Award] (time and wages record) on 89 separate occasions;
(h) clause 22(4) [of the Award] (tool allowance) on 88 separate occasions with total under payments of $738.70; and’ Originating Claim lodged 22 January 2021 [52].

(i) clause 10(4) of the Award (annual leave on termination) on one occasion with a total underpayment of $14,170.85.
9 In addition to seeking orders that Mr Zhu pay the underpayments owing to Ms Chang and Ms Wan, the Claimant also sought penalties and costs against Mr Zhu.
10 Mr Zhu failed to lodge a response and failed to appear at the application for default judgment on 9 April 2021. As a result, orders were made, inter alia, on 9 April 2021 as follows:
1 In default of lodging a response and in default of appearance on 9 April 2021 there be judgment for the claimant as follows:
a. $23,944.35 in respect to entitlements owing to Ms Chang; and
b. $53,414.73 in respect to entitlement owing to Ms Wan; and
c. Interest in the sum of $4,740.98 in respect to entitlements owing to Ms Chang calculated upon $23,944.35 from 24 December 2017 to 9 April 2021 at 6 % per annum; and
d. Interest in the sum of $8,909.58 in respect to entitlements owing to Ms Wan calculated upon $53,414.73 from 30 June 2018 to 9 April 2021 at 6 % per annum.
11 The remainder of the claim for penalty and costs was adjourned to be heard on 20 August 2021. Again, on 20 August 2021 there was no appearance by Mr Zhu.
12 The Claimant lodged and served written submissions in respect to penalty and costs.
13 The Claimant submits that a penalty not exceeding $2,000 may be imposed pursuant to s 83(1) and s 83(4)(a)(ii) of the IR Act, but that the Court must separately consider each contravention of the Award as a contravention to which a penalty can be applied, and those contraventions should not be treated as arising from a single course of conduct. Melrose Farm Pty Ltd t/as Milesaway Tours v Milward [2008] WASCA 175.
However, the Claimant accepted the Court may apply the totality principle in determining an appropriate penalty. In particular, the Claimant referred to Construction, Forestry, Mining and Energy Union v Carl Anthony Perrot and Sandra Lee Perrot trading as C & S Perrott [2003] WAIRC 7370.
wherein Industrial Magistrate Cicchini found that:
10 In considering the appropriate penalty with respect to each breach that led to underpayment it is important to have regard to the totality principle. The Court must have regard for the overall consequences of the Respondents’ actions and the circumstances in which they were committed together with the totality of the underpayment. Further, it is clear that the totality of the penalty should be one so as not to be crushing upon the Respondents. Nevertheless, the penalty should reflect the seriousness of the Respondents’ conduct tempered by the mitigating factors including the Respondents’ lack of prior record of breach.
11 Having regard to those principles it becomes evident that what the Claimant seeks is excessive. To accede to the Claimant’s submission would result in a crushing total penalty, particularly having regard to the nature of the breaches and the quantum involved in each breach. I take the view that with respect to each of the underpayment breaches the appropriate penalty is one of $35.00. The total penalty payable by the Respondents in regard to those breaches will accordingly be $1785.00. [2003] WAIRC 7370 [10] - [11].

14 Relying on Mason v Harrington Corporation Pty Ltd, [2007] FMCA 7 [26] - [59] (Mobray FM).
the Claimant made the following submissions in respect to the factors to be considered when imposing penalties:
(a) Nature and extent of the conduct which led to the breaches:
(i) ‘the number of contraventions (400 and 242 for each employee) and the period of time (over 3 years and nearly 2 years respectively) over which they occurred were extensive’; Claimant’s Submissions lodged 21 April 2021 [21(a)(i)].

(ii) ‘[Mr Zhu] had a business model that involved payment of his employees in a manner entirely inconsistent with his obligations’; Claimant’s Submissions lodged 21 April 2021 [21(a)(ii)].
and
(iii) Mr Zhu’s failure to keep or provide records meant that the entitlements claimed were only part of the total underpayments and ‘the absence of records has made it impossible to establish the full extent of the underpayments’. Claimant’s Submissions lodged 21 April 2021 [21(a)(iii)].

(b) Circumstances in which that conduct took place:
(i) Ms Chang and Ms Wan were vulnerable employees being migrant workers on visas with limited command of English.
(c) The nature and extent of any loss or damage sustained as a result of the breaches:
(i) The underpayments were very substantial, and the employees had been deprived of their entitlements for several years.
(d) Whether the breaches were properly distinct or arose out of one course of conduct:
(i) ‘[I]n the absence of an express legislative provision requiring the conduct to be treated as a single course of conduct, the contraventions should be considered distinct. The fact that [Mr Zhu’s] conduct was to entirely disregard the employment entitlements of the employees should not lead to a diminished penalty given the seriousness and extent of the contraventions. There were distinct and repeated contraventions of multiple award provisions by’ Claimant’s Submissions lodged 21 April 2021 [21(d)].
Mr Zhu, namely:
· the minimum wage for ordinary hours (cl 11 of the Award);
· overtime, work performed on a holiday and work performed on Sunday (cl 8 of the Award);
· work on Easter eve (cl 9 of the Award);
· meal allowance (cl 16 of the Award);
· time and wages records (cl 17 of the Award);
· tool allowance (cl 22 of the Award); and
· annual leave on termination (cl 10 of the Award).
(e) The size of the business enterprise involved:
(i) Mr Zhu ‘operated 5 hairdressing establishments (and, to the best of the Claimant’s knowledge continues to operate multiple establishments)’. Claimant’s Submissions lodged 21 April 2021 [21(e)].
Further Mr Zhu employed multiple hairdressers at each location.
(f) Whether or not the breaches were deliberate:
(i) It was apparent that Mr Zhu ‘was aware of minimum wage entitlements at least by the time that he provided to the Claimant the “payslips” that did not correspond to what Ms Wan was actually paid. It [was] not clear whether [Mr Zhu] was aware of the exact Award entitlements’. Claimant’s Submissions lodged 21 April 2021 [21(f)].

(g) Whether senior management was involved in the breaches:
(i) Mr Zhu was ‘the owner of the business and was solely responsible for paying the employees and maintaining the necessary employment records’. Claimant’s Submissions lodged 21 April 2021 [21(g)].

(h) Whether the party that committed the breach has exhibited contrition:
(i) There has been no contrition exhibited by [Mr Zhu] and he has not cooperated with industrial inspectors investigating the contraventions.
(i) Whether the party that committed the breaches has taken corrective action:
(i) Mr Zhu ‘has not taken any corrective action in respect to the underpayments of the employees’. Claimant’s Submissions lodged 21 April 2021 [21(i)].

(j) Whether the party committing the breach has cooperated with enforcement authorities:
(i) Mr Zhu did not cooperate with the DMIRS and ‘told employees to provide incorrect information to industrial inspectors [and] provided incorrect employment records’.
(k) The need to ensure compliance with minimum standards by provision of an effective means of investigation and enforcement of employee entitlements:
(i) The conduct by Mr Zhu in ‘not maintaining and providing the records required by the Award prevents the adequate investigation and enforcement of employee entitlements and undermines the need to ensure compliance’.
(l) The need for specific and general deterrence:
(i) Mr Zhu’s complete disregard for his legal obligations to his employees was at the serious end of the spectrum. Mr Zhu paid employees without regard and inconsistently with their Award entitlements. As Mr Zhu continues to operate the business, the deterrence Mr Zhu and to other employers ignoring their obligation should be a significant consideration and in all the circumstances the Court should consider a significant penalty in respect to the contraventions.
15 In oral submissions to the Court on 20 August 2021, the Claimant’s counsel reiterated that the nature and extent of the conduct which led to the breaches in terms of the underpayment worked out to be approximately $300 per pay for Ms Chang and $130 per pay for Ms Wan.
16 It was also reiterated that no discount could be awarded to Mr Zhu for any early consent or contrition.
17 Further, it was submitted that the business model employed by Mr Zhu involved the hiring of foreign nationals many of whom were on visas, highlighting the potential for exploitation.
18 In addition, the Claimant submitted that in determining penalties that they should be deterrent and not regarded as the reasonable costs of doing business and that the failure to keep proper books of account amounted to aggravation. Due to the failure of Mr Zhu to keep proper books of account, the Claimant attempted to determine the underpayments to Ms Chang and Ms Wan by reference to the opening and closing times of the salons. Without the records, an accurate estimate could not be ascertained and as such the Claimant submits that the amounts awarded to Ms Chang and Ms Wan should be regarded as likely to have been a minimum amount in terms of their entitlements.
19 Further the counsel for the Claimant suggested that although the Full Bench of the Western Australian Industrial Relations Commission in the decision of Callan v Smith [2021] WAIRC 216.
adjusted the assessment of penalties by 40% taking into account the overlap between separate contraventions and allowing for the totality principle, the Claimant submits that in the assessment, regard should be given to the business model applied by Mr Zhu.
20 As to the specific penalties, the counsel for the Claimant submitted that the facts in Callan v Smith were largely comparable and that the penalties set out at [110] of Callan v Smith were a starting point not an end point.
21 Mr Zhu has not provided any submissions to the Court in respect to the application for penalties and costs.
Determination
22 Schedule 1 and sch 2 attached set out the jurisdiction, practice and procedure for the Western Australian Industrial Magistrates Court and the relevant legislation and authorities concerning pecuniary penalties. As stated in sch 2, a non-exhaustive range of factors apply in determining whether the particular conduct calls for the imposition of the penalty and if so, the amount. Those factors are as follows:
(a) The nature and extent of the conduct which led to the breaches;
(b) Circumstances in which the conduct took place;
(c) The nature and extent of any loss or damage sustained as a result of the breaches;
(d) Whether there has been any similar previous conduct by the Respondent;
(e) Whether the breaches are properly distinct or arose out of one course of conduct;
(f) The size of the business involved;
(g) Whether or not the breaches were deliberate;
(h) Whether senior management was involved in the breaches;
(i) Whether the party committing the breach had exhibited contrition;
(j) Whether the party committing the breach has taken corrective action;
(k) Whether the party committing the breach had cooperated with enforcement authorities; and
(l) The need for specific and general deterrence.
23 These factors were considered in Callan v Smith [2021] WAIRC 216 [91] - [93].
where it stated:
91 As the learned Industrial Magistrate identified, the list is not a rigid catalogue of matters for attention. At the end of the day, the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations: Australian Thelmix Supplies Pty Ltd v McAlarty-Smith [2008] FCAFC 8.
92 Of course, also relevant, is the maximum penalty identified in the statute for the contravention. As Flick J stated in The BKH Contractors Case (No.2) [2018] FCA 1563 at [19]:
In undertaking the task of assessing and quantifying the penalties to be imposed, the maximum penalty prescribed by the Commonwealth legislature for a specific contravention serves as a ‘yardstick’ against which the assessment of penalties is generally to proceed.
93 It is also useful to refer to what the Full Federal Court stated in ABCC v CFMEU at [100]-[104] as providing a useful guidance to assessing penalties:
The first step in assessing the penalties is to identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the award being a separate contravention.
24 It is now necessary to consider the relevant factors and assess the appropriate penalty for each individual contravention.
Nature And Extent Of Conduct And Circumstances In Which It Occurred
25 The number of contraventions by Mr Zhu were significant and consisted of his failure to pay the amounts owing to Ms Chang and Ms Wan for the work performed over a lengthy period and the failure to maintain proper records. The number of contraventions totalled 642. The individual contraventions to Ms Chang involved an underpayment at its lowest of $8.30 and at its highest of $601.03 being an average of $98.94 per occasion. For Ms Wan the lowest underpayment was $8.30 to the highest of $1,003.57 being an average of $133.53 per occasion. For Ms Chang the significant underpayments relate to ordinary hours and Sunday overtime. For Ms Wan the significant underpayments related to overtime and work on Sundays. The underpayments to Ms Chang extended from 7 March 2016 to 29 December 2017. The underpayments for Ms Wan extended from 26 January 2015 to 18 January 2018.
26 There is no evidence that the conduct that led to the contraventions arose from a lack of understanding, knowledge and resources. Rather, it involved a business model involving payments to employees in a manner inconsistent with Mr Zhu’s obligations under the Award. Further the determination of the extent of the contraventions were aggravated by the failure of Mr Zhu to keep adequate records that enable the Claimant to ascertain the extent of the underpayments to Ms Chang and Ms Wan.
27 Clearly when viewed as a whole the contraventions are serious. Nonetheless each contravention must be assessed individually and therefore the relevance of the entirety of the contraventions is limited. Callan v Smith [2021] WAIRC 216 [100].

28 Having regard however to the amount involved in each individual contravention and factors of aggravation, the penalty for each individual contravention must lie in the lower end of the range.
The Circumstances In Which The Conduct Took Place
29 Ms Chang and Ms Wan were migrant workers on visas and therefore vulnerable employees. This factor indicates a penalty of mid-range.
The Nature And Extent Of Any Loss Or Damage Sustained As A Result Of The Breaches
30 As previously stated, the underpayments were substantial and Ms Chang and Ms Wan were deprived of their entitlements for several years. However, as described above, on average the amount of underpayment was relatively small on each individual occasion. This factor indicates a penalty for each contravention at the lower end of the range.
Whether There Has Been Any Similar Previous Conduct By The Respondent
31 There is no evidence that Mr Zhu has committed similar contraventions. This factor is neutral.
Whether The Breaches Are Properly Distinct Or Arose Out Of One Course Of Conduct
32 The Claimant says the contraventions should be considered as distinct as Mr Zhu’s conduct was to entirely disregard the employment entitlements of Ms Chang and Ms Wan. Claimant’s Submissions lodged 21 April 2021 [21(d)].
However as stated in the decision of Callan v Smih [2021] WAIRC 216.
Full Bench of the Western Australian Industrial Commission [97]:
… the separate occasions upon which any particular clause of the Award was breached, calls for application of the course of conduct principle because those breaches were the consequence of a single overriding approach taken by the respondent to payment of a flat rate of pay to Mr Karta, which continued throughout the course of his employment. This should result in adjustment when aggregating the individually assessed penalties.
33 In this case it is alleged by the Claimant that Mr Zhu did not pay Ms Chang and Ms Wan an hourly rate of pay but, rather, ‘paid a flat rate of $100 per day and a bonus amount if an [e]mployee completed more than 28 haircuts in a day in accordance with a chart the Respondent displayed at the Premises’. Originating Claim lodged 22 January 2021 [15].

34 Applying the principles in Callan v Smith, [2021] WAIRC 216.
the separate occasion of each contravention requires consideration of the course of conduct principle. The contraventions to a large extent were a consequence of the approach by Mr Zhu in calculating the earnings of Ms Chang and Ms Wan by paying them a flat rate per day and a bonus for more than 28 haircuts per day. I am satisfied therefore that an adjustment will need to be made, to ensure that to the extent of any overlap of separate contraventions in respect to payment of entitlements that can be considered part of a single course of conduct, no double penalty is imposed.
35 Further, in oral submissions the Claimant accepted that the facts of Callan v Smith [2021] WAIRC 216.
were by and large comparable. Transcript, 8.

Size Of The Business Enterprise Involved
36 Mr Zhu’s business is not insubstantial. He operates five hairdressing salons, employing multiple hairdressers at each location. Nonetheless, the true extent of Mr Zhu’s business operations of the business cannot be ascertained on the evidence provided. This factor lies in the low to mid-range.
Whether Or Not The Breaches Were Deliberate
37 It can be inferred that by the time Mr Zhu provided the Claimant with payslips in respect to Ms Wan that did not accord with what she was actually paid Mr Zhu was aware of the minimum wage entitlements. The Claimant accepts that it is not clear whether Mr Zhu was aware of the exact award entitlements at the time payments were made to his employees. Without more, this factor is assessed at the lower end.
Whether Senior Management Was Involved In The Breaches
38 Mr Zhu is the owner of the business and solely responsible for paying Ms Chang and Ms Wan. This factor lies in the low to mid-range.
Whether The Party Committing The Breach Had Exhibited Contrition
39 The action to date by Mr Zhu has not exhibited any contrition by either admitting the claim bought by the Claimant or by fully cooperating with the Claimant. This factor therefore lies in the mid-range.
Whether The Party That Committed Breaches Has Taken Corrective Action
40 There is no evidence that Mr Zhu has taken corrective action in respect to the underpayments to Ms Chang and Ms Wan. This factor therefore lies in the mid to high range.
Whether The Party Committing The Breach Has Cooperated With The Enforcement Authorities
41 Mr Zhu has not cooperated with the Claimant and has provided incorrect employment records. This factor lies in the mid to high range.
The Need For Compliance With Minimum Standards By Provision Of Effective Means From Investigation And Enforcement Of Employee Entitlements
42 In not maintaining and providing records required under the Award, the Respondent prevented appropriate investigation by the Claimant to enable enforcement of any employees’ entitlements. Further, such conduct undermines the ability of relevant investigating authorities to ensure compliance with minimum standards. This factor lies in the mid to high range.
The Need For Specific And General Deterrence
43 There is evidence Mr Zhu continues to operate a business, specific deterrence is therefore an important factor. Further, general deterrence should constitute a significant element in the assessment of penalty to ensure that penalties that are imposed in like situations should not be reasonably regarded as the cost of doing business. This factor lies in the mid to high range.
Financial Position Of The Respondent
44 Evidence suggests that Mr Zhu continues to operate the business. However, there is no cogent evidence of his financial position. Accordingly, this is a neutral factor.
Assessment Of Penalties
45 Weighing the above factors, I assess the penalty for the contraventions as follows:

Ms Chang
Award Clause
Nature of entitlement/ contravention
Number of contraventions
Penalty per breach
Amount
11(1)(b)(ii)
Minimum wage for ordinary hours
(Underpayment - $14,440.77)
58
$160
$9,280
8(2)(a)
Overtime
(Underpayment - $339.95)
1
$160
$160
8(2)(b)
Work performed on a holiday
(Underpayment - $518.39)
1
$200
$200
8(2)(e)
Work performed on Sundays
(Underpayment - $3,795.51)
14
$160
$2,240
9(1)(c)
Work within ordinary time on Easter Eve
(Underpayment - $183.22)
1
$50
$50
16(3)
Late night trading meal allowance
(Underpayment - $552.20)
44
$10
$440
17(1)(d) and 17(1)(e)
Non-compliance with time and wages recording
61
$200
$12,200
22(4)
Tool allowance
(Underpayment - $506.30)
61
$10
$610
10(4)
Annual leave on termination
(Underpayment - $3,608.01)
1
$200
$200



TOTAL
$25,380

46 Weighing the above matters, I assess the penalty for the contraventions as follows:
Ms Wan
Award Clause
Nature of entitlement/ contravention
Number of contraventions
Penalty per breach
Amount
11(1)(b)(i)
Minimum wage for ordinary hours
(Underpayment - $2,766.10)
29
$160
$4,640
8(2)(a)
Overtime
(Underpayment - $9,589.68)
42
$160
$6,720
8(2)(b)
Work performed on a holiday
(Underpayment - $6,080.39)
13
$200
$2,600
8(2)(e)
Work performed on Sundays
(Underpayment - $19,171.41)
78
$160
$12,480
9(1)(c)
Work within ordinary time on Easter Eve
(Underpayment - $157.15)
1
$50
$50
16(3)
Late night trading meal allowance
(Underpayment - $740.45)
59
$10
$590
17(1)(d) and 17(1)(e)
Non-compliance with time and wages recording
89
$200
$17,800
22(4)
Tool allowance
(Underpayment - $738.70)
88
$10
$880
10(4)
Annual leave on termination
(Underpayment - $14,170.85)
1
$200
$200



TOTAL
$45,960
Adjustments
47 Having assessed the individual penalties for the contraventions it is necessary to consider if an adjustment should be made, to ensure to the extent of any overlap between separate contraventions that can be considered part of a single course of conduct, there is no double penalty imposed. As previously found, I am satisfied that the contraventions are part of the single course of conduct. The assessment requires therefore a reduction of 40% for each contravention.
48 It is then necessary to take account of the totality principle to ensure that multiple penalties once aggregated are just appropriate and proportionate to the conduct viewed as a whole. Callan v Smith [2021] WAIRC 216 [111]; Construction, Forestry, Mining and Energy Union v Carl Anthony Perrot and Sandra Lee Perrot trading as C & S Perrott [2003] WAIRC 7370.
No further adjustment is required. The aggregate penalties in respect to Ms Chang and Ms Wan are as follows:
(a) Penalties applying to Ms Chang’s underpayment is $15,228; and
(b) Penalties applying to Ms Wan’s underpayment is $27,576.
Costs
49 In addition to that penalty, applying the decision of Callan v Smith the costs sought by the Claimant of $82.50 by way of disbursements should also be awarded.
Orders
50 It is therefore ordered as follows:
(a) The Respondent shall pay to the Claimant a penalty of $42,804.
(b) The Respondent shall pay to the Claimant costs of $82.50.



J. HAWKINS
INDUSTRIAL MAGISTRATE


Schedule 1 – Jurisdiction And Procedure Of The Western Australian Industrial Magistrates Court
[1] The IMC has the jurisdiction conferred by the IR Act and other legislation. Section 83(4) of the IR Act confers jurisdiction to impose a penalty if ‘a person contravenes or fails to comply with a provision of an instrument’: s 83(1) of the IR Act. Section 83(2) of the IR Act:
instrument to which [s 83(1)] applies means:
(a) an award; and
(b) an industrial agreement; and
(c) an employer-employee agreement; and
(d) an order made of the Commission, other than an order made under section 23A, 32, 44(6) or 66.
[2] The IMC may impose a penalty ‘not exceeding $2 000 in the case of an employer, organisation or association and $500 in any other case’: s 83(4)(a)(ii) of the IR Act.
[3] ‘The standard of proof to be applied in determining whether there has been a contravention of a civil penalty provision is the standard observed in civil proceedings’: s 83E(8) of the IR Act. However, the contravention has already been determined by entry of the orders made in default of the lodging of a response and appearance on 9 April 2021. Accordingly, the powers, practice and procedure of the IMC in these proceedings are the same as if the proceedings were a case under the Magistrates Court (Civil Proceedings) Act 2004 (WA): s 81CA(2) of the IR Act. Accordingly, in exercising the jurisdiction to impose a penalty, the IMC is exercising a civil jurisdiction and the standard of proof is therefore on the balance of probabilities. When in these reasons I say that I am satisfied, that means I am satisfied on the balance of probabilities.

Schedule 2 – Pecuniary Penalty Orders And Section 83(4) Of The Industrial Relations Act 1979 (WA)
[1] Section 83(4) of the IR Act provides that the IMC may impose a penalty on a person not exceeding $2,000 in the case of an employer, organisation or association and $500 in any other case, if the court is satisfied a contravention of an instrument to which s83(1) of the IR Act applies. The IR Act allows the IMC to order a penalty be paid directly to a person directly affected by the conduct to which the contravention relates or to the Applicant or Treasurer: s 83F(2) of the IR Act.
[2] The purpose served by penalties was described by Katzmann J in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 [388] in the following terms:
In contrast to the criminal law, however, where, in sentencing, retribution and rehabilitation are also relevant, the primary, if not the only, purpose of a civil penalty is to promote the public interest in compliance with the law. This is achieved by imposing penalties that are sufficiently high to deter the wrongdoer from engaging in similar conduct in the future (specific deterrence) and to deter others who might be tempted to contravene (general deterrence). The penalty for each contravention or course of conduct is to be no more and no less than is necessary for that purpose. (citations omitted)
[3] In Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 [14], Tracey J adopted the following ‘non-exhaustive range of considerations to which regard may be had in determining whether particular conduct calls for the imposition of a penalty, and if it does the amount of the penalty’ which had been set out by Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7:
· 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 the 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 for investigation and enforcement of employee entitlements and
· The need for specific and general deterrence.
[4] The list is not ‘a rigid catalogue of matters for attention. At the end of the day the task of the court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations’: Buchanan J in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 [91].
[5] Applying the principles set out in Callan v Smith [2021] WAIRC 216, when properly construed, s 83E(1) of the IR Act prescribes the maximum penalty that is to be applied to any single contravention of a civil penalty provision.
[6] ‘Multiple contraventions’ may occur because the contravening conduct done by an employer:
(a) resulted in multiple contraventions of a single civil penalty provision or resulted in the contravention of multiple civil penalty provisions;
(b) was repeated; and
(c) was done with respect to multiple employees.
[7] Where multiple contraventions occur, it may be necessary to consider the principles in relation to course of conduct or one transaction rule and consider whether it is appropriate to make an adjustment by way of a reduction for each contravention: Callan v Smith [96], [111].
[8] The totality of the penalty must be re-assessed in light of the totality of the offending behaviour. If the resulting penalty is disproportionately harsh, it may be necessary to reduce the penalty for individual contraventions: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 [47] - [52]; Callan v Smith [112].
[9] The task of fixing the penalty is a process of ‘instinctive synthesis’ having regard to the circumstances of the case and the need to maintain public confidence in the statutory regime.
[10] In his paper on civil penalty contraventions delivered to an ‘Employment Law Symposium: Your Guide to Workplace Law 2011’, Law Society of Western Australia (30 November 2011), Gilmour J of the Federal Court of Australia observed that:
Determining penalties is not a matter of precedent. There is no tariff. Regard must be had in fixing a penalty to the individual circumstances of a case and should not be determined by a line by line comparison with another case. In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 295 Buchanan J said:
‘The facts of the instant case should not be compared with a particular reported case in order to derive therefrom the amount of the penalty to be fixed. Cases are authorities for matters of principle; but the penalty found to be appropriate, as a matter of fact, in the circumstances of one case cannot dictate the appropriate penalty in the different circumstances of another case.’
This proposition was supported in ABCC v CFMEU (No.2) (2010) 199 IR 373 at [11] per Barker J and upheld by the Full Court on appeal in McDonald v Australian Building and Construction Commissioner [2011] FCAFC 29.