Australian Rail, Tram and Bus Industry Union v Transit Systems West Services Pty Ltd

Federal Court of Australia|2022-04-04|Before: Rares J

Background 11 The parties filed evidence on the question of penalty. James Sinclair, the managing director of Transit Systems, made an affidavit on 18 March 2021 and gave oral evidence before me today. David Babineau, the secretary of the Union, made two affidavits, one on 24 March 2021 and the other on 31 March 2021, but was not required for cross-examination, and the Union's solicitor, Joseph Kennedy, made an affidavit on 1 April 2021. 12 In addition, late on 1 April 2022, the Transit Systems's solicitor, Sharlene Wellard, of Meridian Lawyers, made an affidavit in support of an application to stay any orders that I might make for payments to employees and for payment of penalties. During the course of argument, that application was cut back, and Transit Systems no longer seeks a stay of any penalties.

The circumstances of the contravention 13 On 2 July 2021, Mr Babineau sent a text to Mr Sinclair informing him that the Union expected that the increase of 2.5% that the Commission had determined recently in the 2020-2021 annual wage review would be paid to the employees. At that stage both Mr Sinclair and Mr Babineau understood that cl 15.1 of the award provided for a 2.5% increase in wages for the calendar years commencing 1 January 2018, 2019 and 2020. The award, however, made no provision for any increase in the calendar year commencing 1 January 2021. Mr Sinclair responded that he would seek legal advice. 14 On 8 July 2021, Mr Babineau responded to Mr Sinclair's request earlier that day for an explanation as to how the Union suggested that the annual wage review decision increase could apply to employees covered by the award. Mr Babineau promptly gave a detailed explanation that substantively reflected, more pithily, why I found as I did in the liability reasons. 15 That explanation led Mr Sinclair immediately to ask the general counsel of Transit Systems, Michael Kent, for legal advice. He responded later on 8 July 2021. Mr Kent asked Ms Wellard for advice later on 8 July 2021. Although privilege has been claimed on the content of Ms Wellard's advice, Mr Kent sent her advice to Mr Sinclair. He emailed Mr Babineau on 10 July 2021 and confirmed that Transit Systems would apply the 2.5% increase to take effect for the first full pay period after 1 July, namely from Sunday 11 July 2021. 16 However, on 14 July 2021, at the executive team meeting of the group of which Transit Systems formed part, the chief executive officer, Clint Feuerherdt, was, in Mr Sinclair's words, "not happy" with that outcome. I infer from the only email from Mr Feuerherdt in evidence, dated 26 August 2021, that his reason was that this created an unbudgeted and unexpected surprise which affected the overall financial position of the group. 17 In the result, on 21 July 2021, Mr Sinclair told Mr Babineau that the payment of the 2.5% increase would not be made as he had promised. That led Mr Babineau on 21 July 2021 to seek information from Mr Sinclair about the reasons for the change of course. 18 On 28 July 2021, Mr Babineau wrote to Mr Sinclair repeating, in substance, the Union's legal argument as to why the employees covered by the award were entitled to the 2.5% increase from 1 July 2021. Mr Babineau's letter demanded on behalf of the Union that Transit Systems confirm in writing within seven days that it would pay the increase backdated to 1 July 2021 for all employees under the award, and in the event that this assurance were not provided, the Union would bring the matter before this Court. 19 On 3 August 2021, Mr Sinclair responded, saying that Transit Systems was seeking legal advice and, at that stage, would not be processing any increased payment. 20 There is no evidence that Transit Systems sought any further legal advice after 8 July 2021 on its liability to pay the 2.5% increase. However, I infer that it did seek advice later as to whether it would be able to incorporate the increase as a term of a new enterprise agreement that would cover both employees formerly covered by the award and other employees whose industrial interests were then currently represented by the Transport Workers' Union of Australia (TWU), comprising 45% of Transit Systems's workforce in bus system 6. 21 By 6 August 2021, Transit Systems had decided that it had to pay the 2.5% increase to employees covered under the award. Mr Sinclair obtained approval from other members of the executive team late on 6 August 2021 to send to all employees on 9 August 2021 an "Enterprise Agreement Update". Importantly, Mr Sinclair informed the executive team that he would provide the update to both unions shortly before sending it to the employees so that the Union "would not 'discredit' our commitment given the national wage case outcome". He sent the update on 9 August 2021 to all employees in the following terms: As you are all no doubt aware, we are about to begin negotiations on a new agreement covering all Bus Drivers in Region 6. The Fair Work Commission (FWC) has recently awarded a National Wage Case pay increase of 2.5% to Modern Awards and this applies to employees covered under Copied State Awards and for our Workforce - this means former STA employees who transferred across on 1 July 2018 and are still employed. I have reached out to both the RTBU and the TWU today and have stated that in good faith, the company would like to pay this increase to all of our drivers in Region 6 as the first annual increment of our new agreement, with future increases across the term of the agreement to be finalised during the course of our negotiations. This 2.5% will apply from the commencement of the first full pay period commencing after 1 July 2021, and will be paid upon FWC registration of the new agreement. Future wage increases would be applied on the anniversary of the registration of the new agreement. (emphasis added) 22 Mr Sinclair gave evidence that when he used the word "discredit" in his email to the executive team, he meant, in effect, that he did not want the Union to tell employees that treating the payment of the increase of 2.5% as a term in the enterprise agreement was inconsistent with Transit Systems's existing unconditional obligation to make that payment then and there. 23 Mr Sinclair informed both unions early on 9 August 2021 that Transit Systems was committing in good faith to pay the 2.5% wage increase as the first annual increment in the proposed enterprise agreement, as backdated to 1 July 2021. 24 Later on 9 August 2021, Daniel Jaggers, the divisional president of the Union, responded to Mr Sinclair, retorting that any bargaining for a wage increase that might be agreed between the parties was an issue entirely separate from Transit Systems's existing legal obligation to pass on the 2.5% wage increase set by the Commission. Mr Sinclair decided not to respond to that email while he waited for clarification and considered legal advice, which, I infer, dealt with what could be contained in any proposed enterprise agreement. 25 On 26 August 2021, the Union's patience was at an end and it commenced this proceeding around midday. 26 At about 5.16 pm on 26 August 2021, the chief operating officer of Transit Systems, Greg Balkin, emailed Mr Feuerherdt, saying: I think we have no alternative but to pay the increase and associated back pay and then double down on any other increases for STA drivers in the first year of the EA. If you agree, we will prepare a comms plan to get some credit for it. Otherwise, we will have the very real possibility of being accused of "wage theft", which would be extremely damaging from a reputational perspective. 27 At 6.14 pm that night, Mr Feuerherdt responded: … I think you know clearly my view on this. We absolutely must get credit for this enormous payout. If attached to the agreement, I was hoping that you could at least get something for it - reduce a penalty, get longer working hours or something. Once you pay it, you know that the task becomes exponentially harder and I have no doubt that you will still face ambit requests for immediate pay increases beyond this. But it is what it is and we don't want to go into a legal battle that we will not win. Mike [Kent] - I would like a clear understanding as to why and how we did not know we could get caught by this and if Meridien [sic] has any part of that then we cannot use them anymore as this is going to be a big unbudgeted blow. Do what you need to do to avoid the court case but I would encourage you to get the new agreement in place and leverage this as soon as you can because it will soon enough fade in people's memories and you will end up paying even more to get the agreement over the line. Please make sure through this process that the ex-STA staff know that their mates in Government only got 0.3% !! (emphasis added) 28 On 30 August 2021, Transit Systems informed the Union that it would pass on the 2.5% increase in full and backdate it to the first full pay period after 1 July 2021. 29 On 9 September 2021, Transit Systems sent a draft enterprise agreement without prior negotiation with, or warning to, the unions, for consideration by the employees. As Mr Babineau said in evidence, that draft included that the pay increase of 2.5% in the first year for employees formerly covered by the award and other payments to TWU members came to be paid the next day on 10 September 2021 would be the only increase in the 2021-2022 financial year. Mr Babineau said that the proposed enterprise agreement was voted on by Transit Systems's employees on 1 and 2 November 2021, and it was rejected by a majority of around 90%. 30 Mr Sinclair gave evidence that he regretted the delay in making the payments due to the employees in full and was deeply sorry for any inconvenience to the employees, the Union and the Court. 31 It is common ground that, up to now, Transit Systems has a very good industrial record, although the Federal Circuit Court had found it liable in respect of one prior, minor contravention in Mantarakis v Transit Systems West Services Pty Ltd [2020] FCCA 2014. There, the Court found that Transit Systems had failed to comply with cl 67.3 of the award to pay the applicant public holiday pay totalling $223.62 and associated superannuation. Transit Systems was ordered to pay that sum to compensate the applicant under s 545(2) and pay his costs but the Court imposed no penalty.

Transit Systems's submissions 32 Transit Systems accepted that it knew that it should have paid, on each of the four paydays, 27 July, 10 August, 24 August and 7 September 2021, but did not pay, the 2.5% increase on each of those days. It was common ground that: cl 15.3 of the award required payment of wages to occur fortnightly so that each underpayment constituted a contravention of s 768AG. because each of the four contraventions involved underpayment of 754 employees, each contravention comprised one course of conduct affecting all of those employees. the circumstances in which the contraventions on 10 and 24 August 2021 occurred also comprised a course of conduct. Transit Systems's failure to pay the 2.5% increase on 7 September 2021 was a technical breach, given that on 30 August 2021 it had agreed to pay the increase and had implemented this as soon as it could on 10 September 2021. 33 Transit Systems accepted that the two contraventions on 10 and 24 August 2021 were more serious than that on 27 July 2021. That was because, by 9 August 2021, it had decided to seek to trade off or incorporate its obligation to pay the 2.5% increase from 1 July 2011 as part of its negotiations for the proposed enterprise agreement. 34 It relies upon Mr Sinclair's expression of contrition, which was not challenged in cross-examination. Transit Systems noted, as I explained in my liability reasons, that in July 2021 it had been confronted with a novel situation. The obligation to make the payments was unexpected and not appreciated until the Union brought it to Transit Systems's attention through Mr Babineau's communication to Mr Sinclair on 2 July 2021. Transit Systems relied on its good industrial law history, noting that its sole prior contravention found by the Federal Circuit Court involved one occasion of a single underpayment. It contended that in the context of an employer of well over 1000 employees, this single, minor transgression, did not detract from its previous conduct, in effect, as a good corporate citizen. It argued that it also took its obligations seriously and, when it finally appreciated that it needed to make the payments forthwith, took prompt steps to do so by 10 September 2021. It referred to its significant cooperation in the conduct of these proceedings and to the unlikelihood of any further contraventions by it.

Consideration 35 In Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at 505-506 [53]-[55] (and see also 507-508 [59]), French CJ, Kiefel, Bell, Nettle and Gordon JJ said: [53] Civil penalty proceedings are civil proceedings and therefore an adversarial contest in which the issues and scope of possible relief are largely framed and limited as the parties may choose, the standard of proof is upon the balance of probabilities and the respondent is denied most of the procedural protections of an accused in criminal proceedings (See Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 at 407-409 [153]-[155] per French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ; at 436-437 [243] per Heydon J). [54] Granted, both kinds of proceeding are or may be instituted by an agent of the state in order to establish a contravention of the general law and in order to obtain the imposition of an appropriate penalty. But a criminal prosecution is aimed at securing, and may result in, a criminal conviction. By contrast, a civil penalty proceeding is precisely calculated to avoid the notion of criminality as such (Gapes [v Commercial Bank of Australia] (1979) 38 FLR 431 at 457-458 per Sweeney J; Hellicar (2012) 247 CLR 345 at 436-437 [243] per Heydon J; cf Chief Executive Offıcer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161 at 205-206 [133]-[136] per Hayne J; Gleeson CJ and McHugh J agreeing at 166 [1], [3]). [55] No less importantly, whereas criminal penalties import notions of retribution (Gapes (1979) 38 FLR 431 at 433; 27 ALR 87 at 90 per Smithers J; cf [Australian Securities and Investments Commission v] Ingleby (2013) 39 VR 554 at 565 [44] per Weinberg JA) and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance ([1991] ATPR 41-076 at 52,152; cf FWBII v CFMEU (2015) 229 FCR 331 at 357-358 [65]-[67]): "Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act] … The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act." (emphasis added) 36 When imposing a civil penalty, the court is concerned to achieve the purpose of deterrence of further contraventions of the statutory norm, both in the case of the person being penalised and the community generally. The purpose of deterrence is to establish an awareness of the consequences of a contravention of the legislation in persons in the sector of the community in which the contravention occurred as well as in the contravenor. 37 Here, the maximum penalty for a single contravention was $63,000, but the aggregate penalty for 754 individual contraventions on each of the four paydays was about $47.5 million. The Union accepts that a penalty in anywhere near the scale of the maximum would be inappropriate. The Union proposed in its written submissions a total penalty for all of the contraventions in the order of $350,000, whereas Transit Systems suggested a penalty in the order of $50,000. 38 In my opinion, Mr Feuerherdt's decision on 14 July 2021 to have his subordinates take steps to see the best way out of the unexpected situation that had been thrust upon Transit Systems is likely to have caused Mr Sinclair to recant from the position he had communicated to Mr Babineau on 10 July 2021. 39 It may be understandable that Mr Feuerherdt made the decision not to pay the 2.5% increase immediately and to seek legal advice as to how the financial impact on Transit Systems and the group might be ameliorated in negotiations for an enterprise agreement. However, those decisions sought, in effect, sought to take the law into Transit Systems's own hands. 40 He knew that the legal obligation of Transit Systems was to pay the 2.5% increase from the first full pay period after 1 July 2021 because the determination of the Commission was not qualified and could not be postponed by the unilateral act of an employer choosing to ignore that obligation. 41 When the senior executive team took the decision on 6 August 2021 that Mr Sinclair would send the update to employees on 9 August 2021, Transit Systems was communicating an intention to obey its legal obligations only as and when it suited it. As the update acknowledged, Transit Systems had to pay the former employees of the Authority covered by the award the 2.5% increase backdated to the first full pay period after 1 July 2021. But Transit Systems was not prepared to honour that obligation until, in effect, it got a return, being that, upon the Commission registering a new enterprise agreement, the increase would be treated as payable backdated to 1 July 2021. 42 There was no lawful basis on which Transit Systems could take that position. And, it maintained that stance beyond the time of the third contravention on 24 August 2021. It only resiled when the Union commenced this proceeding two days later, which Mr Feuerherdt knew Transit Systems could not win. 43 It is important that employers appreciate that they must give effect to determinations of the Commission and their other industrial obligations under the Fair Work Act and other legislation as and when the law requires. 44 Transit Systems took a deliberate stance to ignore or postpone fulfilling its existing legal obligations in respect of its large workforce. It did so in order, initially, to ascertain whether it was entitled to take a different position, but from 6 August 2021, it acted to avoid immediately honouring its legal obligations so as to see if it could exploit the industrial situation to its advantage. Such conduct by an employer is unacceptable and must be attended by an appropriately severe penalty.

What penalties should be imposed? 45 In arriving at appropriate penalty for each contravention, it is, of course, necessary to take into account the totality of the overall impact each had on the workforce of 754 employees affected together with the combined effect of all of the contraventions, both as to their magnitude on each occasion and as part of the courses of conduct that I have described. 46 I infer that the reason for the contraventions on each of the four paydays was only because of the conduct of Mr Feuerherdt, as the chief executive officer of the group. It is not clear on the evidence whether he was an actual or de facto director of Transit Systems but Mr Sinclair and the other members of the executive team acted on the basis that the chief executive officer's decisions had to be implemented. Thus Transit Systems reacted, first because of Mr Feuerherdt's displeasure on 14 July 2021 by reneging on Mr Sinclair's earlier assurance to Mr Babineau that the 2.5% increase would be paid from the next full pay day after 1 July 2021, and secondly, once the proceeding commenced on 26 August 2021, it acknowledged that it would make the payment only when he saw that there was no choice but to depart from the stance that he had deliberately chosen to take. 47 I have had regard to all the circumstances, including the fact that Transit Systems intends to make good each of the four contraventions as best it can and has cooperated to implement the regime, which involved Ms McCormack auditing and identifying each underpayment to its employees, together with the contrition that I accept Mr Sinclair, albeit, not Mr Feuerherdt, has expressed on behalf of Transit Systems. 48 I am of opinion that it is appropriate to impose the following penalties in respect of four contraventions. Date Amount of penalty 27 July 2021 $45,000 10 August 2021 $67,500 24 August 2021 $67,500 7 September 2021 $1,000 Total $181,000

The basis for the stay application 49 Ms Wellard gave evidence that on 1 April 2022, Transit Systems had made submissions in respect of the annual wage review 2021-2022, in accordance with the timetable set by the Commission. Transit Systems submitted there that the Commission should vary or revoke its 2018-2019 and 2019-2020 annual wage review determinations so far as they applied to the award and another copied state instrument that governed its senior employees, namely the State Transit Authority Senior and Salaried Officers' Enterprise State Award 2018. 50 The effect of that application, if granted by the Commission, wholly or in part, would be to remove or vary the obligation of Transit Systems to pay its employees all or some of the sums calculated by Ms McCormack, and the total salary that should now be payable, under the current wage structure. 51 As a result, Transit Systems applied, at the commencement of the hearing today for a stay of the orders for payment of the sums calculated by Ms McCormack in both her current and proposed supplementary reports until after the Commission has considered its application as part of the annual wage review, which is likely to be decided by the end of the first week of June 2022.

Should there be a stay? 52 Ms McCormack will have until 30 April 2022 to prepare a supplementary report as referee, and then the parties will need time to absorb it and facilitate any objections or corrections that may need to be resolved before orders can be made to give effect to her supplementary conclusions. 53 When I pointed out that there would be little point in staying an order for the payment of moneys if the effect of the Commission's decision were, as Transit Systems hopes it will be, the reduction or elimination of any obligation to make further payments now, it contended that, instead, I should not make any orders for payment, but defer doing so until after the Commission makes its decision. 54 The Union pointed out, correctly, that, ordinarily, the Courts will not give effect to an application to stay or postpone the operation of a lawful entitlement under the existing law because there is a prospect of a change in the law or the legal obligations of a party imposed by an administrative decision-maker. Likewise, ordinarily, courts do not adjourn proceedings involving the determination of legal rights on the basis of an expectation that the legislature will enact legislation to vary or abolish those rights. 55 Parties are entitled to have the courts determine matters according to the law as it is: see, eg, Warramunda Village Inc v Pryde (2002) 116 FCR 58 at 75 [63] per Finkelstein J with whom Lee J at 62-63, [19]-[20], and Gyles J at 86 [97] agreed on this issue. In ResMed Ltd v Australian Manufacturing Workers' Union (No 2) (2015) 243 FCR 366 at 379 [49]-[51], Perry J adopted the approach of Bennett J in Apotex Pty Limited v Les Laboratoires Servier (No 6) [2012] FCA 745 at [9] in determining whether or not the Court would grant a stay of orders to which a party was presently entitled by reason that it was anticipated that Parliament or a delegated law-maker may change the law or a person's legal obligations. Relevantly, Bennett J identified guidelines, with which Perry J agreed, that, prima facie, a plaintiff is entitled to have a proceeding tried in the ordinary course of the procedure and business of the Court and that it is unusual to interfere, in the absence of proper grounds justifying such a course, with that entitlement by staying the proceeding. The applicant for such a stay must show that it is just and convenient that the rights of the other party should be not given immediate effect. In the end, the Court's task requires a balancing of the interests of the parties, taking into account all relevant factors in light of the interests of justice as a whole. 56 In the present case, if, as the Union seeks, I were to make an immediate order for the payment of the moneys calculated, or yet to be calculated, by Ms McCormack, there is a possibility that those employees will be paid money that they have to repay or have set-off against later payments or wages if, in the forthcoming annual wage review, the Commission were to grant Transit Systems's application for a variation or revocation of its earlier decisions. 57 The Union raised arguments as to whether the Commission has power to make such a decision, which no party has been able substantively to prepare for, and which may have significant consequences for others were I to try and decide that immediately. 58 In any event, it will be necessary to await Ms McCormack's further report, and to give the parties the opportunity to determine their positions with respect to it. That, necessarily, will involve a delay until after 30 April 2022 so that the time when a final order giving effect to the employees' entitlements until can be made will not occur until some time in May 2022. That will leave a very short period until the Commission determines Transit Systems's application. 59 In the present circumstances, it would not be appropriate to order Transit Systems to make payments of compensation with interest under ss 545 and 547 of the Fair Work Act now to employees, only later to require them to repay money. Transit Systems has undertaken to the Court that it will pay interest on any payments that are due now or become due pursuant to Ms McCormack's supplementary report and the making of final orders to give effect to Transit Systems's liability to make those payments in the event that it is wholly or partly unsuccessful in the Commission. 60 In my opinion, it is preferable, in the interests of justice, to postpone making any final orders as to the sums, if any, due to the affected employees, because of the need to await the outcome of Ms McCormack's supplementary report and the possibility of Transit Systems's application to the Commission being successful in whole or in part. 61 In my opinion, the appropriate course is to make one set of orders for payment, with effect from the last payday in June 2022, of all moneys due to the affected employees with interest, based on the calculations in Ms McCormack's existing report and any supplementary report if its conclusions are accepted, or any dispute in respect of it is resolved prior to that time, so that those orders will operate in a self-executing way. Those orders also would take effect in the event that the Commission dismisses Transit Systems's application to review its earlier determinations. In the event that the Commission accedes to Transit Systems's application, or any conclusion in the supplementary report is contested, the position as to what orders ought be made can be determined in light of the new position, including having regard to any judicial challenge to the Commission's finding. 62 I will leave it to the parties to prepare some orders to give effect to these reasons. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rares.

Fair Work Act 2009(Cth)ss 545, 547

RARES J: 1 On 5 November 2021, I gave reasons dealing with the industrial law consequences of the acquisition by Transit Systems West Pty Ltd, a member of the same corporate group as the respondent, Transit Systems West Services Pty Ltd, as successful tenderer, of the right to operate bus region 6 that principally covered the inner west and southern suburbs of Sydney, formerly operated by the State Transit Authority, on and from 1 July 2018: Australian Rail, Tram and Bus Industry Union v Transit Systems West Services Pty Ltd [2021] FCA 1436 (the liability reasons). 2 As a result of the transfer, staff who worked in bus region 6 and were covered by the State Transit Authority Bus Operations Enterprise (State) Award 2018 made by the Industrial Relations Commission of New South Wales, ceased to be covered by the operation of the State's industrial laws and came to be covered by the provisions of the Fair Work Act 2009 (Cth) and the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (the Transitional Act). The applicant, Australian Rail, Tram and Bus Industry Union, represents the industrial interests of Transit Systems's employees covered by the award. 3 In the liability reasons I held that Transit Systems was liable to increase the employees' wages by the amounts in the 2018-2019, 2019-2020 Annual Wage Review decisions made by the Fair Work Commission pursuant to Pt 2-6 of the Fair Work Act, and item 20 in Sch 9 of the Transitional Act, as well as the 2020-2021 decision. Under cl 15.3 of the award, wages had to be paid fortnightly. 4 On 2 December 2021, I made orders that the parties had agreed would reflect my earlier reasons. I declared that the rights of each employee to wages under the award was varied by the 2018-2019, 2019-2020 and 2020-2021 annual wage review determinations. It followed that each of the employees covered by the award was underpaid in the financial years commencing 1 July 2019, 2020 and 2021. I also ordered that Joanne McCormack of JMC Accounting Group be appointed as a referee to inquire into the amounts of the underpayments. 5 I adjourned to today the hearing of the Union's application for orders for compensation under s 545 of the Fair Work Act, interest under s 547 and pecuniary penalties under s 768AG in respect of the 2021 contraventions caused by Transit Systems having underpaid the affected employees. Transit Systems did not oppose any penalties being payable to the Union. 6 Relevantly, s 768AG of the Fair Work Act provides: A person must not contravene a term of a copied State instrument for a transferring employee that applies to the person. 7 It is now common ground that Transit Systems contravened s 768AG of the Fair Work Act in respect of each of 754 employees by its failures to apply the increase in the 2020-2021 annual wage review determination to the wages paid under the award as a copied State award as set out in the declaration made on 2 December 2021 from the first full payment period on or after 1 July 2021. Although the declaration refers to a period extending up to 27 November 2021, Transit Systems's contraventions occurred only on the four pay periods ending on 27 July 2021, 10 August 2021, 24 August 2021 and on 7 September 2021. The parties accepted during argument that the total quantum of underpayment for the 754 affected employees for each of the four fortnightly periods was in the order of $125,000 or a total of about $500,000. 8 On 10 September 2021, Transit Systems paid all of the affected employees their entitlements in full on the then understanding between the parties that only the 2.5% increase in the 2020-2021 annual wage review determination applied to the award.

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