Matthew Mitchell v Carina Nash Haworth [2025] SAET 96

1. The Applicant seeks interest pursuant to s 547 of the FW Act. Pursuant to that section, unless good cause to the contrary is shown, I must include an amount of interest for the period between the day the relevant cause of action arose and the day the substantive order was made. There is no reason here why interest should not be ordered to be paid.
2. The Applicant submits:

Rule 7 of the South Australian Employment Tribunal Rules 2024 provides that where an issue or procedure is not provided for under the Rules, the Uniform Civil Rules 2020 (UCR) apply.

Rule 185.1(1) of the UCR provide that interest accrues at the rate of 6 per cent per annum.[1]

1. The applicant seeks interest at 6% to the date of judgment in the sum of $459.36. I so order.

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. This Court is an eligible State Court. The contraventions alleged are of civil remedy provisions.

1. In Thompson v Gringos Mexican Restaurant Pty Ltd & Barnes,[2] Dolphin P analysed the recent authorities in this area and helpfully summarised the relevant principles. I can do no better than to set out his comments here.
2. His Honour noted:

The importance of the Pattinson[3] judgment is that the High Court fundamentally changed the approach to the fixing of the quantum of pecuniary penalties that had previously been in place. It concluded that in the appealed from judgment two errors had been made. First, by regarding the discretion of a judicial officer under s 546 of the FW Act (Cth) as constrained by a "notion of proportionality". And second, by regarding the statutory maximum civil penalty as providing a "yardstick". That is, by considering that the maximum should only be imposed in a case involving the worst category of contravening conduct.[4]

1. Regarding those errors, Dolphin P noted the majority said:

The Full Court's critical error was that it was distracted by a concern, drawn from the criminal law, that a penalty must be proportionate to the seriousness of the conduct that constituted the contravention. The power conferred by s 546 of the Act is not subject to constraints drawn from the criminal law and there is no place for a "notion of proportionality", in the sense in which the Full Court used that term, in a civil penalty regime. Further, and relatedly, their Honours were misled by the view that the Act required that the maximum penalty be reserved for only the most serious examples of the offending comprehended by s 349(1), and that this principle could prevent the court from imposing the maximum penalty even though a penalty in that amount might reasonably be considered to be necessary to deter future contraventions of a like kind. Nothing in the text, context or purpose of s 546 requires that the maximum penalty be reserved for the most serious examples of misconduct within s 349(1). What is required is that there be "some reasonable relationship between the theoretical maximum and the final penalty imposed". That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of s 546: the deterrence of future contraventions of a like kind by the contravenor and by others.[5]

It may therefore be accepted that s 546 requires the court to ensure that the penalty it imposes is "proportionate", where that term is understood to refer to a penalty that strikes a reasonable balance between deterrence and oppressive severity.[6]

The Full Court erred in treating the statutory maximum as implicitly requiring that contraventions be graded on a scale of increasing seriousness, with the maximum to be reserved exclusively for the worst category of contravening conduct. Nothing in the text of s 546, or its broader context, requires that the maximum constrain the statutory discretion in this way.

...Considerations of deterrence, and the protection of the public interest, justify the imposition of the maximum penalty where it is apparent that no lesser penalty will be an effective deterrent against further contraventions of a like kind.[7]

1. The applicant submits that there have been 5 relevant contraventions that give rise to the imposition of a pecuniary penalty:
   1. The respondent contravened section 323 of the Act by failing to pay the applicant the amounts payable for the performance of work during the period 29 July 2024 to 4 August 2024.
   2. The respondent contravened section 44 of the Act by failing to pay the applicant redundancy pay pursuant to section 119 of the Act.
   3. The respondent contravened section 44 of the Act by failing to provide the applicant notice or payment in lieu of notice pursuant to section 117 of the Act.
   4. The respondent contravened section 44 of the Act by failing to pay the applicant annual leave pursuant to section 90 of the Act.
   5. The respondent has contravened section 45 of the Act by failing to pay the applicant annual leave loading pursuant to clause 30.3 of the Award.[8]
2. Whilst the applicant acknowledges that "The respondent is entitled to the benefit of s 557 in treating successive contraventions of the one provision in respect of a single employee (the applicant) as one, provided they arise out of a course of conduct,"[9] he submits that the provision has no application to contraventions of different provisions:

[Section] 557(1) does not operate to deem a single contravention of s 45. It operates instead to deem a single contravention of each particular award term which has been contravened.[10]

1. In Rocky Holdings, the Full Court of the Federal Court specifically rejected the proposition that "one provision" referred to one civil remedy provision; rather, the Court considered it referred to the one provision or term of an Act or award that imposed obligations on a respondent or provided rights and entitlements to an applicant.
2. In relation to the appropriate penalty, the applicant relied upon the four-step approach applied by McKerracher J in Fair Work Ombudsman v Kentwood Industries Pty Ltd:[11]
   1. Each contravention of each separate obligation is a separate contravention, so it is necessary to identify the maximum penalty for each separate contravention.
   2. It is necessary then to consider an appropriate penalty to impose with respect to each contravention (whether a single contravention alone or as part of a course of conduct), having regard to all of the circumstances of the case.
   3. To the extent that two or more contraventions have common elements, this may be taken into account when considering the appropriate penalty for each contravention. The respondent should not be penalised more than once for the same conduct and the penalties imposed should be an appropriate response to the respondents' actions.
   4. Having fixed an appropriate penalty for each separate contravention, group of contraventions or course of conduct, a final review of the aggregate penalty is necessary to determine whether it is an appropriate response to the conduct which led to the contraventions.[12]
3. Whilst generally I accept and adopt this process, for completeness I pause to note there is another step, sequentially between steps 2 and 3 above:

The court is required to consider whether any of the breaches are committed by the same person, and should be taken together to constitute a single course of conduct by operation of s 557(1), such that multiple contraventions should be treated (or grouped) as a single contravention;[13]

1. The maximum penalty for each contravention is 60 penalty units. At the time of the contraventions, a penalty unit was $330.[14] Hence, the maximum penalty for the 5 contraventions alleged, if treated separately, would in aggregate be $99,000.
2. The applicant urges me to impose a penalty approaching 75% of the maximum.

1. On the evidence before me, I find that the respondent committed all of the contraventions alleged.
2. However as was acknowledged by the applicant, s 557(1) of the FW Act provides:

For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:

(a) the contraventions are committed by the same person; and

(b) the contraventions arose out of a course of conduct by the person.

1. Constrained by authority, I must find that s 577(1) does not apply to the contraventions found. Nevertheless, "Step 3"[15] still has a role to play.
2. In Kelly v Fitzpatrick[16] Tracey J endorsed a non-exhaustive series of indicia articulated in Mason v Harrington Corporation Pty Ltd[17] as relevant to an assessment of both whether to impose a penalty and if so, the quantum of any penalty. These were:
   • The nature and extent of the conduct which led to the breaches;
   • The circumstances in which that conduct took place;
   • The nature and extent of any loss or damage sustained as a result of the breaches;
   • Whether there had been similar previous conduct by the Respondent;
   • Whether the breaches were properly distinct or arose out of the one course of conduct;
   • The size of the business enterprise involved;
   • Whether or not the breaches were deliberate;
   • Whether senior management was involved in the breaches;
   • Whether the party committing the breach had exhibited contrition;
   • Whether the party committing the breach had taken corrective action;
   • Whether the party committing the breach had cooperated with the enforcement authorities;
   • The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
   • The need for specific and general deterrence.
3. These factors are sometimes known as the "French Factors", having originated in the judgment of French J (as his Honour then was) in Trade Practices Commission v CSR Ltd.[18]
4. In the absence of any evidence from the respondent, certain assumptions must be made and presumptions drawn.
5. There is no evidence to assume any financial incapacity on the part of the respondent.
6. There is nothing to suggest the conduct of the respondent was other than deliberate.
7. There has been a total lack of co-operation, acknowledgement of wrong-doing or corrective action by the respondent.
8. There is no evidence of previous contraventions.
9. In Malatesta v Kva Se Va Ya Pty Ltd,[19] Ardlie DPM imposed 70% of the maximum penalty in not dissimilar factual circumstances.
10. In Thompson, the individual respondent was ordered to pay 85% of the maximum for persistent underpayment and non-payment of wages in proceedings where there was no involvement by him in the substantive proceedings.
11. In this case I would consider 70% of the maximum is an appropriate starting point in respect of each contravention.
12. There were a number of common elements to the respondent's contraventions, such that care must be exercised to avoid penalising the respondent multiple times for the same conduct. Failure to pay annual leave and failure to pay annual leave loading is a clear example. In a broader sense, failure to pay any of the applicant's entitlements upon termination is one course of conduct.
13. In relation to the individual contraventions, I would impose the following penalties.
14. Breach of s323 of the FW Act - 70% of the maximum - $13,860.
15. Breach of s119 of the FW Act - 70% of the maximum - $13,860.
16. Breach of s117 of the FW Act - 40% of the maximum - $7,920.
17. Breach of s90 of the FW Act - 70% of the maximum - $13,860
18. Breach of cl30.3 of the Award - 20% of the maximum - $3,960.
19. This produces an aggregate penalty of $53,460. I next need to consider whether this is "proportionate" in that it strikes the right balance between deterrence and oppressive severity.
20. The offending occurred in the context of non-payment of the applicant's entitlements on termination. There is nothing to suggest the respondent was a repeat offender. The actions of the respondent seem unsophisticated and naive. However, they appear to have been high-handed and taken in contumelious disregard for the applicant or his rights. There is nothing to suggest apology or remorse.
21. In the circumstances, I do not consider a penalty of that magnitude to be proportionate. I consider an aggregate penalty of $30,000 to be an appropriate response to the contraventions. I so order.
22. Section 546(3)(c) of the FW Act provides that the Court may order that the penalty be paid to a particular person.
23. In Sayed v Construction, Forestry, Mining and Energy Union[20] the Full Court of the Federal Court held:

the power conveyed by s 546(3) is ordinarily to be exercised by awarding any penalty to the successful applicant.[21]

(a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause;

(b) or the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or

(c) the court is satisfied of both of the following:

(i) the party unreasonably refused to participate in a matter before the Fair Work Commission;

(ii) the matter arose from the same facts as the proceedings.

1. The applicant submits that the respondent is liable to pay the applicant's costs pursuant to s 570(2)(b) of the FW Act as the respondent's unreasonable act or omission caused the applicant to incur the costs.
2. The unreasonable act or omission alleged is the failure to engage in the proceedings, including responding to demands or orders. The applicant submits omissions of that nature were found to be unreasonable in Rybinski v Geocore Pty Ltd (No 2)[22] and Crawford v Geocore Pty Ltd (No 2).[23] Both cases were decisions of Forbes J and followed the same process of reasoning_._
3. In Rybinski, Forbes J held:

I am satisfied in all the circumstances that the respondent's conduct in failing to participate in the Fair Work Commission proceedings, failing to comply with the order of the Commission and failing to engage in the proceedings in this court are unreasonable acts and omissions which have caused the applicant to incur unnecessary costs. The respondents have been put on notice as to the costs application and have provided no response for the Court to consider. For present purposes, I am satisfied that s 570(2)(b) is engaged and that I should exercise my discretion to order costs.[24]

1. In so doing, his Honour referred to and followed other judgments in that Court:

This Court has previously concluded that a complete failure to engage in proceedings may constitute an unreasonable act. For example, in Kambouridis v L.R. Reed City Pty Ltd [2020] FCCA 1484, the Fair Work Commission (FWC) had determined a dispute and the respondents had failed to comply with the FWC order. The respondents gave no reason for not complying with the FWC order. This conduct "effectively forced the applicant to bring proceedings, despite there being no real dispute: such conduct is unreasonable as it wastes the applicant's costs".[25] Judge Riethmuller awarded costs to the applicant pursuant to 570 of the Act.

In Fair Work Ombudsman v WCH Services Pty Ltd & Anor [2018] FCCA 1876, the applicant sought costs under s 570(2)(b), or alternatively s 570(2)(c), in circumstances where the respondents failed to comply with a FWC order and did not engage in the proceedings before the FWC or the then Federal Circuit Court. Judge Hartnett (as her Honour then was) awarded costs to the applicant under s 570(2)(b) for the following reason at [55]:

"On an objective analysis of the circumstances, the Respondents' conduct has not been what a reasonable person would expect, and has directly caused the Applicant to incur costs. The Respondents have been put on notice as to the costs application and have provided no response for the Court to consider. The Court is satisfied that the Respondents failure to pay the amount ordered by [the FWC] was unreasonable and has caused the Applicant to incur costs."[26]

1. In this court, a similar submission was made to Dolphin J in Thompson. There his Honour said:

I am not convinced that that is a correct analysis. When considering the costs issue, I am mindful to proceed with caution and be careful to exercise my discretion to award costs without undue haste. I must deliberate the issue in the circumstances of this case and in context. Ill made orders as to costs may be discouraging to future parties for fear of an adverse costs order. The bar must not be set so low that exceptions to the usual rule can too easily be found.[27]

1. I find myself in agreement with Dolphin P. I find the respondent has acted unreasonably. However, I decline to exercise my discretion to award costs for the following reasons. In relation to the substantive claim, the submission is close to suggesting a default position that costs should follow the event, which clearly the section is not intending. Moreover, in circumstances where a default judgment arises, costs are kept to a minimum. In relation to the pecuniary penalty, that would at least always require submissions, if not the taking of further evidence. The default of the respondent has not increased the costs associated with that process, but rather quite the reverse.
2. To the extent the applicant should be compensated for the cost of enforcing his entitlements and the respondent's contravention, that is part of the reason why a pecuniary penalty is usually paid to the applicant.
3. The claim for costs is dismissed.

a) Section 323 of the FW Act by failing to pay the applicant the amounts payable for the performance of work during the period 29 July 2024 to 4 August 2024. > > b) Section 44 of the FW Act by failing to pay the applicant redundancy pay pursuant to section 119 of the Act. > > c) Section 44 of the FW Act by failing to provide the applicant notice or payment in lieu of notice pursuant to section 117 of the Act. > > d) Section 44 of the FW Act by failing to pay the applicant annual leave pursuant to section 90 of the Act. > > e) Section 45 of the FW Act by failing to pay the applicant annual leave loading pursuant to clause 30.3 of the Award

2. Interest to the date of order is fixed in the sum of $459.36. 3. Pecuniary penalties are imposed upon the respondent in the sum of $30,000 and are to be paid to the applicant's solicitors Trust Account. 4. The applicant's claim for costs is dismissed.

[1] Applicant's submissions [11]-[12].

[2] [2025] SAET 6.

[3] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13.

[10] Note 8 [20]; Fair Work Ombudsman v South Jin Pty Ltd & Ors (No 2) [2016] FCA 832 at [24]; Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62; (2014) 221 FCR 153.

[11] [2011] FCA 579.

[13] Fair Work Ombudsman v NoBrace Centre Pty Ltd (In Liquidation) (ACN 121 556 447) & Ors (No.2) [2019] FCCA 2970.

[14] s 4AA of the Crimes Act 1914 (Cth).

[16] [2007] FCA 1080.

[17] [2007] FMCA 7.

[18] (1991) ATPR 41-076.

[19] [2018] SAET 159.

[20] [2016] FCAFC 4.

[22] [2024] FedCFamC2G 644.

[23] [2024] FedCFamC2G 656.

[25] Kambouridis v L.R. Reed City Pty Ltd [2020] FCCA 1484 at [35].