Fair Work Act 2009 (Cth)

DECISION OF: His Honour Deputy President Lieschke

Pecuniary penalties - Preliminary issue of whether second respondent was involved in the first respondent's admitted multiple contraventions of the Fair Work Act 2009 by multiple breaches of the General Retail Industry Award 2020 - Employee was not paid: minimum rates for the correct classification of Level 3 or for any lower classification; weekly overtime rates; Saturday and Sunday rates; wages for occasions of required work after a shift; or any wages for the last two weeks of employment - Employee was not: allowed 10-minute breaks; provided rostered times for meal and rest breaks; given access to the Award and NES; or not given a FWIS - Held: Second respondent was knowingly involved and concerned in each contravention, within the meaning of s 550 - Costs application to be determined - Penalty application to be listed for hearing

Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365

1. Dimitrios Totos was both a director and manager of Barossa Retail Food Pty Ltd (Barossa), when it employed Zara Pumpa between 15 February 2021 and 17 February 2022.
2. Ms Pumpa has applied for pecuniary penalty orders against Barossa and Mr Totos for their involvement in multiple contraventions of the Fair Work Act 2009 through breaches of the governing General Retail Industry Award 2020.
3. The preliminary issue for determination is whether Mr Totos was involved in Barossa's admitted contraventions against Ms Pumpa. It is alleged that Mr Totos was involved by either aiding, abetting, counselling or procuring the contraventions; or, by act or omission, was directly or indirectly, knowingly concerned in or party to them: s 550(2)(a) and (c). Mr Totos denies any involvement in all contraventions.
4. An associated underpayment amount of $8,733.90 was claimed from Barossa. After initial partial denials, and a vague counter-claim, Barossa conceded the unpaid entitlements and all alleged contraventions, and withdrew the counte-rclaim allegation. The basis of the denials and the counterclaim are not relevant to the preliminary issue of Mr Totos' alleged involvement.
5. Payment orders and the following declarations of contraventions by the first respondent were made by consent on 15 April 2024:

1. Further to the entry of default judgement against the Respondent, the Court makes the following declarations pursuant to section 26A of the South Australian Employment Tribunal Act 2014 (SA):-

• 1.1 The Respondent contravened section 45 of the Fair Work Act 2009 (the FW Act) by failing to classify the Applicant at the Retail Employee Level 3 classification as required by clause 14.1 of the General Retail Industry Award 2020 (the Award);

• 1.2 The Respondent contravened section 45 of the FW Act by paying the Applicant less than the applicable minimum hourly rate required by clause 11.1 of the Award;

• 1.3 The Respondent contravened section 323(1) of the FW Act by failing to pay the Applicant for 3 hours or at all for work performed on 24, 25, 27 and 31 January 2022;

• 1.4 The Respondent contravened section 323(1) of the FW Act by failing to pay the Applicant at all for work performed between 31 January 2022 and 14 February 2022;

• 1.5 The Respondent contravened section 535(1) of the FW Act by failing to make and / or keep records specifying the hours worked by the Applicant on each day;

• 1.6 The Respondent contravened section 45 of the FW Act by failing to pay the Applicant any penalty rate for time worked on Saturdays and paying the Applicant less than the minimum amount required by clause 22.1(b) for time worked on Saturdays;

• 1.7 The Respondent contravened section 45 of the FW Act by paying the Applicant less than the minimum amount required by clause 22.1(b) of the Award for time worked on Sundays;

• 1.8 The Respondent contravened section 45 of the FW Act by failing to pay the Applicant any overtime rate for time worked in excess of 38 hours per week and paying the Applicant less than the minimum amount required by clause 21.2(c)(i) for time worked in excess of 38 hours per week;

• 1.9 The Respondent contravened section 45 of the FW Act by failing to pay superannuation contributions for the benefit of the Applicant in an amount necessary to avoid being required to pay the superannuation guarantee charge as required by clause 20.2 of the Award;

• 1.10 The Respondent contravened section 45 of the FW Act by failing to pay the Applicant the laundry allowance required by clause 19.3(c)(ii) of the Award;

• 1.11 The Respondent contravened section 45 of the FW Act by failing to provide the Applicant with 10 minute paid rest breaks as required by clause 16.2 of the Award;

• 1.12 The Respondent contravened section 45 of the FW Act by failing to include the timing of rest and meal breaks and their duration in rosters as required by clause 16.3 of the Award;

• 1.13 The Respondent contravened section 45 of the FW Act by failing to make copies of the Award and the National Employment Standards available to the Applicant as required by clause 3.3 of the Award; and

• 1.14 The Respondent contravened section 44 of the FW Act by failing to provide the Applicant with the Fair Work Information Statement as required by section 125(1) of the FW Act.

1. The Court orders, pursuant, to section 545(3) of the FW Act that the Respondent pay to the Applicant with respect to wages the following sums:

1. The Court further orders, pursuant, to section 545(3) and 547 of the FW Act that the Respondent pay to the Applicant an amount of interest fixed at $1,750, based on a mean age of monetary contraventions of 2.5 years and an interest rate of 8%.

1. The Court orders that the sums due to the Applicant be paid within 14 days of the making of this order.
2. Regrettably, the only entitlement that has been paid is the superannuation. Mr Totos said he made the decision that Barossa would pay just this entitlement, and that it would pay the other entitlements later. He said Barossa is not in any form of external administration.[1]
3. I agree with Ms Pumpa's submission that the legal principles to be applied to s 550(2)(a) and (b) are those set out by Justice White in Fair Work Ombudsman v Devine Marine Group Pty Ltd[2]:

...In order to aid, abet, counsel or procure the relevant contravention, the person must intentionally participate in the contravention with the requisite intention: Yorke v Lucas [1985] HCA 65; (1984) 158 CLR 661 at 667. In order to have the requisite intention, the person must have knowledge of "the essential matters" which go to make up the events, whether or not the person knows that those matters amount to a crime: Yorke v Lucas at 667. Although it is necessary for the person to be an intentional participant and to have knowledge of the matters or things constituting the contravention, it is not necessary for the person to know those matters or things do constitute a contravention: Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213; (2002) 118 FCR 236 at [159]- [160]. That is to say, it is not necessary that the accessory should appreciate that the conduct in question is unlawful...

The notion of being "knowingly concerned" in a contravention has a different emphasis from that of aiding, abetting, counselling or procuring" a contravention. To be knowingly concerned in a contravention, the person must have engaged in some act or conduct which "implicates or involves him or her" in the contravention so that there be a "practical connection between" the person and the contravention: Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; (2007) 164 IR 299 at [26]; Qantas Airways Ltd v Transport Workers' Union of Australia [2011] FCA 470; (2011) 280 ALR 503 at [324]- [325].

1. Barossa's admitted contravention of s 535(1) was not addressed by Mr Totos. The admission is based on two letters sent by Ms Pumpa's lawyers to Mr Totos requesting copies of employee records including hours worked, and Mr Totos' failure to respond within the time allowed. Mr Totos did respond to the penalty application by providing copies of payslips, but no time records have ever been produced.

1. Ms Pumpa had worked in the same store for about two years before Mr Totos offered her employment with Barossa. She was the only employee kept on. She was not given anything in writing about the new job. Mr Totos told her what the hourly rate of pay would be.
2. The paid ordinary hourly rate was below the minimum hourly rate for the lowest retail classification from the start of the employment. The paid rate was well below the rate for the correct classification at Level 3. The paid rate fell further below the minimum after Award increases in September 2021.
3. Mr Totos was the sole authority, and had direct management of the business. He trained Ms Pumpa and assigned her duties. In the early period, he worked alongside of her.
4. Mr Totos mostly set the rosters, initially in writing, and later with the Deputy software app. He could alter their length on the day according to work demands and other staff availability. The rostered shifts built in time for a 30-minute unpaid meal break.
5. Mr Totos instructed her to wear a uniform, including when she was pregnant.
6. Ms Pumpa was told of a bookkeeper, Phoebe, that Mr Totos employed in his Melbourne office. Mr Totos directed Ms Pumpa to communicate with her regarding issues with her pay. Ms Pumpa did so when she was not paid, and again when she forgot to sign off on Deputy at the end of a shift.
7. Mr Totos regularly worked with Ms Pumpa in the store in the early period. He would instruct Ms Pumpa when she could have a meal break. He did not allow any paid 10-minute rest breaks. When Mr Totos was in Melbourne where he lived, he monitored the store via cameras and gave instructions by phone.
8. Ms Pumpa's hours of work varied. Her duties included working alone, preparing food and serving customers, opening and closing the store, reporting cash takings, and ordering stock.
9. After working more than 38 hours in a week, Ms Pumpa asked Mr Totos about overtime rates. His reply was "there is no such thing as overtime."[3] No overtime was paid in the 17 weeks when more than 38 hours was worked.
10. Ms Pumpa was rostered to work on 18 Sundays. She was paid a higher rate, but it was still below the minimum Sunday rate for even a Level 1 retail employee.
11. Ms Pumpa was regularly rostered to work on Saturdays. She was never paid the Saturday penalty rate.
12. Ms Pumpa exchanged messages with Mr Totos about her need to return to work to close the store and complete banking procedures after her rostered shift times in January 2022.
13. The Award and the NES were not available in the store, nor were any links provided to online versions. Ms Pumpa was not given a Fair Work Information Statement (FWIS). In oral evidence, Ms Pumpa described the contents of the cupboard that contained the facsimile machine and the adjacent area: they did not include the NES, the Award or a FWIS.
14. Ms Pumpa felt stressed on her last day of work because Mr Totos withheld her last pay due to an assertion she had been overpaid the causal loading. This was despite being treated as a casual and not being paid any annual or personal leave.

1. Mr Totos relied on an affidavit dated 14 October 2024.[4]
2. Mr Totos has operated many retail businesses and currently operates one, but not for Barossa.
3. Barossa operated a second retail store in Melbourne during Ms Pumpa's employment.
4. Mr Totos stated he acquired the business of managing the store as a going concern, including its software payroll system, Deputy.
5. When Mr Totos hired Ms Pumpa, he told her she would be paid the same rate as under her previous employer, and instructed her to provide a previous payslip to his full-time bookkeeper Phoebe.
6. Mr Totos said Phoebe assisted with pays and queries. Mr Totos still approved all payments to staff by Barossa.[5]
7. Mr Totos decided to pay the same hourly rate of pay that he understood was being paid previously. He was aware this rate did not change during Ms Pumpa's employment.
8. Mr Totos did not approve any overtime rates. He told Ms Pumpa that this was because overtime did not apply to casual employees.
9. Mr Totos claimed that "[a]t all times, a full copy of the National Employment Standards and of the General Retail Industry Award 2020 were available and on display adjacent to the facsimile machine in the Nuriootpa store."[6]
10. In oral evidence, Mr Totos agreed he had read parts of the Award, and he knew it applied to this business.[7] He did not know it was a long document.
11. In response to questioning of his claim that the full Award and a copy of the NES were on display, Mr Totos conceded he was wrong. He said there were only two laminated pages on display. These had been prepared and displayed by the previous operator, and included ordinary and weekend pay rates. Mr Totos did not know how old the rates were, and he did not change any rates in the year of Ms Pumpa's employment.[8]
12. Mr Totos claimed that he was prepared to compensate Zara for any shortfall,[9] but did not do so because of concern about the penalty application.

1. Ms Pumpa submitted that on Mr Totos' version he gave no regard to the provisions of the Award, which he admitted applied. Mr Totos knew outdated rates of pay were still on display in the store, and were being used for Ms Pumpa's pay. Mr Totos decided to not pay overtime rates, in direct breach of the Award entitlement to weekly overtime. Mr Totos was directly involved in each contravention.
2. Mr Totos submitted he did not purposely structure the employment to underpay the staff, pointing to the paid Sunday penalty rates.

1. I find Mr Totos to be a highly experienced and sophisticated business operator. Mr Totos had sole management and control of the business of operating the store. He exercised a high level of control over a wide range of business and operational matters. He was the sole decision maker in all matters relevant to Ms Pumpa. Mr Totos used the Deputy software and employed a bookkeeper to assist him in managing at least two stores at the time.
2. The only topic of different evidence was whether the Award and NES were displayed or made available to Ms Pumpa in the store. Ms Pumpa's evidence is that neither document was there. Mr Totos does not assert a copy of the FWIS was provided to Ms Pumpa when he hired her.
3. Mr Totos has given different versions. His first sworn version was of the full Award and NES being on display. Under cross examination he gave a different version of seeing two laminated pages of old Award rates of pay that had been displayed on a wall by the previous operator. He also thought the Award was in the previous operator's "manual",[10] although he did not suggest this to Ms Pumpa.
4. I resolve this difference by preferring Ms Pumpa's evidence. Her evidence was clear and given as part of a very detailed account of her employment conditions. Mr Totos' evidence is unreliable after changing significantly, and was given in an indirect and vague manner. I reject Mr Totos' evidence of the Award being in the previous operator's manual in the store during Ms Pumpa's employment. I find Mr Totos knew the Award was more than two pages of rates. I find no employment information was displayed on a wall or near the facsimile machine, or made available to Ms Pumpa during her employment. I also find Mr Toto knew no FWIS was provided to Ms Pumpa at any period during her employment.
5. I find Mr Totos was involved in the contraventions identified in subparagraphs 1.13 and 1.14 of paragraph 5 above. On behalf of Barossa, he was responsible for hiring, inducting, training and supervising Ms Pumpa. He was present in the store when she commenced. I infer he thought two pages of Award rates would be sufficient. I find his involvement was by being directly knowingly concerned in, by omission, both contraventions.
6. I find Mr Totos was aware of a classification structure in the Award, and that Award rates depended on the correct classification level. Mr Totos told Ms Pumpa what duties to perform, directed her work, and monitored her performance in person, or remotely. He knew she had to regularly open and close the store, work alone, and perform the closing cash duties.
7. In my opinion, Ms Pumpa did not need to also prove that Mr Totos knew of each classification criteria, or that the relevant indicative tasks of Retail Employee Level 3 performed by Ms Pumpa included opening and closing the premises, securing cash, and working alone in the store.
8. I find Mr Totos had knowledge of the essential ingredients of, and participated in, the classification contravention. He set a rate of pay for the new duties she had to perform without regard to the binding classification criteria, which he knew existed. Mr Totos' choice to not check the duties he allocated against the classifications does not negate his direct involvement in the contravention. I find Mr Totos both procured the contravention, and was directly knowingly concerned in it.
9. I find Mr Totos set Ms Pumpa's hourly rates of pay for ordinary hours and Sunday shifts, approved her pays, believed the rates of pay were the same as those paid by the prior employer, knew the Award applied, knew the Award rates increased each year, and knew that Ms Pumpa's rate of pay did not change over the year of her employment.
10. I find Mr Totos was involved in the contraventions of failing to pay minimum ordinary rates of pay, failing to pay the corresponding correct percentage of superannuation contributions, and failing to pay minimum Sunday rates. He did so through direct knowledgeable involvement in setting the shifts and rates without regard to the prevailing minimum Award rates for correctly classified employees.
11. I find Mr Totos knew Saturday penalty rates existed based on his experience, and on a two-page rate sheet which he said included weekend penalty rates.[11] He knew Ms Pumpa was not paid extra for Saturdays, as he set her pay rates, rostered her, and approved her pays. I find Mr Totos was directly knowingly concerned in the Saturday rates contravention.
12. Based on the text messaging, the training and instructions, Ms Pumpa being the only staff member available, and Mr Totos monitoring cash takings daily, I find Mr Totos was aware Ms Pumpa had gone back to perform closing duties on the nominated days in January 2022. I find Mr Totos did not approve any pay for Ms Pumpa for those unrostered duties.
13. In my opinion, Ms Pumpa does not need to prove that Mr Totos knew the unpaid wages were set by the minimum engagement period of three hours, as well as the correct classification, as he knew he had not approved any pay for these duties.
14. I find Mr Totos was involved in the contraventions of s 323 by not paying any of the earned casual wages for each occasion, by being directly knowingly concerned in them.
15. I find Mr Totos knew Ms Pumpa was not paid for her last two weeks of work. Mr Totos knew that she worked, yet he did not approve any payment. I infer that this was a deliberate decision based on Barossa's wrong claim it had overpaid the casual loading to Ms Pumpa. I find Mr Totos was directly involved in making the decision to not pay any of the final two weeks of wages.
16. I find Mr Totos personally decided Barossa would not pay weekly overtime rates, based on the evidence provided by himself and Ms Pumpa. And he had rostered her to work more than 38 hours in 18 weeks.
17. I find Mr Totos directed Ms Pumpa to wear a uniform and knew that Barossa did not launder it. I find he was directly involved in this contravention.
18. I find Mr Totos set and varied Ms Pumpa's shifts. The shifts built in 30- minute unpaid meal breaks, but did not specify their times. I accept Ms Pumpa's unchallenged evidence of not being permitted 10-minute paid breaks by Mr Totos. I find Mr Totos was directly knowingly concerned in each contravention type set out in subparagraphs 1.11 and 1.12 of paragraph 5 above.

1. I have concluded that Mr Totos was involved in each contravention admitted by Barossa, within the meaning of s 550. Mr Totos is thereby taken to have contravened those provisions and is liable to the imposition of a penalty for each contravention_._
2. A directions hearing will be scheduled to program a hearing of the substantive penalty applications_._
3. Prior to the hearing, Ms Pumpa sought an order that Mr Totos pay her legal costs, in accordance with s 570. She submits Mr Totos unreasonably denied accessorial liability, which caused this preliminary hearing to be held, and her to incur legal costs.
4. I invite written submissions from Ms Pumpa within 7 days regarding her costs application, and a response from Mr Totos within a further 7 days.

[2] [2014] FCA 1365, at [176] & [178].