Karki v Woolworths Group Limited [2026] FedCFamC2G 411

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 24.04(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth)), or to record a variation to the order pursuant to r 24.04 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2025 (Cth).

1. These are Fair Work proceedings within the Court's jurisdiction under s 566 of the Fair Work Act 2009 (Cth) ("the Act"). The proceedings were commenced on 19 February 2025 by a statement of claim. That statement of a claim was amended on 3 November 2025 and advanced four contraventions of the Act, which were listed for hearing before this Court on 18 February 2026 by consent. This hearing was conducted and heard concurrently with two other matters. Ultimately, there was a consent position adopted by the parties in relation to three contraventions, which were the subject of declarations, relevantly, as follows:
   1. A declaration that Woolworths Group Limited contravened s 50 of the Fair Work Act 2009 (Cth) (FW Act) by failing to provide Mr Karki with his standard rostered hours during the weeks commencing 30 June 2025 and 7 July 2025 in accordance with clause 8.1(a)(i) of the Woolworths Australian Food Group Agreement 2024 (2024 Agreement).
   2. A declaration that Woolworths Group Limited contravened s 50 of the FW Act by making changes to Mr Karki's standard contract hours on Tuesday 22 July 2025 in a manner that was not consistent with clause 9 of the 2024 Agreement.
   3. A declaration that Woolworths Group Limited contravened s 323(1)(a) of the FW Act by making deductions from Mr Karki's pay on 16 July 2025 and on 23 July 2025.
2. The Court, with the agreement of the parties, heard argument as to whether there should be imposed a civil penalty and what penalty should be imposed. In summary, the respondent contended that the contraventions were de minimis and should not be the subject of any penalty.
3. At the commencement of the hearing on penalty, the Court raised with both parties the proper construction of s 557(3) of the Act. It was submitted by Mr Hicks that the provision, being a penal provision, should be the subject of a narrow construction and that, on its proper construction, the work done by subsection (3) in its reference to an earlier contravention of the provision should be construed as an earlier contravention of the provision.
4. In respect of the particular contravention, be it of the national employment standards and/or be it of the modern award, or the enterprise agreement or workplace determination, or national minimum wage orders, or equal remuneration orders, or regulated labour hire arrangement order, or alternative protected rate of pay orders, or arbitrated protected rate of pay orders, or minimum standard orders, collective agreements, or by contractual orders, or extended parental provisions, or extended family paid family and domestic violence leave provisions, or extended notice of termination provisions.
5. Subsection (2) of s 577 of the Act refers to a number of particular sections and then describes the topic with which it deals. Mr Minucci, on behalf of the respondent, supported the same narrow construction as announced by Mr Hicks in relation to s 557(3) of the Act. The relevance of the issue in relation to s 557 subsection (3) is that the benefit of s 557(1) is lost from a contravention of the substantive provision, a position that was not supported by either party, or is lost when there has been non-compliance with the substantive provision in respect of the particular type of contravention of a particular provision within the relevant standard award agreement and orders of the kind the court has referred to.
6. The Court accepts the submission of the parties that on the proper construction of s 557(3), the benefit of subsection (1) is lost where there has been a pecuniary penalty imposed on the relevant person for an earlier contravention of the provision in respect of the particular provision of the standard award agreement or orders.
7. The Court is satisfied that the taking away of the benefit of the course of conduct provision of subsection (1) is properly characterised as being of a penal nature, albeit that the Court accepts it can be said to be informed by the objectives found in s 3 of the Act. Section 557 of the Act is part of the provisions within division 4 of part 4.1 in relation to civil remedies under chapter 4 concerned with compliance and enforcement of the Act. Given the declarations that were made by consent, it is not necessary for the Court to traverse the whole of the evidence of the applicant in relation to the contraventions.
8. The applicant commenced employment with the respondent at its Booragoon supermarket in about August 2021 in the role of store manager and then was store manager at Victoria Park supermarket since about March 2023, when he worked his first shift. Since then the applicant has been a part-time employee. The applicant identified these contract hours and the standard roster was identified in the Woolworth's Australian Food Group Agreement 2024. The applicant contended he was not provided with his contract hours of 24 hours in a number of weeks.
9. The applicant also identified a change to his contract hours and that he did not provide consent to such change in writing.
10. The applicant also identified two instances of the respondent deducting money from his payslips. The respondent identified these deductions were to retrospectively account for the applicant's change in position from Assistant Grocery Manager to part-time store team member.
11. The Court heard concurrent arguments on penalties and has taken into account the relevant law as identified in the matter of Dare v Woolworths Group Limited (No 2) [2026] FedCFamC2G 407, published at the same time, and the Court does not accept that this is an appropriate case where there should be no penalty imposed.
12. On the issue of penalty, the Court received written and oral submissions on behalf of the applicant. Mr Hicks maintained that there is no guiding principle, that the penalty imposed required any proportionality between the seriousness of the conduct and the penalty imposed, having regard to the maximum penalty, and that there must be some reasonable relationship between the theoretical maximum and the final penalty imposed.
13. The Court regards the relevant principles in respect of the penalty to be succinctly summarised by French J, as he then was, as identified in paragraph [5] in Fair Work Ombudsman v Aica International Pty Ltd [2025] FedCFamC2G 975, and that relevantly includes the nature and extend of the contravening conduct, as one of the several listed factors.
14. Mr Hicks advanced that the penalty must be fixed so as to ensure that the offender and others do not regard the same as an acceptable cost of doing business, and that it must strike a reasonable balance between deterrence and oppressive severity. Mr Hicks advanced that the Court should do what it can to deter non-compliance with the Act and identified the observations made in the Australian Building Construction Commission v Construction, Forestry, Mining and Energy Union [2018] 262 CLR 157 at [195] - [196].
15. Mr Hicks also relied on the proposition that the circumstances of the contravener may be of more significance in determining the extent of the necessity for deterrence and that a large pecuniary penalty may be appropriate for a relatively minor contravention order to serve the purpose of deterrence, whether specific or general or both.
16. It was common ground between the parties that the maximum penalty for each contravention in the present case was $495,000. Mr Hicks addressed the size of the respondent, describing it as an extremely large and well-resourced company, and contended that low penalties will not serve as an effective deterrence. Mr Hicks also advanced that it has been recognised that there is a need for general deterrence in the retail and food manufacturing industries.
17. Mr Hicks made reference to the importance of the statutory provisions that were contravened and contended that higher penalties were likely to be appropriate to secure effective deterrence. Mr Hicks also submitted that the penalty should operate as an incentive to bring a prosecution under the Act and that this ensures enforcement of the legislative scheme. It was submitted that higher penalties incentivise applicants, making contraveners less likely to breach the law.
18. On the first declaration in respect to which the Court found the applicant suffered a loss and made an order for compensation, Mr Hicks submitted a penalty of 60 per cent of the maximum should be imposed, being $297,000. In respect to the second contravention, Mr Hicks submitted that a penalty in this amount of 75 per cent of the maximum, being $371,250, should be imposed. In respect to the third contravention, Mr Hicks submitted that a penalty of 50 per cent of the maximum should be imposed, being $247,500.
19. There was also an issue raised as to whom the penalties should be paid to, and attention was drawn to the observations of learned Lee J in Transport Workers' Union of Australia v Qantas Airways Ltd [2025] FCA 971 at [272]. The applicant seeks half of the penalty to be paid to the applicant and the other half to the Australian Meat Industry Employees Union, being the entity that has assisted the applicant bring the proceedings.
20. The respondent submitted that a Court had a discretion in determining whether a penalty should be imposed. The respondent placed weight on its admission of the contraventions and identified a want of deliberateness or wilfulness in respect of the contraventions.
21. In relation to the nature and the extent of the contravening conduct, the respondent submitted that it had made admissions at a relatively early stage in the pleadings, and that it had rectified its standard roster and overtime issues and had paid outstanding entitlements, and that the respondent had been deprived of the opportunity to resolve these matters at a workplace level, utilising clause 23.2 of the agreement.
22. It was further submitted that Woolworths took immediate steps to ensure compliance, and identified employing an average of 951 new part-time members each month across its 1142 supermarkets, and that that number increases in the lead-up to Christmas. The respondent identified the training of store managers, the sheets and guides that set out the rostering and payroll requirements, and having a dedicated team to assist and advise store managers with their compliance of the agreement. It was further submitted that the respondent utilises a specific ecosystem of applications to feed into the team, being a bespoke application built by the respondent, and that these systems were designed to ensure compliance with the agreement across large recruitment numbers.
23. It was also identified that a working group had been formed with the objective of finding a way to ensure that each new starting permanent team member had a standard roster added into team data as soon as they start work, ideally before their first day, and reference was made to developing a proactive reminder solution within team data. Reference was made to the rolling out of an interim reminder system that was a reactive reminder system which triggered a series of reminders in relation to permanent team members with standard rosters missing after their first day of work, and a capacity for escalation if an issue was not rectified after three reminders to the team experience partners to request immediate action. Reference was made to the interim system achieving positive results, and the proactive reminder solution commenced on 25 November 2025 and focuses on proactively ensuring the issue of a standard roster prior to a team member's first shift.
24. It was identified that the proactive reminder solution triggers a series of notifications. A reference was made to the provision of information documents explaining the proactive reminder solution being sent to group managers, operation managers, team experience partners and to store managers.
25. The respondent submitted in relation to the involvement of senior management that the contraventions were not with the imprimatur of senior management, or by senior management, and that the conduct underpinning the contraventions was not engaged at a senior level. It was submitted that the contraventions follow from the respondent onboarding and rostering processes at the store level. It was submitted that there is not a need for specific and general deterrence, and reference was made to the totality principle. It was submitted that an appropriate penalty, if a penalty was to be imposed, should not exceed $10,000 in relation to the contraventions described as a highly technical nature of breach.

The nature and extent of the contravening conduct

1. The Court has taken into account the two affidavits admitted into evidence on penalty on behalf of the respondent. In relation to the first contravention, the Court does not accept that this was of a highly technical nature and does not accept that it was de minimis or at the lowest end of the scale of seriousness. The Court identifies that the failure to comply with clause 8.1(a)(i), providing Mr Karki with his required contract hours, occurred on two occasions, and that this worker was entitled to expect the respondent would have in place systems to ensure compliance with the said agreement.
2. In relation to the second contravention, the Court accepts that the failure to comply with clause 9, by making a change to the applicant's standard roster without prior written agreement, occurred on 22 July 2025.
3. In relation to the third contravention, the Court accepts that the failure to comply with s 324 of the Act, by making deductions from the applicant's payslips, occurred during the pay period ending 13 July 2025 and the pay period ending 20 July 2025.
4. In relation to all three contraventions, the Court notes that an amount of $872.80 was paid to the applicant on or around 29 September 2025. The Court does not regard clause 23, in relation to disputes, as providing compelling reason why a civil penalty should not be imposed in the present case.
5. Whilst it is open obviously for parties to pursue the avenues under clause 23 for resolving disputes, it is equally open to parties in respect of whom it is alleged there has been a contravention to take the steps that have been taken by the applicant in the present case. The Court is satisfied that the nature and extent of the contravening conduct in the present case warrants the imposition of a civil penalty.
6. In relation to the circumstances in which the conduct took place, the Court has taken into account that the respondent is a very large organisation and a large employer with multiple stores, and that there are invariably training processes that must be in place in relation to training store managers and ensuring appropriate steps for onboarding new employees, including employees of the kind concerning the applicant. However, the applicant was entitled to expect that the respondent would comply with the letter of the agreement and the systems, and process that the applicant had in place failed to ensure that that occurred.
7. In relation to the size of the contravening company, the Court accepts that the respondent is a very large organisation which should be expected to have sophisticated systems to ensure compliance with all requirements of the Act.
8. In relation to the degree of power, the Court accepts in the present case that the respondent is a major entity in the retail market and a very significant employer, employing a very large number of people.
9. In relation to the deliberateness of the conduct and the period over which it extended, the Court accepts that the conduct in the present case in respect of each of the contraventions was not deliberate, and while the period was significant from the viewpoint of the applicant, it has been addressed once raised by these proceedings and there it was of confined duration.
10. In relation to senior management, the Court accepts that the contravention arose at a lower level and that this is not a case where senior management condoned or engaged in the contraventions. The Court would, however, add that it was disappointed that evidence was not put on by senior management at the corporate mind level to identify the acceptance by the respondent of its obligations under the Act and the importance of complying to the letter with relevant agreements or awards.
11. It might be said to be implicit from the evidence that was put on that the respondent was of that mindset; however, the Court is of the view that it should have been express and takes into account the absence of evidence at the corporate mind level in relation to the importance of compliance with the Act and relevant agreements or awards.
12. In relation to the corporate culture conducive to compliance, the Court accepts that there were education programs in place to try and ensure compliance and that there have been corrective measures taken by the respondent. This is not the type of case where it is apparent that any disciplinary action should have been taken.
13. In relation to the disposition to cooperate, it is apparent that the respondent has made significant admissions in relation to these proceedings and has demonstrated a degree of contrition in its swift and prompt approach to the contraventions once alleged. It is not necessary to refer to the contravention that was no longer pressed.
14. The Court identified to the respondent that it regarded the history of compliance with the Act as being relevant to the issue of penalty. The Court was informed that there has been no contravention of s 50 of the Act. Whilst the Court is willing to accept that's the position, it does not identify the history of compliance with the Act, and an opportunity was given to the respondent to do so. The Court received submissions filed on 4 March 2026 and accepts that the prior contravention identified should in the circumstances be given no weight in determining penalty.
15. In all the circumstances, the Court is satisfied in relation to the first contravention that a penalty in the sum of $24,750 should be imposed, reflecting 5 per cent of the maximum penalty of $495,000. In relation to the second contravention, the Court is satisfied that a penalty in the amount of $24,750 should be imposed. In relation to the third contravention, the Court finds that a penalty of $20,000 should be imposed. The Court is not satisfied that this is an appropriate case in which the Court should accept the applicant's request for half the penalty, to be paid to the applicant and half to the union. The total penalty amounts to $69,500 which the Court is satisfied and considers in appropriate. The union brought the proceedings which were prepared by Mr Hicks and in all the circumstances it is the Australasian Meat Industry Employees Union to whom the penalty should be paid and the Court is of the view that this best achieves the objects of the Act.
16. It is for these reasons the Court makes the above orders.

I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Street.