Penalties to be imposed upon PES
77 The penalties to be imposed upon PES in light of the conduct in which (as I have found) it engaged in contravention of the FW Act call for some analysis of the circumstances within which that conduct was engaged. All of what follows emerges without material controversy from the pleadings (especially the admissions) and the evidence.
78 There can be no doubt that, by reason of the conduct in which I am satisfied that PES engaged in contravention of the FW Act, each of the Relevant Employees was underpaid a substantial sum of money over a relatively confined period of time. It is agreed that, in total, they were underpaid $194,249.70 over a period of just 20 months. For the work that they performed over that period, they were paid between 53 and 58 per cent only of what the Award required that they be paid. On any view, those are damning figures.
79 They are made worse by considering the personal circumstances of the Relevant Employees. All are from migrant backgrounds and have limited to negligible written and verbal English skills. At least two of them were recent arrivals in Australia who had limited (if any) employment history here. The three who gave evidence by affidavit all noted what might otherwise fairly be presumed: that they possessed little if any knowledge about their workplace rights or the existence of (or their entitlements under) the Award. All deposed to having experienced difficulty finding employment in Australia.
80 Further, it could hardly be doubted that the Relevant Employees worked hard for what they did receive. Those who gave evidence deposed to working 12-hour shifts, usually six and sometimes seven days per week. For that, they received a flat rate of $22 for every hour that they worked (regardless of when).
81 Although it cannot factor into present calculations, the evidence makes clear that PES's Award transgressions were not limited to the Relevant Employees or the period between February 2018 and October 2019. Once alerted to its wrongdoing (or otherwise prodded into addressing it), PES (and, it would seem, the other respondents) took steps to identify other employees over other periods who might similarly have been paid otherwise than what the Award required that they be paid. Those inquiries revealed a much more significant problem: approximately $2,200,000.00 of entitlements wrongly withheld since 2012. The evidence discloses that those underpayments have since been rectified. That acknowledged, it bears repeating: the court is not here concerned to impose penalties otherwise than in respect of the $194,249.70 by which the Relevant Employees were underpaid between February 2018 and October 2019.
82 Although it would appear no longer to operate (at least not in respect of the two sites at which the Relevant Employees worked), PES is or was, on any view, a sizeable operation. Polytrade is (or was) self-described as one of the "three largest recycling companies in Victoria". Between them, the related entities were able to raise funds sufficient to correct the significant underpayments that were uncovered (including in respect of other employees and other periods). It must be inferred that they were possessed of not insignificant financial means.
83 The enormity of Award underpayments notwithstanding, PES appears (perhaps together with Polytrade) to have reacted responsibly once conscious of the need to address them. It facilitated the applicant's efforts to ascertain the extent of the Relevant Employees' underpayment and agreed to admit the contraventions that were later alleged against it in this proceeding (albeit some months after they were first aired). More significantly, it took measures of its own to correct the underpayments before this proceeding was even commenced (although, again, that did not transpire until after the passage of several months). Those measures extended beyond the Relevant Employees and the period spanning February 2018 to October 2019; but, in the case of the Relevant Employees, the bulk of the amounts comprising the total underpayment amount were repaid on 29 June 2020, with additional, much smaller remedial amounts paid to some of them in January 2021 (a few weeks before this proceeding was commenced).
84 PES (with the assistance of Polytrade), also took steps to guard against repetition of the Award contraventions in which it had engaged. Audit processes were established and maintained to ensure that Award non-compliance would not repeat. It is apparent that the measures that were adopted to address and guard against future Award contraventions reflect an acceptance on the part of PES (at the least) that what occurred ought not to have.
85 Nonetheless, it is also apparent that PES's decision to pay the Relevant Employees a flat rate of pay for all hours worked, regardless of how many they totalled or at what times that work occurred was wantonly naïve, at best. At worst, it involved a deliberate and cavalier disregard of important Award safety net obligations. In light of its no longer operating at the two relevant sites, the need specifically to deter PES from further Award contraventions does not loom as largely as might otherwise be the case. But the need to deter other employers generally in that regard very much does. For the court to realise the deterrent effect that the imposition of penalties must be fashioned to achieve, it is clear that PES must pay a heavy toll for its misconduct.
86 I turn, then, to the individual contraventions and what should suffice to deter their repetition into the future. Insofar as concerns its failure to pay Award rates of pay for ordinary hours of work (above, [39(1)]), I consider that the applicant's proposed penalty - between 50% and 60% of the maximum (discounted for cooperation) - is more punitive than is warranted. PES is a first-time (and, one hopes, a one-time-only) contravenor that, despite the scale and audacity of its transgressions, has responded in a responsible and conscientious way that bespeaks an acceptance of wrongdoing and an eagerness to ensure against similar conduct in the future. The amount of the underpayment ($3,232.44) - though no doubt significant for the Relevant Employees - is nonetheless modest. I consider that, in the circumstances, a penalty set at 20% of the (undiscounted) maximum is appropriate to deter repetition of PES's conduct; both by it and by other employers who might be minded to emulate it.
87 As concerns its failure to pay casual loadings (above, [39(2)] and [39(3)]), 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 - hereafter, "Rocky Holdings").
88 Nonetheless, the legal and factual elements of the casual loading contraventions are plainly interrelated. The court should be alive to that reality and should guard against the possibility - any possibility - of double punishment. Thus, it has been said that the "course of conduct" principle:
…recognises that, where there is an interrelationship between the legal and factual elements of two or more offences with which an offender has been charged, care needs to be taken so that the offender is not punished twice (or more often) for what is essentially the same criminality. The interrelationship may be legal, in the sense that it arises from the elements of the crimes. It may also be factual, because of a temporal or geographical link or the presence of other circumstances compelling the conclusion that the crimes arise out of substantially the same act, omission or occurrences.
See: Royer v Western Australia (2009) 197 A Crim R 319, 328 [22] (Owen JA, with whom Miller JA agreed in the result, Buss JA dissenting).
89 The principles that guide the application of the "course of conduct" principle are notorious and not obviously in dispute. I need not repeat the observations that I made in Australian Building and Construction Commissioner v Pattinson (2019) 291 IR 286, 314-316 [105]-[111]. I am satisfied that it is appropriate to impose upon PES separate penalties for the two casual loading contraventions; but, again, I am not minded to fashion them at the level proposed by the applicant (50% to 60% of the discounted maximum). In the circumstances, penalties set at 30% and 20% of the maximum, respectively, are appropriate to meet the deterrent effect to which the imposition of penalties is directed. The different amounts reflect the severity of the impacts that the contraventions visited upon the Relevant Employees (at least collectively).
90 In relation to PES's failure to pay weekday night shift loadings (above, [39(4)]), I am again not minded to impose a penalty at the level proposed by the applicant. In my view, a penalty set at that level (between 50% and 60% of the discounted maximum) would trespass beyond the requirements of deterrence into the realm of "oppressive severity". As with the non-payment of Award rates of pay for ordinary hours of work, I consider that a penalty set at 30% of the maximum strikes an appropriate balance.
91 I turn to consider PES's failure to pay weekday overtime rates (above, [39(5)]). I accept the applicant's submission that PES's conduct in that regard is deserving of a greater penalty than is warranted for the casual and shift loading contraventions. Nonetheless, I am again unable to agree that a penalty fashioned at 60% to 70% of the discounted maximum strikes a reasonable balance between oppressive severity and the need for deterrence in this case. In saying so, I need not repeat the observations already made about PES having not previously been found to have contravened the Award, nor about its acceptance of wrongdoing. I consider, in all of the circumstances, that a penalty set at 40% of the maximum is appropriate.
92 I take the same approach to the "group[ing]" of PES's failures to pay Saturday and Sunday overtime (above, [39(6)] and [39(7)]) as to the non-payment of casual loadings (above, [87]-[89]). I am satisfied that the conduct that gave rise to those contraventions does not attract the operation of s 557(1) of the FW Act; but also that, by operation of the "course of conduct" principle, the court should be careful to account for the interrelationships between the legal and factual elements of each. Again, I am not minded to impose penalties at the level that the applicant proposes. Penalties set at that level would be inappropriately severe relative to the need for general and specific deterrence. I consider that penalties set at 30% of the maximum for each contravention are appropriate in the circumstances.
93 Insofar as concerns PES's failure to pay public holiday overtime rates (above, [39(8)]), I am, again, not minded to impose a penalty at the level that the applicant proposes (30% to 40% of the discounted maximum). Again, a penalty set at that level would extend beyond what is necessary to deter repetition of the conduct (generally and specifically). It would be oppressive in its severity. In the circumstances (and, in particular, having regard to the amount of the underpayment), a penalty set at 20% of the maximum is appropriate.
94 PES's failure to pay for minimum periods of engagement (above, [39(9)]), though not insignificant, was plainly less egregious than its other conduct. Respectfully, I agree with the applicant's submission (which is consistent with that of PES itself) that it warrants the imposition of a penalty between 10% and 20% of the discounted maximum. A penalty set at 15% of the maximum is appropriate.
95 I am unable, however, to accept that PES's failure to provide information concerning the terms of employee engagement (above, [39(10)]) warrants the imposition of a penalty set at between 30% and 40% of the discounted maximum. It is difficult to discern why it might be said that a penalty in that range strikes an appropriate balance between oppressive severity and the need to deter. Unlike amounts that were underpaid, it is more difficult to gauge the impacts that PES's failure surely visited. Plainly, the obligation to inform is an important one that should be honoured. But it is not apparent here that it has resulted in particular consequences for the Relevant Employees that ought to factor in the court's assessment of what is appropriate. In the circumstances - and, in particular, having regard to PES's status as a first-time "offender" and the measures that it took to correct its misconduct - I consider than a penalty set at 17.5% of the maximum is appropriate.
96 I next turn to consider PES's failure to make superannuation contributions into the correct fund (above, [39(11)]). The applicant proposes that a penalty set at between 10% and 20% of the discounted maximum should be imposed. Although perhaps within the window of appropriateness, I am not minded to set a penalty at that high a level. It is, again, difficult to know what, if any, impact PES's conduct has visited upon the Relevant Employees. Without wishing to understate the significance of the contravention - for a contravention it was - it appears to have been of little more than administrative consequence. I consider that, in all of the circumstances, a penalty set at $3,500.00 is appropriate.
97 PES's failures to make and maintain compliant employee records (above, [41(1)] and [41(2)]) are more serious. It has been said that proper record keeping is "the bedrock of compliance": Fair Work Ombudsman v Dosanjh [2016] FCCA 923, [46] (Judge Altobelli); Fair Work Ombudsman v ACN 052 182 180 Pty Ltd & Anor [2013] FCCA 688, [20] (Judge F Turner) and Fair Work Ombudsman v Soleimani & Anor [2014] FCCA 2380, [55] (Judge Jones). Plainly - and as the applicant submitted - "[i]nadequate record keeping undermines…the effectiveness of the statutory safety-net for employees". Insofar as concerns PES's failure, in particular, to maintain records of employee overtime, that proposition rings loud and true. In the absence of accurate records of what hours employees have worked, it is impossible - or, at the least, needlessly difficult - to reliably ascertain whether they have been paid what they are entitled to have been paid. Thus the creation and maintenance of accurate records is no mere administrative triviality.
98 Those observations notwithstanding, the penalty that the applicant proposes (between 70% and 80% of the discounted maximum) in respect of PES's failure to make and keep overtime records is well above what the circumstances here warrant as appropriate. It must be borne in mind presently that PES's failure to make and create records of that nature does not, for example, appear to have been (and was not suggested to have been) a deliberate exercise in obfuscation or trickery. Records, of course, ought to have been made and retained; but the circumstances do not here present as warranting anything like 80% of the discounted maximum. Rare will be the case that penalties at that level will be appropriate for a first-time contravenor that has shown the measure of appreciation for its wrongdoing that PES has shown. In the circumstances, I am minded to set, as appropriate, a penalty at 40% of the maximum.
99 The failure to make or maintain records pertaining to the termination of Mr Ramu's employment is less egregious. As much is accepted by the applicant, who proposes a penalty of between 10% and 20% of the discounted maximum. I accept that that window is appropriate. I will impose a penalty set at 10% of the maximum.
100 PES's failure to provide pay slips that recorded the name of the superannuation fund into which contributions were paid on behalf of the Relevant Employees (above, [42]) is similar (though not identical) in seriousness to its failure to make contributions into the fund required under the Award. The significance of the failure for the Relevant Employees is not obvious; it may traverse no further than that they were denied a record of the kind to which they were entitled under the FW Act. Again, the applicant proposes a penalty of between 10% and 20% of the discounted maximum. I accept that a penalty set at 10% of the maximum is appropriate in the circumstances.
101 All told, then, I am minded to impose upon PES the following penalties, namely:
For the contravention described above at: …a penalty equal to this percentage of the maximum: …which equates to a penalty of:
[39(1)] 20% $12,600.00
[39(2)] 30% $18,900.00
[39(3)] 20% $12,600.00
[39(4)] 30% $18,900.00
[39(5)] 40% $25,200.00
[39(6)] 30% $18,900.00
[39(7)] 30% $18,900.00
[39(8)] 20% $12,600.00
[39(9)] 15% $9,450.00
[39(10)] 17.5% $11,025.00
[39(11)] N/A $3,500.00
[41(1)] 40% $25,200.00
[41(2)] 10% $6,300.00
[42] 10% $6,300.00
TOTAL $200,375.00