Consideration
91 As accepted by the parties it remains the responsibility of the Court to determine the appropriate penalty in a case such as the present.
92 The parties in their joint submission have conveniently referred to a range of authority governing the imposition of a civil penalty under the FW Act. There is a wide and growing range of authority emanating from this Court concerning the imposition of civil penalties under a range of Commonwealth legislation. It is regularly, and appropriately, observed by the Court when imposing a civil penalty that the purpose of imposing the penalty is to ensure that the objects or objectives of the particular regulatory scheme embodied in the legislation in question is achieved. In the course of the Court stating this, it is usually accepted that the objects or objectives of the relevant legislation are likely to be upheld if an appropriate penalty is imposed on a particular contravener and that, in setting that penalty, it is also appropriate to have regard to the message that the penalty imposed sends to other persons affected by the scheme of regulation in question concerning the need to comply with the provisions of the Act in order to meet the objects or objectives of the legislation. These considerations are often referred to respectively as specific deterrent and general deterrent. Nonetheless it is to the realisation of the objects or objectives of the particular legislation that attention must primarily be given. In this regard, see generally my observations in Comcare v Transpacific Industries Pty Ltd [2012] FCA 90 at [38].
93 In setting a particular civil penalty, the Court necessarily has regard to the nature and seriousness of the contravention and the particular circumstances of each case of contravention. While there is no "checklist" of factors to be considered set out in the FW Act (and usually not set out in other similar types of regulatory legislation), the Court will also regard the particular circumstances in which the Contravention occurred, whether it was a deliberate or more incidental contravention, the extent to which the contravening party has accepted, sooner or later, the fact of the contravention, as well as such factors as the nature and size and general appreciation that a particular contravener should have of the responsibilities that the FW Act imposes on he, she or it.
94 The range of factors that might possibly be considered relevant in a case such as the present have been identified in the joint submissions of the parties and the parties have addressed each of those factors. In the circumstances of this case I consider that each of the factors addressed is relevant and that the observations that are made in the joint submissions by the parties are also generally apposite.
95 In cases where there are a number of contraventions, it is sometimes appropriate to enquire whether there were distinct courses of conduct to which particular contraventions relate. The purpose of doing this is to ensure that the final penalty or penalties imposed do not simply comprise a mathematical total of individual, technical contraventions. In some cases it is the same conduct that has led to the contravention of different statutory provisions, as indeed is the case here, and the contraventions can tend to overlap. Where a number of contraventions are involved in a single course of conduct the penalty should properly reflect the gravity of the relevant course of conduct.
96 In this case I accept that it is reasonable to identify the contraventions as falling within the two broad courses of conduct suggested by the parties, being firstly the denial of the employee's entitlement to unpaid parental leave in contravention of a number of provisions of the FW Act, and secondly the unilateral reduction of the employee's hours of work in contravention of other particular provisions of the award and the FW Act.
97 I also agree that the admitted contravention of cl 10.4(c) of the award is a technical contravention in respect of which no separate penalty need be considered.
98 The parties therefore reasonably submit that the maximum penalty that the Court should consider imposing in respect of each of the two separate courses of conduct identified is $33,000 for WKO, and $6,600 for Ms O'Leary.
99 The process of "instinctive synthesis" referred to by the parties comes to bear on determining what the appropriate penalty for each course of conduct should be. I should add that the process of "instinctive synthesis" is not, as suggested in the joint submissions, a process to be equated with the totality principle, but rather a process that involves taking into account all the relevant circumstances of the case and determining in the exercise of judicial judgment what the appropriate fine or penalty should be: see Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [37]. While often appealed to as reasonably describing how the Court goes about exercising a sentencing function in the administration of the criminal law or when imposing a civil penalty under legislation such as the FW Act, the intuitive synthesis approach is not free from controversy: see, for example, Johnson at [40]-[44] (Kirby J).
100 The principle of totality is different. In Johnson in the joint judgment of Gummow, Callinan and Heydon JJ, their Honours, in the context of sentencing under the criminal law of Western Australia, discussed what had been said by the High Court about sentencing in Mill v The Queen (1988) 166 CLR 59 (Mill) and Pearce. In Johnson, their Honours at [12], page 352 referred to Pearce and observed that in the recent judgment of McHugh, Hayne and Callinan JJ their Honours said that the approach which ought to have been adopted by the sentencing judge in that case was to fix appropriate penalties for both offences, then consider the application of the totality principle and, in particular, whether any adjustments were needed to be made to either of the sentences imposed to achieve the total effective sentence which was consistent with the application of the principle. In Johnson at [18], page 354, their Honours also made reference to what was said in Mill by the Court (Wilson, Deane, Dawson, Toohey and Gaudron JJ) to the effect that the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is proposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is "just and appropriate". In Johnson at [26], their Honours affirmed the principle of totality, observing that the joint judgment in Mill had expressed a preference for what should be regarded as the orthodox, but not necessarily immutable, practice of fixing a sentence for each offence and aggregating them before taking the next step of determining concurrency. Their Honours in Pearce did not decree that a sentencing judge may never lower each sentence and then aggregate them for determining the time to be served. Their Honours noted that the preferable course would usually be the one which both cases commend but neither absolutely fully commands.
101 Their Honours in the joint judgement in Johnson also added at [26] that:
Judges of first instance should be allowed as much flexibility in sentencing as is consonant with consistency of approach and as accords with the statutory regime under which the sentencing is effected.
102 In the end, the point of identifying separate courses of conduct, where they truly exist, or in making some sentences or penalties concurrent, or in deciding not to impose a sentence or penalty in respect of some offences or contraventions, or in considering the principle of totality where there are a number of contraventions (or courses of conduct), is to ensure that the ultimate sentence or penalty reflects the nature and seriousness of the offending or contravening conduct in question and is proportionate to the overall offending or contravening conduct.
103 The principles drawn from the criminal law and such cases as Mill, Pearce and Johnson need to be applied with some caution in the imposition of civil penalties under legislation such as the FW Act, but they do serve to remind the Court that its task in imposing a penalty is to achieve what is appropriate, having regard to the nature and seriousness of an offence, to ensure that the objects or objectives of the civil regulatory legislation in question are achieved. To that end, the principles just discussed may assist in ensuring that excessive penalties going beyond what is necessary to achieve the objects or objectives of such legislation are not imposed.
104 As to the appropriate levels of penalty here, I consider the joint submission made to be correct, and that the penalty for each of the courses of conduct should be towards the lower end of the range after taking all relevant factors into account. The reasons for coming to this conclusion are that there is no suggestion that either respondent has previously contravened the legislation. At the same time, the contraventions are serious ones. The fact is that the respondents unilaterally and unlawfully decided to reduce the hours of employment of a pregnant employee. This led to the employee being constructively dismissed from her employment when she felt she had no option but to terminate her employment in light of her significantly reduced hours. An appropriate message needs to be sent not only to the contraveners in this case, but also to employers at large, that it is unlawful to terminate a woman's employment because she is pregnant.
105 While taking into account what I consider to be the nature and relative seriousness and deliberateness of the contravening conduct in this case, in the end the respondents did not contest their liability at a trial and relatively early in the process admitted their contraventions. This is to their credit.
106 The parties, however, suggest that it is only necessary to impose a civil penalty on the company and not on the moving mind of the company, its director Ms O'Leary. In my view, this is an inappropriate penalty outcome. The fact of the matter is that there would have been no contravention by the company if Ms O'Leary had not acted as she did. Indeed, the evidence shows that Ms O'Leary at one point sought guidance from the Fair Work Ombudsman hotline, which advised her to obtain legal advice, but she failed or neglected to do so. It seems to me in all the circumstances that it would be quite inappropriate not to impose a penalty on the individual.
107 The Fair Work Ombudsman suggests that there is authority to support the view that where the individual, by being a shareholder in the offending corporation, will in effect be financially "punished" by the civil penalty imposed on the corporation, then there is a case for not additionally imposing a civil penalty on the individual. I agree that principle can be relevant and should be regarded here as Ms O'Leary has a stake in the company as a shareholder. Nonetheless, I am also concerned that should, for some reason, the company not pay or be unable to pay the civil penalty imposed on it, the penalty should not go unpaid and Ms O'Leary escape the sanction of the Court for her part in the contraventions.
108 In these circumstances I consider that it is appropriate to also impose a civil penalty on Ms O'Leary of the same kind that the parties have agreed should be imposed on the company, but that the penalty should be suspended and not payable unless the company fails to pay the penalty imposed on it.
109 Similarly, I consider Ms O'Leary should also be personally obliged to pay the recommended compensation of $5,000, which I consider reasonable, in the event the company fails to do so.
110 So far as the power of the Court to make such a suspended penalty or compensation order is concerned, I note that in United Group Resources Pty Ltd v Calabro (No 7) [2012] FCA 432 McKerracher J, at [19], considered there was nothing that militated against a construction of s 545 of the FW Act that would exclude a power to suspend a pecuniary penalty. I consider the power to impose a penalty or award compensation includes the power to impose a penalty or an award on terms, as I propose. Counsel for the parties did not dispute the Court's power in this regard.
111 In conclusion, I am satisfied that the penalties proposed by the parties jointly are within the range of acceptable penalties and orders should be made in the terms proposed, provided however that there should also be an order imposing a similar penalty on the second respondent, as well as a compensation obligation, to be suspended in each case unless the first respondent fails to pay the similar penalty and compensation within the specific time.