EZY Accounting 123 Pty Ltd v Fair Work Ombudsman

THE COURT: 1 Notwithstanding the breadth of submissions canvassed, the resolution of the present appeal falls for determination by reference to the facts presented. The wider principles of law sought to be canvassed on appeal remain for consideration on some future occasion. 2 In the present case, Blue Impression Pty Ltd ("Blue Impression") operates a Japanese fast food chain. The Respondent, the Fair Work Ombudsman ("Ombudsman"), identified contraventions of the Fair Work Act 2009 (Cth) by Blue Impression. Blue Impression sought assistance from the Appellant, a firm of accountants called EZY Accounting 123 Pty Ltd ("EZY Accounting"), to rectify those contraventions. However, further contraventions of the Fair Work Act occurred. 3 An employee of Blue Impression, Mr Jian Hong Zheng, sought the assistance of the Fair Work Ombudsman. 4 The Ombudsman commenced proceedings against (inter alia) Blue Impression and EZY Accounting. Blue Impression admitted the contraventions. EZY Accounting denied any liability. 5 In the proceeding in the Federal Circuit Court of Australia, EZY Accounting was found to have been "involved in" seven contraventions of s 45 of the Fair Work Act, and was therefore itself taken to have contravened those sections pursuant to s 550 of the Act: Fair Work Ombudsman v Blue Impression Pty Ltd [2017] FCCA 810, (2017) 269 IR 92. The contraventions of s 45 were a failure: to pay the minimum hourly rate of pay in accordance with cll 13.2 and 17 of the Fast Food Industry Award 2010 ("Award"); to pay the evening loading in accordance with cl 25.5(a)(i) of the Award; to pay the Saturday loading in accordance with cl 25.5(b) of the Award; to pay the Sunday loading in accordance with cl 25.5(c)(ii) of the Award; to pay the public holiday penalty rate in accordance with cl 30.3 of the Award; to provide rest breaks and meals breaks in accordance with cl 27.1 of the Award; and to pay the special clothing allowance in accordance with cl 19.2(b)(ii) of the Award. The Ombudsman accepted that the judgment of the primary Judge did not provide reasons in relation to the contraventions with respect to the failure to provide rest breaks and meal breaks. The Ombudsman further does not contest that the declaration of contravention should not have been made with respect to rest breaks and meal breaks and that the penalty imposed should be varied accordingly. 6 In very summary form, Senior Counsel on behalf of EZY Accounting contends that there was no basis upon which EZY Accounting could be found to have been "involved in" (within the meaning of s 550 of the Fair Work Act) the contraventions of s 45 of the Act. 7 The appeal is to be dismissed.

Sections 45 & 550 8 The two provisions of the Fair Work Act of present relevance are ss 45 and 550. 9 Section 45 provides as follows: Contravening a modern award A person must not contravene a term of a modern award. Section 45, it may be noted, is made out simply by reference to the fact of contravention. It is not necessary to prove that the person charged with the contravention either knew of the existence of the award or the term which was contravened. Nor is it necessary to prove any intention to contravene the modern award. 10 Section 550 provides as follows (note omitted): Involvement in contravention treated in same way as actual contravention (1) A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision. (2) A person is involved in a contravention of a civil remedy provision if, and only if, the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced the contravention, whether by threats or promises or otherwise; or (c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or (d) has conspired with others to effect the contravention. 11 Sections 550(2)(a) and 550(2)(c), it has been said, have a "different emphasis": Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 ("Divine Marine"). White J there reviewed some of the authorities and summarised their effect as follows: Relevant principles [176] Although the general principles relating to accessorial liability are settled, their application in a case such as the present is not without difficulty. In order to aid, abet, counsel or procure the relevant contravention, the person must intentionally participate in the contravention with the requisite intention: Yorke v Lucas (1984) 158 CLR 661 at 667. In order to have the requisite intention, the person must have knowledge of "the essential matters" which go to make up the events, whether or not the person knows that those matters amount to a crime: Yorke v Lucas at 667. Although it is necessary for the person to be an intentional participant and to have knowledge of the matters or things constituting the contravention, it is not necessary for the person to know those matters or things do constitute a contravention: Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213; (2002) 118 FCR 236 at [159]-[160]. That is to say, it is not necessary that the accessory should appreciate that the conduct in question is unlawful. … [177] Actual, rather than imputed, knowledge is required. So much was made clear in Giorgianni v The Queen (1985) 156 CLR 473 at 506-7 by Wilson, Deane and Dawson JJ … [178] The notion of being "knowingly concerned" in a contravention has a different emphasis from that of aiding, abetting, counselling or procuring" a contravention. To be knowingly concerned in a contravention, the person must have engaged in some act or conduct which "implicates or involves him or her" in the contravention so that there be a "practical connection between" the person and the contravention: Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299 at [26]; Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470; (2011) 280 ALR 503 at [324]-[325]. [179] As indicated, these principles are not in doubt. The more difficult question arises from their application to the circumstances of this case and, in the identification of the essential facts about which an accessory must have actual knowledge. His Honour then considered the decisions of Cowdroy J in Potter v Fair Work Ombudsman [2014] FCA 187 ("Potter"); Besanko J in Fair Work Ombudsman v Al Hilfi [2012] FCA 1166 and Greenwood J in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v John Holland Pty Ltd [2009] FCA 274, (2009) 180 IR 350 and concluded: [187] In my opinion, Potter cannot be distinguished on this basis. The FWO submission does not give effect to the requirement that the accessory's involvement be intentional. That is the real issue to which Cowdroy J's reasoning was directed. Without knowledge that an Award is applicable, it is difficult to see how a finding could be made that the accessory had intentionally participated in the contravention: see Yorke v Lucas at 670. [188] As the respondents were not represented, the Court did not have the benefit of full argument on these issues. Nevertheless, I consider that the claims of accessorial liability in this case should be determined in accordance with the principles stated in Potter and Al Hilfi. That is because knowledge that there is an award which is applicable which prescribes minimum rates or entitlements is a factual element necessary for the establishment of the accessory's intention. 12 Actual knowledge may be inferred from "a combination of suspicious circumstances and a failure to make an inquiry": cf. Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1 at 5 per Finkelstein J. 13 To be "involved in" conduct there has to be some conduct which "implicates" a person in the offending conduct such that they become "involved in" or "associated with" that conduct: Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833 at [116]. It was there said that a person cannot be "involved in" conduct for the purposes of s 550 "merely by reason of his knowledge of the conduct being pursued". 14 In reliance upon Devine Marine, and with reference to the liability of an accessory for a contravention of s 50 of the Fair Work Act, in Australian Building and Construction Commissioner v Parker [2017] FCA 564, (2017) 266 IR 340 at 382 to 383 ("Parker") a potential divergence in the authorities was noted as follows: [126] For a person to be "knowingly concerned in or a party to the contravention" for the purposes of s 550(2)(c), the person must have been an intentional participant with knowledge at the time of the contravention of the essential elements constituting the contravention: cf. Yorke v Lucas at 670. Actual knowledge is required - mere constructive or imputed knowledge is not sufficient. But actual knowledge may be inferred from "exposure to the obvious": [Giorgianni v The Queen (1985) 156 CLR 473 at 507 to 508]. [127] Where the contravention in question is a contravention of a term of an enterprise agreement, there is some divergence in the authorities as to those matters of which an accessory must have knowledge. One line of authority tends to suggest that an accessory must have knowledge that the enterprise agreement applies: cf. Potter v Fair Work Ombudsman [2014] FCA 187 at [80]-[81] per Cowdroy J. Perhaps with an insistence upon a greater degree of knowledge, in Fair Work Ombudsman v Al Hilfi [2012] FCA 1166 at [44] Besanko J observed on the facts of that case that there was a good deal of force in the argument that it was necessary to establish that the accessory had knowledge that an award applied to particular employees, that the work being performed gave rise to those entitlements and that the employees were not paid those entitlements. The other line of authority tends to suggest that the approach in Potter sets the bar too high: Fair Work Ombudsman v Grouped Property Services Pty Ltd (2016) 152 ALD 209 at [1019]. Katzmann J there expressed an obiter view that where "the contravention is a failure to pay award rates, an accessory must know what rates are being paid but need not know that the rates which were paid were below the rates prescribed by the applicable award". [128] Either approach, with respect, exposes a difficulty. Where the contravention in question is a contravention of s 50, that section does not require the person contravening a term of an enterprise agreement to have any knowledge of the existence of an enterprise agreement and does not require knowledge of the term being contravened or the fact that the act of contravention is in fact contravening conduct. If the "elements" of s 50 do not encompass those matters, it is - with respect - difficult to see why an accessory need have any greater knowledge. For a person to contravene s 50, it is sufficient to prove that conduct took place which was in fact a contravention of a term of an enterprise agreement. For the purposes of accessorial liability, all that need be proved is that the accessory had knowledge of the conduct. Section 50, it may be noted, is in comparable terms to s 45 - other than that s 45 refers to "a term of a modern award" and s 50 refers to "a term of an enterprise agreement". 15 In Fair Work Ombudsman v Grouped Property Services Pty Ltd [2016] FCA 1034, (2016) 152 ALD 209 at 349 ("Grouped Property Services"), Katzmann J concluded that a person may be "knowingly concerned" in a contravention even though he may not know, for example, the details of which hours a particular employee worked or when. Her Honour thus concluded: [957] I accept the Ombudsman's contention, as far as it goes. [Australian Communications and Media Authority v Mobilegate Ltd (No 8) [2010] FCA 1197, (2010) 275 ALR 293] shows that, where an alleged accessory is aware of a system producing certain outcomes, and those outcomes constitute contraventions of the Act, it is unnecessary to show that the alleged accessory knew the details of each particular instance of those outcomes in order to show the requisite knowledge. As I will explain, reasoning of that kind allows me to conclude that certain arrangements put in place by Rosario, such as the sham contracting arrangements, were knowing and intentional means of avoiding paying certain entitlements, such as penalty rates and leave loadings. Provided he knew, for example, that an employee covered by the sham contracting arrangements worked on weekends, Rosario could be knowingly concerned in GPS's failure to pay penalty rates notwithstanding that he may never have known on which weekends and for how many hours the employee worked.

The admissions made, the transcript & the findings of the primary Judge 16 Mr Eric Lau was the sole director of EZY Accounting. The Federal Circuit Court found that he was also "in total control" of EZY Accounting and was its "operative mind": [2017] FCCA 810 at [87], (2017) 269 IR at 118. The affidavit evidence of Mr Lau relied on before the Federal Circuit Court sought to confine the ambit of his "professional obligation[s]" because of the limited scope of the tasks EZY Accounting had been retained to discharge. Mr Lau also disclaimed any personal knowledge of Mr Zheng. The forensic objective of EZY Accounting was self-evidently to distance itself from the contraventions of s 45 that had been accepted by Blue Impression. EZY Accounting sought to put itself in a position where it could contend that it had no knowledge of the essential ingredients of the contravention and (accordingly) could not fall within s 550(2) of the Fair Work Act. 17 Notwithstanding the position sought to be advanced, the submission as to the limited role of EZY Accounting was rejected by the primary Judge. 18 The evidence of Mr Lau and the findings of the primary Judge need to be briefly set forth.

The evidence of Mr Lau & his cross-examination 19 The basis of the submission that EZY Accounting played a limited role were set forth in Mr Lau's affidavit. He there stated in part that he "did not see it as part of [his] professional obligation, having regard to the limited scope of work which Ezy had been retained to know whether Blue Impression was paying Mr Zheng minimum entitlements under the Award". Mr Lau also stated in his affidavit that it was "not part of the retainer that Ezy review the hours worked or the times at which the hours were worked by Mr Zheng". Mr Lau "did not check the rates paid to Mr Zheng as against the Award rates". 20 This evidence attracted cross-examination. Part of that cross-examination included Mr Lau being taken to the MYOB rates which were used in calculating the amounts to be paid to employees. Having accepted that those rates were "incorrect", the cross-examination continued: It's inevitable, isn't it, that if those flat rates are not corrected on your MYOB system, which pays all the Blue Impression employees, that there are going to be future underpayments? - They are employees' data from start to at that point in time, prior and current employees. So if we alter the rate in there, it will impact on everybody. Therefore, we will only alter on the ones that occurrence and upon instructions. When you say "occurrence", occurrence of what? - Current employees. I beg your pardon? - Current employees. Yes. So take those 12 employees who were underpaid, as found by the audit. They were going to continue to be underpaid, were they not, if MYOB flat rates were not updated for each of them? - If they are still employed, yes. Mr Lau's attention was then directed to the monies being paid to new employees. Mr Zheng commenced employment after the audit. That cross-examination proceeded as follows: Okay. So it's important, in the context of a high turnover of staff, to ensure that, when a new person begins, they are paid the correct award rate at the time? - That is not a decision I have made. I'm not asking you that. I'm asking you whether that's important? - It is important, yes. Yes. And yet you didn't alter the MYOB database for new employees or existing employees; you didn't alter their flat rates? - No, I didn't. And you did that knowing that they would - it was inevitable they would be underpaid if you didn't? - I have no authority to alter anything. You say that the authority comes from Mr Pai; is that right? - That's correct. Did you ask Mr Pai whether he would agree to you updating the rates? - I didn't ask that question. So you were prepared for your client, Mr Pai, to go on underpaying his staff? - Sorry, can you repeat? You were prepared for Mr Pai, your client, to go on underpaying his staff? - I'm prepared to enter the data as per instruction given. That's not an answer to my question, Mr Lau. You were prepared to go on with a situation, to allow it to continue, whereby your MYOB system had the incorrect rates, and that would inevitably lead to underpayments of wages? - I don't do data entry, so I don't know what's the deal. 21 Before the primary Judge, the Fair Work Ombudsman did not put its "case as high as submitting that Mr Lau did know about Mr [Zheng] specifically". So much was stated in oral submissions by Counsel for the Fair Work Ombudsman.

The adverse assessment as to credit 22 In making findings of fact and in the course of assessing the evidence of Mr Lau, the primary Judge made a series of adverse assessments as to his credit. 23 Those assessments as to Mr Lau's credibility included that: "Mr Lau was not an impressive witness" and he gave "unsatisfactory" evidence: [2017] FCCA 810 at [36], (2017) 269 IR at 108; Mr Lau "was engaged in a transparent (and unsuccessful) attempt to understate the nature of the relationship between himself (as director of Ezy or otherwise)" and Blue Impression: at 108 to 109 [38]; Mr Lau "(unsuccessfully) sought to reconstruct his view and understanding of the nature and level of his involvement in that relationship" and that that attempted reconstruction affected "the quality of his evidence generally and leads to the conclusion that … his evidence [is] unreliable": at 109 [39]; in one exchange during cross-examination Mr Lau was "deliberately obtuse": at 109 [40]; Mr Lau "wished to avoid having objective evidence" as to the fact of underpayment and failure to meet the requirements of the Award "in order that he might avoid culpability": at 110 [43].

The findings of the primary Judge 24 Before the primary Judge part of the case advanced on behalf of the Ombudsman was that EZY Accounting "had actual knowledge of the factual matrix of the admitted contraventions" by Blue Impression and "was an intentional participant" in the contraventions: [2017] FCCA 810 at [12], (2017) 269 IR at 96. 25 The primary Judge agreed. The Judge made the following findings (at 110): [42] Having heard all of the evidence I was left with the clear impression that Mr Lau knew the [Blue Impression] had been underpaying its employees in 2014 and was still underpaying its employees at the relevant time for the purposes of these proceedings and sought in his evidence to indicate that this was not so. [43] In my view his evidence left open the clear option that Mr Lau knew, as a matter of inference, that the first respondent was underpaying its employees (and not meeting the requirements of the Award), including in relation to [Mr Zheng], at the relevant times and wished to avoid having objective evidence that that was so, in order that he might avoid culpability. 26 These findings are in addition to, and more generally expressed than, the following findings as made by the primary Judge (at 118 to 119): [86] … the FWO's claim was that Ezy must have known that the first respondent was underpaying its employees (and in this case Mr Zheng) because Ezy knew the rates in its payroll system were not sufficient to allow the first respondent to comply with the obligations imposed on it by the Award. On the evidence before the Court and for the reasons set out below, I am satisfied this knowledge was clearly fixed in the mind of Mr Lau as a result of the 2014 audit. … [88] Mr Lau agreed in cross-examination that he had received the letter from the FWO in 2014. It was that letter which identified in detail provisions that the Award provided for ordinary hours, hours on Saturdays and Sundays, along with allowances including for uniform. [89] Mr Lau agreed he knew, as a result of the audit, how to check the correct Award rates and that it was inevitable because of the way Ezy's MYOB system worked, if the rates weren't altered, there would be underpayments and that Ezy did not alter those flat rates. … [94] Both Mr Lau and Ms Hii got advice from an organisation that described itself as a "leading expert in the field of workplace relations" (Employsure) on, inter alia, the first respondent's obligations under the [Fair Work Act] and the Award. [95] The company of which Mr Lau was a director, Ezy, produced payroll advices for [Mr Zheng] throughout the relevant periods. Mr Lau was aware of the Award and that it contained clauses dealing with, inter alia, uniform and, Saturday and Sunday rates. (Footnotes omitted.) The letter referred to in para [88] was a letter addressed to Mr Lau. It was dated 24 April 2014 and attached a "Summary of Alleged Non-Compliance". It is within that Summary that Mr Lau's attention was specifically drawn to (inter alia): the various rates of pay per ordinary hour, those rates being dependent upon the age of the employee; the various rates of pay per ordinary hour worked on Saturdays and Sundays, again dependant on the age of the employee; and the allowances and overtime entitlements that were payable. Further to para [89], the primary Judge also concluded (at 119): [96] Ezy admitted its MYOB system contained hourly rates of pay for [Mr Zheng] and the system Ezy operated and had responsibility for (try as they might to deny it) produced payroll records and pay slips for the Employee. [97] On that basis it is risible to suggest that even the most basic query would not have revealed to Ezy that [Mr Zheng] was not receiving: the relevant minimum hourly rate in accordance with clauses 13.2 and 17 of the Award; evening loading in accordance with clause 25.5(a)(i) of the Award; Saturday loading in accordance with clause 25.5(b) of the Award; Sunday loading in accordance with clause 25.5(c)(ii) of the Award; public holiday penalty rates in accordance with clause 30.3 of the Award; rest and meal breaks in accordance with clause 27.1 of the Award (but only in relation to the period 15 December to 31 December 2014); and clothing allowance in accordance with clause 19.2(b)(i) of the Award.

The findings as to knowledge & the absence of appellable error 27 Before this Court on appeal, it was submitted on behalf of EZY Accounting (inter alia) that: there was no evidence to support a number of the findings made against Mr Lau, including the findings with respect to his knowledge at para [42] and [43] and there was no evidence to support the inference drawn at para [43]; the Ombudsman had accepted that "Mr Lau knew nothing about Mr Zheng specifically", that having been the subject of a concession made on its behalf by Counsel at trial; an "award" is not a "law" such that Mr Lau should be deemed to have knowledge of it by reasons of persons being presumed to know the law and that ignorance of the law is no excuse from liability (e.g., Potter [2014] FCA 187 at [81] per Cowdroy J; cf. Giorgianni v The Queen (1985) 156 CLR 473 at 506 per Wilson, Deane and Dawson JJ; Jemena Asset Management (3) Pty Ltd v Coinvest Ltd [2011] HCA 33 at [11], (2011) 244 CLR 508 at 516 to 517 per French CJ, Gummow, Heydon, Crennan, Kiefel and Bell JJ); and the reliance placed by the Fair Work Ombudsman upon "wilful blindness" as a means of establishing (or as a substitute for) "actual knowledge" on the part of Mr Lau was misplaced. It was also submitted on behalf of EZY Accounting (inter alia) that the primary Judge had: "failed to apply the Briginshaw standard to determine whether Ezy had actual knowledge of each of the material facts giving rise to the relevant contraventions"; and failed to provide adequate reasons for the conclusion that EZY Accounting had the requisite knowledge to be involved in the contraventions. 28 Notwithstanding the myriad of issues arising from these submissions, the present appeal can be - and should be - resolved by reference to the findings of fact as to the actual knowledge of Mr Lau (and hence EZY Accounting) set forth at paras [42] and [43] of the reasons of the primary Judge.

Matters not in dispute 29 For the purposes of resolving the present appeal a number of factual matters were quite properly not put in dispute. 30 One such matter was that it was common ground that: the amount of monies in fact paid to employees was less than the ordinary rate of pay to which each employee was entitled and (necessarily) less than the ordinary rate of pay plus whatever other loadings they were entitled to by reason of (for example) having worked on Saturdays or Sundays. A number of the contraventions of s 45 by Blue Impression were, in such circumstances, inevitable. 31 Another such matter, as set forth in the written Outline of Submissions filed by EZY Accounting, was that there "was no dispute that Mr Lau had some knowledge of the Award". Those submissions went on to state: Ezy accepts that through his involvement in the audit and through communications with Blue Impression's advisors, Employsure, Mr Lau knew: a. that the Award applied to most Blue Impression employees; b. the Award base rate of pay for the employees who were the subject of the audit; c. that employees identified in the audit received below-Award rates, that Blue Impression had not directed Ezy to change these rates in MYOB, and hence that those employees identified in the audit as being underpaid would continue to be underpaid if they were still employed; and d. that the Award provided for weekend loadings and the special clothing allowance.

The findings as to actual knowledge 32 The reasons of the primary Judge, in particular at paras [42], [43] and [86]-[95] contain findings that: Mr Lau was aware that the Award provided for a base rate of pay for ordinary hours and for additional penalty rates and allowances; Mr Lau knew that Blue Impression had been underpaying its employees because he knew that "the rates in [EZY Accounting's] payroll system were not sufficient to allow [Blue Impression] to comply with the obligations imposed on it by the Award"; and "as a matter of inference", Mr Lau knew that Blue Impression "was underpaying its employees (and not meeting the requirements of the Award)" including in relation to Mr Zheng. These are findings that Mr Lau had actual knowledge - and not mere constructive knowledge - of both: the Award itself and the "requirements of the Award"; and the facts which constituted a contravention of the Award. 33 These findings, it is respectfully concluded, are sufficient to bring Mr Lau within the reach of s 550(2)(c) - there was a "practical connection" between Mr Lau's involvement in the contravention of s 45 and the conduct of Blue Impression: cf. Devine Marine [2014] FCA 1365 at [178] per White J (and the cases there cited). That "practical connection" and the act by which he "engaged in some act or conduct which 'implicate[d] or involve[d] him …' in the contravention" (cf. Devine Marine [2014] FCA 1365 at [178] per White J) was the act of facilitating the underpayments knowing them to be underpayments. By engaging in such conduct, Mr Lau was "linked in purpose" with the contraventions of Blue Impression: cf. Australian Communications and Media Authority v Mobilegate Ltd (No 8) [2010] FCA 1197 at [165], (2010) 275 ALR 293 at 327 per Logan J (and the cases there cited). It is unnecessary to revisit the conclusion in Parker [2017] FCA 564 at [128], (2017) 266 IR at 383 and the questions of whether an accessory need have any more knowledge of the contravening conduct itself or whether actual knowledge of the award itself is necessary. On the facts of the present case, Mr Lau had actual knowledge of the Award. 34 It was open to the primary Judge to hold that Mr Lau was "knowingly concerned" in the contravening conduct of Blue Impressions based, as it was, on a system of payment where adult employees were invariably paid a flat hourly rate of pay which was below the Award base rate applicable for ordinary hours of work and insufficient to meet any additional requirement made by the Award for a penalty rate to be paid where applicable. Mr Lau knew that system of payment; he knew that the Award provided for a base rate; and he knew it contained provisions for the payment of penalty rates whenever applicable. He also knew that the inevitable result of his facilitation of Blue Impression's system would be that employees working ordinary hours would be underpaid the Award base rate of pay and that employees entitled under the Award to any additional penalty payments would not be paid the applicable penalty. That knowledge and involvement was sufficient to implicate Mr Lau in Blue Impression's contraventions of s 45 of Fair Work Act irrespective of the fact that Mr Lau did not know about the particular employment of Mr Zheng, or the particular hours that he worked or the particular provisions in the Award which gave rise to Mr Zheng's entitlement to be paid a particular penalty rate. As Katzmann J said in Grouped Property Services [2016] FCA 1034 at [957], (2016) 152 ALD 209 at 349 "where an alleged accessory is aware of a system producing certain outcomes, and those outcomes constitute contraventions of the Act, it is unnecessary to show that the alleged accessory knew the details of each particular instance of those outcomes in order to show the requisite knowledge". 35 The findings of the primary Judge were unsurprising given: the acceptance of the fact that the amounts paid to employees was less than the base rate of pay and necessarily less than that base rate of pay together with such other loadings or penalties as were applicable by reason of (for example) working on a Saturday or Sunday; the acceptance that Mr Lau had "some" knowledge of the Award including that it required the payment of a base rate and penalty rates; Mr Lau's acceptance that underpayment was "inevitable" given the manner in which the "system" was being applied to each employee at the time of the audit and that that "system" was not changed thereafter, including when Mr Zheng was employed; and the adverse assessments as to Mr Lau's credit and the finding that the evidence he gave was "unreliable". 36 The factual findings made by a primary Judge, and the findings made by the primary Judge in the present proceeding, are not lightly to be upset on appeal: cf. Warren v Coombes (1979) 142 CLR 531 at 552 to 553 per Gibbs ACJ, Jacobs and Murphy JJ; Saints Gallery Pty Ltd v Plummer (1988) 80 ALR 525. Although it is readily accepted that this Court on appeal must itself consider the available evidence, the findings made by the primary Judge cannot be regarded as glaringly improbable or contrary to compelling inferences: Fox v Percy [2003] HCA 22 at [28] to [29], (2003) 214 CLR 118 at 128 per Gleeson CJ, Gummow and Kirby JJ. 37 Nor does any question arise as to these findings departing from the submission made by the Ombudsman before the primary Judge that Mr Lau did not know anything "specifically" about Mr Zheng. The inference drawn by the primary Judge was one open to him to draw. The inevitability of underpayment and the absence of any change in the manner of calculating remuneration after the 2014 audit was such that it could readily be inferred by Mr Lau that Mr Zheng would be underpaid and that he was in fact underpaid.

CONCLUSIONS 38 The findings of fact made by the primary Judge were findings open to him. No appellable error is exposed in the means whereby those findings were made. 39 The primary Judge was correct in concluding that EZY Accounting satisfied the criteria in s 550(2) of the Fair Work Act and was therefore "involved in" the contraventions of s 45 by Blue Impression. On the facts of the present case, and in summary form, it is concluded that Mr Lau (and therefore EZY Accounting) fell within the terms of s 550(2)(c) in that he was "knowingly concerned" in the contraventions of s 45. 40 It is unnecessary to resolve many of the remaining submissions advanced and contested by the opposing parties. These submissions included whether Mr Lau should be presumed to have knowledge of the terms of the Award by reason of the Award being a "law" and that everyone is presumed to know the law. It is also unnecessary to express any view as to the reach of "wilful blindness" and whether an inference is open that Mr Lau knew those matters he would have learnt had he made even the most basic of inquiries. 41 The Fair Work Ombudsman accepted that the findings of the primary Judge in respect to rest breaks and meal breaks should be set aside. It is thus accepted that declaration 1(f) made by the primary Judge on 28 April 2017 should be set aside. 42 The Ombudsman also submitted that the penalty imposed should be reduced accordingly to $51,330. The approach of the Ombudsman is accepted. EZY Accounting did not make a submission in opposition to that course. 43 The appeal should otherwise be dismissed.

THE ORDERS OF THE COURT ARE:

1. Ground 2 of the Notice of Appeal filed on 7 December 2017 be allowed.
2. Declaration 1(f) as made by the Federal Circuit Court of Australia on 28 April 2017 is set aside.
3. Order 4 of the orders made by the Federal Circuit Court of Australia on 16 November 2017 be varied such that the Appellant is to pay a pecuniary penalty of $51,330 pursuant to s 546(1) of the Fair Work Act 2009 (Cth).
4. The appeal be otherwise dismissed. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Flick, Bromberg and O'Callaghan.