Auscare Corporation Pty Ltd v New South Wales Department of Commerce [2008] NSWIRComm 124 | Case summary

Auscare Corporation Pty Ltd v New South Wales Department of Commerce [2008] NSWIRComm 124 | Case summary | Zoe

[11]

1 On 13 September 2006, Mr Michael Riley, an Industrial Inspector of the respondent, instituted proceedings for a civil penalty by Court Attendance Notice under s 357 of the Industrial Relations Act 1996. Penalties were sought with respect to three contraventions of the Miscellaneous Workers Home Care Industry (State) Award ("the award") between 11 October 2004 and 5 April 2005. Each contravention was expressed as a continuing offence and concerned a former employee of the appellant, Ms Bertha Ventura. 2 On 1 March 2007, Chief Industrial Magistrate Hart found the appellant guilty of each breach of the award: a failure to comply with cl 8 - Casual Employment (which essentially involved the non-payment of Ms Ventura at the Casual Field Staff, Grade 2 rate of pay - see cl 5 and Part B, Table 1 of the award), a failure to comply with cl 10 (i), Saturday and Sunday Work, (with respect to a Saturday Penalty) and a failure to comply with cl 18 (iii), Public Holidays. His Honour imposed a penalty of $1,500 for each breach, but taking into account the principle of totality (his Honour found that each offence arose out of the same course of conduct) reduced the total penalty to $2,500 (a reduction of $2,000) which was apportioned "equally between the three separate offences". This presumably produced a penalty for each offence of about $833. His Honour awarded costs of $1,500 to the respondent. 3 On 15 November 2007, the Full Bench upheld an appeal from that judgment and set aside the penalties imposed at first instance on the basis that the Chief Industrial Magistrate had denied the appellant procedural fairness: Auscare Corporation Pty Ltd v New South Wales Department of Commerce (2007) 168 IR 261 at [4] and [28] (per Walton J and Staff J) and [103] and [118] (per Schmidt J). However, the Full Bench was unable to agree as to whether any reassessment of penalties should occur before the Full Bench or by remitter to the Local Court of New South Wales, and by majority (per Walton J and Staff J) the Full Bench concluded that it would hear the parties on the question of penalty. 4 At the commencement of the hearing of the question of penalty before the Full Bench, Mr P Ginters of counsel, who appeared for the respondent, placed material before the Full Bench which, he submitted, demonstrated that the appellant had been wrongly found guilty of one breach, namely a breach of cl 10 of the award. In the result, and by consent, the appellant was granted leave to amend its appeal in that respect and, after the grant of an extension of time, the appeal (so amended) was upheld so as to set aside that finding of guilt. Otherwise, the matter went forward on the basis that no challenge was made to the findings of guilt for the remaining two breaches of the award. 5 It follows that this judgment concerns the question of penalty with respect to those breaches, namely the breaches found with respect to cls 8 and 18 (iii) of the award. After the dismissal of the breach concerning cl 10 (i) of the award, the total underpayment arising from the breaches over the period charged was $613.69. The appellant paid that sum to the respondent at the time of the investigation by the Inspector (and the additional sum corresponding to the breach concerning Saturday penalties, namely, $39.43). The maximum penalty for each breach under s 357 of the Act is $10,000. 6 This judgment is written after having the benefit of reading the draft judgment prepared by Schmidt J. Unfortunately, I am unable to agree with her Honour's conclusion that no penalty should be imposed in this matter. For reasons I will now give, I consider that, after the application of the principle of totality, a penalty should be imposed, albeit one that is at the low end of the range of available penalties.

[13]

[19] We agree that breaches of industrial instruments are serious matters and, in that respect, we concur with the view expressed by Marks J in Transport Workers' Union v Carey's Warehousing & Distribution Pty Limited and others [2006] NSWIRComm 192 at [15] as follows: [15] The starting point for the assessment of an appropriate penalty is a consideration of the objective seriousness of the offences with which the defendants are charged. The prosecutor submitted, and I accept, that the failure to comply with the provisions of an industrial instrument is a serious matter. Industrial instruments are designed to provide for minimum rates of pay and working conditions for employees. They are established through mechanisms created by government and are intended to have, and do have, the force of law in terms of their application and the enforcement of duties and obligations imposed by them. [16] ...The underpayment of any wages will always be a serious matter, particularly from the perspective of an employee. 20 We would add, however, that the seriousness attaching to breaches of industrial instruments also relates to the important public purpose such instruments serve by the creation of an orderly system of employment regulation, including the establishment, by force of law, of minimum entitlements for employees (as assessed by the Industrial Relations Commission of New South Wales). We also observe in relation to the above matters, his Honour found that not only were the obligations in the relevant award clear and unambiguous, but there was 'evidence of a systematic refusal to pay overtime, for time worked on Saturdays at the rate provided for in the Award, being double time and annual leave loadings.' 21 There is no evidence in the matters before us that there was any systematic refusal to pay the employees concerned in any relevant respect. Without more than passing consideration to the distinction between the Club Award and the Restaurants Award, for the purposes of these proceedings we accept that the reliance on the Restaurants Award was done in good faith (although we note that this observation does not detract from the requirement for strict adherence to the terms of such instruments). 22 Marks J also considered breaches of industrial instruments in Transport Workers' Union of New South Wales v Contract Courier Services Pty Ltd [2007] NSWIRComm 152 and in particular at [20] when he said, in words that we would endorse: [20] I commence by observing that industrial instruments serve an important and integral part in the orderly regulation of relationships between employers and employees and principals and independent contractors. They have the force of law and sanctions are imposed for breach. ... 23 In endorsing his Honour's observations as to the importance of, and integral part, industrial instruments play in the relationship between employers and employees, we would also observe, in relation to the matters before us, there is no evidence, as was the case before his Honour, that 'the conduct of the defendant cannot be characterised as something that was unintended'. As earlier indicated, the breaches of the industrial instruments arising under s 357 of the Act arose as a result of an honest belief as to the relevant award applying. 24 Overall, in relation to the breaches arising under s 357 of the Act, we are of the view that, given the facts and circumstances, they are at the lower end of the scale of objective seriousness.

[16]

8 A corollary of these observations is that the imposition of a penalty under s 357 of the Act must recognise the need for deterrence, both personal and general. This is not to incorporate into the factors to be taken into account in assessing a civil penalty the principles of sentencing in the criminal law (although I leave this question open), but rather to recognise that civil penalties serve a role in enhancing social welfare by minimising the net social cost of wrongdoing and to fix a price on the contravention that is sufficient to deter repetition by the contravenor: Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liquidation) and Others (2007) 161 FCR 513 at [60]. In the context of the system of awards maintained under the Act, deterrence not only serves the function of ensuring that the terms of awards are complied with, but maintains the integrity of the industrial system itself which depends, in large measure, upon such instruments. 9 Deterrence has been recognised as a feature of the fixing of civil penalties by a Full Bench of this Commission in an analogous area (the contravention of dispute orders made under s 139 of the Act): Bluescope Steel Ltd (formerly BHP Steel Ltd) v Australian Workers' Union, New South Wales Branch (No 2) (2005) 141 IR 329 at [4] and in relevantly analogous proceeding under the Workplace Relations Act 1996 in decisions of the Federal Court of Australia: Commonwealth Bank of Australia and Another v Finance Sector Union of Australia (2007) 157 FCR 329 at [181] (and the authorities referred to therein) and Ponzio v B & P Caelli Constructions Pty Ltd and Others (2007) 158 FCR 543 at [93]. The extent to which deterrence may feature in any penalty will, in the case of personal deterrence, depend on an assessment being made as to the risk of re-offending and, in the case of general deterrence, an assessment being made as to the extent to which the penalty will act to a deterrent to others in the community who might be likely to offend. 10 These considerations do not detract from what Schmidt J referred to in her draft judgment as the need, in assessing an appropriate penalty, to have regard to the nature and quality of the offence. In ACCC v Dataline.Net.Au Pty Ltd, the Full Bench of the Federal Court observed (at [60]), in the context of an appeal in proceedings concerning the imposition of a pecuniary penalty for a contravention of the Trade Practices Act 1974 that "the character of the contravention must be the central determination of the penalty taking into account any ameliorating circumstances". That principle is applicable to penalty proceedings under s 357 of the Act.

[28]

14 The first to third and sixth factors (with modification for the present context) are applicable to the present proceedings for a civil penalty. 15 It is from these principles that I will elucidate my reasons for concluding that a penalty should be imposed in this matter, albeit, as earlier mentioned, at the lower end of the possible range of penalties. 16 The appellant is guilty of two contraventions of the award, each contravention attracting a maximum penalty of $10,000. The contraventions arose out of a single course of conduct: the failure to pay Ms Bertha Ventura the full casual rate of pay and some public holiday entitlements due under the award during the course of her employment with the appellant between 11 October 2004 and 5 April 2005. 17 Having regard to the aforementioned principles in Yarramul, the offences, so described, are plainly serious. However, as mentioned above, in assessing whether a penalty should be imposed (and, if applicable, the amount of the penalty) regard needs to be had to the true character of the contravention. I will now turn to that matter before dealing with any particular factors in mitigation. 18 The breaches do not appear to have been deliberate in the sense that the appellant knowingly constructed arrangements which were designed to avoid award requirements. Rather, the breaches appear to have partially arisen from a misunderstanding as to which award operated with respect to work performed by Ms Ventura. This mistake was said to arise because of confusion as to whether the Social and Community Services Employees (State) Award or the award applied to the work performed by that employee. The Social and Community Services Employees (State) Award provided lower rates of pay to those found in the award in some respects. It potentially applied to some aspects of the work engaged in by the enterprise in so far as it carried on the business of providing homecare services for the elderly and disabled. 19 However, there are three counterveiling considerations which reduce the discount that might be afforded the appellant in relation to these factors. These considerations are as follows:

The underpayment of Ms Ventura's entitlements arose in circumstances where the appellant had refused to pay her for the last two weeks of her employment. The fact that there was a dispute about the execution of time slips associated with this period does not excuse the non-payment;
During the hearing before the Full Bench in relation to penalty, Ms Yan Wu, the sole director and shareholder of the appellant, gave evidence for the appellant. She conceded that the appellant's records demonstrated that the appellant paid less to Ms Ventura than required under either the award or the Social and Community Services Employees (State) Award. Ms Wu remonstrated that the records did not, however, present the true payments received by Ms Ventura, which payments were said to be unrecorded and wholly above the rates of pay required under either award. Even allowing for the rather unfortunate history of proceedings leading to Ms Wu being called to give this evidence (as described in the draft judgment of Schmidt J), that evidence was quite unsatisfactory and, ultimately, unconvincing. The above award payment was referred to for the first time during the course of Ms Wu's cross-examination (notwithstanding that neither her affidavit evidence nor exchanges with the Inspector referred to such matters). Further, no appeal has been brought against conviction;
Whilst I am prepared to accept that some part of the failure to pay Ms Ventura in accordance with the award arose from the payroll system operated by the appellant, it is quite clear that the Principal of the appellant, Ms Wu, knew both of the ultimate withholding of payments to her and the anomalies existing in the payroll records (if, in fact, there be anomalies in that respect). 20 In short, it is not appropriate to assess the culpability of the appellant on the basis that the contravention solely arose from a misunderstanding as to how the award system operated (including which of two awards applied). Further, the fact that the contraventions were identified as a result of a dispute as to entitlements at the end of Ms Ventura's employment does not, when seen in its proper context, ameliorate the seriousness of the contraventions but, rather, is an aggravating factor. I should note, in this respect, that there were some issues raised about Ms Ventura engaging in some untoward conduct toward the end of her employment. None of these suggestions are made out in the evidence and are not appropriate to be brought into account in the absence of any probative evidence on the question (including that of Ms Ventura). 21 There are a number of mitigating factors which bear upon the assessment of penalty which I describe below (although at the same time identifing any limitation as to the extent to which a mitigating factor may be significant):
This was the first offence by the appellant. This factor is significant given that the contravention occurred against a background of a large, casual workforce employed over a long period of time. As at 15 July 2005 the appellant employed 79 casual staff and over the course of a year usually employed about 200 employees. The business operated since 1993, although the appellant only incorporated in June 2004. No other contraventions have been brought to account;
The appellant rectified the underpayment shortly after enquiries were made by Inspector Riley and otherwise co-operated with the respondent. This demonstrates some degree of contrition, although the evidence given by Ms Wu does leave some doubt as to whether the appellant fully appreciates the seriousness of its breach of the award. Further, the appellant does not appear to have significantly altered its payroll procedures after the contravention and has not conducted an audit of its records;
The losses occasioned by the breaches are relatively small given the extent of the operations of the appellant (although, presumably, not so significant for the employee affected);
The testimonials produced by the appellant demonstrate that it is a good service provider in a significant area of public service. 22 There are two additional factors which require particular attention. First, it was submitted by Mr R Reitano, counsel for the appellant, that a significant mitigating factor was the prospect that a conviction may cause the appellant to lose business. There was a prospect that appellant may lose future government tenders. It was contended that "whilst these considerations are not without doubt, the appellant should be given the benefit of the doubt in respect of each of them in the sentencing process". On the other hand, the respondent submitted that this matter was entirely speculative and, in any event, it should have alerted the appellant to the need to be especially vigilant in ensuring compliance with its award obligations. 23 In my view, this consideration can only have limited impact upon the assessment of penalty for the following reasons. First, it would appear that the contention is based to some extent upon a false premise. The flaw in the argument may be demonstrated thus. The appellant had originally sought to avail itself of a remedy (or an equivalent thereof ) under s 10 of the Crimes (Sentencing Procedure) Act 1999 to avoid a conviction and, thereby, removing from the appellant any obligation to declare in the tendering process that it had contravened an industrial instrument. That submission was abandoned properly as there had not been a conviction entered, as such, at first instance and the Crimes (Sentencing Procedures) Act 1999 had no application. However, the alternative submission suffers from a similar difficulty. In that submission, the appellant contended that no penalty should be imposed to a similar end, namely, that the appellant would not come under notice in that part of the tendering process which dealt with the issues of compliance with awards. However, this notion overlooks the fact that there is no appeal from the findings of guilt (that is the finding of a contravention) at first instance. In this context, whether a penalty is imposed is irrelevant to the avoidance of any requirement to declare a contravention of an award and the appellant's submissions suffer from a logical inconsistency. 24 Secondly, and in any event, in order to make good this contention the appellant would need to demonstrate that a distinction would be made by the authority responsible for issuing contracts based upon the level of penalty imposed. In the present matter, the appellant would, therefore, need to sustain an argument that some real difference in the tendering process would result from the imposition of a low penalty as opposed to no penalty where a guilty verdict has otherwise been entered. Such an outcome is improbable. Further, there has been no evidence called by the appellant to sustain the foundation of this proposition, namely, the imposition of a penalty at any level will adversely impact upon the appellant's prospects in the tendering process. 25 In the final analysis, the respondent is correct to submit that this contention is somewhat speculative. There has been no loss of business on this account by the appellant since the conclusion of the proceedings before the Chief Industrial Magistrate. 26 Finally, there would not seem to be a significant basis in any tendering process for low penalties for contraventions of the kind described in this case to adversely affect the appellant.

[29]

27 The appellant also submitted that the history of the course of the proceedings before the Chief Industrial Magistrate and the appellant's ultimate vindication in that respect having regard to Auscare (No 1) should result in a conclusion that there existed in this case exceptional circumstances which would warrant the imposition of no penalty. I note in this respect that Schmidt J's draft judgment amply sets out the historical circumstances relied upon. 28 Whilst I agree with the summary provided by her Honour, I do not agree that those circumstances may, as contended by the appellant, be properly taken into account in the assessment of penalty. The matter comes before the Court on the basis of two proven contraventions (which were amply made out by the additional evidence called in the penalty proceedings). The nature and quality of those contraventions is not enlarged or diminished by the manner, however unsatisfactory, in which proceedings went forward in the Local Court. The appellant has exhausted the relief that it may seek in this respect, save as to costs, by its successful appeal in Auscare (No 1). It is unwarranted to speculate upon whether the offences may or may not have been proved if an appeal was brought against the findings of guilt, as the appellant has not brought an appeal in that respect. Thus, the issue only bears upon the question of costs, to which I will now turn. 29 The appellant has incurred significant costs in these proceedings, substantially because of the miscarriage of proceedings at first instance (although a component of the costs was incurred in the prosecution by the appellant of its position in relation to penalties in these proceedings). Without venturing into a general consideration as to whether costs may be taken into account in assessing the appropriate penalty in proceedings such as these (although I note the earlier observation of Jessup J in Ponzio in that respect), I consider that it is appropriate, in the particular circumstances of this case, to reduce the penalty which may otherwise be imposed based on the significant costs incurred by the appellant (as well as having regard to this factor in the ultimate costs orders in the proceedings). 30 Finally, I turn to the question of deterrence. In my view, both general and specific deterrence are relevant to this matter. General deterrence is necessary in order to demonstrate that enterprises, particularly those of the size of the appellant, need to be vigilant in ensuring proper compliance with the terms of awards. A penalty should also be imposed in this matter in order to deter enterprises generally from inadequately monitoring and controlling their payroll systems with respect to award obligations. Enterprises need to commit such resources as are necessary to ensure that they properly carry out their obligations imposed under awards. 31 Specific deterrence will only feature in a minor way in this matter. The appellant's concerns about obtaining future government tenders should be sufficient to motivate strict compliance with the relevant awards. However, some element of personal deterrence must still feature in the penalty imposed. The rather unsatisfactory evidence given by the appellant's Principal as to the management of its employment records, and an absence of the auditing of them in the face of proven breaches, indicates why specific deterrence should remain an element of the penalty imposed, albeit not resulting in a significant addition to it. 32 Having regard to the aforementioned discussion of the character of the contravention and the quite significant ameliorating factors applicable to the matter (save as to costs), I consider that the penalties originally imposed by the Chief Industrial Magistrate for each offence were appropriate (although, obviously, the ultimate penalty, after the principle of totality was applied, would be less because one finding of guilt was quashed by this Full Bench). This conclusion is a fortiori when regard is had to the principle of deterrence. 33 The cost consideration earlier alluded to does call for some further amelioration of the penalty imposed by the Chief Industrial Magistrate, but does not, in my view, constitute of itself or, when taken with the culmination of other mitigating factors, warrant the imposition of no penalty. Such a conclusion is not available given the principles stated in Yarramul, the seriousness of the contravention as earlier discussed and the need for deterrence. Rather, the penalty should be imposed very much at the low end of potential penalties. I would impose a penalty of $750 for each of the two remaining contraventions, giving a total penalty of $1,500. However, I consider that the principle of totality requires a reassessment of that penalty (see Ponzio per Jessup J at para [145] and [146] and Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 per Stone and Buchanan JJ). Applying that principle, I would reduce the penalty to $825 which will be equally apportioned between the two offences. 34 There remains a question of costs of these proceedings and the proceedings at first instance. In my view, Mr Ginters was correct in his submission that each party should pay its own costs of the appeal. The same result should follow in relation to the costs at first instance. The appellant has been successful in overturning the finding of guilt with respect to one offence and setting aside, on appeal, the balance of the penalties in Auscare (No 1). However, the appellant has not been successful in its application for no penalty. A fair apportioning of that outcome, in my view, is for each party to pay its own costs. The question of reserved costs in the orders given by the majority in Auscare (No 1) (at [28]) should be answered accordingly. Orders

[31]

JUDGMENT OF SCHMIDT J 36 On 15 November 2007, an appeal from a decision of the Chief Industrial Magistrate, finding the appellant guilty of three breaches of s 357 of the Industrial Relations Act 1996, ('the Act') was upheld, the Full Bench being of the unanimous view that the Chief Industrial Magistrate had erred, in denying the appellant procedural fairness. (See Auscare Corporation Pty Ltd v New South Wales Department of Commerce (2007) 168 IR 261.) The penalty imposed by the Chief Industrial Magistrate was quashed and by majority, (Walton J and Staff J, Schmidt J dissenting), the Full Bench concluded that it would hear the parties on the question of penalty. This judgment deals with that question. 37 The case originally advanced by the appellant on appeal, was that the finding that it had breached the applicable award, the Miscellaneous Workers Home Care Industry (State) Award, ('the Home Care Award') was not challenged. That position altered, when the hearing on penalty commenced, when an unusual development was announced. 38 On commencement Mr Ginters of counsel, appearing for the respondent, immediately announced that on the material which the parties proposed to tender, it had become apparent that the appellant had wrongly been found to have breached clause 10 of the Home Care Award. In the circumstances, by consent, the appellant was granted leave to appeal that aspect of his Honour's decision out of time, in accordance with s 189 of the Act and the appeal was upheld. 39 As to the other two award breaches dealt with in the proceedings below, the appellant maintained its position, that the finding of the breach was not challenged. Those breaches related to underpayment of wages due under the Home Care Award to a casual employee, Ms Ventura and to a failure to pay her a holiday penalty. 40 When the parties led their evidence, it became apparent that there had been further, significant difficulties, at the hearing below. This explained how it was that the respondent came to accept that the appellant had been wrongly found to have breached clause 10 of the Award. Not only was there a significant difficulty in the way in which the respondent had conducted its case below, which led to the late appeal in relation to that breach, there were other problems with the respondent's case, revealed by the evidence which it led as to sentencing. This opportunity arose as the result of the orders made in the November judgement. 41 As a result, the respondent's case on appeal showed that there was a serious denial of justice, so far as the appellant was concerned, at first instance, which the November judgment did not deal with. In the result, the course which the proceedings have taken, must have a significant impact on how the question of the imposition of any penalty for the two remaining award breaches, is now determined.

[32]

The parties' cases 42 The respondent's case, put in written submissions, was that a question arose as to whether each breach of the Award constituted a separate contravention, for the purposes of s 357 of the Act, which provided a $10,000 maximum penalty for such an offence. It was argued that the appellant had been found to have contravened three clauses of the award, which imposed different obligations, namely clause 8 Casual Employment; clause 10 Saturday, & Sunday Work and clause 18 Public Holidays. It followed that each breach gave rise to a separate contravention. (See Gibbs v The Mayor, Councillors and Citizens of the City of Altona (1992) 37 FCR 216 at 237; Masters v Highway One Transport Pty Ltd (1990) 33 IR 1 at 4 and Cotis v Pow Juice Pty Ltd [2007] FMCA 140 at [39]-[42].) 43 In Yarramul Pty Ltd (t/as La Porchetta) v Office of Industrial Relations (2007) 167 IR 385, principles applicable to the imposition of civil penalties for breach of awards were discussed at [12] - [13]. Those principles and the considerations identified in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7, provided the basis for the respondent's submissions as to penalty. 44 It was submitted that the breaches all 'appear to be traced' to the appellant's misunderstanding of how the award system operated and the belief that the award did not apply to the employment in question. It was argued that industrial instruments such as awards, serve an important function of setting minimum pay and conditions for employees; they have the force of law and failure to comply with such an award, is a serious matter. 45 Underpayment of wages was argued always to be a serious matter. The effect of the breach here was to deprive an employee of benefits, which timely payment of wages would have provided. 46 The appellant provided agency home care services to the elderly and disabled. It was a single director company, which proceeded on the basis that the Home Care Award did not apply to the employment; that Ms Ventura was paid at least 50 cents more than the award; that other awards applied to the employment and that the appellant could contract out of the award. 47 The underpayment of $632.32 occurred over the period 11 October 2004 to 5 April 2005, although with the upholding of the appeal in relation to the Saturday penalty breach, that figure declined to $613.89. This was a first offence and the breaches were attributable to a belief that the applicable award did not apply. The appellant employed 79 casual staff as at 15 July 2005 and 200 in total, over the course of a year. It was not contended that the breaches were deliberate. Ms Wu had responsibility for the appellant's accounts, payroll and group certificates. The underpayments had been rectified and the appellant had co-operated in the respondent's investigations. 48 Even if specific deterrence was not warranted in this case, as to which there was no evidence of steps taken to ensure that such an offence could not occur again, general deterrence was required. As a matter of general principle, the Court would be disinclined to impose no penalty, where breaches have been found. Only exceptional cases would attract no penalty. It was, however, accepted that the totality principle would be applied to the penalty. 49 In the oral submissions developed at the hearing, particular reliance was placed on the observations in the November judgment, in the majority decision:

[34]

50 It was submitted that while the Appeal Bench had concluded in the November judgment, that there had been irregularities in the proceedings below, which required that the appeal be upheld and penalty be reconsidered, nothing had been demonstrated on the evidence, which would warrant the conclusion that this was an exceptional case, warranting the result that no penalty be imposed for the two award breaches proven. 51 It was accepted that in imposing penalty, the Full Bench would not put out of its mind the course which the proceedings had taken, particularly the procedural fairness irregularities, but the hearing on penalty moved forward on the basis that while considerable cost had been incurred by the appellant, the respondent had submitted that each party should bear its own costs, in the circumstances. It was argued that the cost of these appeal proceedings was not a basis on which the Court's discretion not to impose a penalty, would be exercised. 52 It was also conceded that it was difficult to defend his Honour's decision below, given the procedural irregularities dealt with in the November decision. Nevertheless, penalty had to be determined against a backdrop of a finding of contravention. It followed that it would amount to 'double dipping', to now factor in those irregularities, in determining whether to impose a penalty on the appellant, although it was conceded that such matters might be considered in determining the quantum of the penalty. 53 Ms Wu's evidence as to the consequences of the imposition of a penalty on the appellant, was submitted to be merely speculative. Indeed, those consequences ought to have ensured extra vigilance in relation to award compliance by the appellant. 54 For the appellant, it was accepted in written submissions that any failure to pay wages and other entitlements was generally regarded to be a serious matter, but it was argued that there was no presumption as to seriousness and that each case fell to be determined on its own facts. 55 Here the evidence showed an honest belief on the part of the appellant that a different award applied to the employment of the employee in question. That evidence was not challenged by the respondent. There had been a dispute with the employee, over a failure to submit time sheets concerning the hours in question. The failure was limited to one employee, over the course of a single pay period. It followed that the three offences charged arose out of a course of conduct, properly to be regarded as comprising one offence. 56 The appellant was a first offender, only incorporated in 2004 with a sole director and shareholder, Ms Wu, who had, however, previously conducted the business of the appellant, with no prior offences. The evidence showed significant ramifications for the appellant of any conviction, for future government tenders. Account would also be taken of the course of the proceedings and the cost necessitated by the appeal proceedings, which would significantly outweigh the amount of any fine, otherwise imposed. 57 In light of the extenuating circumstances, it was argued that this was an appropriate case for the exercise of the discretion against proceeding to penalty. In oral submissions it was explained that various factors would lead the Court to the conclusion that this was an exceptional case, warranting the imposition of no penalty. Not only was this a first offence, in circumstances where the appellant believed another award was applicable to the work in question and there was a dispute about the final two weeks' pay, what had transpired on appeal must also be considered. 58 This case comfortably fell within the description of being exceptional. The evidence led on appeal had revealed the deficiencies in the way the proceedings below were conducted, leading to the finding of breach in relation to the Saturday penalty being set aside, by consent. Even if it were suggested that Ms Wu had contributed to what had occurred below, by appearing herself for the appellant, there could be no doubt that the Court system had badly failed this appellant. 59 In terms of punishment, what the appellant had to endure in these proceedings, could not be treated as if it had not occurred. Proper account would have to be taken of the course of the proceedings below and on appeal. That the appellant might have also been able to appeal the other two breaches, was not to the point, minds might differ as to that. The word 'exceptional', was apt to describe what had happened to this first offender, operating over a long period of time in a business which employs a significant workforce. The prosecution essentially related to a dispute over payment on termination for the last two weeks work, a sum now of some $600. It did the appellant no justice to describe this case as anything other than exceptional, warranting the imposition of no further penalty.

[35]

The evidence 60 The respondent called further affidavit evidence from Inspector Riley, in relation to sentencing. The Inspector deposed that while his report had been tendered at the hearing before the Chief Industrial Magistrate, the documents annexed to the report were not tendered. Those documents comprised various correspondence, records produced by the appellant and copies of various awards, on which the opinions expressed in the report were based. 61 The correspondence included a Notice to Produce documents, of 28 June 2005, which was responded to by letter of 15 July, enclosing various of the appellant's records, including time sheets 'for the period 21/3/05 - 17/4/06' which had not been paid. This period included Good Friday, for which Ms Ventura had claimed payment, but had not worked, and 5 April 2005, a day on which neither Ms Ventura, nor the client had signed the time sheet, to indicate that the work in question had been performed. The last occasion before this date on which work had been performed, was 1 April. That time sheet had been signed by both Ms Ventura and the client. The client had not signed the time sheet for 25 March, Good Friday. 62 On 25 August the appellant wrote to the Inspector, in response to an email not in evidence, enclosing a brochure and advising that the award applied by the appellant for home care work was 'Award Code 861' and that 'for community support service is Award Code 783'. I note in passing that these appear to be respectively the Home Care Award and the Social and Community Services (State) Award. 63 On 21 September, a further Notice to Produce was issued to the appellant. On 26 September, further records in relation to Ms Ventura's employment were provided. 64 The appellant had not called evidence from Ms Wu in the proceedings below, although she had tendered various records. Only one of those documents appeared in the appeal book, a pay sheet for the period ending 3 April 2005. The time sheets which had been marked Exhibit A in the proceedings below, could not be located in the Local Court file and so they were tendered again, at the hearing before us. 65 On appeal, Ms Wu gave affidavit evidence, on which she was cross examined. Her affidavit evidence was that she had commenced trading as a sole trader in the home care and community services industry, operating in the Sydney metropolitan area, in 1993. The defendant was incorporated in July 2004 and neither she, nor it, had been prosecuted for any breach of any award, or industrial legislation, prior to this prosecution. 66 Work is referred to the appellant by government agencies and volunteer organisations. The appellant employs casual staff to provide home and community services to elderly, infirm or frail clients. The home care work involves services such as cleaning, personal care, meal preparation, respite and laundry. The community services work involves taking clients to various appointments outside the home. 67 Home care employees are paid under the Home Care Award and community service employees pursuant to the Social and Community Service Employees (State) Award. It is common, over the course of a fortnight, for employees to perform work under both awards and as Ms Wu explained in cross examination, some employees providing community services, might on occasions also provide what would otherwise be described as personal services, such as assisting a client to go to the bathroom, while out on a community service visit. 68 Casual employees are paid fortnightly, after providing their timesheets, which must be signed by the client, to verify that the claimed work has been performed. The timesheets must also be signed by the employee. 69 The appellant tenders for work from government agencies, usually for two to three year periods. Convictions must be disclosed in such tenders. 70 These proceedings arose out of the employment of a Ms Ventura, who had been rostered to work on a Good Friday, but had been advised the preceding Monday or Tuesday of a change, which instead involved her working on Saturday, as the result of a request made by the client, Canterbury Community Options Programmes. Ms Ventura did not work on Good Friday, but sought payment for that day, nevertheless. Ms Wu sought to explain to her that as a casual, she had no entitlement to be paid for that day. 71 The issue was not resolved in phone discussions and Ms Wu asked Ms Ventura to see her. She had not signed all of her time sheets, for the pay period ending 3 April 2005. In the meantime, another issue had arisen. There was a complaint that Ms Ventura had accepted money direct from a client, having been told by Ms Wu that this was not permitted. 72 Ms Ventura refused to come to see Ms Wu to discuss these matters, or to sign her time sheets. Ms Wu refused, in the circumstances, to pay Ms Ventura for the pay period in question. She accepted that, in hindsight, she should not have taken that course. 73 Ms Ventura lodged a complaint and Ms Wu was approached by one of the respondent's Inspectors, who inspected the appellant's records in relation to Ms Ventura's employment. This prosecution resulted and Ms Wu has since attended to the underpayment found by the Chief Industrial Magistrate. 74 On Ms Wu's evidence, in September 2005, the Inspector wrote to her requiring payment to Ms Ventura of:

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Total $653.32 75 Ms Ventura had been classified and paid by the appellant as a Field Staff Grade 1 under the Home Care Award, having regard to information provided to the appellant by Ms Ventura, when first employed. The Inspector took the view that she should have been classified as Grade 2, on the information Ms Ventura provided to him. It was not disputed that the Inspector told Ms Wu that he believed what Ms Ventura had told him and that it was not necessary for Ms Ventura to sign her time sheets, in order to receive payment. 76 Ms Wu understood that the Saturday penalty related to 28 November, a day on which Ms Ventura had not worked for the appellant and the holiday payment related to 17 April, again a day Ms Ventura did not work, she having not worked beyond 5 April. 77 Ms Wu explained that she had not understood what was occurring during the proceedings before the Chief Industrial Magistrate and accepted that she ought to have had legal representation at the hearing, given the level of her understanding of English. If she had, she believed that the appellant could have successfully defended these prosecutions. In cross examination she explained how she herself unexpectedly came to appear for the appellant at the hearing. 78 On her evidence, Ms Wu accepted the consequence of her decisions, but was concerned that if convicted, the appellant would lose future tenders, putting in jeopardy the future viability of the appellant's business. She had not had the opportunity to put evidence as to those concerns, in the proceedings below. 79 She explained that the convictions had to be disclosed in the tender process and that if the appellant lost its contracts from the government funded agencies that it services, comprising almost all of its clients, its business would have to close. This would result in the loss of employment of the appellant's two full-time staff, employed to work in addition to Ms Wu and some 50 casual staff, engaged at any one time, with a total of about 90 casuals on its books. In cross examination, Ms Wu explained how the fact of this appeal had been disclosed since the proceedings before the Chief Industrial Magistrate. 80 Ms Wu provided a number of testimonials, to support her claim that no penalty should be imposed on her. She also attested that she had incurred some $16,846 in legal costs, in connection with these proceedings. 81 Annexed to Ms Wu's affidavit were various documents, including the time sheets relating to Ms Ventura. An email sent by Ms Wu to the Inspector on 6 July was attached, advising that a complaint had been made about Ms Ventura, by a client to whom the appellant had been contracted to provide services by the Canterbury Community Options Programme. Ms Ventura had refused to discuss the complaint, or to clarify her timesheets. The total pay owing to Ms Ventura was specified to be $379.00 and Ms Wu advised 'if we do not hear from you of what to do with her pay, we would be quite happy to proceed the payment direct to her bank account'. 82 Ms Wu also annexed a copy of the Inspector's report dated 15 February 2006, which was in evidence below. It noted Ms Ventura's complaint that she had not been paid her final two weeks' pay. The report indicated that the appellant had produced time sheets and that Ms Ventura:

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83 The inconsistency in this passage, was not explained in the report. Indeed, the report went on to note that the complainant in her 'witness statement' only claimed that she was employed to 5 April. Where the Inspector's reference to 17 April came from, was not explained, although it seems from the evidence now led, that it came from Ms Wu's correspondence of 15 July 2005, where she advised of the problem with the time sheet for 5 April. 84 The report went on to indicate that the Inspector had concluded, for reasons outlined, having regard to information Ms Ventura had provided the Inspector, that Ms Ventura should have been classified and paid as a Grade 2 employee under the Home Care Award. The Inspector noted that payslips showed that she had received an hourly rate less than the Award rate and that she was not paid 'for the final fortnight's work, which included 20 hours ordinary pay and 4 hours public holiday pay'. The Inspector noted that Ms Ventura denied the claim of theft and that the appellant claimed time sheets were incomplete, but 'failed to provide any further information regarding her claim the time sheets were incomplete'. 85 I observe in passing that the evidence was that the appellant's system required that the client, as well as the employee, sign the time sheet to verify that the work in question had been performed. The time sheets provided to the Inspector, on their face showed that they were incomplete, as Ms Wu had explained. The existence of such a system, given the work performed for clients in their homes, paid for by Government and other agencies, funded by Government, does not appear surprising. What further information was required from the appellant, to explain how it was that the time sheets were said to be incomplete, was unclear, on the evidence. While not saying so, presumably the Inspector accepted Ms Ventura's claim that she had performed work on the days in question, despite the apparent failure to complete the time sheets, or to have the client sign the time sheets. 86 The Inspector calculated that a total of $525.88 was outstanding ($350.60 underpayment and $175.28 holiday rates). How this figure was arrived at, was not explained in the report. The Inspector also noted that he had explained to Ms Wu, how the area incidence and duration clause of awards operated; had sent her extracts and rates summaries from the two awards in question and understood that Ms Wu would attend to the underpayment. She later advised however, that she still believed that the Social and Community Services (State) Award applied to the work in question. 87 In September 2005, the Inspector issued a further Notice to Furnish records, which were provided by the appellant. The Inspector's consideration of this information revealed the underpayments, earlier set out, which were later pursued in these prosecutions. The dates to which those underpayments related, were not, however, specified in the Inspector's report. On 29 September 2005, the Inspector issued a further notice which advised: Period Ending Ordinary Hours Saturday Pub. Hol. Paid 17/10/2004 4 $63.00 28/11/04 9.5 1.5 $189.40 12/12/04 14.5 $217.50 26/12/04 3.5 $52.50 20/02/05 12 $180.00 20/03/05 22 $358.00 17/04/05 20 4 $0

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Paid: $1060.40 Earned: $1,713.72 Difference: $653.32 88 Again, I observe in passing that this calculation was less than adequate, as the respondent accepted, at least in relation to the alleged breach of the Saturday penalty. On Ms Wu's evidence in cross examination before us, it was apparent that she certainly misunderstood it. Even Ms Wu's cross examination, did not clarify all aspects of this calculation. 89 The Inspector's report also noted that a Notice to Employer had been issued to the appellant, who had advised that she believed her workers were covered by the Social and Community Services (State) Award. Again I observe that statement does not appear to be consistent with the communications which are now in evidence. The Inspector referred to Ms Wu's letter of 25 August, which was to different effect, as I have noted above. Consideration 90 The November judgment dealt with the appellant's complaint that the appellant had been denied procedural fairness by the Chief Industrial Magistrate. That complaint was made out and the penalty imposed was quashed. By majority, it was concluded that this Bench should hear the parties on penalty. Directions were given as to the filing of evidence and submissions on sentencing. It was that process which revealed to the parties that the appellant had not, in fact, committed one of the breaches which the Chief Industrial Magistrate had found proven, with the result that consent orders were made, extending time to appeal that aspect of his Honour's decision and upholding the appeal in relation to the Saturday penalty. 91 The evidence led also shed light on a further, serious difficulty with the conduct of the trial below, which led the appellant to submit that the circumstances were such, that this Appeal Bench would conclude that an exceptional case had been demonstrated, which would properly lead to the conclusion that no penalties should be imposed, for the two remaining breaches in question in these proceedings. 92 For reasons which I will explain, I am satisfied that the appellant's submission must be accepted. 93 Determination of penalty, for any award breach, must be approached in the first instance, by reference to the nature and quality of the breach in question. Given the way in which the respondent conducted the proceedings below, there was simply no evidence on which any proper assessment could have been made by the Chief Industrial Magistrate, of the nature and quality of these offences. Indeed, it came to be common ground, by the time of the sentencing hearing, that one of the offences was certainly not proven. On the evidence now before us, it would appear that the remaining offences may also not have been proven, but for the appellant's acceptance that it had applied the incorrect award. 94 These observations are important, given what was here in issue between the parties, at this stage of the proceedings. As was observed by the Full Bench in Yarramul, there is a significant public interest in employers observing their award obligations, which explains the views there expressed, that it will only be in exceptional cases, that a failure to meet such obligations, will not result in the imposition of any penalty. 95 There is, however, also a significant public interest in how the respondent, on behalf of the State, pursues and prosecutes award breaches and how judicial officers conduct hearings as to such alleged breaches. What here arises for consideration is an approach to the proof of the award breaches pursued by the respondent, which fell considerably short of its obligations as prosecutor. That problem was exacerbated by the conduct of the trial by the Chief Industrial Magistrate, where the appellant was an unrepresented litigant, who was not only denied procedural fairness, in the manner described in the November judgment, but who was found to have committed the breaches in question, without any foundation for the charges being established, on the respondent's evidentiary case. This was made clear by the respondent's tender, before us, of the annexures to the Inspector's report. 96 The consequence of that situation for the appellant, is not just the costs which have been incurred in these appeal proceedings, as a natural incidence of our adversarial legal system, as the respondent submitted. Instead, there has been a significant failure to adhere to fundamental aspects of the justice system, by both the prosecutor and the trial judge. 97 These are serious observations, which are necessary to be made, in the extraordinary circumstances of this case. 98 In the proceedings below, evidence was called by the respondent from the Inspector. His report was in evidence. There were certain difficulties appearing on the face of the report, as I earlier noted. Despite this, the annexures to the report were not tendered below. Nor was the complaint which had been made by Ms Ventura put in evidence. Nor were the statements and information she had provided to the Inspector tendered, even though the Inspector referred to her 'witness statements' in his report. Nor was Ms Ventura called to give evidence. 99 The result was that there was no evidence of the work actually performed by Ms Ventura, on the days in question, when it was claimed that the wrong award was applied. Further, precisely on what days it was, that the alleged breaches occurred, was not specified, either in the charges, or in the Inspector's report. Each charge simply specified that the three award breaches alleged to have occurred in each case, occurred on '11 October 2004 to 05 April 2005 and continuing'. The Inspector's report referred to no particular dates. 100 Despite the way in which the charges were framed, the respondent did not tender any of the appellant's records, on which the Inspector had relied, in coming to the conclusions reached in his report. Nor was the award alleged to have been breached, received by his Honour, or the rates alleged to have applied to the period in question, tendered. No reference was made to the area, incidence and duration clause of the award, or the evidence on which it was submitted to be open to his Honour to conclude that the work performed on the days in question, had been covered by that award, in the submissions which the respondent put below. 101 It was Ms Wu who tendered the appellant's time and wages records in her evidentiary case. What, in fact, was before his Honour was unclear, however. Those documents did not appear in the appeal book, not being able to be located in the Local Court file, but they were tendered before us. Despite being tendered, however, at the trial below, no reference was made by the respondent to those records, in its case, to explain how it was submitted that the alleged breaches had been made out on the evidence. Had that occurred, the error in the Inspector's report, which before us, eventually led to the appeal being upheld in relation to the Saturday penalty breach, might have been uncovered. 102 How it was, given the state of the evidence before his Honour, that his Honour could have come to the conclusion that the award applied to the work in question; that the claimed classification applied to Ms Ventura, or that the breaches alleged to have occurred, in each case on '11 October 2004 to 05 April 2005 and continuing', had been established to the requisite level, is entirely unclear. As noted in the November judgment, the Chief Industrial Magistrate abandoned giving reasons for his decision, so what view his Honour took as to these matters, is not known. 103 Given what the Inspector's report comprised, however, that it was not a sufficient basis for the findings of breach, is clear. The report certainly contained no explanation of how it was that it had been concluded that the Home Services Award applied to the work in question, given the competing awards. No evidence was led to establish that the Inspector's conclusions, or calculations were accurate. Further, on its face, the report suggested that the Inspector had reached conclusions inconsistent with the time and wages records maintained by the appellant, which Ms Wu had apparently tendered. The appellant's system required Ms Ventura and the client to sign time sheets, acknowledging that the claimed work had been performed. On 5 April for example, this did not occur. Presumably Ms Ventura claimed to have worked that day performing work to which the Home Services Award applied and the Inspector accepted her claim, given the way in which the charge was framed. No evidence was led, however, which proved that Ms Ventura had actually worked that day. The time sheet certainly was not a basis upon which it could have been concluded that any work was performed that day, if that was what Ms Ventura had claimed. It had not been signed by either Ms Ventura, or the client. 104 Despite all of the obvious difficulties with the conclusions reached at trial, as to the two remaining award breaches, the appellant did not appeal these convictions. That, in my view, is to the considerable credit of the appellant, which has also paid what the Chief Industrial Magistrate ordered, even in relation to the Saturday penalty. 105 From Ms Wu's evidence in cross examination, it was apparent that she did not understand the award breaches which the Inspector alleged the appellant had been involved in, when she appeared for the appellant at the hearing below. The transcript of the proceedings showed that she was attempting to raise with the Inspector, various problems with his report. She undoubtedly had great difficulty in undertaking that exercise, but she was certainly trying to draw the Inspector's attention to various difficulties, which she also sought to raise, albeit inadequately, in her submissions. His Honour took no account of any of these matters.

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106 By letter of 29 September, advice had been given to the appellant that Ms Ventura ought to have been graded as a 'Field Staff Grade 2 employee' under the Home Care Award and a calculation was set out, by reference to various pay periods and payments made, as I have earlier set out. 107 That advice was confusing, to say the least. It did not accord with the fortnightly pay periods maintained by the appellant, as its records showed. The Inspector suggested that 22 ordinary hours had been worked in the period to 20 March 2005 and 20 hours in the next period, to 17 April 2005. The time records, maintained by the appellant, however, were for fortnightly periods concluding on 1 April and 15 April. What holiday, or Saturday, it was claimed Ms Ventura had worked, but was not paid for, was not identified. The hours specified by the Inspector in his letter as having been worked by Ms Ventura, also did not accord with the hours recorded as having been worked on the time records. 108 Although not tendered by the respondent in its case, presumably, the relevant time sheets were in evidence before his Honour when tendered by Ms Wu. Assuming that to have been so, it follows that there was no evidence of any time sheet which confirmed that work had been performed after 1 April 2005. Consistently with this, Ms Wu also tendered a pay slip, for the period ending 3 April 2005. Plainly, it was not proven in the proceedings below, that the employment continued after 3 April. 109 As observed in the November judgment, Ms Wu experienced great difficulty in endeavouring to undertake her cross examination of the Inspector. Before us, she explained how it was that the appellant came to appear unrepresented. That was a decision which the appellant accepts it made and which had certain consequences, which the appellant does not complain about. Nevertheless, what cannot be overlooked, is the onus which fell on the respondent to demonstrate that the breaches alleged, had been committed. On the material before the Chief Industrial Magistrate, that onus was simply not met. The Inspector said in cross examination as to Ms Ventura, that:

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112 The information provided by Ms Ventura, which led the Inspector to the conclusion that she should have been classified as a Grade 2 employee, was not, however, led in evidence. What material the Inspector had regard to, from Ms Ventura, is therefore still unknown. The Inspector explained that Ms Ventura had given him information as to her experience and work, but no evidence was led as to such matters. Nor was what the Inspector had made of the time sheets provided by Ms Wu explained, despite the obvious difficulties with the face of the report. 113 The submissions advanced below for the respondent were short, to the effect that the calculations contained in the Inspector's report had been conducted by reference to records provided by the respondent, but the records themselves were not referred to. On appeal, the Inspector's report has been accepted to be inaccurate in one respect at least, given what appears in those time sheets. How that material supported any of the conclusions reached by the Inspector, was not explained below. The Inspector's conclusions as to Ms Ventura's proper classification, flowed from information which she had provided to him. Even on appeal, what this information was, is not known. That material has never been tendered. 114 The case advanced below in submissions was a simple one, that the material contained in the Inspector's report was a sufficient basis upon which to conclude that the breaches in question had been established, despite the annexures to the report not being tendered. This was accepted by the Chief Industrial Magistrate, without reasons being given. As noted in the November judgment, his Honour commenced giving those reasons, observing that the parties ought to have resolved the matter without litigation, but that it appeared that the appellant had a 'fundamental misunderstanding of the way in which the award system works' and that it was open to offer work at a particular rate, although there were limitations on the extent to which parties could contract out of the award. At that point, Ms Wu began interjecting, to attempt to draw to his Honour's attention to the other awards applying in this industry. His Honour went on to observe that there was confusion on the appellant's part in that 'there should be a different rate of pay in respect of different specific duties'. When Ms Wu again sought to interject, to refer his Honour to the other applicable awards, his Honour simply ceased giving reasons for his decision and then made orders, finding the three breaches proven after observing that:

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Giving full weight to the adversary character of a criminal trial and the difficulties of advising an accused who is not represented, I nevertheless consider that the trial judge is bound to ensure that an accused person has a fair trial. To that end he is under a duty to give the accused such information and advice as is necessary to ensure that he has a fair trial. Once an issue as to the voluntariness of a confession arises fairness to the accused suggests that he should be acquainted with his right to a voir dire hearing. If he is left in ignorance of it he loses a valuable opportunity of testing the admissibility of the evidence, an opportunity which is often availed of by counsel for the accused. A trial in which a judge allows an accused to remain in ignorance of a fundamental procedure which, if invoked, may prove to be advantageous to him, can hardly be labelled as 'fair'. 119 These are not of course, criminal proceedings, but nevertheless involve serious allegations of award breach. In these circumstances, had the appellant been legally represented, it may well have been appreciated that a no case submission was available to be made at the conclusion of the respondent's case below. Plainly, had such a submission then been put, the charges might have been dismissed. There was simply no evidence led in the respondent's case below, on which it could have been concluded that the alleged breaches had been proven. It was Ms Wu who led the records the appellant kept. On their face, they cast doubt on two of the breaches alleged and in fact showed that one had not occurred at all, but the respondent did not address such matters and his Honour did not appreciate the problems with the respondent's case, which those records demonstrated and which Ms Wu was endeavouring to raise. 120 While his Honour was certainly not obliged to act as the appellant's advocate, that he failed to ensure that the appellant received a fair trial, in the circumstances confronting him, given the respondent's approach to the prosecution of the alleged breaches, cannot be doubted. 121 It was only on appeal, the appellant having in the meantime accepted legal advice that it had wrongly applied the award in question and so the finding of breach of two aspects of the award was not challenged, that evidence was led by the respondent, which went some way to demonstrating the two breaches which remain in question, had in fact occurred. 122 Even so, it was not until the cross examination of Ms Wu, that it became apparent that it was a failure to pay a public holiday penalty for Easter Saturday, falling on 29 March 2005, which underpinned the respondent's breach of holiday penalty case. That date was not one referred to in the Court Attendance notice, the Inspector's correspondence, or even in the proceedings below. 123 As was submitted for the appellant, the Appeal Bench must consider the two breaches which the appellant now accepts occurred. In considering what penalty, if any, to impose as to those breaches, the starting point is the nature and quality of the offences in question. I am satisfied, however, that as a matter of justice, what also must be considered in determining whether a penalty should be imposed on the appellant in the circumstances of this case, is the extraordinary course which this litigation has taken. 124 The respondent submitted that the breaches in question were serious. What the nature and quality of the offences in question truly were, is difficult to determine, in these unusual circumstances, given the state of the evidence. While the Inspector's conclusions as to the applicable award are now unchallenged by the appellant, the evidentiary basis on which conclusions as to the nature and seriousness of these offences could rest, is still rather deficient, given the absence of any evidence from Ms Ventura and the absence of proper explanation of what dates the underpayment of wages case related to. 125 The Inspector's calculation did not identify the days in which it was claimed the underpayment was made. From the advice given in the Inspector's notice, not put in evidence below, it was mostly in relation to the work performed in the last fortnightly pay period, for which there was no payment made. That was not all that was claimed to have been underpaid, but the actual dates the underpayments occurred, is difficult to determine. 126 It was not disputed that the appellant was engaging casuals to perform some work covered by the Home Services Award and other work, covered by the Social and Community Services Award, which had lower rates, although the appellant was paying 50 cents per hour above the rates fixed by that Award. The respondent's case was that instead of paying above the applicable rate fixed by the Home Services Award, Ms Ventura was paid some $2 per hour below that rate. On appeal it was accepted, however, that the payment made in respect of the Saturday penalty, showed that there was, in fact, no underpayment on that occasion, under the Home Services Award. Whether the Inspector's calculation was in respect of all other days Ms Ventura had performed work for the appellant, or only some of them, as seems more likely to have been the case, given the sum in question, was entirely unclear. Nevertheless, in its case, the respondent accepted that the underpayment, which on the Inspector's evidence, Ms Ventura had not complained about, but he had discovered independently, had not resulted from any deliberate contravention of the award. 127 On the evidence, that submission was properly put. 128 In cross examination, Ms Wu denied that the appellant had not had regard to the applicable award, in the rates which it had offered and paid Ms Ventura. While the appellant accepts that certain underpayments occurred, on Ms Wu's evidence, the appellant's bank records might cast a different light on even that matter, but she accepts that on the face of the time records and the pay slips provided to Ms Ventura, there was an underpayment and that the appellant has not set out to establish that the Inspector's calculations were otherwise incorrect. The payments determined by the Chief Industrial Magistrate, to have been outstanding, have been paid. 129 What appears to have occurred is a breakdown in the relationship between Ms Ventura and the appellant, over events in the last weeks of her employment, which included a refusal to complete her time sheets and a serious allegation in respect of an elderly client, that Ms Ventura had wrongly taken money from the client and her refusal to discuss that matter with the appellant. That dispute did not excuse the appellant from paying Ms Ventura what was owing to her for the work she had performed, as the appellant accepts. The underpayment has been made good, even the payment which the respondent has conceded before us was not due in relation to Saturday penalty work, as the Inspector had claimed, given what the wage records revealed. 130 All of these matters must be considered in determining penalty. On any view, the seriousness of these award breaches must fall at the lower end of the scale. 131 I am satisfied, as the appellant submitted, that the course which these proceedings have taken must also be considered. That is not to twice take into account the matters dealt with in the November judgment, as the respondent argued. Rather, it is to properly consider the further difficulties now revealed on the evidence, which were not dealt with in the November judgment, in determining whether the Court should exercise its discretion to refrain from imposing a penalty, in the unusual circumstances of this case, as the appellant claims. 132 Not only has the appellant now demonstrated a denial of procedural fairness, in relation to the hearing on penalty, the evidence led by the respondent before us, has shown firstly, that one breach found proven below, did not occur at all; that there is considerable doubt that the other two offences were proven at the trial below; and that, furthermore, the appellant was denied justice, in the proceedings at first instance. 133 The appellant undoubtedly did not receive a fair trial below. The appeal process has remedied that deficiency, in circumstances where the appellant has accepted the failure to adhere to the Award and has paid more than what was due to Ms Ventura, on any view. But for that, it is difficult to see how even the two breaches still pursued by the respondent, could have been upheld on appeal, even given the evidence led by the respondent before us. 134 This outcome has been achieved at considerable cost to the appellant. That both the respondent, as prosecutor and the Chief Industrial Magistrate, erred in the approach taken below, cannot be doubted. Properly, even the respondent does not deny that there were serious deficiencies in the way in which this trial was conducted. 135 I am well satisfied that these unusual circumstances, when considered together with the award breaches here in issue, are sufficient to warrant the conclusion that no penalty ought to be imposed on the appellant, in all of the circumstances confronting this Bench. 136 Appeal benches are undoubtedly concerned with the correction of error. In this case, at this stage of these proceedings, the Bench is concerned with the penalty properly to be imposed for two accepted award breaches, in circumstances where it was not in dispute, that the employer engages employees to perform various work, to which different awards apply. In its case, the respondent accepted that there was no deliberate intention by the appellant to pay Ms Ventura pursuant to the wrong award. It also accepted that the appellant has always co-operated in the investigation. The evidence certainly bore that out. 137 The appeal has been pursued at very considerable cost to the appellant, for reasons connected with its concern that any imposition of a penalty will have a serious impact on its ability to obtain further contracts with the agencies it currently services. I accept that is a serious concern, on the evidence, a matter of importance not only to the appellant, but also to the continued employment of the many casual staff who it employs to provide these important services to elderly and frail clients living in the community. 138 In Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186, the Court of Appeal had occasion to consider the approach taken to demeanour-based factual findings by a trial judge, particularly where a witness is from a different cultural background. It was there observed that:

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142 This bench had the opportunity to see Ms Wu give her evidence in cross examination and so had an advantage, which his Honour did not have. That advantage cast further light on how the trial below miscarried. As the Court of Appeal observed in Goodrich Aerospace, undoubtedly this is an experience which will live with Ms Wu for the rest of her life. It will have ongoing and serious impact, both for the appellant and Ms Wu. 143 At the end of the day this Court is fundamentally concerned with justice. That this appellant did not receive justice from the legal system, in the proceedings below, has been well and truly demonstrated. 144 I am satisfied that it would not achieve justice to now impose a penalty for award breach, in addition to what the appellant has already undergone in these proceedings, which, in my view, is punishment enough for the breaches truly in question. In making that observation, I do not have only in mind the costs of the proceedings and what has been paid to Ms Ventura, plainly more than she was owed, on any view. Those costs and additional payments were not the simple by-product of an adversarial system of justice. In this instance, I am satisfied that they were the product of a serious and unusual failure of that system. 145 Just as compliance with award obligations is important, so too, is the proper operation of the State's system of enforcement of award obligations. To overlook what here in truth occurred, in determining what penalty should be imposed, would not achieve justice. 146 Finally I deal with the question of costs. In the proceedings below, the Chief Industrial Magistrate made an order of $500 costs in favour of the respondent, in respect of each of the three award breaches found. As the respondent accepted, a necessary by-product of upholding the appeal, is that the costs order made in relation to that matter, must be set aside. 147 As to the costs of the appeal, it was submitted for the respondent that no order would be made in favour of the appellant, but given the procedural difficulties dealt with in the November judgment, the proper order would be an order that each side bear its own costs of the appeal. I cannot accept that submission. I am well satisfied that justice requires that the usual costs order should be made in favour of the appellant for the appeal proceedings. Orders

Auscare Corporation Pty Ltd v New South Wales Department of Commerce

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Cases Cited (20)

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