Fair Work Ombudsman v Ho

Fair Work Ombudsman v Ho - [2024] FCAFC 111 - FCAFC 2024 case summary — Zoe

[7]

INTRODUCTION 1 This appeal concerns the determination of civil penalties under the Fair Work Act (2009) and whether separate contraventions, arising from breaches of different terms of a modern award, may be treated as one contravention by operation of s 557 of the Act. 2 The appellant, the Fair Work Ombudsman, appeals from a decision of a single judge of this Court. In that decision, the primary judge found that Polytrade Employment Services (PES), by paying a flat rate to five of its employees (the relevant employees), had failed to pay minimum hourly rates, minimum engagement periods, casual loadings, overtime rates, shift loadings and weekend and public holiday penalties under the Waste Management Award 2010. The primary judge found that failure by PES constituted 11 breaches of the Award and as a result 11 contraventions of s 45 of the Act. 3 PES employed the relevant employees to work at one of two waste recycling facilities operated by Polytrade Pty Ltd. The respondent to the appeal, Ms Pui Shan Christine Ho, was the sole director, secretary and shareholder of PES. She was also a 10% shareholder of Polytrade. Mr Man Seng Cheng, Ms Ho's husband, held the remaining 90% shareholding in Polytrade and was its sole director and secretary. 4 The primary judge found that Polytrade, Ms Ho and Mr Cheng were each "involved in" eight of PES's contraventions pursuant to s 550 of the Act (the accessorial liability provision). By that provision they were "taken to have contravened" s 45 of the Act. 5 The primary judge imposed 11 penalties on PES for its 11 separate breaches of the Award. His Honour found that s 557 of the Act (the course of conduct provision) did not permit the grouping of the 11 contraventions of s 45 by PES. His Honour imposed eight penalties on Polytrade and Mr Cheng for the eight separate contraventions in which they were involved. The primary judge found that s 557 of the Act did not apply to the contraventions of Polytrade and Mr Cheng, with a "considerable degree of hesitation" given that was the position for which both Polytrade and Mr Cheng had contended. His Honour found that Ms Ho was involved in eight separate contraventions by PES but, by operation of s 557 of the Act, he found that those contraventions constituted a single contravention. He imposed one penalty on Ms Ho. 6 By her one ground of appeal the Ombudsman submits that the primary judge erred in applying s 557 of the Act to find that Ms Ho's eight contraventions of s 45 constituted one contravention. Rather, the Ombudsman says on the proper construction of s 557, as determined by the Full Court of this Court in Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62; 221 FCR 153, that section groups contraventions of the same term of an award, and not contraventions of s 45, for both primary contravenors and accessories. The Ombudsman says that the primary judge should have found Ms Ho engaged in eight contraventions of s 45 of the Act and accordingly had eight penalties imposed. 7 Ms Ho concedes the primary judge was wrong to treat her eight contraventions of s 45 as one contravention by operation of s 557 of the Act. However, by her proposed Notice of Contention, for which leave was sought to file outside the time required by the Federal Court Rules 2011 (Cth), she contends that the same result would, and should, have been achieved by operation of s 556 of the Act (the civil double jeopardy provision), or the one transaction principle, or the totality principle. The Ombudsman consented to leave being granted for the Notice of Contention to be filed out of time. At the hearing of the appeal, the Court decided to determine that leave together with the appeal. 8 For the reasons that follow, the Court finds that the primary judge erred in his application of s 557 in respect of Ms Ho. Ms Ho's eight contraventions should not have been found to constitute one contravention. Further, whilst leave is granted for Ms Ho to file the Notice of Contention out of time, the Court finds that s 556, the one transaction principle, and the totality principle do not have the result that Ms Ho's eight contraventions should constitute one contravention. 9 Having found error the Court considers that the most efficient course is for it to reassess the penalties to be imposed on Ms Ho and determines, for the reasons set out below, that Ms Ho pay a penalty in the sum of $27,720.

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The primary judge's findings on the conduct of Ms Ho 12 Ms Ho's Amended Defence admitted, amongst other matters, that she was "a person responsible, in a practical sense, for ensuring that PES complied with its legal obligations under the FW Act". The primary judge determined that matter was "plainly significant". He reasoned that given PES did not comply with those obligations, it must be the case that Ms Ho failed to discharge that responsibility. The primary judge found at [129] (Fair Work Ombudsman v PTES 928 Pty Ltd [2023] FCA 934, to be referred to as J): …in other words, that she should be understood, by that failure (or those failures), to have engaged in conduct in the form of an omission (or omissions). But the omission was, in each case, the same: it subsisted in Ms Ho's failure to ensure that which she was responsible for ensuring (namely, that PES complied with its legal obligations under the FW Act - specifically, with its obligation under s 45 not to contravene the terms of the Award). 13 The primary judge described the position of Ms Ho as different from the position of PES. He concluded that the Award imposed multiple obligations on PES and that, for the purposes of s 45 of Act, the contravention of its terms was the failure to make the payments that each individual requirement of the Award compelled. However, for Ms Ho, the primary judge found that the Award did not bind her, and s 45 of the Act did not compel her to abide by its terms. Rather, he said that the only relevant obligation was to "ensure that PES complied with its legal obligations under the FW Act". The primary judge found that Ms Ho failed in that obligation on multiple occasions "but each occasion involved the same conduct (that is, the same omission)". Accordingly, he concluded: That understood, s 557(1) is applicable. Although she must be understood to have engaged (indeed, I have found that she did engage) in multiple contraventions of s 45 - specifically, in each of the eight Accessorial Contraventions - they must, for the purposes of pt 4 1 of the FW Act (and, in particular, s 546), be "…taken to constitute a single contravention". 14 For the reasons set out below, the primary judge was in error to treat the multiple contraventions of different Award terms, as a single contravention, when assessing the appropriate penalty Ms Ho was liable to pay.

[11]

Rocky Holdings and its application to Ms Ho 16 In Rocky Holdings the employer paid its employee a flat rate of pay. That flat rate relevantly resulted in breaches of six different award terms. The employer admitted the contraventions of the six different award terms (and as a result six contraventions of s 45 of the Act). Two directors of the employer admitted they were "involved in" the six contraventions of s 45 as accessories pursuant to s 550 of the Act. However, the employer and directors contended that s 557 required only one penalty to be imposed on each of them in respect of the six contraventions of s 45. The primary judge, Emmett J, disagreed and relevantly imposed six penalties on the employer and directors. On the appeal the parties agreed that the appeal should be determined on the basis that the contraventions arose from the same course of conduct, where for the purposes of s 557(1) a relevant "course of conduct" can relate only to contraventions of a civil penalty provision. The relevant issue of construction on the appeal was whether "a civil penalty provision" means s 45 of the Act or "a provision" of "a term" of an award. That question arose for both the employer, as the primary contravenor, and the directors, as accessories. 17 The Full Court concluded at [13] that: The reference in s 557(1) to "a civil remedy provision referred to in subsection (2)" discloses that it is the provision which is relevant. Section 557(2) identifies each of ss 44(1) and 45 as a civil remedy provision. It is the substance of those provisions which create the proscriptions. Section 44(1) proscribes contraventions of a provision of the NES. Section 45 proscribes contravention of a term of a modern award. 18 The Full Court accepted (and set out at [13]) the submissions of the Ombudsman that: section 557 also operates on contraventions which relevantly occur when a term of an award or a provision of an NES is contravened. This now occurs indirectly through the operation of sections 44 and 45. In the case of s. 45 (for example), the contravention occurs when a term of a modern award is contravened. Thus the effect of subsection 557(1) in relation to contraventions of s. 45 is that: …2 or more contraventions of (a term of an award) are, subject to subsection 3, taken to constitute a single contravention… 19 In support of its conclusion the Full Court also had regard to the Explanatory Memorandum to the Fair Work Bill 2008 (Cth) where it provided two examples of the operation of s 557(1) as follows: For example, if a company contravenes a single term of a modern award in respect of ten employees, these ten contraventions are taken to be a single contravention. This means that the maximum penalty that the Court can impose for the contravention is 300 penalty units. Similarly, if a company contravenes five separate terms of a modern award in respect of ten employees, these 50 contraventions are taken to be five contraventions. This means that the maximum penalty that the Court can impose is five times a maximum penalty of 300 penalty units. 20 Those two examples are consistent with the Full Court's construction. 21 The effect, in Rocky Holdings, was that multiple breaches of the same award term could be taken to constitute a single course of conduct and as a result one contravention of s 45. However, the resulting six contraventions of s 45 could not be grouped so as to constitute one contravention of s 45. In other words, the Full Court determined that s 557 operates, with respect to s 45, only on breaches of the same award term; s 557 does not group contraventions of different award terms. 22 Rocky Holdings has been followed by single judges and a Full Court of this Court. Those single judge decisions include: Fair Work Ombudsman v Commonwealth Bank of Australia [2024] FCA 81 at [59] (Bromwich J); Fair Work Ombudsman v IE Enterprises Pty Ltd [2021] FCA 60 at [13] (Anderson J), Enkel v We R Finance Pty Ltd [2020] FCA 1668 at [66]-[67] (Jackson J), Fair Work Ombudsman v Phua & Foo Pty Ltd [2018] FCA 137 at [35] (Siopis J), Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832 at [24] (White J), and Fair Work Ombudsman v Devine Marine Group Pty Ltd [2015] FCA 370; 234 FCR 122 at [12] (White J). The Full Court, in Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 270 FCR 39 at [286] (Besanko and Bromwich JJ), by analogous reasoning, endorsed the Rocky Holdings reasoning, when determining that contraventions of different enterprise agreement terms, comprise separate contraventions. 23 By analogy with Ms Ho, the Ombudsman contended that Ms Ho's eight breaches of different Award terms, and resulting eight contraventions of s 45, could not be grouped so as to constitute one contravention. Both the Ombudsman and Ms Ho contended that the primary judge failed to apply Rocky Holdings. 24 This Court agrees that where the primary judge found the eight contraventions of s 45 of the Act (for breaches of eight different Award terms) constituted one contravention, he erroneously failed to apply Rocky Holdings. 25 The primary judge did apply Rocky Holdings in respect of the conduct of PES. At [87] he determined: As concerns its failure to pay casual loadings … I do not accept that PES's contraventions should be seen by operation of s 557(1) as a single contravention for the purposes of pt 4-1 of the FW Act. The Award obligation to pay a casual loading in respect of ordinary hours of work was separate to the Award obligation to pay a casual loading in respect of other hours of work. Contraventions of those obligations involve (and, in this case, involved) different species of omission and, therefore, sufficiently different conduct: Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 (North, Flick and Jagot JJ …). 26 In this passage, the primary judge emphasised the different omissions for different obligations and accordingly the "sufficiently different conduct" of PES. However, when dealing with Ms Ho, the primary judge determined that Ms Ho had engaged in an omission, that for each Award term was the same. Namely, a failure to discharge the responsibility for ensuring that PES complied with its legal obligations under the Act. 27 The conclusion in Rocky Holdings did not depend on the employer, or the accessories, engaging in separate acts or omissions. Rather, the parties agreed that all of the contraventions arose out of a course of conduct. The chapeau to s 557(1) asks whether there are "2 or more contraventions of a civil remedy provision". If there are, they will be taken to constitute a single contravention if they were "committed by the same person" (s 557(1)(a)) and "arose out of a course of conduct" (s 557(1)(b)). Rocky Holdings construed the expression "2 or more contraventions of a civil remedy provision" in the chapeau as relevantly "2 or more contraventions of a term of an award". Rocky Holdings determined that s 557(1) cannot group contraventions of different award terms, whether subss 557(1)(a) and (b) are satisfied or not. That was equally true for PES and Ms Ho. The primary judge was wrong to find that Ms Ho's eight contraventions of s 45 constituted one contravention for the purposes of s 557(1) of the Act.

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Lohr and its application to Ms Ho 28 Lohr, like the present case and Rocky Holdings, involved the payment to employees of a flat rate of pay. The primary judge in Lohr, Manousaridis J, found that those flat rates resulted in 12 breaches of 12 different award terms and as a result 12 contraventions of s 45 by the employer. Mr Lohr was found to be involved in those 12 contraventions as an accessory under s 550 of the Act. Judge Manousaridis followed Rocky Holdings in holding that s 557 grouped multiple contraventions of a single award term but did not group contraventions of different terms. However, Manousaridis J then reasoned that the "one transaction principle" enabled him to treat the 12 contraventions as one contravention at common law. On appeal, Bromwich J determined, applying Rocky Holdings, that s 557 did not operate so as to allow multiple contraventions of s 45, arising from breaches of different award terms, to be treated as one contravention. He then reasoned that the common law "one transaction principle" or "course of conduct principle" did not enable the 12 contraventions to be treated as one contravention. Bromwich J set out and accepted the following two submissions of the Ombudsman in the appeal at [33]: The written submissions for the FWO on these grounds summarised the error asserted to have been made by the primary judge as follows (emphasis in original; footnotes omitted): 24. First, properly understood, the "one transaction" or "course of conduct" principle does not permit a sentencing judge to impose a single sentence for multiple contraventions on the basis that they formed part of a course of conduct, except where that is a course agreed or accepted by the parties. Absent a statutory provision that provides otherwise, a sentencing judge is required to impose a separate penalty for each contravention, having considered whether the penalties need to be adjusted to avoid the aggregate penalty being excessive. The Primary Judge did not do that. 25. Second, s.557 of the Act is the express statutory manifestation of the one transaction or course of conduct principle. By enacting s.557 Parliament has determined how multiple contraventions arising from a course of conduct are to be treated. Having applied s.557 of the Act it was not open for the Primary Judge to further consolidate the 12 contraventions into one contravention by applying that principle, in effect, again. 29 Bromwich J then concluded at [34]: Even if s 557 allows for the continued application of the course of conduct principle, which may be doubted, the application of s 557 to the facts of this case meant that there was no remaining work for the course of conduct principle to do. The fact of flat rates of pay cannot operate to deny the multiplicity of contraventions that this approach was found by his Honour to have produced. His Honour therefore erred in further consolidating the number of contraventions from 12 to one… 30 Relevantly for Ms Ho, Bromwich J made clear that the course of conduct principle had no work to do where there was one decision to pay one flat rate, and that decision led to breaches of different terms of the award. 31 In the present case, the primary judge determined that Lohr was of "limited, if any, assistance". He did so in part on the basis of his view that Lohr was concerned with "the sequential application of both s 557(1) and the so-called 'course of conduct' principle". However, in Lohr Bromwich J determined that both s 557(1) and the common law did not allow multiple breaches of different award terms to be treated as one contravention of s 45. The primary judge also formed the view that Lohr, and the first instance decision in Lohr (Safecorp), did not examine the specific accessorial conduct of Mr Lohr. It appears to us that Manousaridis J did examine those circumstances (See Safecorp at [124]-[126], [139], [142] and [146]). 32 In our view, the findings of Bromwich J in Lohr supported the Ombudsman's position before the primary judge in this case that Ms Ho's eight contraventions of s 45 of the Act should not have been taken to constitute one contravention.

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Leave to extend time for the filing of the notice of contention 41 The Rules provide that a notice of contention is to be filed 21 days after the notice of appeal is filed. Here the notice of appeal was filed on 8 September 2023. The proposed notice of contention was filed on 26 April 2024. 42 A principal consideration, when exercising the discretion to grant leave for a notice of contention to be filed outside the 21 day period, is the proper administration of justice and the need to ensure that a decision has been made in a procedurally fair manner and in accordance with law: see SZMTJ v Minister for Immigration and Citizenship (No 2) [2009] FCA 486; 232 FCR 282 at [13]. 43 In Peter Vogel Instruments Pty Ltd v Fairlight.Au Pty Ltd [2016] FCAFC 172; 343 ALR 387 the Full Court stated at [92]: We consider that the grant of an extension will be governed by familiar considerations applicable to discretionary matters concerning case management. Any such assessment necessarily involves many potentially competing considerations in light of the overarching purpose set out in section 37M of the Federal Court of Australia Act 1976 (Cth), being to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. The significance of case management principles in determining the outcome of interlocutory applications is now widely accepted; Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at [111] - [114]; Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46; (2013) 250 CLR 303 at [51], [52], [56], [57]; Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101; (2010) 187 FCR 261 at [45]. 44 As explained, the notice of contention was filed well outside the period provided for by the Rules, and it was filed 24 days before the hearing of the appeal. However, the Ombudsman consents to the extension of time. The Ombudsman does not complain that she has had insufficient time to address the arguments advanced in the notice. The Ombudsman does not complain that she will suffer any prejudice by an extension of time. 45 The notice of contention did not delay or unduly extend the time of the hearing of the appeal. The hearing was able to be heard on the day and in the time allocated. There was no complaint that the notice added significantly to the cost of the hearing. Whilst we discourage the late filing of notices of contention, in the present circumstances, including the Ombudsman's consent, this Court will extend the time for that filing.

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Does s 556, the double jeopardy provision, result in one contravention by Ms Ho? 46 The respondent submits, by ground 1 of her notice of contention, that s 556 of the Act operates to preclude the Court from imposing on her more than one penalty. 47 Section 556 provides: If a person is ordered to pay a pecuniary penalty under a civil remedy provision in relation to particular conduct, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of a law of the Commonwealth in relation to that conduct. 48 The respondent contends that s 556 should be read "in the same way" as s 557 so that "some other provision of a law of the Commonwealth" includes "different award obligations". Therefore, she says, by reliance on the Full Court in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2019] FCAFC 201; 272 FCR 290, that the reference in s 556 to "particular conduct" is a reference to what she "actually did". She says that what she actually did was to "transfer money to the relevant employees by the process described in her affidavit". That she submits is the "single positive act". 49 We reject the respondent's submission. First, s 556 refers to "some other provision of a law of the Commonwealth". An award is enforceable by operation of s 45 of the Act, which provides that a person must not contravene a term of a modern award, but an award is not itself a law of the Commonwealth. As we have found, breaches of multiple award terms result in multiple breaches of s 45 of the Act. Section 556 does not have operation in relation to multiple contraventions of the same provision in the Act: See Australian Building and Construction Commissioner v Huddy (No 2) [2017] FCA 1088 at [61] per White J. 50 Second, the appellant in her submission identified the contrast between ss 556 and 557. As we have found above, the relevant construction of s 557 turns on the expression "2 or more contraventions of a civil remedy provision"; multiple breaches of s 45 relating to different award terms do not constitute "2 or more contraventions of a civil remedy provision". The Ombudsman submits, and we accept, that is because the substance of such contraventions differ and not because the award terms are different provisions of a law of the Commonwealth. As submitted by the Ombudsman, the expression "some other provision of the law of the Commonwealth" in s 556 cannot be read in the same way as the expression "2 or more contraventions of a civil remedy provision" in s 557. 51 Third, if the respondent's approach was correct then it would significantly undermine the application of s 557. The operation of s 557 requires that Ms Ho be liable for eight contraventions. Despite this Ms Ho contends s 556 could then be applied to reduce that number to one. Such an approach would undermine the object at s 3(b) of the Act to ensure relevant and enforceable minimum terms and conditions through modern awards. It would also, as the Ombudsman contends, lead to the anomalous result, criticised by Rocky Holdings, that the same maximum penalty would apply to a person who had contravened multiple terms of an award on multiple occasions, as to a person who had contravened one term on one occasion. 52 Ground 1 of the notice of contention fails.

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Does the 'one transaction principle' result in one contravention by Ms Ho? 53 By apparent reliance on ground 2 of her notice of contention, Ms Ho contends that if s 556 does not result in one penalty for her, then the application of common law principles achieves the same result. Ms Ho submits that if it is accepted that Ms Ho engaged in a single positive contravening act, then the "one transaction principle" should apply, resulting in one penalty. 54 In Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 (ABCC v CFMEU) the Full Court said at [148]: The important point to emphasise is that, contrary to the Commissioner's submissions, neither the course of conduct principle nor the totality principle, properly considered and applied, permit, let alone require, the Court to impose a single penalty in respect of multiple contraventions of a pecuniary penalty provision. There is no doubt that, in an appropriate case involving multiple contraventions, the Court should consider whether the multiple contraventions arose from a course or separate courses of conduct. If the contraventions arose out of a course of conduct, the penalties imposed in relation to the contraventions should generally reflect that fact, otherwise there is a risk that the respondent will be doubly punished in respect of the relevant acts or omissions that make up the multiple contraventions. That is not to say that the Court can impose a single penalty in respect of each course of conduct. Likewise, there is no doubt that in an appropriate case involving multiple contraventions, the Court should, after fixing separate penalties for the contraventions, consider whether the aggregate penalty is excessive. If the aggregate is found to be excessive, the penalties should be adjusted so as to avoid that outcome. That is not to say that the Court can fix a single penalty for the multiple contraventions. (Emphasis added.) 55 The Full Court then identified at [149] some limited circumstances where a single penalty may be imposed for multiple contraventions. None of those are relevant here. The Full Court said: In an appropriate case, however, the Court may impose a single penalty for multiple contraventions where that course is agreed or accepted as being appropriate by the parties. It may be appropriate for the Court to impose a single penalty in such circumstances, for example, where the pleadings and facts reveal that the contraventions arose from a course of conduct and the precise number of contraventions cannot be ascertained, or the number of contraventions is so large that the fixing of separate penalties is not feasible, or there are a large number of relatively minor related contraventions that are most sensibly considered compendiously. As revealed generally by the reasoning in Commonwealth v Director, FWBII, there is considerably greater scope for agreement on facts and orders in civil proceedings than there is in criminal sentence proceedings. As with agreed penalties generally, however, the Court is not compelled to accept such a proposal and should only do so if it is considered appropriate in all the circumstances. It is also at the very least doubtful that such an approach can be taken if it is opposed or the proceedings are defended. 56 Those paragraphs were endorsed by the Full Court in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Registered Organisations Commissioner [2020] FCAFC 232; 283 FCR 404 at [81]-[82]. Statements to the same effect were made by Full Courts in Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 262 FCR 243 and Transport Workers' Union of Australia v Registered Organisations Commissioner (No 2) [2018] FCAFC 203; 267 FCR 40. 57 Consistent with those authorities, the one transaction principle does not, in the present circumstances, permit a reduction or limit on the number of penalties. The application of the one transaction principle does not lead to the result that Ms Ho engaged in one contravention of the Act. Nothing in the authorities above (together with Rocky Holdings and Lohr) leads to the result that Ms Ho's supposed single act of underpayment by the payment of a flat rate results in only one contravention. 58 Ground 2 of the notice of contention, as it is directed to the one transaction principle, fails.

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Principles 65 In her written submissions on penalty, the Ombudsman referred to and relied upon her penalty submissions filed before the primary judge. There was no meaningful dispute between the parties on the principles regarding the imposition of penalties. Those principles are uncontroversial. The relevant principles can be summarised as follows: (a) Section 546 confers a discretion that is to be exercised judicially, that is, fairly and reasonably having regard to the subject matter, scope and purpose of the legislation: see Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 274 CLR 450 at [40] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ). (b) Civil penalties are imposed primarily, if not solely, for the purpose of deterrence: see Pattinson at [15] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ). That is, the purpose of the penalty is to promote the public interest in compliance and to attempt to put a price on a contravention that is sufficiently high to deter repetition by the contravenor and by others who are in a position to contravene legislation: see Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (the Agreed Penalties Case) at [55]). (c) A penalty is appropriate if it is no more than might be considered to be reasonably necessary to deter further contraventions of a like kind by the contravenor and others: Pattinson at [9]. (d) Whilst the imposition of the penalty is at large, there should 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]. The reasonable relationship should be considered by reference to the need for deterrence: Pattinson at [55]. (e) Whilst the Court's task is to determine what is an appropriate penalty, the authorities have identified several factors which inform the assessment of a penalty of appropriate deterrent value. However, such factors should not be approached as a rigid catalogue or checklist: Pattinson at [18]-[19], citing French J in Trade Practices Commission v CSR Ltd [1990] FCA 521; [1991] ATPR ¶41-076 at 52,152-53. The factors set out by French J were: the nature and extent of the contravening conduct; the amount of loss or damage caused; the circumstances in which the conduct took place; the size and power of the contravening company; the deliberateness of the contravention and the period over which it extended; whether the contravention arose out of the conduct of senior management; whether the company has a corporate culture conducive to compliance; and, whether the company has shown a disposition to co‑operate with the authorities responsible for the enforcement in relation to the contravention.

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Ms Ho's complicity 77 At J[155] the primary judge concluded that Ms Ho contravened s 45 knowingly; "in other words, that she was knowingly complicit in what PES did". At J[162] his Honour concluded that whatever was done, or not done, was "with knowledge that the Relevant Employees would be paid less than what the Award entitled them to be paid". Again, none of those conclusions were challenged before this Court and are relied upon in this reassessment. 78 Reliance is also placed on Ms Ho's admissions set out above, and Ms Ho's acceptance in the appeal that she was "complicit in [the] underpayment contraventions". 79 The Ombudsman submitted that consideration ought to be given to Ms Ho's conduct as compared to that of Mr Chen (the other individual accessory), given penalties have already been ordered by the primary judge in relation to his conduct and the Court ought to apply the "parity principle". It may be accepted that the Court may utilise the "parity principle" as an analytical tool when assessing what may be considered reasonably necessary to deter further contraventions of the Act: see Pattinson at [45]. A marked disparity in penalty as between individuals that would give rise to a "justifiable sense of grievance" is to be avoided: see Postiglione v The Queen [1997] HCA 26; 189 CLR 295 at 301 (Dawson and Gaudron JJ), 309 (McHugh J), 322-23 (Gummow J), 335-36 (Kirby J). However, the deployment of this tool forms part of, but does not replace, the Court's task of assessing Ms Ho's conduct and the appropriate penalty in the circumstances to achieve specific and general deterrence. 80 Ms Ho submits that she was not involved in recruitment, setting or changing pay rates or anything beyond transferring pay. She contends, by comparison, that Mr Cheng was in effective control not only of Polytrade, but of employee entitlements. The Ombudsman responds that Mr Cheng denied responsibility for recruitment and setting rates. We are not able, on the evidence before us, to determine Mr Cheng's responsibility for recruitment and setting rates. However, and in any event, the significant aspects of culpability are: the responsibility for compliance with the Award and Act obligations; the knowledge of the Award obligations; and the knowledge that the payments made did not meet those obligations. In those respects, there is no difference between Mr Cheng and Ms Ho. Both of them made the same admissions in respect of that responsibility and knowledge. 81 Whilst we accept, as contended for by Ms Ho, that she had no personal involvement with the employees and had never been on site, her admissions as to her responsibility to those employees and her knowledge of their underpayments must be taken into account. 82 Ms Ho suggests that it was Polytrade that benefitted from the underpayments rather than PES. Mr Cheng held a 90% shareholding in Polytrade. However, Ms Ho, for a time, held a 10% shareholding in Polytrade and was the sole shareholder of PES. We accept the submission of the Ombudsman that Ms Ho did not deny receiving some benefit as the result of her shareholding, and further that any reduction in the costs of Polytrade provided a benefit to PES. 83 Whilst we have given some discount to Ms Ho for the reduced need for specific deterrence, the primary judge also gave such a discount to Mr Cheng on the basis that he was "no longer in business (or, at least, not in the business of waste recycling)": J[165].

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