2024 WAIRC 00789
INDUSTRIAL MAGISTRATES COURT OF WESTERN AUSTRALIA


CITATION
:
2024 WAIRC 00789



CORAM
:
INDUSTRIAL MAGISTRATE D. SCADDAN



HEARD
:
FRIDAY, 9 AUGUST 2024



DELIVERED
:
FRIDAY, 30 AUGUST 2024



FILE NO.
:
M 76 OF 2022, M 91 OF 2022



BETWEEN
:
CONSTRUCTION, FORESTRY AND MARITIME EMPLOYEES UNION


CLAIMANT





AND





QUBE PORTS PTY LTD (ABN: 46 123 021 492)


RESPONDENT

CatchWords : INDUSTRIAL LAW – FAIR WORK – Assessment of pecuniary penalties for contraventions of Fair Work Act 2009 (Cth) – Failure to pay for Closed Port Day and National Public Holiday while on approved planned time off and personal leave
Legislation : Fair Work Act 2009 (Cth)
Industrial Relations Act 1979 (WA)
Industrial Magistrate's Court (General Jurisdiction) Regulations 2005 (WA)
Crimes Act 1914 (Cth)
Instrument : Qube Ports Pty Ltd Port of Dampier Enterprise Agreement 2020
Qube Ports Pty Ltd Port of Dampier Enterprise Agreement 2016
Case(s) referred
to in reasons: : 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
Construction, Forestry and Maritime Employees Union v Qube Ports Pty Ltd [2024] WAIRC 220
Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2018] FCA 480
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 [No 2] [2012] WASC 27
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285
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; (2014) 221 FCR 153
Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832
Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; 239 FCR 336
Result : Pecuniary penalty to be paid
Representation:
Claimant : Mr L. Edmonds (of counsel)
Respondent : Mr R. Boothman (of counsel)



REASONS FOR DECISION
Introduction
1 On 21 July 2022, the claimant lodged M 76 of 2022 alleging the respondent contravened the Qube Ports Pty Ltd Port of Dampier Enterprise Agreement 2020 (EA 2020) as it related to employee, Daniel Miller (Mr Miller).
2 On 1 August 2022, the claimant lodged M 91 of 2022 alleging the respondent contravened the Qube Ports Pty Ltd Port of Dampier Enterprise Agreement 2016 (EA 2016) and EA 2020 as it related to employee, Rebecca Macdonald (Ms Macdonald).
3 On 7 December 2022, Industrial Magistrate Coleman made orders consolidating M 76 and M 91 of 2022.
4 Following the filing of amended statements of claim in both claims, on 23 December 2022 the respondent admitted all contraventions save for the portion of M 91 of 2022 relating to the payment of long service leave (the Disputed Claim).
5 The Disputed Claim was determined on the papers with Industrial Magistrate Coleman publishing her reasons for decision on 9 February 2024, dismissing the Disputed Claim.
6 Thereafter, programming orders were made in relation to hearing and determining the claimant’s application for the imposition of pecuniary penalties in respect of the admitted contraventions in M 76 of 2022 and M 91 of 2022.
7 These are the reasons for decision in relation to penalty.
8 In relation to Mr Miller, the respondent admits it breached:
(a) section 50 of the Fair Work Act 2009 (Cth) (FWA) by failing to pay him for 1 January 2022 under cl 33.3.4(d) of EA 2020 where 1 January 2022 is a Closed Port Day (CPD) and he was on approved Planned Time Off (PTO); and
(b) section 323 of the FWA by failing to pay him in full for the failed payment for 1 January 2022.
9 In relation to Ms Macdonald, the respondent admits it breached:
(a) section 50 of the FWA by:
(i) deducting a personal leave day for 25 December 2020 contravening under cl 33.3.6 of EA 2016 where 25 December 2020 is a CPD, and she was on personal leave;
(ii) failing to pay her for 26 and 28 December 2020 contravening, cl 33.3.2(d) of EA 2016 where 26 and 28 December 2020 are Normal Public Holidays (NPH) and she was on personal leave; and
(iii) failing to pay her one additional day’s personal leave upon termination of her employment contravening cl 35.6.1(b) of EA 2020.
(b) section 323 of the FWA by failing to pay her in full for the failed payments for 26 and 28 December 2020.
10 The parties provided the Court outlines of written submissions and additional evidence on the payment of a pecuniary penalty.
11 Schedule I of these reasons outline the jurisdiction, standard of proof and practice and procedure of the Industrial Magistrates Court of Western Australia (IMC).
12 Schedule II of these reasons outline the provisions of the FWA and principles relevant in determining an appropriate pecuniary penalty (if any) for the respondent’s contraventions.
The Agreed Facts
13 Agreed Facts were lodged in March 2023.
M 76 of 2002 - Mr Miller
14 The salient facts include that EA 2020 covered and applied to the claimant, the respondent and Mr Miller, as an employee of the respondent.
15 The claimant is an ‘employee organisation’ with standing to commence M 76 of 2022.
16 The respondent is a ‘national system employer’, ‘constitutional corporation’ and is engaged in the business of stevedoring.
17 Mr Miller was employed as a permanent variable salary employee (VSE) pursuant to cl 9.5 of EA 2020. From 23 December 2021 to 1 January 2022, Mr Miller was on approved PTO. As a result, Mr Miller did not work on 1 January 2022.
18 However, Mr Miller should have been, but was not, paid $234.78 (gross) for 1 January 2022 pursuant to cl 33.3.4(d) of EA 2020.
19 On or about 25 August 2022, the respondent paid Mr Miller $234.78 (gross).
M 91 of 2022 - Ms Macdonald
20 The salient facts include that EA 2016 and EA 2020 covered and applied to the claimant, the respondent and Ms Macdonald, as an employee of the respondent.
21 The claimant is an ‘employee organisation’ with standing to commence M 91 of 2022.
22 The respondent is a ‘national system employer’, ‘constitutional corporation’ and is engaged in the business of stevedoring.
23 Ms Macdonald commenced employment with the respondent on 13 August 2008 and was employed as VSE from 25 July 2011 to 4 November 2021 when she resigned.
24 Ms Macdonald was on personal leave from 21 to 28 December 2020 (inclusive), of which three days coincided with public holidays on 25, 26 and 28 December 2020. Ms Macdonald did not work on public holidays.
25 Under EA 2016, 25 December 2020 is a CPD and 26 and 28 December 2020 are NPHs.
26 On or about:
(i) 31 December 2020, the respondent paid Ms Macdonald $370.01 (gross);
(ii) 22 December 2022, the respondent paid Ms Macdonald $458.08 (gross); and
(iii) 22 December 2022, the respondent paid Ms Macdonald $371.01 (gross).
Other Evidence
27 The claimant relies upon a witness statement signed by Joel O’Brien (Mr O’Brien), Organiser of the Maritime Union of Australia Division of the claimant, on 27 June 2024 (the O’Brien Statement).
28 In the O’Brien Statement, Mr O’Brien summarises, and annexes, the correspondence between him and the respondent’s employees concerning the payments owed to Mr Miller and Ms Macdonald O’Brien Statement at [4] to [10] and JOB1 and JOB2.
.
29 Consistent with the respondent’s evidence (see below), the correspondence commences with Mr Miller raising the ‘missing New Year’s Day’ to shift manager, Bill Hutchinson (Mr Hutchinson) on 17 January 2022. Initially Mr Hutchinson indicated that he had ‘sorted this out with payroll’ O’Brien Statement at JOB1.
.
30 Thereafter, on 28 January 2022, Mr Miller appears to have been informed by person or persons unknown that he was not getting paid for New Year’s Day as he was on ‘Approved PTO’ O’Brien Statement at JOB1
.
31 Consistent with the respondent’s evidence, on 18 February 2022, Mr Miller escalated the issue to presumably his next line manager, Michael Kranendonk (Mr Kranendonk), where he was informed that ‘[i]ts the rule of – if a VSE is not available to be allocated due to taking a PTO they would not be advantaged to receive any payment’ O’Brien Statement at JOB1
. Mr Miller responded that he could not see ‘that rule anywhere... I’m happy to be convinced otherwise though based on the EA’ O’Brien Statement at JOB1
.
32 On 18 February 2022, Mr Kranendonk informs Mr Miller ‘[t]his is our position, but if you are not satisfied please run this though Part A clause 49.1’, the dispute resolution clause in EA 2016 and EA 2020 O’Brien Statement at JOB1.
. Mr Miller responded, ‘Ok will do’ and ‘I’ll run through the process though just to be sure and have a clear outcome’ O’Brien Statement at JOB1
.
33 Thereafter, Mr Miller informs Mr O’Brien that he would like to take this further and that he has engaged local and State management, consistent with cl 49.1 of EA 2016 and EA 2020.
34 Consistent with cl 49.1, Mr O’Brien outlined the claimant’s reason for why Mr Miller should be paid in accordance with EA 2020. On 30 March 2022, Mr Kranendonk provided a substantive response to Mr O’Brien’s email to which Mr O’Brien responded O’Brien Statement at JOB1.
. Thereafter, the respondent invited the claimant to continue to invoke cl 49.1.
35 Ms Macdonald appears to have first raised an issue with respect to her leave on 8 January 2021, however, the issue relates to 24, 25 and 26 December (presumably 2020) and the taking of leave O’Brien Statement at JOB2.
. Thereafter, Mr O’Brien attaches emails from Matthew Waddell (Mr Waddell), Operational Superintendent, showing Ms Macdonald was recorded on sick leave/personal leave. There are then several emails between Mr O’Brien and Mr Waddell concerning the reimbursement of personal leave taken on a public holiday with reference to cl 33.3 of EA 2016, the parties’ dispute over the entitlement, and referral to the dispute resolution procedure O’Brien Statement at JOB2
.
36 Mr O’Brien also annexes three decisions of prior contraventions by the respondent O’Brien Statement at JOB3.
.
37 At the penalty hearing, the claimant tendered a further witness statement of Mr O’Brien dated 7 August 2024 annexing iterations of EA 2016 and EA 2020. In addition, Mr O’Brien refers to 19 2020 agreements relevant to ports operated by the respondent Australiawide with an expiry date of 30 June 2024.
38 The respondent relies upon an affidavit affirmed by Andrew Rattery (Mr Rattery), Pilbara Port Manager, on 30 July 2024 (the Rattery Affidavit). Mr Rattery also gave oral evidence at the penalty hearing.
39 Mr Rattery attests to being employed by the respondent as Pilbara Port Manager since December 2017. His role includes the ‘safe, efficient, smooth and profitable delivery of the daily operational activity at the ports that Qube has operations at in the Pilbara region’ Rattery Affidavit at [5].
.
40 His inquiries reveal the respondent employs 2,025 employees and approximately 10,109 employees are employed by the respondent and related bodies corporate Rattery Affidavit at [6].
.
41 The relevant superintendent is responsible for manually uploading public holidays or CPDs to Microster, the software system used by the respondent and the respondent’s payroll department Rattery Affidavit at [7].
.
42 Mr Rattery clarified in his oral evidence that since 2022, the relevant Superintendents no longer manually upload public holidays or CPDs for Provisional Variable Salary Employees and VSEs, but this process is carried out automatically by the respondent’s National Labour Centre. That is, the respondent pre-populates the payroll information reducing the prospect of future similar underpayments.
43 At the time of the underpayments (to presumably Mr Miller and Ms Macdonald), the parties were in dispute over interpretations under EA 2016 and EA 2020 as it related to the entitlement to pay for employees not available to work on a public holiday or CPD Rattery Affidavit at [8].
.
44 The respondent’s view was that employees who were not available to work on these days were not entitled to payment, whereas the claimant’s view was to the contrary Rattery Affidavit at [8].
.
45 Consistent with EA 2016 and EA 2020 dispute resolution clauses, Mr Miller raised the issue with his supervisor, Mr Hutchinson on 17 January 2022 and Ms Macdonald raised the issue with her supervisor, Mr Waddell on 4 January 2022 Rattery Affidavit at [9].
.
46 When the issue was not resolved, it was escalated to Mr O’Brien, an official for the claimant, and Mr Kranendonk, former WA Manager, and David Wingate, General Manager – Ports. Rattery Affidavit at [9].

47 The issue was resolved when the respondent accepted an employee who was not available to work on a public holiday or CPD was entitled to payment under EA 2016 or EA 2020 Rattery Affidavit at [9].
.
48 Mr Rattery asserts that he believes the dispute between the parties was isolated to a period of time relevant to M 76 and M 91 of 2022 and to another claim, M 119 of 2023, also before the IMC. Accordingly, it is his belief that the failure to pay for public holidays or CPDs (as it relates to VSEs) is not a widespread issue Rattery Affidavit at [10].
.
49 His inquiries did not reveal a deliberate effort not to pay relevant employees for public holidays or CPDs but came about because the respondent held a genuine belief it was paying relevant employees in accordance with EA 2016 and EA 2020, and resolution of the issue took some months Rattery Affidavit at [11].
.
50 Mr Rattery, on behalf of the respondent, apologises to Mr Miller and Ms Macdonald and acknowledges the respondent is at fault.
51 Mr Rattery refers to cl 23.2 of EA 2016 and EA 2020. He states that in his experience, having regard to the size and scale of the respondent’s operations, the number of errors dealt with by the respondent is relatively small Rattery Affidavit at [13].
.
52 He further states that he has endeavoured to cooperate with the claimant and provided instructions to admit the claims at the earliest opportunity. Further, he uses his position to rectify issues at an early stage, resulting in payments on the same day, off pay cycle or in the next pay cycle Rattery Affidavit at [15].
.
53 In his oral evidence, Mr Rattery stated that in 2021 he instructed Mr Waddell to undertake a review at the port of Port Hedland and he found one employee who had been underpaid (a separate and unrelated issue) and arranged for that person to be paid in accordance with the relevant agreement. He understood that reviews are carried out periodically rather than investigations.
54 Mr Rattery also stated in his oral evidence that he was informed by line managers that the issue as it related to Mr Miller and Ms Macdonald had been resolved, and that this was generally via progression reports, which he thought occurred prior to the court case commencing.
55 He is aware the respondent and the claimant were engaging in discussions via the dispute resolution procedure and at the end of the discussions, the respondent paid Mr Miller and Ms Macdonald, but he could not recall when that was and accepted that it might not have been when indicated in his affidavit Rattery Affidavit at [16].
.
The Claimants’ Submissions on Penalty
56 Both parties refer to the law in respect of the determination of an appropriate pecuniary penalty for contraventions of the FWA.
57 In summary, the claimant submits:
· the IMC is empowered to order a person to pay a pecuniary penalty the court considers appropriate if the court is satisfied 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;
· in respect of M 76 of 2022, Mr Miller was on approved PTO and was entitled to be paid $234.78 for 1 January 2022. The payment was not made until 25 August 2022;
· in respect of M 91 of 2022, Ms Macdonald was entitled to be paid an additional day of personal leave on termination of her employment for 25 December 2020 and NPH payment for 26 and 28 December 2020. On 22 December 2022, the respondent paid $458.08 and $372.01 to her;
· the failure to make the payments to Mr Miller and Ms Macdonald were deliberate courses of action where the respondent was on notice on five occasions over two months. The respondent ‘courted the risk’ and refused to rectify the breach. It was only after the proceedings were commenced that corrective action was taken;
· the respondent is not contrite, and the late admission and corrective action are rhetoric and a ‘box ticking exercise’ to satisfy the court and to avoid a more serious penalty;
· 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;
· the ‘underpayments’ were escalated to senior levels of management; and
· there is no evidence indicating the lessons that have been learned from previous contraventions or positive steps to ensure future compliance.
58 Therefore, the need for specific and general deterrence is great.
59 A substantial, personal deterrent penalty is also called for to deter future contraventions.
60 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
61 In summary, the respondent submits:
· it failed to pay an employee in recognition for public holidays not worked – 26 and 28 December 2020 in respect of Ms Macdonald (M 91 of 2022) and 1 January 2022 in respect of Mr Miller (M 76 of 2022). In respect of Ms Macdonald the respondent improperly deducted a day of personal leave for 25 December 2020 which was a CPD;
· the payments were required pursuant to cl 33.3.2(d) of EA 2016 and EA 2020;
· the non-compliance arose because of an administrative oversight and was inadvertent in that the claimant and the respondent were in dispute as to the interpretation of EA 2016 and EA 2020, specifically whether an employee who was not available to work on a public holiday or CPD was entitled to payment. The parties held opposing views and utilised the dispute resolution process under the enterprise agreements. There is no evidence either party held their view unreasonably;
· the contraventions of s 50 and s 323 of the FWA should be considered a single course of conduct for the purposes of s 557 of the FWA;
· 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 4% of the maximum is considered appropriate;
· this is not a matter in which an imposition of penalties is necessary to encourage general or specific deterrence where the parties utilised the appropriate process to resolve a dispute, and the respondent accepted its interpretation was wrong;
· the respondent admitted to the breaches at the earliest stage of the proceedings, and the respondent has already paid the monies to Mr Miller and Ms Macdonald;
· the underpayments involved reasonably modest amounts, and no evidence has been adduced of prejudice suffered by Mr Miller or Ms Macdonald;
· the respondent does not have a history of contumeliously failing to pay their employees their lawful entitlements;
· it has demonstrated remorse, cooperation and taken 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
· consistency is an important consideration and there is no evidence any additional financial resources would have prevented the breach.
62 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.
Relevant Finding on Penalty
63 Because it was directly raised by the claimant, I make the following finding of fact as it relates to course of conduct and contrition.
64 For the following reasons, I do not accept the respondent’s conduct in not making the payments to Mr Miller and Ms Macdonald was a deliberate course of conduct in the pejorative manner suggested by the claimant.
65 The respondent did not agree with Mr Miller in terms of the payment for 1 January 2022, but it had paid him for Christmas and Boxing Days, indicating that it was not looking to escape making payments for public holidays more broadly. Further, the respondent invited Mr Miller to invoke the dispute resolution process under EA 2020 if he was not satisfied with the outcome, which Mr Miller acknowledged he would do so for clarity. Thereafter, the dispute resolution process was invoked.
66 While the process took more time with Ms Macdonald, again there was no indication that the respondent was seeking to escape making payments and the initial enquiry appears to have included another issue, although this was not especially clear from the emails.
67 At no stage did the respondent try to dissuade Ms Macdonald, Mr Miller or Mr O’Brien from progressing the non-payment through the dispute resolution process or at all, notwithstanding it had a different view, albeit it is now known that view is wrong.
68 For the following reasons I accept the respondent’s expression of contrition.
69 In the Rattery Affidavit, Mr Rattery apologised for the underpayments to Mr Miller and Ms Macdonald. Having the benefit of hearing Mr Rattery’s oral evidence, I formed the view that he was a truthful witness, whose apology can be accepted as genuine. Consistent with the apology is the prior payment of monies owed. The respondent admitted the contraventions and has cooperated in the legal process with admitting the claim (save for the Disputed Claim which was dismissed after hearing) and the filing of a statement of agreed facts.
70 The claimant’s cynical view of the respondent’s apology appears to be more grounded in a prior claim based on comments made by a different Industrial Magistrate, rather than the evidence before the Court in this claim.
Determination On Penalty
71 The maximum penalty with respect to a contravention of s 50 and s 323 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 $66,600.
Section 557 of the FWA
72 The effect of s 557(1) of the FWA is that two or more contraventions of the FWA referred to in subsection (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…
73 I am satisfied that in relation to M 76 of 2022, as it relates to Mr Miller, the contraventions of s 50 and s 323 of the FWA is a single contravention where the contravention was by the respondent and arose from the one failure by the respondent to pay him for a CPD while he was on approved PTO.
74 I am further satisfied that in relation to M 91 of 2022, as it relates to Ms Macdonald, the contraventions of s 50 and s 323 of the FWA is a single contravention where the contravention by the respondent arose from a failure to pay her for a CPD and NPHs while she was on personal leave.
75 However, if the respondent’s submission extends to the contraventions being grouped as one single contravention for both employees, I don’t accept this submission for the following reasons:
(a) while not determinative, the contraventions occurred at different ports;
(b) while the contraventions involved the failure to pay for CPD and NPH, it involved different enterprise agreements;
(c) the contravention relating to Mr Miller related to the non-payment for a CPD; and
(d) the contravention relating to Ms Macdonald related to the non-payment for NPHs and deduction of personal leave on a CPD.
Thus, while similar and related, the course of conduct is, in my view, distinct.
76 Having regard to the parties’ submissions, the Agreed Facts, and the parties’ evidence, the following considerations are significant in assessing the appropriate penalty in this case.
Whether the organisation has engaged in similar conduct
There are three similar claims before the IMC, being M 76 of 2022, M 91 of 2022 and M 119 of 2023. Arguably, the respondent has engaged in similar conduct, but I note that the disputes involve similar issues (having regard to my comments above) with two of the three claims being over a similar time period. One of the claims has a historical component. I also note that the claims involve the ports of Dampier and Port Hedland.
The claimant also refers to other claims against the respondent. In Construction, Forestry and Maritime Employees Union v Qube Ports Pty Ltd [2024] WAIRC 220 at [38] (including footnote 2), I outlined claims referred to by the same claimant. At [53], I commented on the claimant’s submission regarding the respondent’s history of purported non-compliance. I do not resile from that comment. The difference with respect to M 76 and M 91 of 2022 (and in due course M 119 of 2023) is that the respondent’s contraventions extended across two employees (and a third employee in M 119 of 2023), albeit its genesis is rooted in the same erroneous view. I am not persuaded this means the respondent is a recalcitrant contravener who displays contemptuous disregard for employment law. However, the respondent or the respondent’s management should adopt a more cautious and timely approach as it relates to employee entitlements, even if invoking the dispute resolution procedure.
Whether the conduct was deliberate
I refer to the finding above as it relates to deliberateness of conduct. However, other considerations are relevant, including that Mr Miller and Ms Macdonald contested the respondent’s reason for non-payment and the proper construction of EA 2016 and EA 2020 was ‘far from certain,’ such that the respondent ‘can be characterised as having “taken the odds”’: Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2018] FCA 480 (Hail Creek) at [17]. That is, in invoking the dispute resolution process, the respondent must have been aware of, and elected to, take the risk that its conduct if not would, then might, contravene s 50 of the FWA.
Unlike in Hail Creek, there is no evidence the respondent should have been on notice or have had a heightened awareness of the risk it took from an erroneous construction because it had previously been found to have contravened EA 2016 or EA 2020 and had pecuniary penalties imposed: Hail Creek at [18].
Further, there is no evidence that in not making the payments to Mr Miller or Ms Macdonald, the respondent obtained, or sought to obtain, any financial benefit.
Notwithstanding this, where the construction of terms of EA 2016 and EA 2020 were squarely in issue, the respondent could have adopted a more cautious approach, as stated.
Corrective action
Mr Miller and Ms Macdonald have been paid the amounts owed to them and Ms Macdonald had her personal leave credited to her balance. I also note that Ms Macdonald’s payments were made almost two years after they were due, although one payment was made six days after it was due.
In terms of other corrective actions, the respondent has automated, via its National Labour Centre, NPHs and CPDs and removed manual entry by individual Superintendents. Thus, arguably, reducing the risk of future underpayments.
Contrition and avoidance of repetition
The respondent has apologised. I do not accept that the apology is not genuine for the reasons given.
The respondent has cooperated in the court process by admitting the claims and preparing agreed facts. The Disputed Claim was dismissed. A percentage discount of 30% is appropriate considering the respondent’s contrition and cooperation in the proceedings and the rectification undertaken.
The size of the entity and involvement of senior management
The respondent is a large business in Australia and can reasonably be expected to have in place systems that reduce the risk of underpayments to employees. True enough, mistakes can happen, and there may be differences in opinion in interpreting industrial instruments. However, it is also reasonable to infer that the respondent is well resourced and, as stated, could have sought timely advice.
Loss or damage suffered as a result
Mr Miller’s and Ms Macdonald’s consequential ‘loss’ (being the actual entitlements) is reasonably modest and has been fully addressed, albeit after the proceedings commenced.
77 The contravening conduct in all circumstances is properly categorised in the low range in respect of both Mr Miller and Ms Macdonald.
78 Considering the above, specific deterrence is less important, but certainly not unimportant, 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.
79 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 762; [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 (Pattinson) [46].

80 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] and [47].
I am not satisfied that this is a case for no penalty to be applied. Pattinson [46] and [47].

81 For these reasons, the penalty to be applied in each of M 76 of 2022 and M 91 of 2022 is:

Maximum
Penalty applied
Breach of Agreement contravention
$66,600

Payment in full contravention
$66,600

One single contravention (s 557(1) and (2))
M 76 of 2022 with 30% discount

$3,500
One single contravention (s 557(1) and (2))
M 91 of 2022 with 30% discount

$4,000
82 For the avoidance of doubt, while I accept that in each of M 76 of 2022 and M 91 of 2022 there is a single contravention under s 557 of the FWA, I do not accept that this extends to one penalty being imposed for the two claims. M 76 of 2022 and M 91 of 2022 are two separate claims, albeit there is commonality as it relates to failure to pay the entitlements. There are also relevant differences related to Ms Macdonald, which accounts for the slightly higher penalty.
83 In my view, no reduction for totality is required, where $3,500 and $4,000 are appropriate penalties ‘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 be just and appropriate in all the circumstances of the case.
84 The claimant seeks an order pursuant to s 546(3)(c) of the FWA that the penalties be paid to the claimant. An order will be made that the respondent pay the penalties of $3,500 and $4,000 to the claimant.
Orders
85 In respect of M 76 of 2022, pursuant to s 546(1) and (3) of the FWA, the respondent is to pay to the claimant a pecuniary penalty of $3,500.
86 In respect of M 91 of 2022, pursuant to s 546(1) and (3) of the FWA, the respondent is to pay to the claimant a pecuniary penalty of $4,000.



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 IMC, 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; and
· Section 323 – failing to make payments in full.
[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, 374, 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.
[7] In the context of an allegation of the breach of a civil penalty provision of the Act 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, 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:
December 2020
January 2022
December 2022
$ 222
$ 222
$ 222
[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) [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)
[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 [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.
[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 [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 [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)