Fair Work Ombudsman v Downings Pty Ltd trading as Fremantle Pharmacy [2025] FedCFamC2G 1122

1. Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) and within 28 days of this order, the first respondent pay a penalty in the sum of $28,875 to the consolidated revenue of the Commonwealth for its contravention of section 716(5) of the Fair Work Act, the subject of the declaration made on 29 November 2024.
2. Pursuant to section 546(1) of the Fair Work Act 2009 (Cth) and within 120 days of this order, the second respondent paid a pecuniary penalty of $3,000 to the consolidated revenue of the Commonwealth by reason of his involvement in the first respondent's contravention of section 716(5) of the Fair Work Act the subject of the declaration made on 29 November 2024.
3. Pursuant to rule 13.06(1)(e) of the Federal Circuit and Family Court of Australia (Division 2)(General Federal Law) Rules 2021 (Cth), the hearing of these penalty proceedings is to proceed, notwithstanding the failure of the first respondent to appear.
4. Leave is granted to the applicant to take steps for enforcement if either respondent fails to comply with the orders above.

Note: The form of the order is subject to the entry in the Court's records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

1. The applicant ("Fair Work Ombudsman") commenced proceedings on 5 July 2024, seeking declarations in respect of a contravention of a s 716(2) notice served on the first respondent with the second respondent being knowingly involved in that contravention. On 29 November 2024, this Court made orders for steps to be taken in compliance with the notice dated 23 August 2023. Firstly, by calculating and paying to the employee, Ahmed Gedawy ("Mr Gedawy"), the amounts owed in respect of accrued undertaken paid annual leave. Secondly, calculating paying any superannuation contribution into the employee, Mr Gedawy's nominated superannuation fund. Thirdly, producing to the Fair Work Ombudsman a schedule outlining the calculation of the outstanding annual leave and outstanding superannuation and fourthly, producing evidence that the outstanding annual leave and outstanding superannuation have been paid. The Court, on 29 November 2024, made a declaration of s 716 of the Fair Work Act 2009 (Cth) ("the Act") by both the first respondent and the second respondent and fixed the matter for a penalty hearing on 13 June 2025.
2. The Fair Work Ombudsman has tendered and had marked as exhibits, communications sent to the first respondent in respect of the digital hearing at which the first respondent failed to attend on 13 June 2025, and also serving copies of the two affidavits and outline of submissions relied upon by the Fair Work Ombudsman for the purpose of the penalty hearing, all dated 11 April 2025. The Court is satisfied that the respondents were aware of today's penalty hearing and were afforded procedural fairness in respect of the same and that it is appropriate to make an order under r 13.06(1)(e) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)("General Federal Law Rules") that the penalty hearing proceed.
3. The following affidavits were read, with annexures treating as being in evidence:

(1) Affidavit of Sam Coton affirmed 11 April 2025; and

(2) Affidavit of Jay Chin affirmed 11 April 2025.

1. The Court finds, based on the evidence, that Mr Chin, being a Fair Work Inspector under s 700 of the Act, undertook an investigation around May 2023 in relation to compliance by the first respondent with the Pharmacy Award 2020 in relation to an employee, Mr Gedawy.
2. The investigation identified Mr Gedawy was an employee between 1 October 2010 and 17 April 2013. The investigation resulted in the inspector forming the belief that the employee had a period of accrued untaken paid annual leave when he ended his employment and that the first respondent was in contravention of the Act by failing to pay Mr Gedawy his accrued annual leave entitlement. Having formed a reasonable belief, the inspector issued the compliance notice dated 23 August 2023 which the Court finds complied with the requirements of s 716(2) of the Act and s 716(3) of the Act. No steps were taken to identify any reasonable excuse for the failure to comply under s 716(6) of the Act. Nor was any step taken to set aside the notice under s717 of the Act. On 6 October 2023, steps were taken on behalf of the Fair Work Ombudsman to contact the respondents to identify that the time for compliance had expired and that if they did not provide evidence of compliance, they would be issued with a notice of failure to comply.
3. On 19 October 2023, the Fair Work Ombudsman issued the first respondent with a failure to comply notice inviting an explanation for the failure to comply. The first respondent has not responded to the communications or complied with the compliance notice dated 23 August 2023. The first respondent is still registered as a corporate entity and the second respondent is the sole director and shareholder. The second respondent has a pharmacist registration number, and no steps have been taken to comply with the notice by the respondents. There was a response filed on 21 October 2024 on behalf of the first respondent that said:

The business has been sold. The company has no remaining assets and will be liquidated.

1. The response was signed by the second respondent.
2. The affidavit of Sam Coton, identifies the taking of steps to try and communicate with the respondents in respect to the failure to comply with the notice and identifies an email received from the second respondent dated 25 June 2024, relevantly, as follows:

I am writing to inform you that Downings Pty Ltd is no longer trading.

The business has been sold as a going concern.

The company has, now, no assets and is not trading.

It is now negotiating with the lending bank as it owes more than the sale generated.

The company will go into liquidation.

I am sorry to inform you that the legal process will only deliver more costs that cannot be paid.

1. On 5 November 2024, the second respondent sent a further email in relation to confirmation of the sale of the business, that a particular property at Cottesloe had been sold by the bank, that the second respondent is now renting, that the bank took the proceeds of both sales and that a significant sum of money is still owing to the bank. That email also said that:

1. On 1 November 2024, the second respondent sent an email to the Fair Work Ombudsman that he is currently awaiting two casual contract positions, and he was hoping to achieve 40 hours a week. The second respondent confirmed that Judo Bank had sold both the family home and the business and is still owed more than 2.5 million and that he is a guarantor for that amount and has no further assets to sell. The second respondent identified that his wife is working full-time and pays the rent and all the bills and that he pays for the food and cleaning bills.
2. On 14 November 2024, the second respondent provided an update as to his position that he accepted a position for casual employment and provided the latest statements from Judo Bank. The second respondent again confirmed that the first respondent is not trading, and that the pharmacy was sold and has no assets but owes liabilities to the bank. The email dated 14 November 2024, also made reference to the second respondent having no assets as the family home was sold and that he has been unable to engage his solicitor until he commences employment.

1. The relevant principles in relation to penalty hearing under s 547 of the Act are helpfully summarised from a decision of the High Court in the Australian Building and Construction Commission v Paterson [2022] HCA 13, which is set out as follows:

9 The Commissioner's contentions should be accepted and the appeal allowed. Under the civil penalty regime provided by the Act, the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act. In that context, the penalties fixed by the primary judge were appropriate because they were no more than might be considered to be reasonably necessary to deter further contraventions of a like kind by Mr Pattinson, the CFMMEU or others. They represented a reasonable assessment of what was necessary to make the continuation of the CFMMEU's non-compliance with the law, amply demonstrated by the history of its contraventions, too expensive to maintain.

10 The Full Court's critical error was that it was distracted by a concern, drawn from the criminal law, that a penalty must be proportionate to the seriousness of the conduct that constituted the contravention. The power conferred by s 546 of the Act is not subject to constraints drawn from the criminal law and there is no place for a "notion of proportionality", in the sense in which the Full Court used that term, in a civil penalty regime. Further, and relatedly, their Honours were misled by the view that the Act required that the maximum penalty be reserved for only the most serious examples of the offending comprehended by s 349(1), and that this principle could prevent the court from imposing the maximum penalty even though a penalty in that amount might reasonably be considered to be necessary to deter future contraventions of a like kind. Nothing in the text, context or purpose of s 546 requires that the maximum penalty be reserved for the most serious examples of misconduct within s 349(1). What is required is that there be "some reasonable relationship between the theoretical maximum and the final penalty imposed". That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of s 546: the deterrence of future contraventions of a like kind by the contravenor and by others**.**

...

14 In The Commonwealth v Director, Fair Work Building Industry Inspectorate ("the Agreed Penalties Case")13, French CJ, Kiefel, Bell, Nettle and Gordon JJ said that civil penalty provisions of the kind enacted in s 546 have a "statutory function of securing compliance with provisions of the [statutory] regime". Although it is accepted in the authorities that the courts may adapt principles which govern criminal sentencing to civil penalty regimes, "basic differences"14 between criminal prosecutions and civil penalty proceedings mean there are limits to the transplantation of principles from the former context to the latter. Indeed, the Act is emphatic in drawing a distinction between its civil penalty regime and criminal proceedings. For example: a contravention of a civil remedy provision is not an offence15; the rules of evidence and procedure for civil matters are applicable to proceedings relating to a contravention of a civil remedy provision; and a court must not make a pecuniary penalty order for a contravention of a civil remedy provision against a person who has already been convicted of an offence for substantially the same conduct.

15 Most importantly, it has long been recognised that, unlike criminal sentences, civil penalties are imposed primarily, if not solely, for the purpose of deterrence. The plurality in the Agreed Penalties Case said:

"[W]hereas criminal penalties import notions of retribution 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:

'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.'"

16 In a similar vein, in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner21, the Full Court of the Federal Court cited the decision of French J in Trade Practices Commission v CSR Ltd22 and the reasons of the plurality in the Agreed Penalties Case as establishing that deterrence is the "principal and indeed only object" of the imposition of a civil penalty: "[r]etribution, denunciation and rehabilitation have no part to play".

...

18 In CSR, French J listed several factors which informed the assessment under the Trade Practices Act 1974 (Cth) of a penalty of appropriate deterrent value:

"The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:

1. The nature and extent of the contravening conduct.

2. The amount of loss or damage caused.

3. The circumstances in which the conduct took place.

4. The size of the contravening company.

5. The degree of power it has, as evidenced by its market share and ease of entry into the market.

6. The deliberateness of the contravention and the period over which it extended.

7. Whether the contravention arose out of the conduct of senior management or at a lower level.

8. Whether the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.

9. Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention."

19. It may readily be seen that this list of factors includes matters pertaining both to the character of the contravening conduct (such as factors 1 to 3) and to the character of the contravenor (such as factors 4, 5, 8 and 9). It is important, however, not to regard the list of possible relevant considerations26 as a "rigid catalogue of matters for attention"27 as if it were a legal checklist. The court's task remains to determine what is an "appropriate" penalty in the circumstances of the particular case.

1. The relevant principles were further helpfully addressed by the learned Bromwich J in Fair Work Ombudsman v Commonwealth Bank of Australia [2024] FCA 81 at [36] to [42], which provides:

Relevant Principles

1. The relevant civil penalty imposition principles are largely agreed in the otherwise competing written submissions and may be shortly summarised as follows. The primary, if not sole, purpose of a civil penalty is deterrence: Pattinson at [9] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ). The Court is to identify the "appropriate" penalty necessary to deter future contraventions "of a like kind" by the contravener and others to achieve specific and general deterrence: Pattinson at [9]-[10]. This will require regard to be taken of the conduct giving rise to the contravention, the circumstances of the contravener, and factors indicating the risk of future contraventions: Pattinson at [58]-[60].
2. Following Pattinson at [10] and [38]-[42], the power to impose a civil penalty in s 546 of the FWA is "not subject to constraints drawn from the criminal law and there is no place for a 'notion of proportionality' " of the kind identified for the purposes of criminal proceedings in Veen v The Queen [No 2] (1988) 164 CLR 465, namely a relationship between the seriousness of the conduct and the penalty imposed. Rather, what is required is that there be "some reasonable relationship between the theoretical maximum and the final penalty imposed": Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at [156], quoted in Pattinson at [53]. That relationship is established where "the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of s 546: the deterrence of future contraventions of a like kind by the contravenor and by others": Pattinson at [10].
3. The concept of proportionality is confined to striking a reasonable balance between deterrence and oppressive severity, Pattinson approving in that context what was said in Reckitt Benckiser at [152]:

If it costs more to obey the law than to breach it, a failure to sanction contraventions adequately de facto punishes all who do the right thing. It is therefore important that those who do comply see that those who do not are dealt with appropriately. This is, in a sense, the other side of deterrence, being a dimension of the general deterrence equation. This is not to give licence to impose a disproportionate or oppressive penalty, which cannot be done, but rather to recognise that proportionality of penalty is measured in the wider context of the demands of effective deterrence and encouraging the corresponding virtue of voluntary compliance.

1. Where a contravener has already taken steps to mitigate the risk of future contraventions, deterrence may be effective with a more modest penalty: Pattinson at [60]. Effective deterrence of a well-resourced contravener may require a larger penalty: Pattinson at [60]. However, as CBA and CommSec correctly observed, it does not follow that a profitable and large employer must, as a matter of course, attract the highest penalty.
2. Drawn from Trade Practices Commission v CSR Ltd [1991] ATPR 41-076 at 52,152 (French J), quoted in Pattinson at [18], relevant but non-exhaustive considerations in the assessment of the appropriate penalty may include:

1. The nature and extent of the contravening conduct.

2. The amount of loss or damage caused.

3. The circumstances in which the conduct took place.

4. The size of the contravening company.

5. The degree of power it has, as evidenced by its market share and ease of entry into the market.

6. The deliberateness of the contravention and the period over which it extended.

7. Whether the contravention arose out of the conduct of senior management or at a lower level.

8. Whether the company has a corporate culture conducive to compliance, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.

9. Whether the company has shown a disposition to co-operate with the authorities responsible for enforcement of the Act in relation to contravention.

1. State of mind is also an issue in this penalty imposition exercise. As was pointed out by the Full Court in Reckitt Benckiser in relation to state of mind in relation to civil penalty contraventions generally at [131]:

If a contravention does not involve any state of mind then it is for the party asserting any particular state of mind (be it a deliberate flouting of the law, recklessness, wilful blindness, "courting the risk", negligence, or innocence or any other characterisation of state of mind) to prove its assertion. If, in the event, neither party discharges its onus to establish any particular state of mind in relation to the contraventions, the Court determines penalty on no more than the fact of the proscribed nature of the conduct (see, by analogy see R v Olbrich (1999) 199 CLR 270; 166 ALR 330; [1999] HCA 54 (Olbrich) at [22]-[28]). However, if any degree of awareness of the actual or potential unlawfulness of the conduct is proved then, all other things being equal, the contravention is necessarily more serious. Such awareness may be able to be inferred from the very nature of the conduct or representations constituting the conduct. However absence of such proof does not establish a mitigatory state of mind (see, by analogy, R v Storey [1998] 1 VR 359 at 369, quoted with approval by the majority in Olbrich at [27]; see also [25]). It means only that the neutral state of mind required for liability has not been disturbed for the purposes of penalty. If a contravening party wishes to go beyond the neutral statutory state of mind for liability and positively assert a lack of consciousness of the character of the conduct for the purposes of penalty, that is a circumstance of mitigation which the contravening party must prove.

1. Moreover, as the majority judgment in Pattinson pointed out at [46]:

A contravention may be a "one-off" result of inadvertence by the contravenor rather than the latest instance of the contravenor's pursuit of a strategy of deliberate recalcitrance in order to have its way. There may also be cases, for example, where a contravention has occurred through ignorance of the law on the part of a [contravenor], or where the official responsible for a deliberate breach has been disciplined by the union. In such cases, a modest penalty, if any, may reasonably be thought to be sufficient to provide effective deterrence against further contraventions.

1. Whilst it is clear from the decision of the High Court that the purpose of the single penalty provision is the promotion of the public interest in compliance with the provisions of the Act by deterrence of further contraventions of the Act, it is useful to identify the framework behind that statutory provision. Section 3 of the Act identifies the objects of the Act, relevantly identifying in three of those provisions ensuring enforcement, and in another provision identifying effective compliance mechanisms. Those aspects of the objects of the Act inform the purpose of s 547 of the Act, as does chapter 5 of the Act, in relation to which under pt 5.2 there is established the Office of the Fair Work Ombudsman, and in particular div 2 under the guide to pt 5.2, identified in s 679 of the Act; being the role of the Fair Work Ombudsman in promoting and monitoring compliance with the Act.
2. Under pt 5.2, in div 2 there is also identified in the guideline that the office of a Fair Work inspector and the role of the inspectors is to exercise compliance powers for the purpose of the Act being complied with.
3. Section 716 of the Act is a core provision of the compliance powers of the Fare Work Ombudsman to ensure compliance with the Act. The role of that compliance notice is of considerable importance as a mechanism to ensure the Fair Work Ombudsman's role in the enforcement of compliance with the Act is able to be effectively implemented. Section 716 of the Act requires particular compliance for the issue of a valid notice and, indeed under s 711(7) of the Act there is a review procedure available in relation to the compliance notice, which further reinforces its importance as a provision in ensuring compliance with Act.
4. Section 716 of the Act encourages compliance by the terms of subsection (4B), which provides that a person who complies with the notice in relation to a contravention of a civil remedy provision is not taken to have admitted to contravening the provision or to have been found to have contravened the provision. That is a powerful incentive for employers to comply with the obligations imposed by a s 716 notice. Most importantly, s 716(6) provides that a person must not fail to comply with a notice given under this section. There is a qualification in respect of that confirmation in s 716(6), that s 716(5) does not apply if the person has a reasonable excuse.
5. A contravention of s 716 of the Act falls within the civil penalty provisions found in s 539 of the Act. In addition to the enforcement powers under s 545 of the Act, the Act creates the pecuniary penalty orders that are available under s 546 of the Act, which relevantly provides as follows:

(1) The Federal Court, the Federal Circuit and Family Court of Australia (Division 2) or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.

Note 1: Pecuniary penalty orders cannot be made in relation to conduct that contravenes a term of a modern award, a national minimum wage order or an enterprise agreement only because of the retrospective effect of a determination (see subsections 167(3) and 298(2)).

Note 2: Pecuniary penalty orders cannot be made in relation to conduct that contravenes a term of an enterprise agreement only because of the retrospective effect of an amendment made under paragraph 227B(3)(b) (see subsection 227E(2)).

Determining amount of pecuniary penalty

(2) Subject to this section, the pecuniary penalty must not be more than:

(a) if the person is an individual - the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or

(b) if the person is a body corporate - 5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).

(2A) Despite paragraph (2)(b) and subsection (2AA), if:

(a) the civil remedy provision is a selected civil remedy provision; and

(b) the person is a body corporate; and

(c) when the application for the order is made, the person is not a small business employer; and

(d) the contravention is associated with an underpayment amount; and

(e) the application specifies that the applicant wants the maximum penalty to be calculated based on a multiple of the underpayment amount; and

(f) the person is not taken to have contravened the civil remedy provision under section 550 (person involved in a contravention); the pecuniary penalty must not be more than the greater of the following:

(g) the amount worked out in accordance with subsection (2AA);

(h) 3 times the underpayment amount.

Note: For when contravention of a civil remedy provision is associated with an underpayment amount, see section 546A.

(2AA) Despite paragraph (2)(b), if:

(a) the civil remedy provision is a selected civil remedy provision; and

(b) the person is a body corporate; and

(c) when the application for the order is made, the person is not a small business employer;

the pecuniary penalty must not be more than 5 times the amount worked out in accordance with paragraph (2)(b).

Payment of penalty

(3) The court may order that the pecuniary penalty, or a part of the penalty, be paid to:

(a) the Commonwealth; or

(b) a particular organisation; or

(c) a particular person.

Recovery of penalty

(4) The pecuniary penalty may be recovered as a debt due to the person to whom the penalty is payable.

No limitation on orders

(5) To avoid doubt, a court may make a pecuniary penalty order in addition to one or more orders under section 545.

1. The second respondent attended the penalty hearing but was not given leave to appear on behalf of the first respondent. The second respondent orally confirmed the content of the communications that had been sent to the Fair Work Ombudsman. It was in those circumstances that the Court permitted the second respondent to be sworn and to give oral evidence in respect of his financial circumstances. The second respondent identified that he had casual employment and that his wife was paying the rent for where he lived and that the first respondent was not trading.
2. The second respondent cooperated with the Court in the giving of oral evidence, albeit that he should have taken steps much earlier to engage with a Fair Work Ombudsman and should have taken steps, consistent with the opportunity provided by the directions made by this Court, to file affidavit evidence. That said, it is apparent from the email chains that the second respondent did endeavour to cooperate with the Fair Work Ombudsman in relation to the failure to comply with the compliance notice. The explanation given by the second respondent for not complying with the notice was, in substance, that he was reliant upon the accountant to undertake and perform that task, and that the accountant had the records and that he was unable to perform the task. Whilst the evidence of the second respondent in respect of his inability to perform the task is unsatisfactory, the Court nonetheless accepts it as credible.

1. The Court has taken into account that the contravention of s 716 of the Act in the present case related to an employee of the first respondent who had been employed for the period 1 October 2010 to 17 April 2023.
2. The Court finds that the first respondent did intentionally fail to comply with the contravention notice and has not complied with that notice to date. The evidence before the Court is that there were no steps taken by the first respondent to comply with the notice, and the steps taken by the second respondent were clearly inadequate and insufficient, and the notice has not been complied with to date.

1. It appears that Mr Gedawy's accrued annual leave entitlement has not been paid for a substantial period, and it is appropriate to conclude that the value of that entitlement was likely to have been significant. The Court is not in a position to calculate what the amount of that significant entitlement would have been. The Court takes into account that the impact on that particular employee or the failure to comply with the obligation in respect to the accrued annual leave entitlement would have been of considerable significance.
2. The Court also notes, in relation to the nature and extent of the loss, that the Fair Work Ombudsman has had to take significant steps because of the failure to comply with the compliance notice, expending public funds to pursue these proceedings. The Court accepts that part of the purpose of s 716 of the Act is to facilitate a means of compliance without the cost of litigation. In relation to the circumstances in which the conduct took place, the Court accepts that the first respondent was the subject of action by the lender who has caused the assets of the first respondent to be sold, and that the second respondent believed he was dependent upon the accountant to take steps to comply with the notice and on his evidence, had no records from which he could perform the necessary calculations.

1. The Court accepts that the first respondent is still registered but finds that it is imminently about to be placed in liquidation and has no assets and is not trading. In relation to the deliberateness of the conduct, the Court finds the first respondent did deliberately fail to comply with the notice.
2. The explanation by the second respondent in respect of reliance upon the accountant was not satisfactory, but nonetheless, the Court accepts that the second respondent anticipated the need for the task to be undertaken by his accountant, and contends he was unable to do so. The Court accepts that the contravening conduct was, by the second respondent, also deliberate.

1. It was the second respondent, being the sole director of the first respondent, that was knowingly involved in the contravention and who failed to take any steps to comply with the notice.

1. It is apparent that the first respondent has no ongoing corporate culture. The Court accepts that the second respondent did not have in place measures to ensure compliance, but as the first respondent has ceased trading, and is about to be placed in liquidation, it diminishes, slightly, the significance of the failure to put in place proper steps that would have facilitated calculation and payment of the employee of his entitlements and compliance with the notice.

1. In relation to corrective action and cooperation, the Court accepts that the respondents have not complied with the compliance notice but finds that there has been a level of contrition and cooperation by the second respondent in the communications sent to the Fair Work Ombudsman and also, by the giving of the oral evidence in these proceedings.

1. The Court has taken into account that the maximum penalty for the first respondent is the amount of $41,250 and that the maximum penalty for the second respondent is the sum of $8,250. The Court has taken into account the object of s 546 of the Act, being the promotion of the public interest in compliance with the provisions of the Act by deterrence of further contraventions in the Act. In relation to general deterrence, s 716 of the Act is a core provision of the Act for the purpose of compliance and facilitating steps for enforcement of the obligations under the Act. There is a real and significant need for general deterrence in respect of an entity, be it a small business, in complying with a s 716 notice.
2. The Court has taken into account the recommended penalty by the Fair Work Ombudsman in respect of the first respondent, which was a range of 70% to 80%, being $28,825 to $33,000.
3. In relation to specific deterrence, the Court finds that this is a case where the first respondent is about to be placed in liquidation and there is, on the evidence, no substantial weight to the concept of need for specific deterrence.
4. In relation to the second respondent, the Court regards the belated engagement by the second respondent as diminishing the importance of the need for specific deterrence in relation to the second respondent. The Court has taken into account the second respondent's limited financial means and the evidence he gave in relation to his part-time employment.
5. In all the circumstances, the Court is satisfied that it is appropriate to impose a penalty on the first respondent in the sum of $28,875, being 70% of the maximum penalty.
6. In relation to the second respondent, in all the above circumstances, it is appropriate for the Court to impose a penalty on the second respondent in the sum of $3,000, which is approximately 36% of the maximum penalty.
7. The Court proposes to give the second respondent the period of 120 days to pay the said penalty. The Court will grant leave to the applicant to take steps for enforcement if necessary.

I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Street.