2024 WAIRC 00152
INDUSTRIAL MAGISTRATES COURT OF WESTERN AUSTRALIA


CITATION : 2024 WAIRC 00152

CORAM : INDUSTRIAL MAGISTRATE T. KUCERA

HEARD : ON THE PAPERS

DELIVERED : TUESDAY, 9 APRIL 2024

FILE NO. : M 145 OF 2022

BETWEEN : WESTERN AUSTRALIAN PRISON OFFICERS' UNION OF WORKERS
CLAIMANT

AND

MINISTER FOR CORRECTIVE SERVICES
RESPONDENT


CatchWords : INDUSTRIAL LAW – Imposition of pecuniary penalty – Principles considered when determining penalty – Breach of industrial agreement – Where conduct of the Respondent was deliberate – Penalty to be paid to Claimant
Legislation : Industrial Relations Act 1979 (WA)
Fair Work Act 2009 (Cth)
Instrument : Department of Justice Prison Officers Industrial Agreement 2020
Case(s) referred
to in reasons: : Australian Building and Construction Commission v Pattinson [2022] HCA 13; 274 CLR 450
Western Australian Prison Officers’ Union of Workers v Minister for Corrective Services [2023] WAIRC 00725; 103 WAIG 1620
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560
Callan v Smith [2021] WAIRC 00216; 101 WAIG 1155
Milardovic v Vemco Services Pty Ltd (No 2) [2016] FCA 244; 242 FCR 492
Ponzio v B&P Caelli Constructions Pty Ltd [2007] FCAFC 65; 158 FCR 543
United Voice WA v Director General, Department of Education [2012] WAIRC 00778; 92 WAIG 1655
Western Australian Prison Officers Union of Workers v Minister for Corrective Services [2023] WAIRC 00867; 103 WAIG 1878
Trade Practices Commission v CSR Limited [1990] FCA 762
Result : Penalty imposed
Representation:
Claimant : Mr C. Fordham (of counsel) as instructed by the Western Australian Prison Officers’ Union of Workers
Respondent : Mr R. Andretich (of counsel) as instructed by the State Solicitor’s Office

REASONS FOR DECISION
1 On 28 August 2023, I determined the employing entity, the Minister for Corrective Services (the respondent) breached cl 22.1 of the Department of Justice Prison Officers Industrial Agreement 2020 (2020 Agreement), by failing to pay Maureen Harvey (Ms Harvey) at overtime rates for the work she performed on the 2022 King’s Birthday Public Holiday.
2 After issuing my reasons for decision in Western Australian Prison Officers’ Union of Workers v Minister for Corrective Services [2023] WAIRC 00725; 103 WAIG 1620 (decision), I directed the parties to each file an outline of submissions on penalty. I also scheduled a penalty hearing that was to be held on 12 February 2024.
3 On 7 February 2024 the parties, by consent, requested that I vacate the penalty hearing and decide the issue of penalty on the submissions they had filed. For the following reasons, I have decided that a pecuniary penalty should be imposed for the respondent’s breach.
Orders that may be made
4 The orders the Court can make in an application alleging a breach of an industrial agreement are set under s 83(4) of the Industrial Relations Act 1979 (IR Act) which relevantly states:
(4) On the hearing of an application under subsection (1) the industrial magistrate’s court may, by order –
(a) if the contravention or failure to comply is proved –
(i) issue a caution; or
(ii) impose a pecuniary penalty in accordance with subsection (4A) or
(b) dismiss the application.
5 The maximum pecuniary penalty for a breach of an industrial agreement in the case of a body corporate (which would include a government department) under s 83(4A) of the IR Act is a fine of $65,000. For cases involving a serious contravention by a body corporate, a maximum pecuniary penalty of $650,000 applies. Industrial Relations Legislation Amendment Act 2021 proclaimed on 17 June 2022, coming into effect on 20 June 2022

6 In addition to the pecuniary penalties under the IR Act, a Full Bench of the Western Australian Industrial Relations Commission (WAIRC) in Callan v Smith [2021] WAIRC 00216; 101 WAIG 1155 (Callan v Smith) found that when imposing penalties, the Court may impose a separate penalty for each breach, where multiple contraventions are committed, even as part of a single course of conduct.
7 As a result of the interaction of the decision in Callan v Smith and the pecuniary penalties under s 83 of the IR Act, the capacity of the Court to impose large fines on employers where they are found to have contravened the terms of an industrial agreement are significant.
Determining the orders to be made
8 I recently set out the principles to be applied when determining the orders the Court should make in an application under s 83 of the IR Act, in a matter involving the same parties: Western Australian Prison Officers Union of Workers v Minister for Corrective Services [2023] WAIRC 00867; 103 WAIG 1878 (WAPOU Caution decision).
9 It is also relevant the WAPOU Caution decision involved a breach of the Agreement by the respondent, even though it did not occur at the prison where Ms Harvey works and was in relation to a different entitlement; the payment for personal leave.
10 At paragraph [20] of the WAPOU Caution decision, I noted the primary purpose of pecuniary penalties under a statute such as the IR Act, is to secure compliance with the provisions of the statutory regime. French J in Trade Practices Commission v CSR Limited [1990] FCA 762, which was cited with approval in Callan v Smith at [30].

11 I also observed the Court has a discretion under s 83 of the IR Act and may in an appropriate case, issue a caution instead of imposing a pecuniary penalty. When exercising this discretion, the Court is required to turn its mind as to whether an appropriately crafted warning would, instead of a pecuniary penalty, have the effect of deterring a contravener from engaging in the same or similar conduct. Western Australian Prison Officers Union of Workers v Minister for Corrective Services [2023] WAIRC 00867; 103 WAIG 1878 at [25].

12 In Callan v Smith, a Full Bench of the WAIRC observed that when determining penalty, the Court is required to have regard to a nonexhaustive range of considerations to decide, whether particular conduct calls for the imposition of a penalty, and if it does, the amount of a penalty. Callan v Smith at [90].

13 In Callan v Smith at [90] the following considerations were set out, which include but are not limited to:
(a) the nature and extent of the conduct which led to the breaches;
(b) the circumstances in which that conduct took place;
(c) the nature and extent of any loss or damage sustained as a result of the breaches;
(d) whether there had been similar previous conduct by the respondent;
(e) whether the breaches are properly distinct or arose out of the one course of conduct;
(f) the size of the business enterprise 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 had taken corrective action;
(k) whether the party committing the breach had cooperated with the enforcement authorities;
(l) the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
(m) the need for specific and general deterrence.
14 Citing the decision in Australian Ophthalmic Supplies Pty Ltd v McAlarySmith [2008] FCAFC 8; 165 FCR 560, the Full Bench in Callan v Smith at [91] observed 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.
15 A further consideration is the maximum penalty identified in the statute for the contravention. As Flick J stated in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (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…
16 The factors which inform an assessment of a civil penalty with an appropriate deterrent value were similarly described by the High Court in Australian Building and Construction Commission v Pattinson [2022] HCA 13; 274 CLR 450 (Pattinson) at [18]. The considerations described were consistent with and much the same as those set out in Callan v Smith.
17 The High Court in Pattinson noted the list of considerations when determining penalty is not a rigid catalogue of matters for attention. Relevantly at [19] the majority concluded:
It is important, however, not to regard the list of possible relevant considerations as a “rigid catalogue of matters for attention” as if it were a legal checklist. The court’s task remains to determine what is an “appropriate” penalty in the circumstances of the particular case. (footnotes omitted)
Statement of Beven Hanlon
18 Before providing a summary of the claimant’s submissions on penalty, I have to address the witness statement which the claimant filed from Beven Hanlon, who is the claimant’s Assistant Secretary (Hanlon Statement).
19 The claimant sought to rely upon the Hanlon Statement as supplementary evidence in support of its submissions on penalty.
20 The respondent objected to the Hanlon Statement on two grounds. The first was that the Hanlon Statement contained information which contradicted the evidence that Acting Assistant Superintendent of Operations Vose (AASO Vose) gave in the substantive hearing.
21 The respondent submitted the Hanlon Statement should not be admitted because it contained evidence that should have been adduced during the substantive hearing. The respondent’s other objection went to questions of relevance.
22 I am inclined to accept the respondent’s objections. Mr Hanlon, in his capacity as both the Assistant Secretary and in the Industrial Officer’s role he occupied previously, is someone who could have given evidence about the making of the 2020 Agreement and its predecessor industrial agreements.
23 Much of the information in the Hanlon Statement goes to the matters that were in issue at the substantive hearing and yet the claimant for whatever reason decided not to include a statement from Mr Hanlon as part of its case. It is too late now to include that material.
24 I also do not consider there was anything in the Hanlon Statement that was not already before the Court that would have made a material difference to the outcome on penalty. For these reasons I do not rely upon Mr Hanlon’s statement for the purposes of determining penalty.
Claimant’s submissions
25 In its outline of submissions, the claimant submitted that while the specific contravention related to the nonpayment of overtime on one occasion, there was added significance in that the breach arose due to a blanket denial of the right to a day of paid leave on a public holiday for certain categories of employees.
26 The claimant submitted the contravention occurred in the context of a reversal of the respondent's policy position with respect to public holidays under cl 136 of the 2020 Agreement.
27 The claimant contended the respondent's actions highlight the need, for a penalty to prevent the respondent from taking the view that intentionally taking the risk, of a possible contravention(s) of an industrial agreement should be an acceptable cost of doing business.
28 The claimant contended that the denial of benefit to a paid public holiday is a significant matter, much more than what the unpaid monetary sum of approximately $215 in overtime payment might ordinarily suggest.
29 The claimant asserted that there is a particular nonfinancial significance to the enjoyment of a benefit to a paid day of leave which is celebrated across the State.
30 The claimant also noted that it had to incur legal fees to uphold the rights of its members in bringing the proceedings.
31 Up to the date of the hearing, the respondent had continued to assert that its changed view of the 2020 Agreement was the correct one.
32 The claimant contends that there is a need in this case to ensure that the penalty be sufficient to ensure the respondent takes a more cautious approach to the introduction of new policies regarding employment conditions, including a greater effort at consultation.
33 The claimant said the employer in this case is a very large government employing authority, with a sophisticated level of internal knowledge about industrial law, with a large capacity to absorb the payment of a pecuniary penalty.
34 The claimant submitted that in all the circumstances, including the following –
(a) the significance to an employee of the benefit to a paid holiday which has been denied;
(b) the attitude of the respondent in relation to the implementation of the change, consultation, and status quo provisions of the 2020 Agreement;
(c) the apparent willingness of the respondent to take the risk of a possible contravention; and
(d) the need to provide a counterincentive to deter future decisions to refuse entitlements that may be viewed by the respondent as costly or inconvenient,
that a penalty in the midrange is appropriate.
Respondent's submissions
35 Regarding the nature and extent of the conduct, the respondent submitted that it arose directly from the respondent’s interpretation of the 2020 Agreement.
36 Referring to paragraphs [25] and [85] of the WAPOU Caution decision, the respondent submitted the provisions of the 2020 Agreement in this case had also not been judicially considered, are ambiguous and have not been consistently applied.
37 The respondent submitted that only one breach has been found to have occurred with the damage ensuing from that breach limited to $215.51. The respondent submitted, there are no similar previous breaches, but it follows from the respondent's interpretation there may have been others.
38 The breach was deliberate in the sense that the respondent believed Ms Harvey was, under the 2020 Agreement, only entitled to be paid her annualised salary rate for work performed on a public holiday in accordance with her roster. As a result, the respondent did not pay her overtime. It was not in dispute that Ms Harvey was rostered to work on 26 September 2022. A separate direction to work overtime was not given.
39 The respondent submitted the claim proceeded substantially as an interpretation application rather than one that was brought to secure the respondent's compliance with a known clear obligation, which the respondent deliberately breached.
40 Referring to the WAPOU Caution decision at [56], the respondent submitted that where the resolution of a claim requires the interpretation of the disputed terms of an industrial instrument, this will be relevant in relation to whether the conduct under consideration should be viewed as intentional or deliberate and in mitigation.
41 Referring to paragraph [177] of the decision, the respondent submitted that it was relevant the claim was only upheld after an extensive analysis of the preceding Agreements going back to 2010.
42 The respondent submitted that in all the circumstances, a caution should be imposed instead of a penalty. The respondent submitted that there are no factors that call for the imposition of a penalty to deter breaches by the respondent or other employers.
Consideration
43 Having regard to parties’ submissions and the circumstances of this case, this matter stands in contrast to the WAPOU Caution decision. I respectfully disagree with the respondent’s characterisation of the breach.
44 I do not regard this as an appropriate case in which a caution should issue. There are several very significant differences between this matter and the WAPOU Caution decision, that justify the imposition of a pecuniary penalty, which I will now set out.
Extent of conduct and the circumstances in which the breach occurred
45 Although I accept that like the contravention in the WAPOU Caution decision, this case only involved a single breach, in which the quantum ($215.51) falls at the lower end of the range of underpayment, the contravening conduct in issue was more serious.
46 The breach in the WAPOU Caution decision arose in the context of the respondent’s refusal to approve an employee’s application for personal leave. Under cl 71 of the 2020 Agreement (Personal Leave) management is permitted to exercise a discretion as to whether to refuse an officer’s application for personal leave.
47 The respondent’s breach of cl 71 for which a caution was imposed occurred because the relevant superintendent and her superiors, who were invested with the requisite authority to accept or reject the affected officer’s sick leave application, did not exercise their discretion correctly.
48 In contrast, the breach in this case did not involve an error in the exercise of the respondent’s discretion. It involved a breach of an entitlement provision in which there was no discretion to be exercised.
49 In this matter, the respondent took a different view of the entitlements principal officers were entitled to receive under the 2020 Agreement on public holidays and decided to apply it across the prison system to an affected category of employees.
50 The respondent concedes that it made a deliberate choice regarding its interpretation of cl 21.1 and cl 136 (Public Holidays) of the 2020 Agreement which ultimately resulted in its breach of the 2020 Agreement. Where the parties are at odds, is how this choice should be viewed when determining whether a penalty should be imposed.
Conduct was deliberate
51 It is my view that the respondent’s deliberate choice regarding its interpretation of the relevant clauses of the 2020 Agreement relating to work on public holidays is what differentiates the respondent’s conduct in the present case from what was in issue in the WAPOU Caution decision.
52 There was evidence in the substantive hearing that before AASO Vose moved to Karnet Prison Farm (Karnet), Ms Harvey took her public holidays as paid days off. If she was required to work, Ms Harvey was paid at overtime rates.
53 However, in September 2022, following the arrival of AASO Vose at Karnet, the respondent issued a Departmental Guidance Note (Exhibit R2) that changed this practice (Guidance Note).
54 The effect of the Guidance Note, particularly in so far as it applied to Principal Officers at Karnet (including Ms Harvey) was to interpret the provisions regarding Principal Officers’ entitlements on public holidays differently.
55 The respondent said it issued the Guidance Note because ‘it did not have a consistent approach in relation to work on public holidays’ Western Australian Prison Officers’ Union of Workers v Minister for Corrective Services [2023] WAIRC 00725; 103 WAIG 1620 [25].
. Simply put, the respondent wanted to address the situation where there were some Principal Officers who, before the Guidance Note issued, were getting public holidays as paid days off and some who did not. It also follows that the respondent took the view there were some Principal Officers who were potentially being paid at overtime rates, who were receiving a windfall and it wanted this to cease.
56 Consequently, the respondent decided to adopt a new universal approach. This resulted in some employees like Ms Harvey being required to work on public holidays at their usual salary, on days they weren’t previously required to and for which they would not be paid at overtime rates.
57 The respondent does not dispute this occurred and that it made a deliberate choice to interpret the 2020 Agreement regarding the requirement for Principal Officers to work on public holidays and what they would be paid.
58 I therefore find the respondent embarked on a deliberate course which resulted in the breach. In choosing a different interpretation, the respondent decided to take a risk that its interpretation was correct.
59 It cannot be said the breach was the result of a mistake or inadvertence. In this case the respondent knew that it would be directing Ms Harvey to work on a public holiday and that it would not only be depriving her of a paid day off, but her entitlement to be paid at overtime rates for the interruption to her leisure time as well.
60 Having assumed this risk, the respondent can hardly complain when it is faced with a penalty where its interpretation of the 2020 Agreement is found to be wrong.
Nature and extent of any loss or damage sustained
61 The nature and extent of the loss and damage in this matter is at two levels. Firstly, and as I have acknowledged, Ms Harvey was not only deprived of a paid day off on a public holiday but the entitlement to be paid at overtime rates for the interruption to her leisure time.
62 It is well known that work in the prison system is difficult and demanding. The removal of an entitlement by departmental directive in breach of the 2020 Agreement cannot have made Ms Harvey’s job any easier.
63 At the second level, the claimant has incurred loss and damage by having to bring enforcement proceedings on Ms Harvey’s behalf. I accept the claimant would have incurred significant legal costs, which are not recoverable under s 83 of the IR Act. These are matters to which I will return when framing the final orders.
Scale and size of the business
64 The respondent properly described, is a large government department. When deciding what orders to make under s 83(4) of the IR Act, this consideration is weighed up for two reasons.
65 Firstly, where a respondent is a large and wellresourced government department, it is reasonable to expect it could have done more to prevent a contravention. On this, there were other avenues open to the respondent to resolve any issues it may have had regarding the interpretation of the 2020 Agreement in so far as it dealt with the requirement for Principal Officers to work on public holidays and what they would be paid. One such avenue was an application to the WAIRC under s 46 of the IR Act. This is a point to which I will return.
66 Secondly, the scale and size of the business is relevant for the purposes of setting a pecuniary penalty to a level to deter future contravening conduct. According to this logic, the bigger the size and scale of the business the greater the fine needs to be to deter future contravening conduct. This is a matter I will also return to when framing the final orders.
Financial position of the respondent
67 The financial position of the respondent in this matter, as in most cases, does not carry any great weight in the assessment of an appropriate disposition. However, as a wellresourced employer, the respondent will at the very least, have the means to pay a fine and to ensure similar contraventions are not repeated.
Corrective action, contrition, and cooperation
68 In relation to cooperation and like the WAPOU Caution decision, this is not a case where the contravention was admitted at an early stage, thereby saving the parties and the Court the costs of a contested hearing. The case did however proceed efficiently to the extent that much of the material evidence upon which the matter had to be decided was agreed or not disputed.
69 In relation to corrective action, counsel for the respondent in correspondence to the Court dated 31 January 2024 advised the Court that it has since implemented the decision. I have assumed this means the respondent has since paid Ms Harvey’s overtime which I have had regard to in mitigation.
70 The extent to which I can view these factors in the respondent’s favour are however somewhat diminished by the respondent’s failure to show contrition for the approach it took when applying its revised interpretation of the 2020 Agreement.
71 In relation to contrition, I accept that until the decision issued, the respondent had continued to assert that its changed view of the 2020 Agreement was the correct one. The respondent has also not expressed any regret for its decision to apply a new universal interpretation in breach of the public holiday provisions of the 2020 Agreement and the impact this may have had on Ms Harvey.
72 As factors to be weighed in mitigation, it is almost as though the respondent’s corrective action when weighed against its lack of contrition, cancels the other out.
Competing interpretations of the Agreement
73 I accept that in this case, like the WAPOU Caution decision, there were competing arguments on the construction of the 2020 Agreement that needed to be resolved. In this matter the Court was required to review previous industrial instruments for the purposes of interpreting the 2020 Agreement in context.
74 While I accept there is a role for the Court to play in resolving competing views as to how an industrial agreement should be interpreted as there was in the WAPOU Caution decision, and I have had regard to this as a mitigating factor, it is not a licence to avoid the imposition of penalties where the adoption of a new interpretation results in a deliberate breach of an industrial agreement.
75 In this matter there were alternative paths the respondent could have taken that did not place it at risk of a pecuniary penalty. The respondent knowingly chose to follow a path that exposed it to this risk.
76 In the circumstances, I do not consider that issuing a caution would be an appropriate outcome in this case. It would not have the desired deterrent effect the enhanced penalty regime under the IR Act was enacted to achieve.
Specific and general deterrence
77 Noting the respondent’s breach of cl 21.1 of the 2020 Agreement was deliberate, it is my view that a penalty for the purposes of specific deterrence must be set that will deter the respondent from repeating or engaging in similar contravening conduct.
78 Rather than adopting and applying by directive, a new blanket approach to entitlement provisions that exposed the respondent to the risk of pecuniary penalty, the respondent could have utilised the more cautious avenue available to it under s 46 of the IR Act.
79 On the issue of general deterrence, the authorities I referred to in the previous paragraphs [10]  [17] make it clear that a fine must be set at a level that will not only deter the respondent from engaging in further contravening conduct, but others involved in or contemplating taking a similar path.
80 The penalty cannot be so low that it will be viewed by the respondent or others as an acceptable cost of doing business: Pattinson at [98].
81 The penalty should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by likeminded persons or organisations: Ponzio v B&P Caelli Constructions Pty Ltd [2007] FCAFC 65; 158 FCR 543 at [93].
Penalty to be imposed
82 For the reasons outlined in the preceding paragraphs, I have determined that a fine of $15,000 to be the most appropriate disposition in this case.
83 The quantum of the pecuniary penalty is in my view, appropriate having regard to all the circumstances of this matter including the following:
i. the outcome in the decision has at least clarified what entitlements Principal Officers like Ms Harvey are entitled to receive under the 2020 Agreement;
ii. while the breach falls at the lower end of the range of contravening behaviour, Ms Harvey was deliberately deprived of an entitlement that she would otherwise have been entitled to receive;
iii. the breach occurred before the issuance of the WAPOU Caution decision and so the issuance of the caution to the respondent in that matter is not relevant to the penalty to be imposed;
iv. the size and scale of the respondent’s business is such that there were alternatives to clarify its interpretation of the 2020 Agreement instead of engaging in contravening conduct;
v. the respondent made a deliberate choice to engage in contravening behaviour and that it should be deterred from repeating conduct of this kind.
Other orders
84 Although in its originating claim, the claimant, by way of relief, asked the Court to impose a pecuniary penalty, it did not specify who the penalty should be paid to.
85 The claimant did however request the Court make such further orders as the Court deemed appropriate. The claimant also asked for an order under s 83(5) of the IR Act requiring the respondent pay Ms Harvey the amount of any underpayment.
86 The matter of who the penalty should be paid to is important because the Court has a discretion under s 83F(2) of the IR Act to decide who will receive the penalty.
87 In relation to this, s 83F(2) of the IR Act provides the Court may order that the amount of the penalty, or part of the amount be paid to:
(a) a person directly affected by the conduct to which the contravention relates; or
(b) the applicant; or
(c) the Treasurer.
88 In Milardovic v Vemco Services Pty Ltd (No 2) [2016] FCA 244; 242 FCR 492 (Milardovic) Her Honour Mortimer J (as she then was) at [40]  [44] made the following observations regarding her discretion to order the payment of a penalty to the complainant under s 546 of the Fair Work Act 2009 (Cth), which is in very similar terms to s 83F(2) of the IR Act.
89 When determining who a pecuniary penalty should be paid to in an underpayment of wages claim, Her Honour in Milardovic, noted:
40 Were I free to do so, I would, in the exercise of the Court's discretion under s 546(3), order that the penalty be payable to the Commonwealth rather than to [the applicant]. However that course is not open to me following the Full Court's decision in Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4. The Full Court's decision requires the Court to make an order that [the respondent] pay the penalty the Court has imposed on it to [the applicant].
41 That the Full Court's decision in Sayed requires me to make such an order arises from several aspects of the Full Court's reasons. First, at [72] their Honours identified “a certain symmetry between the person or entity authorised to prosecute an enforcement proceeding and the person or entity to whom the penalty, if imposed, might be paid”.
42 [A]t [101] the Full Court [in Sayed] held:
[T]he power conveyed by s 546(3) is ordinarily to be exercised by awarding any penalty to the successful applicant. We accept that there may be cases … where the penalty, or a part of the penalty, should be paid to another person in the circumstances described by Gray J in [Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2008] FCAFC 170] at [44].
43 The reference to Gray J in Plancor is a reference to the following passage of his Honour’s reasons … at [44]:
[T]he initiating party is normally the proper recipient of the penalty as part of a system of recognising particular interests in certain classes of persons… in upholding the integrity of awards and agreements the subject of penal proceedings. Where a public official vindicates the law by suing for and obtaining a penalty, it is appropriate that the penalty be paid to the Consolidated Revenue Fund. Otherwise, the general rule remains appropriate, that the penalty is to be paid to the party initiating the proceeding, with the Gibbs (Gibbs v The Mayor, Councillors and Citizens of City of Altona [1992] FCA 553; 37 FCR 216) … exception that the penalty may be ordered to be paid to the organisation on whose behalf the initiating party has acted.
44 Subject then to the “Gibbs exception” … the Full Court’s decision in Sayed is authority for the proposition that where a proceeding is brought by an applicant on his or her own behalf, the discretion in s 546(3) is to be exercised to make any penalty the Court orders payable to that applicant. Aside from the identity of the person who brings the proceedings, and taking into account the “Gibbs exception”, the Full Court’s judgment does not appear to provide for any other basis upon which a penalty should be made payable to another person or entity set out in s 546(3).
90 Similarly, Magistrate Cicchini in United Voice WA v Director General, Department of Education [2012] WAIRC 00778; 92 WAIG 1655 determined that it was appropriate to order a penalty to be paid to a union that had expended the time and resources to enforce an industrial agreement on behalf of its members, commenting at [15]:
I accept that the claimant has been vigilant in ensuring compliance with the [a]greement. It is important that parties who police compliance with industrial agreements be rewarded for their efforts. There can be no doubt that in this instance the claimant has expended considerable resources and time in bringing the claim. The payment of penalties to it will, in part, ameliorate its costs and the harm done. I propose to order that the penalties imposed be paid by the respondent to the claimant.
91 While neither party specifically addressed this matter in their submissions on penalty, the reasoning of their Honours in the authorities I have referred to sets out the path I am required to take in exercising this discretion.
92 I have already noted the claimant has had to commit significant resources to recover the underpayment. I also consider that any deterrent value with the imposition of a fine will be lost if the Court was to order the fine be returned to the same source from which the respondent draws its funding.
93 For these reasons I have determined the penalty should be paid to the claimant pursuant to s 83F(2)(b) of the IR Act.
94 Having found the breach of cl 21.1 of the 2020 Agreement proved, and notwithstanding the respondent saying it has implemented the decision, I will, for completeness, also order the respondent under s 83(5) to pay Ms Harvey the sum of $215.51.



T. KUCERA
INDUSTRIAL MAGISTRATE