Appeal against a decision of the Industrial Magistrate in matter no.  M 94/2020 given on 19 February 2021

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

FULL BENCH

CITATION : 2021 WAIRC 00216

DELIVERED : FRIDAY, 16 JULY 2021

FILE NO. : FBA 1 OF 2021

Appellant

AND

Garth Douglas Smith

Respondent

ON APPEAL FROM:

Jurisdiction : Industrial Magistrates Court

Coram : Industrial Magistrate J Hawkins

File No : M 94 of 2020

Catchwords : Industrial Law (WA) – Appeal against decision of Industrial Magistrate imposing penalties for contravention of award – Relevant principles applied – Awarding of costs – Appeal allowed – Decision of Industrial Magistrate set aside – New penalties imposed – Costs orders made

Legislation : Fair Work Act 2009 (Cth) Part 4-1, s 557(1)

Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 (WA)

Industrial Relations Act 1979 (WA) ss 81E, 83, 83A, 83B, 83C, 84

Labour Relations Reform Act 2002 (WA)

Magistrates Court Civil Proceedings Act 2004 (WA)

Workplace Relations Act 2006 (Cth)   

Result : Appeal upheld.  Orders made

Representation:

Counsel:

Appellant : Mr S Pack of counsel

Respondent : No appearance

Intervenors : Mr C Fogliani of counsel on behalf of UnionsWA

 : Mr P Moss on behalf of the Chamber of Commerce and Industry of Western Australia

Solicitors:

Appellant : State Solicitor’s Office

Case(s) referred to in reasons:

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8

Commissioner of Taxation v Arnold (No 2) [2015] FCA 34

Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2010) 258 CLR 482

Como Investments Pty Ltd v Graham McCorry (1993) 73 WAIG 2925

Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450

Director General of Department of Transport v McKenzie [2016] WASCA 147

Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503

Gapes v Commercial Bank of Australia Ltd (1979) 27 ALR 87

Graham McCorry v Bolivia Nominees Pty Ltd T/A Ballajura Tavern (1992) 72 WAIG 2521

House v The King (1936) 55 CLR 499

James Turner Roofing Pty Ltd v Peters (2002) 82 WAIG 765

Mason v Harrington Corporation Pty Ltd [2007] FMCA 7

Melrose Farm Pty Ltd t/as Milesaway Tours v Milward [2007] WAIRC 00504; (2007) 87 WAIG 1089

Melrose Farm Pty Ltd t/as Milesaway Tours v Milward [2008] WASCA 175; 175 IR 455

Miles & Ors v Milward [2007] WAIRC 01230; (2007) 87 WAIG 2991

NI v The State of Western Australia [2020] WASCA 78

Nicoletti and Nicoletti v Transport Workers’ Union of Australia, Industrial Union of Workers, Western Australian Branch (1998) 78 WAIG 4316

Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355

Real Estate and Business Agents Supervisory Board v Landa [2009] WASCA 191

Royer v The State of Western Australia [2009] WASCA 139

Strahan v Brennan [2014] WASC 190

The BKH Contractors Case (No. 2) [2018] FCA 1563

The Governing Council of North Metropolitan TAFE v State School Teachers’ Union of WA [2018] WAIRC 00746; (2018) 98 WAIG 1209

Trade Practices Commission v CSR Ltd [1990] FCA 762; (1991) 13 ATPR 41-076 (20 December 1990)

Transport Workers’ Union of Australia, Industrial Union of Workers, Western Australian Branch v Arrow Holdings Pty Ltd (1989) 69 WAIG 1050

Transport Workers’ Union of Australia, Industrial Union of Workers, Western Australian Branch v Arrow Holdings Pty Ltd (1989) 69 WAIG 2668

Reasons for Decision

Introduction

1         This is the unanimous decision of the Full Bench.

2         The key issue in this appeal is whether the $2,000 maximum penalty in s 83(4) of the Industrial Relations Act 1979 (WA) (IR Act) for the contravention of industrial instruments applies to each individual contravention or whether the maximum applies regardless of the number of contraventions.

3         The appeal also concerns the power of the Industrial Magistrates Court of Western Australia (Industrial Magistrates Court) to award costs under s 83C of the IR Act.

4         In the proceedings before the learned Industrial Magistrate, the respondent admitted contravening the Shop and Warehouse (Wholesale and Retail Establishments) State Award 197 (Award) by underpaying one of its employees on 282 separate occasions.  Those underpayments totalled $31,396.94 over a period of two years from 2015 to 2017.

The proceedings at first instance

5         The appellant is an industrial inspector appointed under s 98(1) of the IR Act.  On 15 July 2020, the industrial inspector commenced proceedings in the Industrial Magistrates Court seeking orders against the respondent:

(a) for the respondent to pay a penalty for each of the separate identified contraventions of the Award, such penalties to be determined and imposed by the Court pursuant to s 83(4)(a)(ii) of the IR Act;

(b) that the respondent pay an amount of $31,396.94 for outstanding award entitlements pursuant to s 83A(1) of the IR Act;

(c) an order that the respondent pay the disbursements incurred by the claimant in relation to the proceedings pursuant to s 83C(1); and

(d) an order that the respondent pay pre‑judgment interest pursuant to r 12(1) of the Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 (WA).

6         In its claim, the industrial inspector alleged that the respondent operated a business trading as Hi Ho and Hi Ho Personnel, being a labour hire business providing labour to a fruit and vegetable wholesaler.  The proceedings were brought in respect of Mr William Karta, who was employed by the respondent as a casual storeperson.  Mr Karta’s employment was covered by the scope of the Award.

7         It was alleged that:

(a) for the duration of Mr Karta’s employment, he was underpaid for his Monday to Friday ordinary time hours in contravention of cl 7(3) and (4) and cl 35 of the Award on 96 occasions with an underpayment of ordinary time rates of $6,151.34;

(b) for the duration of Mr Karta’s employment, the respondent contravened cl 13 of the Award on 97 occasions by failing to pay the prescribed overtime rate of pay for hours worked before 6.30 am Monday to Friday, with a total underpayment of $13,603.32;

(c) for the duration of Mr Karta’s employment the respondent contravened cl 13(5)(b) of the Award on 79 occasions by failing to pay him the prescribed rate for overtime hours performed on Sundays with a total underpayment of $10,165.95; and

(d) for the duration of Mr Karta’s employment, the respondent contravened cl 13(6) of the Award on 10 occasions by failing to pay him the prescribed rate for work performed on public holidays, resulting in an underpayment of public holiday hours of $1,748.84.

8         Mr Karta was on a student visa when he commenced employment with the respondent’s predecessor.

9         On 10 November 2020, the respondent filed a response in the Industrial Magistrates Court wholly admitting the claim and consenting to the Court making the orders sought by the industrial inspector.  On 19 January 2021, a hearing was held before the learned Industrial Magistrate to determine the penalty for the admitted contraventions and the industrial inspector’s application for payment of disbursements.

10      In an ex tempore decision, the learned Industrial Magistrate took the view that the maximum penalty of $2,000 prescribed by s 83(4) applied in respect of all 282 contraventions and imposed a single penalty of $1,700.  Her Honour refused the application for payment of disbursements on the basis that the costs sought, being $143 paid to AAC Process Servers in respect of attempts to locate and serve the respondent, and $26.70 for Landgate search fees, were excluded from recovery under s 83C.

The appeal

11      The industrial inspector has appealed against the Industrial Magistrates Court decision pursuant to s 84 of the IR Act on three grounds.  They are:

(a) The learned Industrial Magistrate made an error of law in holding that on the proper construction of s 83(4)(a) of the IR Act the maximum penalty that can be imposed by the Court for multiple proven contraventions of an instrument to which s 83 applies is $2,000, in the case of an employer, regardless of the number of proven contraventions.

(b) The penalty of $1,700 for the 282 proven contraventions imposed by the learned Industrial Magistrate was manifestly inadequate having regard to the full circumstances of the contraventions, so as to amount to an error of law.

(b) The learned Industrial Magistrate made an error of law in holding that the costs incurred by the appellant for a process server and Landgate search fees were costs “for the services of any … agent” of the appellant within the meaning of s 83C(2) of the IR Act, and thereby erred in refusing to consider whether, as a matter of discretion, an order for the costs sought should be made.

12      The respondent was unrepresented in the proceedings at first instance and in the appeal.  Because the appeal raises an important question as to the proper approach to the determination of penalties, the Full Bench of the Western Australian Industrial Relations Commission (Full Bench) granted leave to both the Chamber of Commerce and Industry of Western Australia (CCIWA) and UnionsWA to intervene in relation to ground 1 of the appeal.  Both made submissions in writing.  The appeal was determined on the papers without objection from any party, with the original hearing date being vacated due to COVID-19 lockdown measures.

The Industrial Magistrate’s approach

13      It appears from the transcript of her Honour’s ex tempore reasons for decision, that the learned Industrial Magistrate accepted that 282 contraventions of the Award were admitted by the respondent, and that the entitlements Mr Karta was deprived of amounted to a significant sum over a significant period.  Her Honour noted that the issue of whether each breach of the applicable award is to be treated as a separate and distinct contravention attracting a penalty, and the application of the “Mason v Harrington approach”, had been the subject of inconsistent application as between different Industrial Magistrates.  Her Honour observed that the legislative provisions considered by Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 under the Workplace Relations Act 2006 (Cth), namely s 719, expressly provided that where two or more breaches of an applicable provision were committed by the same person and where the breaches arose out of the same course of conduct by the person, the breach is to constitute a single breach.  Her Honour also noted that unlike the Federal legislation, the IR Act is silent on how multiple contraventions may be treated.

14      The learned Industrial Magistrate considered that in the context of s 83(1), which her Honour viewed as contemplating multiple contraventions or failures, because of the expression “contravenes” and “fails” in that subsection, s 83(4) should be construed as referable to multiple contraventions attracting a maximum penalty of $2,000.

The enforcement regime of the IR Act

15      Of the three grounds of appeal, ground 1 involves the question of the correct construction of s 83(4) and ground 3 involves construction of s 83C.

16      The rules of statutory construction require primary attention to be directed to the text of the relevant provisions: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [47]; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 at [39].  There must be regard to the language of the statutory instrument viewed as a whole, considered in its context: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [69].  The primary object of statutory construction is to construe a statutory provision so that it is consistent with the language and purpose of all provisions of the statute.  The meaning of the text may require consideration of the context.  Context is referred to here in the wide sense and includes the existing state of the law, the mischief the statute is intended to remedy, other related statutory provisions, legislative history and the general purpose and policy of the provision: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 at [4]; Director General of Department of Transport v McKenzie [2016] WASCA 147 at [46].

17      Accordingly, in the exercise of interpreting ss 83(4) and 83C, it is helpful to consider the objects of the enforcement regime contained in Part 3 of the IR Act more generally.

18      The Labour Relations Reform Act 2002 (WA) (LRR Act) introduced a new enforcement regime under Part 3 of the IR Act, repealing and replacing s 83 and introducing new provisions: ss 83A, 83B and 83C.  Sections 83E and 83F were also inserted, introducing “Civil Penalty Provisions” along with a definition of that phrase in s 7.

19      Section 7, as so amended, defines “Civil Penalty Provision” to mean:

…a provision of this Act, or any other written law, that is specified to be a civil penalty provision for the purposes of section 83E…

20      The civil penalty provisions of the IR Act are ss 49D, 49E, 49J, 49M, 97XZ, 97Y, 97YB, 97YD, 97YE, 97YF, 97UK and 102.

21      Section 83E deals with proceedings for contraventions of a Civil Penalty Provision, providing:

83E. Civil penalty provision, proceedings for contravening

(1) If a person contravenes a civil penalty provision, an industrial magistrate’s court may make an order imposing a penalty on the person, not exceeding —

(a) in the case of an employer, organisation or association, $5 000; and

(b) in any other case, $1 000.

22      Notably, contravening an award, an industrial agreement or an order of the Commission is not, of itself, a “Civil Penalty Provision”, at least as that term is defined in s 7.  Indeed, while there is no doubt that awards made under Part 2 Division 2A, industrial agreements registered under Part 2 Division 2B and other orders of the Commission are binding on those to whom they apply, the Act does not expressly prohibit their contravention.  Rather, in relation to awards, s 37 relevantly provides:

37. Effect, area and scope of awards

(1) An award has effect according to its terms, but unless and to the extent that those terms expressly provide otherwise it shall, subject to this section —

(a) extend to and bind —

(i) all employees employed in any calling mentioned therein in the industry or industries to which the award applies; and

(ii) all employers employing those employees…

23      Similarly, for industrial agreements, s 41(4) provides:

(4) An industrial agreement extends to and binds —

(a) all employees who are employed —

(i) in any calling mentioned in the industrial agreement in the industry or industries to which the industrial agreement applies; and

(ii) by an employer who is —

(I) a party to the industrial agreement; or

(II) a member of an organisation of employers that is a party to the industrial agreement or that is a member of an association of employers that is a party to the industrial agreement;

and

(b) all employers referred to in paragraph (a)(ii),

and no other employee or employer, and its scope shall be expressly so limited in the industrial agreement.

24      Section 114 further prohibits the avoidance of obligations under awards, industrial agreements, and orders of the Commission by contracting out, in the following terms:

114. Contracting out from awards etc. prohibited

(1) Subject to this Act, a person shall not be freed or discharged from any liability or penalty or from the obligation of any award, industrial agreement or order of the Commission by reason of any contract made or entered into by him or on his behalf, and every contract, in so far as it purports to annul or vary such award, industrial agreement or order of the Commission, shall, to that extent, be null and void without prejudice to the other provisions of the contract which shall be deemed to be severable from any provisions hereby annulled.

(2) Each employee shall be entitled to be paid by his employer in accordance with any award, industrial agreement or order of the Commission binding on his employer and applicable to him and to the work performed, notwithstanding any contract or pretended contract to the contrary, and the employee may recover as wages the amount to which he is hereby declared entitled in any court of competent jurisdiction, but every action for the recovery of any such amount shall be commenced within 6 years from the time when the cause of action arose, and the employee is not entitled to recovery of wages under this subsection and otherwise, in respect of the same period.

25      Despite the uncontroversial position that awards, industrial agreements, and orders of the Commission have statutory force, there is no “Civil Penalty Provision” in the IR Act associated with the breach, contravention or non‑compliance with such orders or instruments.  However, aside from the “Civil Penalty Provisions” that may be the subject of proceedings under s 83E, the IR Act also:

(a) creates a range of offences attracting penalties, for example: ss 48B, 73, 77, 78, 83B, 96C, 96D, 96E, 97WF, 97XB, 97YC, 97YG, 98, 99A, 111, and 112A; and

(b) empowers the Industrial Magistrates Court to impose pecuniary penalties in circumstances other than for the contravention of a “Civil Penalty Provision” as defined or the commission of an offence: s 83(4) and 83B(5).

26      Section 81CA distinguishes between the Industrial Magistrates Court’s general jurisdiction and its prosecution jurisdiction.  Its general jurisdiction includes proceedings under ss 83(1) to (7) and ss 83B(1) to (9).  The procedure that applies to matters in the general jurisdiction is that set out in the Industrial Magistrates Courts (General Jurisdiction) Regulations 2005 (WA) which are, in effect, civil rules of practice: s 81CA(2) and reg 3.

27      Therefore, notwithstanding the fact that the IR Act does not expressly describe the penalties in 83(5) and 83B(4) as “Civil Penalty Provisions” or refer to “civil penalties”, it is appropriate to characterise these provisions as civil penalty provisions.  That is simply because they confer power to impose punitive sanctions outside of the usual criminal process in accordance with civil rules of practice: Gapes v Commercial Bank of Australia Ltd (1979) 27 ALR 87.

28      As a civil penalty provision, it follows that s 83(4) was employed by the legislature to emphasise the public interest in observance of awards, industrial agreements, and other instruments to which the section applies.

29      Part III of the IR Act is headed “Enforcement of Act, awards, industrial agreements and orders”, providing an abundantly clear indication that the objective of the Part is to promote compliance.  This purpose is expressed in the objects of the IR Act at s 6(d).  It is an object of the IR Act:

…to provide for the observance and enforcement of agreements and awards made for the prevention or settlement of industrial disputes…

30      The courts have said many times in the context of industrial legislation that the purpose of a civil penalty is primarily, if not wholly, protective in promoting the public interest in compliance.  The High Court in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2010) 258 CLR 482 confirmed and stated clearly that the primary, if not the only object of penalties in industrial relations legislation, is protective in promoting the public interest in compliance.  The plurality cited French J’s statement in Trade Practices Commission v CSR Ltd [1990] FCA 762; (1991) 13 ATPR 41-076 (20 December 1990):

The principal, and I think probably the only object of the penalties…is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.

31      Whilst civil penalties in industrial legislation are undoubtedly “penal” and penalising, punishment conceptually has no role in forming the statutory construction exercise concerning the scope of the Court’s power or the means of exercise of its power: Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177 at [39].  These themes were encapsulated by the comments of Smith AP (as she was then) in The Governing Council of North Metropolitan TAFE v State School Teachers’ Union of WA [2018] WAIRC 00746; (2018) 98 WAIG 1209 at [52] when she said:

The primary purpose of s 83 is two-fold.  Firstly, its function is to coerce and ensure compliance with an instrument by providing for the imposition of penalties as a means of deterrence.  Secondly, s 83 provides the means by which sanctions can be imposed on a person who contravenes or fails to comply with an instrument.

Ground 1 - construction of s 83(4)(a)

32      Section 83 of the IR Act provides:

83. Enforcing awards etc.

(1) Subject to this Act, where a person contravenes or fails to comply with a provision of an instrument to which this section applies any of the following may apply in the prescribed manner to an industrial magistrate’s court for the enforcement of the provision —

(a) the Registrar or a deputy registrar;

(b) an industrial inspector;

(c) in the case of an award or industrial agreement, any organisation or association named as a party to it;

(d) in the case of an award, industrial agreement or order, an employer bound by it;

(e) any person on his or her own behalf who is a party to the instrument or to whom it applies;

(f) if an employee under an employer‑employee agreement is a represented person, a representative acting on his or her behalf.

(2) In this section —

instrument to which this section applies means —

(a) an award; and

(b) an industrial agreement; and

(c) an employer‑employee agreement; and

(d) an order made by the Commission, other than an order made under section 23A, 32, 44(6) or 66.

(3) An application for the enforcement of an instrument to which this section applies shall not be made otherwise than under subsection (1).

(4) On the hearing of an application under subsection (1) the industrial magistrate’s court may, by order —

(a) if the contravention or failure to comply is proved —

(i) issue a caution; or

(ii) impose such penalty as the industrial magistrate’s court thinks just but not exceeding $2 000 in the case of an employer, organisation or association and $500 in any other case;

or

(b) dismiss the application.

(5) If a contravention or failure to comply with a provision of an instrument to which this section applies is proved against a person as mentioned in subsection (4) the industrial magistrate’s court may, in addition to imposing a penalty under that subsection, make an order against the person for the purpose of preventing any further contravention or failure to comply with the provision.

(6) An order under subsection (5) —

(a) may be made subject to any terms and conditions the court thinks appropriate; and

(b) may be revoked at any time.

(7) An interim order may be made under subsection (5) pending final determination of an application under subsection (1).

(8) A person shall comply with an order made against him or her under subsection (5).

Penalty: $5 000 and a daily penalty of $500.

[Section 83 inserted: No. 20 of 2002 s. 155(1).]

33      The appellant relies upon the Industrial Appeal Court’s decision in Melrose Farm Pty Ltd t/as Milesaway Tours v Milward [2008] WASCA 175; 175 IR 455 as authoritatively determining the correct construction of s 83(4)(a).  The appellant submits that the Industrial Appeal Court confirmed an interpretation of s 83(4)(a), such that it provides for a penalty which may be imposed in respect of each contravention.

34      Melrose Farm Pty Ltd’s ground of appeal in the Industrial Appeal Court contended error “in finding that a separate beach of the Act occurred on each occasion [the employee] was paid and that a separate penalty should be imposed for such breach.” This ground was dismissed with Le Miere J providing brief reasons at [118].

35      We have difficulty accepting that the Industrial Appeal Court’s decision in Melrose Farm Pty Ltd t/as Milesaway Tours v Milward settles the issue in this appeal as to the correct construction of s 83(4).  At first instance, in Melrose Farm Pty Ltd t/as Milesaway Tours v Milward [2007] WAIRC 00504; (2007) 87 WAIG 1089, the learned Industrial Magistrate treated underpayments made by the employer to a casual employee in multiple pay cycles, as multiple contraventions of the applicable award, and imposed multiple penalties accordingly.  The employer appealed to the Full Bench on four grounds: Miles & Ors v Milward [2007] WAIRC 01230; (2007) 87 WAIG 2991.

36      The greater part of the Full Bench’s reasons for decision dealt with the construction of the relevant award, whether the employer was bound by it, whether the employee was a casual employee and the competence of the proceedings below.  Only one ground of appeal before the Full Bench concerned the penalty.  It was articulated:

The Industrial Magistrate erred in law in imposing a separate penalty for each week Mr Sladden was found to have been underpaid, in that on a proper construction of the Industrial Relations Act 1979 and authority, a failure to pay the rate of wage prescribed by an award is a continuing breach and in the absence of express provision for penalties for a continuing breach, only one penalty should be imposed.

37      This ground of appeal was addressed by Ritter AP at [226]-[233].  His Honour summarised the submission in support of the ground in this way at [226]-[227]:

Milesaway Appeal - Ground 5

226 In this ground Milesaway asserted that any failure to pay the rate of wage prescribed by the award was a continual breach and therefore only one penalty for each employer should have been imposed by the Industrial Magistrate. It was submitted this followed from the legislative scheme, the award and the characteristics of the employment relationship. It was submitted that a breach of the award did not occur until the obligation to pay the wage arose and it was only at that time that it could be determined whether there was an underpayment. Mr McCorry referred to clause 11(8) of the award…             
 

227 It was submitted than an obligation to pay crystallised at the time when an employee left his employment…

38      It appears from what was said by Ritter AP above, that the appellants advanced this ground on the basis that, under the terms of the particular award properly construed, the failure to pay a casual employee from week to week was a single, continual breach.  This conclusion was advanced by reference to the termination clause of the award, and the absence of any requirement in the award for weekly payment of wages to casual employees.  The imposition of a single penalty would therefore follow from the conclusion that there is a single breach.

39      These submissions were rejected by Ritter AP at [233], where his Honour concluded that, on a correct construction of the award, the obligation to pay arises each week, such that each week’s underpayment was a separate contravention.  The proposition that multiple contraventions should be treated as single contravention for the purpose of penalty, or that the maximum penalty applied to multiple contraventions, was neither advanced nor considered.

40      There were four appeals to the Industrial Appeal Court, primarily concerning issues of construction of the award, the findings that it applied to the employer and the finding that the employee was a casual employee under the award.  Another ground of appeal concerned the power to award interest on underpayments.  Again, the vast bulk of the reasons for decision deal with matters not relevant to this appeal.

41      One of the grounds of appeal, considered at [114]-[118] of Le Miere J’s reasons for decision was:

…that the Full Bench erred in its construction of the Award and s 83 of the Act in finding that a separate breach of the Award occurred on each occasion [the employee] was paid and that a separate penalty should be imposed for each such breach.

42      This ground, on its face, appears to have involved two issues and two limbs: the two limbs being the construction of each of the award and the Act; the two issues being the number of breaches and the number of penalties, respectively.

43      However, it must be borne in mind that this was a single ground of appeal.  Further, when the ground is considered in light of what the Full Bench did decide, and perhaps more importantly what it did not decide, it cannot be said that the Industrial Appeal Court was required to consider the second limb nor the second issue, as distinct grounds.  Nor can it be said that the Industrial Appeal Court answered the second limb or second issue as a distinct question.  As in the appeal before the Full Bench, at [116], it is apparent that the alleged error the Court was required to consider was the imposition of several penalties, flowing from the finding of several breaches.  The core challenge was the finding of several breaches as opposed to a single continuing breach:

116 The appellants submitted that there can only be a breach when the obligation is not complied with. The appellants then submitted that where, as here, an award makes no provision for the frequency of payment of a casual employee - other than on termination of employment - the breach begins at the time of termination. As Mr Sladden was a casual employee for the duration of his employment, the appellant submits that there was no breach of the Award until he was terminated and not paid all the monies alleged to be owing to him. Accordingly, it was submitted, there was only one breach and only one penalty should have been applied.

44      In other words, the question of whether a single penalty must be imposed for multiple breaches, did not arise.  The result is that there is no binding authority as to the construction of s 83(4)(a) and this Full Bench is required to construe it.

45      The natural, ordinary meaning of the words in s 83(4) “the contravention or failure” is a singular, identifiable, individual contravention or failure.  The definite article “the” in this context is indicative of specificity and particularly, and there is specificity in the following words, “contravention” and “failure”. Neither of those words are expressed other than in the singular sense.

46      No support for an alternative, unnatural meaning is properly gained by reference to the words “contravenes or fails” in s 83(1).  Subsection 83(4) uses the nouns “contravention” and “failure”.  Subsection 83(1) uses the respective verbs “contravenes” and “fails.”  There is no room grammatically or conceptually for reading this verb form of the present simple verb “contravene”, as excluding a single contravention or necessarily referencing multiple contraventions.  By way of illustration, it is both correct to say that by her one contravention she contravenes the section and to say that by her ten contraventions she contravenes the section.  Accordingly, s 83(1) is not context that supports the learned Industrial Magistrate’s limiting construction of s 83(4).

47      Further, s 83(1), being the definite or specific condition which the definite article in s 83(4) references, speaks of “a provision” of “an instrument” indicating a single contravention is contemplated.

48      The purpose of the enforcement regime of the IR Act, as discussed above, supports the words being their natural and ordinary meaning.  In particular, it is supported by the object of promoting the public interest in compliance with industrial instruments.  It would be contrary to that object if multiple instances of non-compliance were penalised as a single non-compliance.

49      So too, the legislative history, seen in the light of the state of the law in relation to prior enactments of the IR Act, supports the words being given their natural and ordinary meaning.  In its submissions, UnionsWA referred to a number of decisions of the Full Bench of this Commission in relation to the approach to penalties.  In particular, UnionsWA referred to Como Investments Pty Ltd v Graham McCorry (1993) 73 WAIG 2925; Graham McCorry v Bolivia Nominees Pty Ltd T/A Ballajura Tavern (1992) 72 WAIG 2521; James Turner Roofing Pty Ltd v Peters (2002) 82 WAIG 765; Nicoletti and Nicoletti v Transport Workers’ Union of Australia, Industrial Union of Workers, Western Australian Branch (1998) 78 WAIG 4316; Transport Workers’ Union of Australia, Industrial Union of Workers, Western Australian Branch v Arrow Holdings Pty Ltd (1989) 69 WAIG 1050; and Transport Workers’ Union of Australia, Industrial Union of Workers, Western Australian Branch v Arrow Holdings Pty Ltd (1989) 69 WAIG 2668.

50      UnionsWA submitted that the approach taken to the assessment of penalties in these cases has consistently been to apply the maximum prescribed penalty as a maximum in respect of each individual contravention of an industrial instrument, where each instance of an underpayment is an individual contravention.  UnionsWA submitted that these decisions were binding on the Industrial Magistrates Court in the exercise of its discretion on penalty: [15] of UnionsWA’s Outline of Submissions.

51      Strictly speaking none of these decisions were binding on the Industrial Magistrates Court, nor did they authoritatively decide the issue that is raised by this appeal, as to the correct construction of s 83(4).  They all concerned the provisions of the IR Act prior to the amendments effected by the LRR Act, which commenced on 8 July 2002 and repealed the section then under consideration.  Although s 83(4) is substantially the same as the relevant predecessor provision in s 83(2), the statutory context was changed by the LRR Act.  While courts are permitted to have regard to prior statutory provisions and their construction as part of the exercise of interpreting current, or amended provisions, a new provision must still be construed according to its terms and not approached “through the fog of authorities on its predecessor”: D Pearce Statutory Interpretation in Australia 9th Edition [3.36] citing Armstrong v Edgecock [1984] 2 NSWLR 536 at [540].

52      It is true that the Full Bench decisions affirm that each occasion of underpayment, that is, each breach of a clause of an industrial instrument providing an entitlement, for every pay cycle when the underpayment is made, represents a separate breach.  That position is not in contention in this appeal.  The respondent admitted 282 breaches. The learned Industrial Magistrate proceeded to assess penalty on the basis that there were 282 individual breaches.

53      That the Industrial Magistrates Court and the Full Bench of the Commission treated the predecessor provisions as requiring the assessment of a penalty for each individual contravention prior to the LRR Act, is relevant context in construing the current provision.  There is no indication from the text of the current provision, that the amendments to s 83 were intended to result in a departure from the then accepted approach to penalties.

54      Accordingly, in our view, s 83(4)(a) properly construed prescribes the maximum penalty that is to be applied to any single, individual contravention of an industrial instrument.

55      CCIWA urged upon the Full Bench that the Industrial Magistrate was correct in construing s 83(4) as involving a single maximum penalty for multiple contraventions.  It did so by submitting to the effect that:

(a) The Industrial Appeal Court decision in Melrose Farm is distinguishable from the present case.  For the reasons set out above, we accept that the decision is not on point in this appeal.

(b) Melrose Farm was not cited by the industrial inspector at first instance and the industrial inspector should not now be allowed to raise it on appeal; and

(c) If it were the intention of Parliament for the maximum penalty to apply to each contravention, the Act would be worded to make that clear. This contention can be dealt with briefly by observing that the converse to CCIWA’s position is also true.  That is, had Parliament intended the maximum penalty to apply to multiple contraventions, the IR Act would be worded to make that clear.  It is not.

Course of conduct in sentencing

56      There is a hint that the learned Industrial Magistrate’s ex tempore reasons for decision either confused or conflated the distinct issues of the construction of s 83(4) and the application of “course of conduct” principles.  Her Honour embarked upon a consideration of the legislative “course of conduct” provisions in the Federal legislation and contrasted it with the silence of the IR Act on that front, yet apparently drew support for her Honour’s approach to construction from that consideration.  We are mindful that in considering a magistrate’s reasons, it is necessary to keep in mind the nature of a magistrate’s work including their time constraints, volume of cases and the relative informality involved. As Martin CJ in Strahan v Brennan [2014] WASC 190 observed at [89]-[90], it is not appropriate to scrutinise the reasons for decision given by magistrates with a fine-tooth comb.  However, the distinction between the provisions of the IR Act and “course of conduct” provisions in the Federal legislation deserves some attention here.

57      First, there is simply no utility in referencing decisions under the Federal legislation to assist in the construction of s 83(4).  The respective statutes are not comparable by virtue of the inclusion of requirements such as those found in Part 4-1 of the Fair Work Act 2009 (Cth) and s 557(1) of that Act.

58      Second, “course of conduct” principles may have a role to play, but not in the construction of the legislation.  Rather the role is in the sentencing exercise itself.  The principle, which is also referred to as the “one transaction principle”, is a common law rule that applies in sentencing.  While the principle is derived from criminal law sentencing principles, it has also been applied in the context of civil pecuniary penalty proceedings.

59      The principle was discussed by Owen JA in Royer v The State of Western Australia [2009] WASCA 139 at [19]-[34].  His Honour describes the principle at [22]:

…At its heart, the one transaction principle recognises that, where there is an interrelationship between the legal and factual elements of two or more offences with which an offender has been charged, care needs to be taken so that the offender is not punished twice (or more often) for what is essentially the same criminality. The interrelationship may be legal, in the sense that it arises from the elements of the crimes. It may also be factual, because of a temporal or geographical link or the presence of other circumstances compelling the conclusion that the crimes arise out of substantially the same act, omission or occurrences.

60      Owen JA points out that if the particular circumstances call for the application of the “one transaction” principle (because there is sufficient legal and factual interrelationship between offences), then it applies at the “second stage” of sentencing, that is, after the penalty or sentence for the individual offences or contraventions have been assessed.  It does not operate to enable a sentencing court to effectively treat multiple offences as one offence which is to be penalised. This caution against misapplication of the principle was also highlighted in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113, where the Full Court of the Federal Court said that a single penalty cannot be imposed for multiple contraventions based on the course of conduct principle, unless specifically authorised by statute.

61      CCIWA submitted that the respondent’s conduct arose out of a single course of conduct, because all breaches were the consequence of the single act of applying a flat rate of pay to all hours worked.  That proposition can be accepted without too much difficulty.  The circumstances of this case do involve factual commonality underpinning all 282 contraventions, such as to call the “course of conduct” principles into play in sentencing.  However, as demonstrated above, it is going too far to elevate the principle as having an equivalent effect to a statutory provision like s 557 of the Fair Work Act 2009 (Cth).  Under the IR Act, it remains a common law guiding principle, which is applied to ensure the outcome of the sentencing exercise is appropriate in the circumstances.  To treat the principle as compelling a court to treat multiple contraventions as though they are one contravention, would lead to error.  CCIWA also submits:

31. We also note that cl 35(2) of the award provides that an employer may elect to pay an employee either weekly or fortnightly. If the approach advocated by the appellant was upheld it would create a bizarre outcome in which the maximum penalty in this matter would effectively be halved had the employer elected to pay the employee on a fortnightly basis. Such a principle would mean that the maximum penalty that could apply for a minor contravention made over an extended period would be higher than a far more serious contravention made over a short period of time. This is clearly not the intention of the legislation.

62      We are unable to agree with CCIWA’s conclusion as to the effect of the construction given to s 83(4).  Sentencing principles will always enable the courts to have regard to factors such as those CCIWA has identified, in order to arrive at a penalty that is appropriate in the individual case.  By way of illustration, had the respondent underpaid his employee the same total amount but over monthly, as opposed to weekly, pay cycles, there would be fewer contraventions, but each contravention would be of greater severity.

63      We would uphold ground 1.

Ground 2 - manifestly inadequate

64      The second ground of appeal contends –

“The penalty of $1,700 for the 282 proven contraventions imposed by the learned Industrial Magistrate was manifestly inadequate having regard to the full circumstances of the contraventions, so as to amount to an error of law”.

65      The learned Industrial Magistrate’s decision in relation to the quantum of penalty is a discretionary one.  As a discretionary decision, the well‑established principles that apply are those stated in House v The King (1936) 55 CLR 499 at [504]‑[505] as follows:

…The manner in which an appeal against an exercise of discretion should be determined is governed by established principles.  It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course.  It must appear that some error has been made in exercising the discretion.  If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so…

66      The imposition of a manifestly inadequate penalty constitutes an implied error of law.  A penalty will be manifestly inadequate if it is plainly unreasonable or unjust: Real Estate and Business Agents Supervisory Board v Landa [2009] WASCA 191 per McClure at [25].

67      In imposing the global penalty of $1,700, the learned Industrial Magistrate said that she would have arrived at this penalty “in any event”, that is, regardless of whether the maximum applied to multiple contraventions or to each contravention.  The learned Industrial Magistrate referred in this regard to “totality” and the financial position of the respondent.  Her Honour did not elaborate in her ex tempore reasons for decision, as to how she applied or purported to apply the totality principle or the financial position of the respondent, in arriving at a penalty of $1,700.

68      The facts relevant to penalty as found by the learned Industrial Magistrate are not the subject of this appeal.  The relevant facts are:

(a) Mr Karta was on a student visa, at least when he commenced working in Australia.

(b) The total sum that Mr Karta was deprived of, as a consequence of the breaches, was $31,396.94.

(c) The underpayments occurred over a two-year period.

(d) There is no evidence that the respondent had previously engaged in similar conduct.

(e) The respondent’s business had upwards of 96 employees.

(f) There is no direct evidence of deliberate flouting by the respondent.

(g) The underpayment remained unpaid as at the date of the hearing, despite orders for compensation having been made.

(h) The respondent had no “assets to speak of” and had debts to repay.

(i) The respondent admitted the 282 breaches once he was served with the originating process.

(j) At the hearing, the respondent told the Court that he no longer operated a business.

69      If ground 1 is upheld on the basis that the learned Industrial Magistrate has acted upon an incorrect construction of s 83(4), it must follow that the discretion exercised pursuant to that incorrect construction has miscarried.

70      This is the case despite her Honour’s rider to the effect that she would impose the same penalty in any event, having regard to the totality principle.  The totality principle does not permit or require that the court impose a single global penalty in respect of multiple contraventions: ABCC v CFMEU at [148].  The totality principle is distinct from, but related to and not to be confused with, the course of conduct principles discussed above.  The totality principle involves the court reviewing an aggregate sentence to ensure it is appropriate.  It is a step taken after applying the course of conduct principle to determine whether penalties should be consecutive or concurrent.  In other words, the totality principle cannot be applied without first assessing a penalty for individual contraventions.

71      Further, it must be accepted as uncontroversial that any penalty imposed should be sufficient to serve as both a specific and general deterrent.  As observed in ABCC v CFMEU at [98] (citations omitted):

…both specific and general deterrence are important. A pecuniary penalty for a contravention of the law must be fixed with a view to ensuring that the penalty is not to be regarded by the offender or others as an acceptable cost of doing business. In relation to general deterrence, it is important to send a message that contraventions of the sort under consideration are serious and not acceptable.

72      A penalty of $1,700 for 282 contraventions of an award amounting to a total underpayment of over $30,000, does not achieve deterrence in the requisite sense.  The learned Industrial Magistrate has erred in principle when exercising the discretion to fix the penalty at $1,700.  The penalty of $1,700 simply cannot be reasonably justified once it is accepted that the maximum penalty of $2,000 applied in respect of each and every contravention, nor having regard to the requirement of sentencing that the penalty operate as a specific and general deterrent against future contraventions.

73      We would therefore uphold ground 2.

Ground 3 - costs for the services of an agent of a party

74      The final ground in the appeal is that the learned Industrial Magistrate made an error of law in holding that the costs incurred by the industrial inspector for a process server and for Landgate search fees were costs “for the services of any agent” of the industrial inspector within the meaning of s 83C(2) of the IR Act, and thereby erred in refusing to consider whether, as a matter of discretion, an order for the costs sought should be made.

75      The learned Industrial Magistrate declined the application for costs on the basis that s 83C(2) precluded recovery of costs “for services of any legal practitioner or agent of that party”.

76      Section 83C(2) is in the following terms:

(2) In proceedings under section 83 or 83B costs shall not be given to any party to the proceedings for the services of any legal practitioner or agent of that party unless, in the opinion of the industrial magistrate’s court, the proceedings have been frivolously or vexatiously instituted or defended, as the case requires, by the other party.

77      The appellant submits that the fees for a process server and for Landgate searches are not fees of an agent within the meaning of s 83C(2) and contends that, in context, reference to an agent refers to the services of an agent who represents the party in the proceedings as described in s 81E of the IR Act.

78      Section 81E provides:

Representation of parties in industrial magistrate’s court

In proceedings before an industrial magistrate’s court a party may —

(a) appear in person; or

(b) be represented by an agent; or

(c) be represented by a legal practitioner.

79      There is considerable force to the appellant’s submission that reference to an agent of a party in s 83C refers to the agent representing the party under s 81E.  It is a settled rule of statutory construction that words within a statute are assumed to be used consistently and precisely: D Pearce Statutory Interpretation in Australia, 9th Edition at [4.6] and [4.7]. Where a word is used consistently in legislation it should be given the same meaning consistently.  In Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450 Hodges J at [452], described this rule of construction as “fundamental”.

80      The consistent construction approach is supported by other context found in Part III of the IR Act.  Section 84(5), which deals with appeals from the Industrial Magistrates Court to the Full Bench, makes provision for costs in the following terms:

(5) In proceedings under this section costs shall not be given to any party to the proceedings for the services of any legal practitioner, or agent of that party unless, in the opinion of the Full Bench, the proceedings have been frivolously or vexatiously instituted or defended, as the case requires, by the other party.

81      This section also references the phrase “agent of that party”.  Given the nature of appeals to the Full Bench from the Industrial Magistrates Court, it is difficult to envisage any costs that a party might incur for an appeal other than the costs of representation.  Appeals will not generally involve attendance by witnesses or the incurring of costs for production of evidence.  For the words “agent of that party” to have practical operation, it must refer to an agent representative in the appeal.

82      The IR Act contains provisions outside of Part III which are relevant context. Section 31, which is headed “Representation of parties to proceedings” enables parties to appear in proceedings “by an agent”: s 31(1)(b).  Section 31(3) provides that a person or body appearing by “a legal practitioner or agent” is bound by the acts of that legal practitioner or agent.  Section 91(1)(a) similarly provides that in proceedings before the Industrial Appeal Court, a party may “appear personally or by his agent”.  Section 112A deals with the registration of “industrial agents” under a scheme provided for by the regulations. Most relevantly, s 112A(1) defines “carrying on business as an industrial agent” as:

…a reference to carrying on business as a person who does either or both of the following —

(a)  appears as an agent under section 31, 81E or 91;…

83      Again, approaching the construction of s 83C with a view to consistency, these sections support a construction of the word “agent” in section 83C as meaning a representative agent, that being the sense in which references to “agent” are used throughout the IR Act.

84      A further difficulty in the learned Industrial Magistrate’s application of s 83C, although perhaps not the construction of the phrase, is that the Industrial Magistrate has disregarded the effect of the words “of that party” in finding that the costs of a legal process server were costs for “the services of an agent of a party”.  Typically, the costs of Landgate search fees and process servers are costs incurred by a legal practice or other representative upon the instructions or a request of the legal practice.  Even if the service provider was then an “agent”, it is agent for the legal practice, not the client party to the proceedings.

85      Further, the structure of ss 83C(1) and (2) is such that the legislative intention appears to be that there should be some scope for costs recovery in s 83 proceedings, albeit limited.  The construction placed on this section by the learned Industrial Magistrate leaves little or no scope for costs of any type to be recoverable, a result which sits uneasily with the enforcement objects of the section.

86      It is unnecessary in this appeal to consider the further issue of whether a legal process server is an “agent” or not.  Agency is a very large subject in the law.  It is perhaps enough to indicate doubt about whether a legal process server has the ability to bind the legal practice that engages them, such as to be indicative of an agency relationship.  A conclusion that they are an agent, would require evidence of the terms of the engagement of the putative agent.  No such evidence was before the learned Industrial Magistrate, upon which any such finding could be open.

87      We would uphold this ground of appeal.

Reconsideration of penalty

88      As the appeal grounds are upheld, it is appropriate to vary the learned Industrial Magistrate’s orders and re‑exercise the discretion in the imposition of penalties.

89      As the individual findings made by the learned Industrial Magistrate relevant to penalty are not the subject of appeal, are limited in their content and devoid of any complexity, there is no call for overly elaborate reasoning.

90      The learned Industrial Magistrate correctly identified the “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”, drawing from Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14 and Mason v Harrington Corporation Pty Ltd [2007] FMCA 7.  Those considerations are:

(a) the nature and extent of the conduct which led to the breaches;

(b) the circumstances in which that conduct took place;

(c) the nature and extent of any loss or damage sustained as a result of the breaches;

(d) whether there had been similar previous conduct by the respondent;

(e) whether the breaches are properly distinct or arose out of the one course of conduct;

(f) the size of the business enterprise involved;

(g) whether or not the breaches were deliberate;

(h) whether senior management was involved in the breaches;

(i) whether the party committing the breach had exhibited contrition;

(j) whether the party committing the breach had taken corrective action;

(k) whether the party committing the breach had cooperated with the enforcement authorities;

(l) the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and

(m) the need for specific and general deterrence.

91      As the learned Industrial Magistrate identified, 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: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8.

92      Of course, also relevant, is the maximum penalty identified in the statute for the contravention.  As Flick J stated in The BKH Contractors Case (No. 2) [2018] FCA 1563 at [19]:

In undertaking the task of assessing and quantifying the penalties to be imposed, the maximum penalty prescribed by the Commonwealth legislature for a specific contravention serves as a “yardstick” against which the assessment of penalties is generally to proceed.

93      It is also useful to refer to what the Full Federal Court stated in ABCC v CFMEU at [100]‑[104] as providing a useful guidance to assessing penalties:

The first step in assessing the penalties is to identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the award being a separate contravention.

Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301 at 36.

94      In this case there are 282 separate contraventions, a contravention occurring on each occasion when Mr Karta was underpaid an entitlement.  Those 282 contraventions involve seven provisions of the Award as set out in the table below:

95      Clause 35 of the Award is headed “Payment of Wages”.  It relevantly requires that wages be paid within three trading days from the last day of the pay period, and that the employer may elect a weekly or fortnightly pay period.

96      Applying the principles in relation to course of conduct or one transaction, it is appropriate to group the contravention of cl 35 of the Award in each instance with the contravention of a corresponding provision of the Award, as the same conduct constituting the breach of the substantive provision is that which constitutes the breach of cl 35.  In other words, it would be appropriate to apply the course of conduct principles to impose a single penalty for an underpayment which is both a breach of cl 35 and another clause of the Award.  Ordinarily, that should be done after assessing the penalty for an individual breach of the Award.  However, in alleging and admitting 282 breaches, rather than 379 breaches, the parties have circumvented the need for this exercise.

97      Further, the separate occasions upon which any particular clause of the Award was breached, calls for application of the course of conduct principle because those breaches were the consequence of a single overriding approach taken by the respondent to payment of a flat rate of pay to Mr Karta, which continued throughout the course of his employment.  This should result in adjustment when aggregating the individually assessed penalties.

98      Turning then to the appropriate penalty in respect of each final individual contravention.

Nature and extent of conduct and the circumstances in which it occurred

99      The contraventions consisted of the respondent’s failure to pay amounts to which Mr Karta was entitled under the terms of an award for work he performed.  The total amount of the underpayments across all 282 contraventions is significant.  However, the amount involved in the individual contraventions, while perhaps significant relative to what Mr Karta was paid in each pay period, is not significant in terms of the severity of contraventions.  Each individual contravention involved an underpayment of between $4.80 and $350.68, or an average amount of $111.34 per occasion.  The ordinary hourly rate contraventions are in smaller sums, compared with the overtime rate contraventions.  The overtime for public holiday contraventions are in the largest sums, but the fewest occasions.

100   The circumstances in which the respondent failed to pay the amounts due to Mr Karta is also relevant.  The contraventions cumulatively extended over a significant period of time, being two years, and at least 97 occasions of payroll processing.  Viewed cumulatively, the contraventions are egregious.  However, as each contravention is being assessed individually, the relevance of these factors is limited.  The conduct that led to the contraventions cannot be said to have been from a lack of understanding, knowledge, and resources.  Nor was the respondent ignorant of the fact that he was bound by the terms of an award in relation to Mr Karta’s employment.

101   Given the amount involved in each individual contravention, the penalty for each individual contravention must lie at the lower end of the scale, in the range of 10% to 25% of the maximum.

Nature and extent of any loss or damage sustained

102   As discussed above, the loss suffered by Mr Karta was of a pecuniary nature and was in relatively small amounts on each individual occasion, despite cumulatively amounting to a significant underpayment.  This factor indicates a penalty for each contravention at the lower end of the range as described above.

Scale and size of business

103   There was scant evidence before the Industrial Magistrates Court, and there remains scant evidence before the Full Bench, in relation to the respondent’s business.  It cannot be said that the business was small.  The evidence was that it employed up to 96 employees.  There is no indication that the size of the business should weigh in favour of diminishing the penalty that should otherwise be assessed.

Deliberateness of contraventions

104   This factor is neutral.  The learned Industrial Magistrate found that there was no evidence of deliberately flouting the Award.  There was however evidence that the respondent knew that it had obligations to comply with an award.

Corrective action, contrition, and cooperation

105   It is accepted that the respondent admitted the contraventions when responding to the Originating Claim on 10 November 2020.  This avoided the need for the industrial inspector to prove the contraventions and expedited the final orders.  However, the respondent had not, at the date of the hearing before the Industrial Magistrates Court, rectified the underpayment or paid any sum to Mr Karta or the industrial inspector. The respondent has taken no steps to remedy the underpayment.  There was an insinuation that this was due to the respondent’s financial circumstances, but the evidence fell short of establishing an inability to pay all or any part of the underpayments.

106   By admitting the contraventions, the respondent has avoided the need for what could potentially have been a complex and substantial hearing.  Reductions for early admissions do not merely act as a reward to the individual respondent, but as encouragement to other contravening parties to admit contraventions at an early stage: NI v The State of Western Australia [2020] WASCA 78 at [61]‑[68].  Having regard to the nature of the case, and the character and extent of the benefits resulting from the admissions, a discount of 20% should be applied for the respondent’s admissions, so that a $100 penalty is reduced to $80, and a $250 penalty is reduced to $200.

Specific and general deterrence

107   There was evidence that the respondent has no assets and had ceased trading.  In these circumstances there is an immaterial risk of the respondent again contravening an industrial instrument.  The penalty therefore need not include a component for specific deterrence.

108   There is no question that the penalty should include a significant component for general deterrence.  General deterrence should constitute a significant element in the assessment of penalty.

Financial position of respondent

109   The financial position of the person against whom an order is made may be relevant but, in most cases, will not carry great weight in the assessment of penalty: Commissioner of Taxation v Arnold (No 2) [2015] FCA 34 at [200]‑[203].  Having already factored the effect of the respondent’s financial position on the likelihood of future contraventions, there is no call for any further reduction.

Assessment of penalty

110   Weighing the above matters, we assess the penalty for the contraventions as follows:

Adjustments

111   Having assessed the individual penalties for the contraventions, it is appropriate to consider whether any adjustment should be made to ensure that, to the extent of any overlap between separate contraventions that can be considered part of a single course of conduct, there is no double penalty imposed.  As indicated, we are satisfied the contraventions are all part of a single course of conduct, and as such, it is appropriate to make an adjustment.  In our assessment, this calls for a reduction of 40% on each contravention.

112   The Full Bench is then required to apply the totality principle, to ensure that the multiple penalties, once aggregated, are just, appropriate, and proportionate to the conduct viewed as a whole, making such adjustments as are necessary.  The aggregate penalty of $22,704 is, in our view, appropriate having regard to conduct viewed as a whole, such that no further adjustment is required.  Accordingly, we arrive at a final penalty of $22,704.

Conclusion

113   We would uphold the appeal and set aside the decision of the Industrial Magistrates Court.  We would substitute a penalty of $22,704 and order that the respondent pay the claimant’s costs in the sum of $169.70.