Tzu-Chi Lin v Mr Cheese Central Kitchen Pty Ltd & Ors [2025] SAET 97

1. The money claims can only be brought against the employer.
2. I am satisfied that the applicant was always employed by a business known as Mr Cheese Central Kitchen. However that cannot have always been a business operated by the first respondent, as it was not registered until 30 May 2022. I would be prepared to assume that the business was transmitted to it from that date, and that the applicant's employment was transferred to it. Thereafter, the first respondent would have assumed liability for all accrued entitlements of the applicant. In any event, it does not matter, as all of the money claims relate to periods commencing after 30 May 2022.
3. I find that from at least that date, Mr Liu was the operating mind of the first respondent. Any acts or omissions by the first respondent were in any practical sense his.
4. No allegations are made by the applicant against the third respondent, other than being the shareholder of the first respondent. As no proper basis for its joinder has been established, the claim against it is dismissed.
5. The fourth respondent is the second respondent, Mr Liu.

1. On the basis of the documents put before me by the applicant, and in default of any contrary material or challenge to it from the respondents, I find that the first respondent is liable to the applicant for the following:

(a) Unpaid wages between 3 March 2025 and 2 April2025 - $4,799.50;

(b) Unpaid overtime between 12 December 2022 and 30 March 2025 - $5,183.10;

(c) Unpaid annual leave 2025 - $3,171.48; and

(d) Unpaid superannuation 2023, 2024 and 2025 financial years - $18,585.90.

1. Pecuniary penalties may be imposed if a court considers appropriate for a contravention of a civil remedy provision within the Fair Work Act 2009 (FW Act).[1] The applicant relies upon this provision to seek pecuniary penalties from the first respondent.
2. Additionally, a person involved in such a contravention is taken to have contravened that provision.[2]
3. 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. It is this provision that the applicant relies upon to seek a pecuniary penalty be imposed on Mr Liu. By virtue of Mr Liu being the sole director and guiding mind of the first respondent, I find that he is a person involved in any contraventions for the purposes of the FW Act.
2. The applicant has compiled a schedule of the contraventions she alleges:

The below table serves to summarise the contraventions, by reference to the Fair Work Act 2009 (FW Act) or the Fair Work Regulations 2009 (Regs) or the Hospitality Industry (General) Award 2020 (Award). The contraventions under the FW Act have been highlighted in bold for ease of reference.

• 1.1 Failing to pay award rates included minimum award rates, overtime and penalties

• 1.3 Unreasonably directing the Applicant to take annual leave without 28 days' written notice

• 1.5 Failing to consult with the Applicant regarding changes to her hours of work

• 1.6 Failing to pay wages fortnightly in accordance with the Award

• 1.7 Failing to pay final pay in accordance with the Award

• 1.8 Failing to classify the Applicant in accordance with the Award

• 1.9 Failing to pay superannuation in accordance with National Employment Standard s 116B

• 1.10 Contravening a modern award (first eight contraventions detailed above)

• 1.11 Failing to pay the Applicant in full at least monthly, including failing to pay loadings, overtime or penalty rates

• 1.12 Failing to accurately record the hours worked including overtime, accurately record annual leave taken, accurately reflect the failure to pay superannuation, accurately reflect when wages were actually paid into the Applicant's bank account.

• 1.13 The Employer knew and continues to know, that the employee records are false and misleading given that superannuation has never been paid to the Applicant's superannuation account

• 1.14 Failing to correct records in circumstances where superannuation was never paid

• 1.15 Failing to detail on payslips the date upon which payment was made

• 1.16 Failing to detail loadings to which the Applicant was entitled, including annual leave loading;

1. The applicant alleges that there were multiple contraventions of each category but accepts that multiple contraventions would be grouped to those 11 categories.[3]
2. The maximum penalty for a contravention of a provision (or a group of contraventions of a single provision amounting to a course of conduct) is 60 penalty units for an individual and 5 times that amount for a corporation.
3. With the current value of a penalty unit of $330, this equates to maximum penalties per contravention of $19,800 and $99,000 respectively.
4. I have recently had occasion to consider these provisions and recent authorities.[4]
5. Determining penalties is a five step process:

Step One: The court is to identify the separate contraventions involved. For the purposes of s 539(2), each contravention of an obligation located in the Act, Regulations and Award constitutes a separate contravention of a civil remedy provision of the Act;

Step Two: 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;

Step Three: To the extent that two or more contraventions have common elements, this should be taken into account in considering what an appropriate penalty is in all the circumstances for each contravention. The Respondents should not be penalised more than once for the same conduct. The penalties imposed by the court should be an appropriate response to the Respondents' actions. Importantly, this third task is distinct from, and in addition to, the final application of the 'totality principle';

Step Four: The court will consider an appropriate penalty to impose in respect of each contravention, whether a single contravention, a course of conduct, or group of contraventions, having regard to all of the circumstances of the case; and

Step Five: Having fixed an appropriate penalty for each contravention, the court should then review the aggregate penalty so as to determine whether it is an appropriate response to the contravening conduct. In doing so, the court should apply an 'instinctive synthesis' in making this assessment. This final step is commonly known as the 'totality principle'.[5]

1. In light of what appears above, these can be dealt with expeditiously and combined.
2. I accept the breaches identified by the applicant and note the concessions regarding grouping. Thus, I find there have been multiple contraventions of 15 separate provisions, which for the purpose of penalties, should be viewed as 15 contraventions. Contravention 10 is a catch all already entirely addressed by more specific contraventions.

1. There are common elements to many of the contraventions. Contraventions numbered 1, 2, 6, 7, 8 and 11 relate to non-payment of appropriate wage entitlements. Contraventions numbered 4 and 9 both relate to failure to pay superannuation. Contraventions numbered 12, 13, 14, 15 and 16 all relate to the failure to maintain proper records. Contraventions numbered 3 and 5 relate to work rostering. I therefore consider to avoid a contravenor being punished more than once for the same conduct. Penalties should be assessed on the basis of 4 groups of contraventions.

1. In assessing penalties for a contravention, or a series of contraventions, regard should be had to the "French Factors":[6]
   • 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.[7]
2. In relation to the importance of deterrence, the High Court has held:

...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.[8]

1. In terms of the French Factors, I find as follows.
2. The conduct is part of a prolonged and widespread "wage theft" as I discussed in Stanley v Lumina Group & Ors:[9]

Failure to pay wages due has been described as "wages theft." It is tantamount to an employer stealing from its employee. Were the situation reversed and an employee stole from their employer, in any resulting prosecution the employee could face the sanction of imprisonment. There is no reason why theft by an employer should be treated as any less serious.[10]

1. This decision is one of several before me relating to the same respondents. The conduct complained of was not isolated in time or in those affected.
2. At the time of offending, it appears the employer was involved in a substantial business enterprise.
3. The conduct could not have been other than deliberate.
4. There has been no suggestion of apology or contrition for the actions of Mr Liu and the employer.
5. The respondents have not complied with any orders made in the proceedings.
6. No corrective action has been taken.
7. In Thompson v Gringos Mexican Restaurant Pty Ltd & Barnes,[11] Dolphin P imposed a penalty of 85% of the maximum in not dissimilar circumstances. I adopt the same starting point here in respect of the first 2 groups of contraventions. In relation to the other 2 groups, I fix a starting point of 70% of the maximum.
8. This would produce pecuniary penalties in relation to Mr Liu of $61,380 and the first respondent of $306,900.

1. Having regard to the totality principle, I am satisfied that the penalty so arrived at in relation to Mr Liu is appropriate. Mr Liu conducted the business in such a way that he used "free" labour from the applicant to prop up the business. If the business failed, the applicant would not be paid. If the business succeeded, the applicant would be paid no more than that to which she was entitled and Mr Liu would profit. It is important that employers, and those who stand behind them, should not see pecuniary penalties as just another cost of doing business. The penalty imposed must be large enough to act as a true deterrent to such an approach.
2. As the majority in Pattinson said:

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.[12]

1. In relation to the first respondent, such an overall penalty seems of oppressive severity in circumstances where the company has failed financially. I understand a winding up application is to be heard on 17 September 2025. The full penalty is therefore probably redundant and unnecessary to provide an appropriate general deterrence. I would reduce the penalty to $180,000.
2. The applicant seeks an order that the pecuniary penalty be paid to her.
3. Section 546(3)(c) of the FW Act provides that the Court may order that the penalty be paid to a particular person.
4. In Sayed v Construction, Forestry, Mining and Energy Union,[13] 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.[14]

1. The pecuniary penalty should be paid to the applicant.

1. The claim against the third respondent is dismissed.
2. Judgment for the applicant against the first respondent in the amount of $34,617.81 with liberty to apply in relation to interest thereon.
3. The first and second respondents are in contravention of the FW Act, Fair Work Regulations 2009 and Hospitality Industry (General) Award 2020 as set out in [23] hereof.
4. Pecuniary penalties for such contraventions are imposed on the first respondent in the sum of $180,000 and on the second respondent in the sum of $61,380.
5. All pecuniary penalties are to be paid to the applicant.

[4] See Matthew Mitchell v Carina Nash Haworth [2025] SAET 96.

[5] Fair Work Ombudsman v NoBrace Centre Pty Ltd (in Liquidation) & Ors (No 2) [2019] FCCA 2970.

[8] Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 at [50].

[9] [2024] SAET 58.

[11] [2025] SAET 6.

[13] [2016] FCAFC 4.