2021 WAIRC 00168
WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT


CITATION : 2021 WAIRC 00168

CORAM
: INDUSTRIAL MAGISTRATE J. HAWKINS

HEARD
:
FRIDAY, 18 JUNE 2021

DELIVERED : WEDNESDAY, 23 JUNE 2021

FILE NO. : M 39 OF 2021

BETWEEN
:
RYLAN CAIRNS
CLAIMANT

AND

STATEWIDE SECURITY (WA) PTY LTD
RESPONDENT

CatchWords : INDUSTRIAL LAW – Assessment of pecuniary penalties for contravention of the Fair Work Act 2009 (Cth) – section 45 of the Fair Work Act 2009 (Cth)
Legislation : Fair Work Act 2009 (Cth)
Crimes Act 1914 (Cth)
Industrial Relations Act 1979 (WA)
Instrument : Security Services Award 2010 (Cth)
Case(s) referred
to in reasons: : Commonwealth of Australia v Director, Fair Work Building and Industry Inspectorate [2015] HCA 46
Miller v Minister of Pensions [1947] 2 All ER 372
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008)165 FCR 560
Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62; (2014) 221 FCR 153
Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832
Milardovic v Vemco Services Pty Ltd (Administrators Appointed) (No 2) [2016] FCA 244
Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4
Result : Pecuniary penalty imposed
REPRESENTATION:

CLAIMANT : MR P. MULLALLY (AGENT) FROM WORKCLAIMS AUSTRALIA
RESPONDENT : NO APPEARANCES

REASONS FOR DECISION
Introduction
1 Mr Rylan Cairns (Mr Cairns) commenced a claim against Statewide Security (WA) Pty Ltd (SSW) on 10 February 2021. Upon Mr Cairns’ application for default judgement, orders were made on 16 April 2021 that SSW pay Mr Cairns $4,927.58 plus interest.
2 By his claim, Mr Cairns also sought payment of a pecuniary penalty relating to the contravention he alleged against SSW. That part of Mr Cairns’ claim was adjourned to hear the parties in respect to penalty.
3 Mr Cairns has lodged and served submissions in respect to the claim for pecuniary penalty in accordance with the orders made on 16 April 2021.
4 SSW wrote, by email, to Mr Cairns’ industrial agent on 8 May 2021 advising that SSW is no longer operating and has not been operating since the second quarter of 2020. Further, the email suggested that SSW and its director were without funds and would be unable to pay Mr Cairns. SSW has not appeared in the proceedings or lodged any submissions in respect to the claim for a pecuniary penalty.
5 Mr Cairns’ claim for pecuniary penalty relates to the failure of SSW to pay him in the role of a ‘Security Officer Level 1’ in accordance with Security Services Award 2010 (Cth) (the Award).
6 Mr Cairns’ claim attached a schedule of those underpayments which is alleged to have occurred from 6 January 2020 to 30 August 2020, being a total of 107 underpayments. The total of underpayments amounted to $4,927.58. By his submissions, Mr Cairns alleges that this is a contravention of s 45 of the Fair Work Act 2009 (Cth) (FW Act) which is a civil penalty provision pursuant to s 539(2) of the FW Act.
7 Schedule 1 and sch 2 of these reasons for decision outline the jurisdiction practice and procedure of the Western Australian Industrial Magistrates Court under the FW Act and the principles relevant in determining an appropriate penalty (if any) under the FW Act.
8 The maximum penalty for the alleged contravention is as follows:
· Section 45 of the FW Act is a civil penalty provision, a contravention of which is dealt with in item 2 of s 539(2) of the FW Act. Item 2 carries a maximum penalty of 60 units for a non-serious contravention of s 45 of the FW Act. Mr Cairns’ claim alleges the contravention is a non-serious contravention. Section 546(2)(b) of the FW Act provides that if a person is a body corporate the pecuniary penalty must not be more than ‘5 times the maximum number of penalty units’. The penalty unit as of 1 July 2020 is $222 pursuant to s 4AA of the Crimes Act 1914 (Cth). Therefore, the maximum penalty for a contravention of s 45 of the FW Act is as follows:
5 x 60 units = 300 penalty units
300 penalty units x $222 = $66,600.
Submissions On Penalty From Mr Cairns
9 In summary, the submissions state that:
· The contraventions during Mr Cairns’ employment between 6 January 2020 and 30 August 2020 which was not an insignificant period and amounted to 107 contraventions.
· Nonetheless, Mr Cairns alleges that the employment relationship was evidently a smooth one.
· The loss suffered by Mr Cairns was not insignificant for an employee at his level.
· There had been no evidence of previous similar conduct by SSW.
· The contraventions arose from a consistent course of conduct.
· The employer was a small business, and the director was involved in the breaches.
· SSW acted deliberately in paying at less than the Award rate.
· SSW has not engaged in the process which is a factor relevant to contrition.
· There is no evidence that SSW has changed its ways.
· Allowing for issues of totality and to ensure the result is not crushing on SSW, Mr Cairns says that payment of $5,000 is proportionate to the overall offending and the penalty should be payable to Mr Cairns.
Determination
10 Applying the relevant principles referred to sch 2 of these reasons, the following considerations are significant in assessing the appropriate pecuniary penalty:
· In the absence of any comment by SSW the contraventions in respect to underpayment of wages can be characterised as a disregard for the law.
· The contraventions can be properly characterised as a single contravention which flowed throughout the term of Mr Cairns’ employment arising from the same course of conduct in weekly underpayment to him.
· There is no evidence that SSW exploited or profited from that underpayment.
· SSW operates a small business and presently it appears, from the information received from SSW, that it lacks the funds to make any payment to Mr Cairns. Further, based on that same information, it appears that SSW may be pursuing deregistration soon. Accordingly, specific deterrence is not a significant factor.
· Nonetheless, like all contraventions, general deterrence is also an important factor. A civil penalty promotes the public interest in compliance with the law. It is not additional compensation for financial or emotional stress, hurt feelings, inconvenience or legal fees. Commonwealth of Australia v Director, Fair Work Building and Industry Inspectorate [2015] HCA 46 [55]
The offending in all of the circumstances is properly characterised as falling at the lower end of offending.
· The amounts unpaid to Mr Cairns, as a relatively low wage earner, was not insignificant and because of the factors referred to above, caution is not appropriate nor is imposing no penalty whatsoever. Although the contraventions arose primarily out of the same course of conduct, the period over which the contraventions occurred was not fleeting. Allowing for principles of totality and proportionality, I, therefore, impose the following penalty:
o $4,280 for the failure to pay wages in full pursuant to s 45 of the FW Act.
11 I am satisfied that it is appropriate that the penalty be paid to Mr Cairns.
Order
12 For the reasons set out above, I make the following order:
1) That SSW pay to Mr Cairns, by way of pecuniary penalty, the sum of $4,280.



J. HAWKINS
INDUSTRIAL MAGISTRATE




Schedule 1: Jurisdiction, Practice And Procedure Of The Western Australian Industrial Magistrates Court Under The Fair Work Act 2009 (Cth)
Jurisdiction
[1] An employee, an employee organization or an inspector may apply to an eligible state or territory court for orders regarding a contravention of the civil penalty provisions identified in s 539(2) of the FW Act. The Western Australian Industrial Magistrates Court (‘IMC’ or ‘the Court’), being a court constituted by an industrial magistrate, is ‘an eligible State or Territory court’: s 12 of the FW Act (see definitions of ‘eligible State or Territory court’ and ‘magistrates court’); Industrial Relations Act 1979 (WA) s 81 and s 81B.
[2] The application to the IMC must be made within six years after the day on which the contravention of the civil penalty provision occurred: s 544 of the FW Act.
[3] The civil penalty provisions identified in s 539 of the FW Act include:
· Section 44 of the FW Act;
· Section 535 of the FW Act; and
· Section 536 of the FW Act.
[4] An ‘employer’ has the statutory obligations noted above if the employer is a ‘national system employer’ and that term, relevantly, is defined to include ‘a corporation to which paragraph 51(xx) of the Constitution applies’: s 14 and s 12 of the FW Act. The obligation is to an ‘employee’ who is a ‘national system employee’ and that term, relevantly, is defined to include ‘an individual so far as he or she is employed by a national system employer’: s 13 of the FW Act. It is not in dispute and it was found that SSW is a corporation to which paragraph 51(xx) of the Constitution applies and that Mr Cairns was employed by SSW.
[5] Where the IMC is satisfied that there has been a contravention of a civil penalty provision, the court may make orders for:
· A person to pay a pecuniary penalty: s 546 of the FW Act.
Burden and standard of proof
[6] In an application under the FW Act, Mr Cairns carries the burden of proving the claim. The standard of proof required to discharge the burden is proof ‘on the balance of probabilities’. In Miller v Minister of Pensions [1947] 2 All ER 372, 374, Lord Denning explained the standard in the following terms:
It must carry a reasonable degree of probability but not so high as is required in a criminal case. If the evidence is such that the tribunal can say ‘we think it more probable than not’ the burden is discharged, but if the probabilities are equal it is not.
[7] In the context of an allegation of the breach of a civil penalty provision of the FW Act it is also relevant to recall the observation of Dixon J said in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336:
The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters ‘reasonable satisfaction’ should not be produced by inexact proofs, indefinite testimony, or indirect inferences. [362]
[8] Where in this decision it is stated that a finding has been made, the finding is made on the balance of probabilities. Where it is stated that a finding has not been made or cannot be made, then no finding can be made on the balance of probabilities.

Schedule 2: Pecuniary Penalty Orders Under The Fair Work Act 2009 (Cth)
Pecuniary penalty orders
[1] The FW Act provides that the Court may order a person to pay an appropriate pecuniary penalty if the court is satisfied that the person has contravened a civil remedy provision: s 546(1) of the FW Act. The maximum penalty for each contravention by a natural person, expressed as a number of penalty units, set out in a table found in s 539(2) of the FW Act: s 546(2) of the FW Act. If the contravener is a body corporate, the maximum penalty is five times the maximum number of penalty units proscribed for a natural person: s 546(2) of the FW Act.
[2] The rate of a penalty unit is set by s 4AA of the Crimes Act 1914 (Cth): s 12 of the FW Act. The relevant rate is that applicable at the date of the contravening conduct:
Before 28 December 2012
$110
Commencing 28 December 2012
$170
Commencing 31 July 2015
$180
Commencing 1 July 2017
$210
Commencing 1 July 2020
$222
[3] The purpose served by penalties was described by Katzmann J in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 [338] in the following terms (omitting citations):
In contrast to the criminal law, however, where, in sentencing, retribution and rehabilitation are also relevant, the primary, if not the only, purpose of a civil penalty is to promote the public interest in compliance with the law. This is achieved by imposing penalties that are sufficiently high to deter the wrongdoer from engaging in similar conduct in the future (specific deterrence) and to deter others who might be tempted to contravene (general deterrence). The penalty for each contravention or course of conduct is to be no more and no less than is necessary for that purpose.
[4] In Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 [14], Tracey J adopted the following ‘non-exhaustive range of considerations to which regard may be had in determining whether particular conduct calls for the imposition of a penalty, and if it does the amount of the penalty’ which had been set out by Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7:
· 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.
[5] The list is not ‘a rigid catalogue of matters for attention. At the end of the day the task of the court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations’. (Buchanan J in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008)165 FCR 560 [91]).
[6] ‘Multiple contraventions’ may occur because the contravening conduct done an employer:
(a) resulted in a contravention of a single civil penalty provision or resulted in the contravention of multiple civil penalty provisions;
(b) was done once only or was repeated; and
(c) was done with respect to a single employee or was done with respect to multiple employees.
[7] The fixing of a pecuniary penalty for multiple contraventions is subject to s 557 of the FW Act. It provides that two or more contraventions of specified civil remedy provisions (including contraventions of an enterprise agreement and a contravention on s 323 on the payments) by an employer are taken be a single contravention if the contraventions arose out of a course of conduct by the employer. Subject to proof of a ‘course of conduct’, the section applies to contravening conduct that results in multiple contraventions of a single civil penalty provision whether by reason of the same conduct done on multiple occasions or conduct done once with respect to multiple employees: Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62; (2014) 221 FCR 153; Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832 [22] (White J) The section does not to apply to case where the contravening conduct results in the contravention of multiple civil penalty provisions (example (a) above): Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 [411] (Katzmann J).
[8] The totality of the penalty must be re-assessed in light of the totality of the offending behaviour. If the resulting penalty is disproportionately harsh, it may be necessary to reduce the penalty for individual contraventions: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 [47] - [52].
[9] Section 546(3) of the FW Act also provides:
Payment of penalty
(3) The court may order that the pecuniary penalty, or a part of the penalty, be paid to:
(a) the Commonwealth; or
(b) a particular organisation; or
(c) a particular person.
[10] In Milardovic v Vemco Services Pty Ltd (Administrators Appointed) (No 2) [2016] FCA 244 [40] - [44], Mortimer J summarised the law (omitting citations and quotations) on this provision in light of Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4:
[T]he power conveyed by s 546(3) is ordinarily to be exercised by awarding any penalty to the successful applicant … [T]he initiating party is normally the proper recipient of the penalty as part of a system of recognising particular interests in certain classes of persons … in upholding the integrity of awards and agreements the subject of penal proceedings. Where a public official vindicates the law by suing for and obtaining a penalty, it is appropriate that the penalty be paid to the Consolidated Revenue Fund. Otherwise, the general rule remains appropriate, that the penalty is to be paid to the party initiating the proceeding, with the ‘Gibbs’ [Gibbs v The Mayor, Councillors and Citizens of City of Altona [1992] FCA 553] … exception that the penalty may be ordered to be paid to the organisation on whose behalf the initiating party has acted.