2024 WAIRC 00170
INDUSTRIAL MAGISTRATES COURT OF WESTERN AUSTRALIA


CITATION : 2024 WAIRC 00170

CORAM : INDUSTRIAL MAGISTRATE D. SCADDAN

HEARD : ON THE PAPERS

DELIVERED : FRIDAY, 19 APRIL 2024

FILE NO. : M 120 OF 2023 AND M 151 OF 2023

BETWEEN : CONSTRUCTION, FORESTRY AND MARITIME EMPLOYEES UNION
FIRST CLAIMANT

GREGORY LEMAIRE
SECOND CLAIMANT
AND

RND CREWING PTY LTD (ABN: 72 620 554 038)
RESPONDENT

CatchWords : INDUSTRIAL LAW – Fair Work – Assessment of pecuniary penalties for contraventions of Fair Work Act 2009 (Cth) – Underpayment of day rate under enterprise agreement – Incorrect date on corresponding pay slip
Legislation : Fair Work Act 2009 (Cth)
Industrial Relations Act 1979 (WA)
Crimes Act 1914 (Cth)
Industrial Magistrate's Court (General Jurisdiction) Regulations 2005 (WA)
Instrument : RND Crewing Pty Ltd Agreement 2023 (Cth)
Case(s) referred to
in reasons : Fair Work Ombudsman v Priority Matters Pty Ltd (No 5) [2020] FCCA 901
Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; 239 FCR 336
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482
Miller v Minister of Pensions [1947] 2 All ER 372
Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336
Sammut v AVM Holdings Pty Ltd (No2) [2012] WASC 27
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560
Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62; 221 FCR 153
Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832
Milardovic v Vemco Services Pty Ltd (Administrators Appointed) (No 2) [2016] FCA 244; 242 FCR 492
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 274 CLR 450
NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285
Trade Practices Commission v CSR Ltd [1990] FCA 521; (1991) ATPR 41-076
Result : Pecuniary penalty to be paid
REPRESENTATION:


CLAIMANTS : MR L. EDMONDS AND MS S. SAYED (OF COUNSEL)
RESPONDENT : MR R. GUNNINGHAM (OF COUNSEL)

REASONS FOR DECISION
Introduction
1 On 2 October 2023, the Construction, Forestry and Maritime Employees Union (First Claimant) lodged a claim alleging RND Crewing Pty Ltd (ABN: 72 620 554 038) (respondent) failed to comply with the RND Crewing Pty Ltd Agreement 2023 (the Agreement) and contravened the Fair Work Act 2009 (Cth) (FWA) by failing to pay Gregory Lemaire (Second Claimant), an employed casual cook, the amount of $885 (claim M 120 of 2023).
2 The First Claimant alleged the respondent breached:
Section 50 of the FWA – Contravention of an Enterprise Agreement
a. By failing to pay the correct day rate over two periods, 21 July 2023 to 13 August 2023 and 14 August 2023 to 27 August 2023.
Section 323 of the FWA – Contravention of Payment in Full
b. By failing to make the [same] payment in full and at least a month after it is due.
3 On 21 December 2023, the Second Claimant lodged a claim alleging the respondent contravened s 536 of the FWA by putting the incorrect date on the pay slip for the amount referred to above after it was paid in full by the respondent (claim M 151 of 2023).
4 The First and Second Claimants apply for a pecuniary penalty in respect of the alleged contraventions.
5 On 30 October 2023, the respondent formally admitted it had not paid the correct day rate to Mr Lemaire for the periods claimed but said the amount of the underpayment was $880, not $885. The respondent also said it paid $879.99 to Mr Lemaire on 3 October 2023 and interest sought of $6.59 on 5 October 2023.
6 On 20 February 2024, the respondent formally admitted Mr Lemaire’s pay slip relevant to the underpayment was dated 27 September 2023 rather than 3 October 2023, however, the respondent provides an explanation for why this occurred and denies a pecuniary penalty should be imposed.
7 The issue relevant to the First Claimant, as agreed between the parties, is the imposition of a pecuniary penalty pursuant to s 546(1) of the FWA.
8 The issue relevant to the Second Claimant is whether a pecuniary penalty should be imposed and, if so, the appropriate penalty pursuant to s 546(1) of the FWA.
9 To that end, the parties provided to the court a Statement of Agreed Facts (the Agreed Facts) and an outline of written submissions each on the payment of a pecuniary penalty.
10 In addition, the First and Second Claimant rely upon two witness statements, each by the Second Claimant, and the respondent relies upon the witness statements of Will Pryce (Mr Pryce), Director and Area Manager – Australia and New Zealand, for the respondent and Sue Bailey (Ms Bailey), Administration Manager, for the respondent.
11 Orders were made to hear claims M 120 of 2023 and M 151 of 2023 on the same occasion given the contraventions arose out of the same facts involving the same employer and employee.
12 Schedule I of these reasons outlines the jurisdiction, standard of proof and practice and procedure of the Industrial Magistrates Court (IMC).
13 Schedule II of these reasons outlines the provisions of the FWA and principles relevant in determining an appropriate pecuniary penalty (if any) for the respondent’s contraventions.
The Agreed Facts
14 Schedule III of these reasons annex the Agreed Facts (only). The salient facts from the Agreed Facts are as follows.
15 The Agreement was approved by the Fair Work Commission on 15 May 2023 with effect from 22 May 2023.
16 The Agreement was subject to written undertakings by the respondent signed by Mr Pryce, which then formed a term of the Agreement (the Undertakings).
17 Pursuant to the Agreement, specifically included in the Undertakings, is the payment of a daily rate of $855 for a casual employee engaged as a cook/caterer. Undertaking 4. e. provides ‘with respect to Schedule 1 (Casual employee – Day Rate), the Cook / Caterer’s day rate and the GPH, Deckhand, Greaser's day rate will be $855 and increase at a rate of 3% every year’.

18 Mr Lemaire was employed by the respondent as a casual cook from 2 August 2023 to 27 August 2023 for a total of 21 days over two discreet periods. The same payment applied to each period. On each day, Mr Lemaire was paid $815 and not $855 contrary to the terms of the Agreement.
19 Thus, the underpayment for the first period (of 12 days) was $480 and the underpayment for the second period (of nine days) was $360. The total underpayment was $840 (the Underpayment).
20 On 3 October 2023, the respondent paid to Mr Lemaire $886.58, being the Underpayment and interest on the Underpayment.
21 To the Agreed Facts, I would also add the following facts which were either not in dispute or the subject of uncontroverted evidence which I find to be reliable.
22 The respondent is owned by RN Dredging Pty Ltd (RN Dredging) which in turn is owned by a company incorporated in Denmark.
23 The respondent employs 11 employees. RN Dredging employs Mr Pryce and Ms Bailey and contracts Nicole Hancock (Ms Hancock), a bookkeeper, to administer the payroll.
24 The respondent issued Mr Lemaire a pay slip for the Underpayment where the pay slip date of payment was 27 September 2023 (the Pay Slip). The Underpayment was paid on 3 October 2023.
25 The respondent uses a payroll software system called Xero which requires the respondent to select a pay period. The pay periods applicable to the payment of the Underpayment were either 11 to 24 September 2023 with payment on 27 September 2023, or 25 September to 8 October 2023 with payment on 11 October 2023.
26 The respondent operates a two week pay cycle beginning on a Monday and ending on a Sunday with the payment date on the following Wednesday.
27 Xero is programmed to the respondent’s pay cycle and payment date, which is automatically populated upon Ms Hancock inputting employee hours into Xero to commence a pay run.
28 A draft pay slip is generated which is checked by Ms Bailey before the pay run is finalised by Ms Hancock and the final pay slip generated by Xero.
Other Evidence
29 Mr Lemaire’s witness statement relevant to the Pay Slip annexes a copy of the Pay Slip and states that he did not work for the respondent on 27 September 2023 and did not receive payment of the Underpayment on 27 September 2023.
30 He was copied into an email to the respondent from the First Claimant dated 2 October 2023 advising the respondent of claim M 120 of 2023.
31 Ms Bailey reports directly to Mr Pryce and carries out a range of administrative duties, including administering the payroll with a contracted licenced bookkeeper, Ms Hancock.
32 On 3 October 2023, Ms Bailey was informed by Mr Pryce of the Underpayment and was instructed to immediately pay the Underpayment. She then emailed Mr Lemaire to inform him the payment would be made and emailed Ms Hancock requesting she urgently pay the Underpayment.
33 Mr Pryce states the Underpayment was inadvertent and was paid as soon as the error was realised along with interest on the Underpayment. While Mr Pryce volunteered and agreed the Undertakings to the Agreement (relevant to Mr Lemaire’s role as a casual cook), at the time Mr Pryce mistakenly believed Mr Lemaire was being paid in accordance with Schedule 1 of the Agreement where he forgot the Undertakings (for reasons given).
34 Using the rate in Schedule 1 of the Agreement, Mr Lemaire was paid $815 for a travel day to commence employment because he started on short notice, albeit there was no requirement under the Agreement for the travel day to be paid. This payment was an ex gratia payment.
35 On 22 August 2023, Mr Pryce received an email from Mr Lemaire stating he had assumed additional responsibilities which uplifted his pay. Mr Pryce said he made enquiries with the captain of the ship and was informed Mr Lemaire was not performing additional duties. It was in this context that Mr Pryce says he looked at a hard copy of the Agreement to conclude the applicable (albeit incorrect) rate was $815 per day for a casual cook. Mr Pryce admits failing to look at the Undertakings to the Agreement which refer to the increased day rate for a casual cook.
36 In respect of the next email from Mr Lemaire dated 23 August 2023 querying the entitlement to $855 per day, Mr Pryce admits he had made up his mind that the day rate was $815 because he assumed Mr Lemaire was again referring to a payment for additional duties.
37 Mr Pryce states that when he received an email from the First Claimant on 2 October 2023 with the attached claim (M 120 of 2023), he realised Mr Lemaire was referring to the Undertakings to the Agreement and made immediate arrangements to backpay the Underpayment with interest.
38 Upon making enquiries with Ms Hancock, Ms Bailey identified that Ms Hancock selected the most recent pay run period to process the Underpayment, causing Xero to generate the Pay Slip where the most recent pay period ended on 24 September 2023 with the payment date being 27 September 2023.
39 The Pay Slip noted on the bottom the payment was for the Underpayment for the fortnights ending 13 and 27 August 2023.
40 Ms Bailey says she is aware the automatic payment date can be changed on Xero by setting a new pay cycle, however, she did not think to do so in relation to the Pay Slip as her intention was to pay the Underpayment as quickly as possible.
41 Ms Bailey says she did not direct Ms Hancock to change the pay cycle for the Underpayment or cause the wrong date to be entered on the Pay Slip, but says it was an unintentional error.
42 On 8 March 2024, the error was rectified, and a new pay slip sent to Mr Lemaire.
43 Mr Pryce has now directed Ms Bailey and Ms Hancock to always create a new pay cycle in the event a back payment is processed in the future so that this issue does not occur again.
44 Mr Pryce further states that he was previously unaware the automatic payment date in Xero could by changed. He was not aware because he did not process pays, was not familiar with Xero and did not have a Xero log in. However, since becoming aware of the issue, he has directed Ms Bailey and Ms Hancock to create a new pay cycle in Xero, as already explained.
The Claimants’ Submissions on Penalty
45 In summary, the claimants submit:
· the IMC is empowered to order a person to pay a pecuniary penalty the court considers appropriate if the court is satisfied that the person has contravened a civil remedy provision: s 546(1) of the FWA;
· contraventions of s 50 and s 323 of the FWA are contraventions of a civil remedy provision: s 539(2) of the FWA, where the maximum penalty for each contravention is 300 penalty units; The Respondent being a body corporate is liable to a maximum penalty five times that for a natural person – see the table at s 539(2) of the FWA where each contravention is subject to a maximum penalty of 60 units for a natural person and s 546(2).

· the Underpayment was not an insignificant amount;
· while the respondent admitted the Underpayment, it did not rectify the breaches in a timely manner, making the payment after the institution of the proceedings;
· irrespective of whether the contraventions were deliberate or not, the effect of the Underpayment is Mr Lemaire was denied his lawful entitlement;
· the respondent is a large, sophisticated, and profitable company, who should be expected to have sufficient structures in place to ensure compliance with the legislation and (presumably) agreements to which it is bound;
· communication between Mr Lemaire and one of the respondent’s officers demonstrates on 23 August 2023, Mr Lemaire directly referred to the requirement to pay a daily rate of $855. Mr Pryce in his witness statement admitted he had incorrectly made up his mind the day rate was $815 and beyond raising the issue with the captain of the vessel, did not reply to the communication;
· this demonstrates a lack of remorse by the respondent and the hope the issue would fall away upon the release of Mr Lemaire from the respondent’s employment; and
· no corrective action has been taken beyond paying the Underpayment. There is no evidence indicating the lessons that have been learned from the contraventions or positive steps to ensure future compliance.
46 Therefore, the need for specific and general deterrence is great.
47 Further, there are two courses of conduct, and the two contraventions should be treated separately as they arise out of different facts.
48 A substantial, personal deterrent penalty is also called for as the respondent expressed no contrition and failed to make payment of monies due at the cessation of the Second Claimant’s employment without a reasonable excuse.
49 The penalties should be awarded to the claimant in accordance with decision in Milardovic v Vemco Services Pty Ltd (Administrators Appointed) (No 2) [2016] FCA 244; 242 FCR 492 [40].
The Respondent’s Submissions on Penalty
50 In summary, the respondent submits:
· the Underpayment was inadvertent and was paid as soon as the error was realised. Similarly, the error on the Pay Slip was inadvertent and borne out of attempting to pay the Underpayment quickly;
· an ‘ex gratia’ payment of $815 was paid to Mr Lemaire for the day he travelled to work on 1 August 2023, and, as such, for the first period, he was paid $335 more than he was, in fact, entitled to under the Agreement (taking into consideration the Underpayment);
· while the respondent accepts that it cannot ‘offset’ the ‘ex gratia’ payment, it is consistent with the Underpayment not being deliberate and is relevant to the overall ‘losses’ suffered by Mr Lemaire;
· upon reviewing the claim, the respondent realised the error and promptly paid the Underpayment and interest;
· while the breach is admitted both in relation to s 50 and s 323 of the FWA, the contraventions are properly categorised at the lower end of offending and a penalty of $1,000 or less is appropriate;
· this is not a matter in which an imposition of penalties is necessary to encourage general or specific deterrence;
· two of the contraventions arose out of the same essential course of conduct, being an inadvertent failure to correctly apply the Undertakings to a single employee, and the respondent should not be punished twice for what is the same offending;
· one of the contraventions was associated with paying the Underpayment;
· noting the seriousness of employee underpayments, the contraventions in this case are relatively minor and were of limited extent;
· the respondent’s enterprise is small with no Human Resources support, and the finances and operations are overseen and managed by Mr Pryce. While the respondent is part of an international structure, its Australian enterprise is relatively small, which does not diminish its obligation to meet minimum standards referrable to employees but contextually supports the inadvertent nature of the Underpayment;
· once the claim was received, the respondent realised the mistake and paid the Underpayment the next day. The Pay Slip has been rectified. The communication referred to by the First Claimant does not take into consideration previous email communication between Mr Lemaire and Mr Pryce;
· the respondent has never engaged in similar conduct, and this is an isolated event where the respondent never intended to employ a cook and where it forgot about the application of the Undertakings to the Agreement to the Cook/Caterer classification;
· a smaller quantum or no penalty may be imposed in circumstances where a party has inadvertently breached its obligations rather than engaged in a deliberate and calculated breach;
· it has demonstrated remorse, cooperation and taken prompt corrective action;
· it can otherwise be concluded that there is a culture of compliance, and the evidence does not demonstrate any systemic, wilful, or deliberate contravention of the FWA; and
· there is no risk of repetition where Mr Pryce is responsible for the respondent’s finances and operations, the respondent’s payroll contractor and administrative staff are aware of the error, and the respondent intends engaging a Human Resources consultant.
51 The respondent says that applying the principles in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 274 CLR 450 (Pattinson), a significant penalty would be unreasonably oppressive and severe in the circumstances.
Determination On Penalty
52 The maximum penalty with respect to a contravention of s 50 and s 323, as well as s 536(2)(b), of the FWA by the respondent is 300 penalty units, given the respondent is a body corporate. The maximum penalty in respect of each contravention is $93,900.
53 The effect of s 557(1) of the FWA is that two or more contraventions of the FWA referred to in subsections (2) are taken to constitute a single contravention if they are committed by the same person and arose out of a course of conduct by that person. Notably, s 50 and s 323 of the FWA are referred to in s 557(2) of the FWA:
In addition to the statutory course of conduct provision, it is open to the Court to consider the application of common law course of conduct principles where the contraventions contain common elements or can be said to overlap with each other… It may be appropriate for the Court to group contraventions where, if they were treated separately, this would potentially penalise a respondent twice… Fair Work Ombudsman v Priority Matters Pty Ltd (No 5) [2020] FCCA 901 [28] (other citations omitted).

54 Having regard to the parties’ submissions and to the Agreed Facts, while there was a course of conduct in that the respondent failed to pay the correct day rate over 21 days, the failure resulted from the one misapplication of the Undertaking to Mr Lemaire. I find that the two contraventions (s 50 and s 323) by the respondent are properly characterised as a single contravention where there is commonality in the conduct, or the contravention flows from a course of conduct committed by the respondent (Mr Pryce).
55 Therefore, the following considerations are significant in assessing the appropriate penalty in this case:
First Claimant
· whether the organisation has engaged in similar conduct: the respondent has not been found to have previously contravened the FWA;
· whether the conduct was deliberate: the contraventions do not demonstrate an ongoing deliberate non-compliance with employment law and occurred over discreet periods of time in August 2023 in atypical circumstances. The respondent is obliged to comply with the terms of the Agreement, although a fair reading of the email communication leading up to 23 August 2023 puts in context Mr Pryce’s error. Mr Pryce recognises he should have paid more attention to Mr Lemaire’s later correspondence;
· corrective action: the respondent paid the Underpayment and interest the day after the claim was lodged and has taken steps commensurate with the contraventions to ensure future compliance with the Agreement and the FWA. It is unlikely this conduct will occur again in the future;
· contrition and avoidance of repetition: together this demonstrates, if not contrition, a willingness to learn from the proceedings and a commitment not to repeat the conduct;
· the size of the entity and involvement of senior management: the respondent is a modest business in Australia employing approximately 16 people, albeit it is part of a larger international business. Regardless of its size, the respondent has an obligation under the law and to its employees to act in a diligent manner with respect to employee entitlements. Mr Pryce accepts his role in the contraventions and is remorseful; and
· loss or damage suffered as a result: Mr Lemaire’s consequential ‘loss’ (being the actual entitlements) is reasonably modest and has been fully addressed after approximately six weeks, including the payment of interest. Notably, the contravention under s 323 of the FWA as it relates to the second period was overdue by approximately 10 days.
Second Claimant
· whether the organisation has engaged in similar conduct: the respondent has not been found to have previously contravened the FWA as it relates to the Pay Slip;
· whether the conduct was deliberate: the contravention does not demonstrate an ongoing deliberate non-compliance with employment law. The date error on the Pay Slip was due solely to an unfortunate human error where the respondent wanted to quickly address the Underpayment. There was no intention to mislead or engage in any deceptive conduct;
· corrective action: the respondent clarified its use of Xero to ensure it changes the pay cycle if it needs to backdate payments in the future;
· contrition and avoidance of repetition: it is highly unlikely a date error on a pay slip from a back payment will occur again;
· the size of the entity and involvement of senior management: the respondent is a modest business in Australia employing approximately 16 people, albeit it is part of a larger international business. Regardless of its size, the respondent has an obligation under the law and to its employees to act in a diligent manner. Mr Pryce accepts his lack of understanding of Xero and has made himself more aware. Ms Hancock’s and Ms Bailey’s role was, simply put, human error and observe that but for the grace of God go all of us; and
· loss or damage suffered as a result: Mr Lemaire’s consequential ‘loss’ (being the actual entitlements) is reasonably modest and has been fully addressed after approximately six weeks, including the payment of interest. As it relates to the Pay Slip, this factor is neutral.
56 The contravening conduct in all circumstances is properly categorised in the low range in respect of the First Claimant, and in the exceptionally low range in respect of the Second Claimant.
57 Considering the above, specific deterrence is less important in this case than the need to deter employers more generally in contraventions of the FWA and ensure the public interest in the protection of employee entitlements.
58 While criminal penalties import notions of retribution and rehabilitation, the primary purpose of a civil penalty is to promote the public interest in compliance with the law and not as an additional award of compensation for financial or emotional stress, hurt feelings, inconvenience or legal fees. Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 [55] (referring to Trade Practices Commission v CSR Ltd [1990] FCA 521; (1991) ATPR 41-076).
This purpose is met by imposing an ‘appropriate penalty’ striking a balance between oppressive severity and the need for deterrence in respect of the particular case. Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 274 CLR 450 [46].

59 Further, in certain cases a modest penalty, if any, may reasonably be thought to be sufficient to provide effective deterrence against future contraventions where, by way of example, the contravention is a ‘oneoff’ result of inadvertence and not part of a deliberate strategy to circumvent the law, the person responsible for the contravention has been disciplined or counselled, there is genuine remorse, or, the contravention is unlikely to arise again having regard to the reduced risk of future contraventions. Pattinson [46]  [47].

60 For these reasons, the penalty to be applied in respect of the First Claimant’s claim is:
First Claimant

Maximum
Penalty applied
Breach of Agreement contravention
$93,900

Payment in full contravention
$93,900

One single contravention (s 557(1) and (2))

$4,000
Total

$4,000
61 In my view, no reduction for totality is required. However, for the avoidance of doubt, had both contraventions been treated separately I would have imposed penalties of $3,500 in respect of each contravention (totalling $7,000) but I would have reduced the amount by 42% to $4,000, which, in my view, is an appropriate penalty ‘that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case.’ Pattinson [46].
This would also be consistent with the principle that the penalty must not be excessive and must be just and appropriate in all the circumstances of the case.
62 The First Claimant seeks an order pursuant to s 546(3)(c) of the FWA that the penalties be paid to the First Claimant. An order will be made that the respondent pay the penalty of $4,000 to the First Claimant.
63 In respect of the penalty to be applied with respect to the Second Claimant’s claim, I have considered the circumstances of the contravention. I am firmly of the view that this was a oneoff incident where the payment date on the Pay Slip was recorded incorrectly due to the automatic payroll system used. While the pay cycle could have been changed on Xero, it was apparent that this was not in Ms Bailey’s mind when she wanted to give effect to an instruction to rectify the Underpayment. Notably, Ms Bailey and Ms Hancock did, in fact, ensure the instruction was immediately carried out. In my view, the circumstances of this contravention are wholly incompatible with the principles of general deterrence. It is a sad day when oneoff inadvertent human errors in respect of an incorrect date on a pay slip is the subject of proceedings purporting to promote the public interest in compliance with the law.
64 It is for those reasons, in my view, that this is one of the rare occasions when no penalty is required to provide effective deterrence against future contraventions of this type.
Second Claimant

Maximum
Penalty applied
Breach of Agreement contravention
$93,900
$0
65 No penalty is required to be paid to the Second Claimant.
Orders
66 The respondent is to pay to the First Claimant a pecuniary penalty of $4,000.
67 The respondent is to pay no pecuniary penalty to the Second Claimant.


D. SCADDAN
INDUSTRIAL MAGISTRATE


Schedule I: Jurisdiction, Practice and Procedure of the Industrial Magistrates Court of Western Australia Under the Fair Work Act 2009 (Cth)
Jurisdiction
[1] An employee, an employee organization or an inspector may apply to an eligible state or territory court for orders regarding a contravention of the civil penalty provisions identified in s 539(2) of the FWA. The Industrial Magistrates Court of Western Australia (IMC or Court), being a court constituted by an industrial magistrate, is ‘an eligible State or Territory court’: s 12 of the FWA (see definitions of ‘eligible State or Territory court’ and ‘magistrates court’); Industrial Relations Act 1979 (WA) s 81, s 81B.
[2] The application to the IMC must be made within six years after the day on which the contravention of the civil penalty provision occurred: s 544 of the FWA.
[3] The civil penalty provisions identified in s 539 of the FWA include:
· Section 50 – contravention of an enterprise agreement;
· Section 323 – failing to make payments in full; and
· Section 536(2) – incorrect prescribed information on a pay slip.
[4] An ‘employer’ has the statutory obligations noted above if the employer is a ‘national system employer’ and that term, relevantly, is defined to include ‘a corporation to which paragraph 51(xx) of the [Australian] Constitution applies’: s 14, s 12 of the FWA. The obligation is to an ‘employee’ who is a ‘national system employee’ and that term, relevantly, is defined to include ‘an individual so far as he or she is employed … by a national system employer…’: s 13 of the FWA.
[5] Where the IMC is satisfied that there has been a contravention of a civil penalty provision, the court may make orders for a person to pay a pecuniary penalty: s 546 of the FWA.
Burden and Standard of Proof
[6] In an application under the FWA, the claimant carries the burden of proving the claim. The standard of proof required to discharge the burden is proof ‘on the balance of probabilities’. In Miller v Minister of Pensions [1947] 2 All ER 372, Lord Denning explained the standard in the following terms:
It must carry a reasonable degree of probability but not so high as is required in a criminal case. If the evidence is such that the tribunal can say: “We think it more probable than not,” the burden is discharged, but, if the probabilities are equal, it is not. (374)
[7] In the context of an allegation of the breach of a civil penalty provision of the FWA it is also relevant to recall the observation of Dixon J said in Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336:
The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences. (362)
[8] Where in this decision it is stated that a finding has been made, the finding is made on the balance of probabilities. Where it is stated that a finding has not been made or cannot be made, then no finding can be made on the balance of probabilities.
Practice and Procedure of the Industrial Magistrates Court of Western Australia
[9] Subject to the provisions of the FWA, the procedure of the IMC relevant to claims under the FWA is contained in the Industrial Magistrate's Court (General Jurisdiction) Regulations 2005 (WA) (IMC Regulations). Notably, regulation 35(4) of the IMC Regulations provides the court is not bound by the rules of evidence and may inform itself on any matter and in any manner as it thinks fit.
[10] In Sammut v AVM Holdings Pty Ltd (No 2) [2012] WASC 27, Commissioner Sleight examined a similarly worded provision regulating the conduct of proceedings in the State Administrative Tribunal and made the following observation:
The tribunal is not bound by the rules of evidence and may inform itself in such a manner as it thinks appropriate. This does not mean that the rules of evidence are to be ignored. The more flexible procedure provided for does not justify decisions made without a basis in evidence having probative force. The drawing of an inference without evidence is an error of law. Similarly such error is shown when the tribunal bases its conclusion on its own view of a matter which requires evidence [40]. (citations omitted)

Schedule II: Pecuniary Penalty Orders Under the Fair Work Act 2009 (Cth)
Pecuniary Penalty Orders
[1] The FWA provides that the IMC may order a person to pay an appropriate pecuniary penalty if the court is satisfied that the person has contravened a civil remedy provision: s 546(1) of FWA. The maximum penalty for each contravention by a natural person, expressed as a number of penalty units, is set out in a table found in s 539(2) of the FWA: s 546(2) of the FWA. If the contravener is a body corporate, the maximum penalty is five times the maximum number of penalty units proscribed for a natural person: s 546(2) of the FWA.
[2] The rate of a penalty unit is set by s 4AA of the Crimes Act 1914 (Cth): s 12 of the FWA. The relevant rate is that applicable at the date of the contravening conduct:
August 2023
$313
[3] 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 (Grouped Property Services) 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 [388]. (citations omitted)
[4] In Pattinson [42], the plurality confirmed that civil penalties ‘are not retributive, but rather are protective of the public interest in that they aim to secure compliance by deterring repeat contraventions’. However, ‘insistence upon the deterrent quality of a penalty should be balanced by insistence that it “not be so high as to be oppressive”’: [40], citing NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285.
[5] In Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14, Tracey J adopted the following ‘nonexhaustive 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 [14].
[6] 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; 165 FCR 560 (Australian Ophthalmic Supplies) [91]).
[7] Although these factors provide useful guidance, the task of assessing the appropriate penalty is not an exact science: Commonwealth v Director, Fair Work Building Inspectorate [2015] HCA 46; 258 CLR 482 [47]. The Court must ultimately fix a penalty that pays appropriate regard to the contraventions that have occurred: Pattinson [19]. ‘[A] court empowered by s 546 to impose an “appropriate” penalty must act fairly and reasonably for the purpose of protecting the public interest by deterring future contraventions of the Act:’ Pattinson [48].
[8] ‘Multiple contraventions’ may occur because the contravening conduct done by an employer:
(a) resulted in a contravention of a single civil penalty provision or resulted in the contravention of multiple civil penalty provisions;
(b) was done once only or was repeated; and
(c) was done with respect to a single employee or was done with respect to multiple employees.
[9] The fixing of a pecuniary penalty for multiple contraventions is subject to s 557 of the FWA. It provides that two or more contraventions of specified civil remedy provisions (including contraventions of an enterprise agreement and a contravention on s 323 of the FWA on the payments) by an employer are taken be a single contravention if the contraventions arose out of a course of conduct by the employer. Subject to proof of a ‘course of conduct’, the section applies to contravening conduct that results in multiple contraventions of a single civil penalty provision whether by reason of the same conduct done on multiple occasions or conduct done once with respect to multiple employees: Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62; (2014) 221 FCR 153; Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832 [22] (White J) The section does not to apply to cases where the contravening conduct results in the contravention of multiple civil penalty provisions (example (a) above): Grouped Property Services Pty Ltd (No 2) [411] (Katzmann J).
[10] 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 [47] - [52].
[11] Section 546(3) of the FWA also provides:
Payment of penalty
(3) The court may order that the pecuniary penalty, or a part of the penalty, be paid to:
(a) the Commonwealth; or
(b) a particular organisation; or
(c) a particular person.
[12] In Milardovic v Vemco Services Pty Ltd (Administrators Appointed) (No 2) [2016] FCA 244 [40] - [44], Mortimer J, in light of Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; 239 FCR 336, summarised the law:
[T]he power conveyed by s 546(3) is ordinarily to be exercised by awarding any penalty to the successful applicant. … [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. (original emphasis) (citations omitted)
Schedule III: Statement of Agreed Facts
Introduction
[1] This Statement of Agreed Facts is agreed between the Claimant and Respondent for the purposes of the claim by the Claimant against the Respondent in the Industrial Magistrates Court (Claim No: M 120 of 2023).
[2] This document has been jointly filed by the Claimant and Respondent pursuant to orders made by the Clerk of the Industrial Magistrates Court on 23 November 2023.
[3] The facts herein are agreed only for the purposes of this proceeding.
The Parties
[4] The Claimant is and was at all material times:
a. an organisation, as defined in section 12 of the Fair Work Act 2009 (Cth) (the FW Act) and section 6 of the Fair Work (Registered Organisations) Act 2009 (Cth) (the RO Act);
b. a body corporate able to sue and be sued in its registered name by reason of section 27 of the RO Act;
c. an employee organisation as defined in section 12; and
d. an industrial association as defined in section 120.
[5] The Respondent is and was at all material times:
a. a 'constitutional corporation' within the meaning of that term in section 12 of the FW Act;
b. a 'national system employer' within the meaning of that term in section 14 of the FW Act;
c. a corporation able to sue and be sued; and
d. carrying on a business engaged in the provision of marine services.
The Agreement
[6] The RND Crewing Pty Ltd Agreement 2023 (the Agreement) was approved by the Fair Work Commission on 15 May 2023 and had effect from 22 May 2023.
[7] The Agreement was approved subject to a written undertaking by the Respondent. That undertaking was signed by Will Pryce, Area Manager for Australia and New Zealand for the Respondent and is taken to be a term of the Agreement.
[8] Attached and marked Annexure 1 is a copy of the Agreement including the written undertaking signed by Will Pryce.
[9] Pursuant to the terms of the Agreement, a casual employee engaged as a Cook/Caterer, is entitled to receive a daily rate of $855.00.
[10] At all material times, the Agreement covered and applied to the Claimant and the Respondent.
The employment of the Claimant’s member
[11] From 2 August 2023 until 23 August 2023 (the relevant period), Mr Gegory Lemaire (Lemaire) was employed by the Respondent as a Cook on a casual basis and was paid a daily rate of $815.
[12] During the relevant period, the Agreement covered and applied to Lemaire.
[13] For the period commencing 2 August 2023 to 13 August 2023 (period 1):
a. Lemaire worked a total of 12 days.
b. For each day worked in period 1, the Respondent paid Lemaire a gross amount of $815 per day.
c. each day worked in period 1, Lemaire was entitled to be paid a gross amount of $855 per day.
For the 12 days worked, the Respondent underpaid Lemaire $480.00.
[14] For the period commencing 14 August 2023 to 27 August 2023 (period 2):
a. For period 2, Lemaire worked a total of 9 days.
b. For each day worked in period 2, the Respondent paid Lemaire a gross amount of $815 per day.
c. For each day worked in period 2, Lemaire was entitled to be paid a gross amount of $855 per day.
d. For period 2, The Respondent underpaid Lemaire in the amount $360.00.
[15] The total amount of the underpayment was $840.00.
Rectification of the Underpayment
[16] On 3 October 2023, the Respondent made a payment of $886.58 to Lemaire.

[signatures and annexures removed]