Liam Elliott v John Derrington [2025] SAET 100

1. The applicant gave evidence before me. I find the applicant's evidence to be a reliable basis for findings of fact. I therefore make the following findings.
2. The applicant was employed as an apprentice by the employer between July 2023 and November 2024.
3. For the first 3 to 4 months of his employment, the applicant did not receive any payslips. He was being paid substantially below the rates prescribed under the Building and Construction General On-site Award 2020 (the Award).
4. The applicant queried the rate with the respondent, but nothing changed until his apprenticeship contract was signed through MEGT (Australia) Ltd.
5. The respondent later indicated that he had no idea that he had been underpaying the applicant, and that he would back pay the shortfall. Thereafter, the employer commenced paying the applicant at the Award rate.
6. The employer did not pay the arrears shortfall, with the respondent repeatedly saying "I'm a bit strapped for cash at the moment."[2]
7. Subsequently, there was an Award increase that was not passed on.
8. Superannuation contributions were paid by the employer at the rate that was paid, not at the rate which should have been paid.
9. All of the applicant's dealings with the employer in relation to work and money were with the respondent.
10. In his time working for the employer, the applicant was only aware of two other employees apart from the respondent.
11. The default judgment obtained against the employer has not been paid.

1. Section 546(1) of the Fair Work Act 2009 (FW Act) provides:

The Federal Court, the Federal Circuit Court 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.

1. For present purposes, civil penalty provisions in the FW Act relevantly include:

(a) Section 44: "An employer must not contravene a provision of the National Employment Standards (NES);

(b) Section 45: "An employer must not contravene a term of a modern award;

(c) Section 323(1): "An employer must pay an employee amounts payable to the employee in relation to the performance of work" in full at least monthly;

(d) Section 536(1): "An employer must give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work".

1. The NES require payment of the appropriate levels of superannuation.
2. The terms of a modern award include an obligation to pay as a minimum the correct award rate.
3. Additionally, a person involved in such a contravention is taken to have contravened that provision.[3]
4. Section 550(2) of the FW Act then provides:

(2) A person is involved in a contravention of a civil remedy provision if, and only if, the person:

(a) has aided, abetted, counselled or procured the contravention; or

(b) has induced the contravention, whether by threats or promises or otherwise; or

(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

(d) has conspired with others to effect the contravention.

1. I find the employer committed the following contraventions:

(a) Failure to pay the correct award rate;

(b) Failure to pay wages as and when required;

(c) Failure to pay correct superannuation;

(d) Failure to provide payslips.

1. I view the failure to pay the correct wages and to pay the correct award rate as essentially the same conduct. To penalise each separately would doubly penalise for the same conduct. Accordingly, I will proceed to treat the matter on the basis that there were 3 contraventions to be considered.
2. I further find the respondent was a "person involved in" the contraventions. He was for all intents and purposes the guiding mind of the employer.
3. I have recently had occasion to review the authorities on assessment of penalties.[4] I need not repeat it here, but rely upon my reasoning there as apposite to the present case.
4. The maximum penalty for each contravention is 60 penalty units. At the time of the contraventions, the value of a penalty unit was $313.
5. Taking into account the "French Factors",[5] I consider the respondent has shown a cavalier disregard for his employees, his responsibilities to the applicant and this Court, and the rights of the applicant. He has shown no contrition or remorse. Once the incorrect payments were brought to his attention (if he was not already aware), the failure to pay the arrears must be seen as deliberate. I adopt as a starting point 70% of the maximum penalty units per contravention.
6. For 3 contraventions, that is an aggregate penalty of $39,438.
7. I must then consider the totality principle: whether such a penalty is proportionate to the need to ensure a satisfactory level of deterrence whilst not being of oppressive severity.[6]
8. The aggregate penalty is over 3 times the monetary sum the employer failed to pay. No-one would dismiss that as merely a cost of doing business.
9. I consider for a person involved in a relatively small employer, as is the respondent, such a penalty would be of oppressive severity and not required to provide an appropriate level of personal and general deterrence. I would therefore reduce the penalty to $25,000.
10. The applicant seeks an order that the penalty be paid to him. I consider it is appropriate to do so.[7]

1. I impose a pecuniary penalty on the respondent in the sum of $25,000.
2. The respondent is to pay the pecuniary penalty to the applicant.

[4] Matthew Mitchell v Carina Nash Haworth [2025] SAET 96; Tzu-Chi Lin v Mr Cheese Central Kitchen Pty Ltd & Ors [2025] SAET 97.

[5] Matthew Mitchell v Carina Nash Haworth [2025] SAET 96 at [27].

[6] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 at [41].

[7] Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4.