2021 WAIRC 00555
WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT


CITATION : 2021 WAIRC 00555

CORAM
: INDUSTRIAL MAGISTRATE J. HAWKINS

HEARD
:
THURSDAY, 2 SEPTEMBER 2021

DELIVERED : FRIDAY, 29 OCTOBER 2021

FILE NO. : M 64 OF 2021

BETWEEN
:
BRIAN RAVENSCROFT, DEPARTMENT OF MINES, INDUSTRY REGULATION AND SAFETY
CLAIMANT

AND

KULDEEP SINGH JODHA AS TRUSTEE FOR THE BRAR FAMILY TRUST T/AS INDIAN GARDEN RESTAURANT
RESPONDENT

CatchWords : INDUSTRIAL LAW – Assessment of penalty for contravention of section 83E(1)(a) of the Industrial Relations Act 1979 (WA)
Legislation : Industrial Relations Act 1979 (WA)
Magistrates Court (Civil Proceedings) Act 2004 (WA)
Instruments : Restaurant, Tearoom and Catering Workers’ Award (WA)
Case(s) referred
to in reasons: : Callan v Smith [2021] WAIRC 216
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113
Commissioner of Taxation v Arnold (No. 2) [2015] FCA 34
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
Result : Penalty imposed
REPRESENTATION:

CLAIMANT : MS A. WILSON (OF COUNSEL)
RESPONDENT : IN PERSON

REASONS FOR DECISION
Introduction
1 On 19 May 2021, I made orders which included the following:
a The respondent contravened s 102(1)(a) of the Industrial Relations Act 1979 (the Act) on two occasions:
i. The respondent, being lawfully required to do so, failed to produce records in respect of the Notice 1 to Produce Records by 10 of January 2020; and
ii. The respondent, being lawfully required to do so, failed to produce records in respect of the Notice 2 to Produce Records by 16 of July 2020.
(Notices 1 and 2)
2 A copy of the orders made 19 May 2021 is annexed at sch 1 (the Orders).
3 Brian Ravenscroft, Department of Mines, Industry Regulation and Safety (the Claimant) sought payment of a penalty pursuant to s 83E(1)(a) of the Act for each of the two contraventions of s 102(1)(a) of the Act. The maximum penalty pursuant to s 83E(1)(a) of the Act for such contraventions is $5,000.
4 The Claimant maintains that Kuldeep Singh Jodha as Trustee for the Brar Family Trust t/as Indian Garden Restaurant (Mr Jodha) has committed two contraventions and, therefore, submits that the maximum penalty that can be imposed is $10,000.
5 Following the Orders, the claim for penalty and costs was adjourned to 20 August 2021. It was at this hearing that Mr Jodha first appeared. As a consequence of advising that he was seeking legal advice, a further adjournment to 2 September 2021 was granted.
6 On 2 September 2021, both parties appeared. Mr Jodha was not legally represented. The Claimant advised that Mr Jodha had contacted the Claimant in the preceding week to advise that the documents that were subject of the Orders would be provided by Friday, 27 August 2021 (the relevant documents). As of 2 September 2021, Mr Jodha confirmed that he had not provided the relevant documents to the Claimant but indicated that he would be in a position to do so by Friday, 3 September 2021. As a result, I reserved my decision concerning penalty to enable any such compliance to occur. I further ordered that the Claimant lodge and serve any further information as to whether Mr Jodha had provided the relevant documents.
7 By letter dated 7 September 2021, the Claimant advised that Mr Jodha had not provided the Claimant with the relevant documents.
8 At the hearing on 2 September 2021, Mr Jodha confirmed that he did not wish to be heard in respect to the issue of penalty and costs. He advised that at present he was working and in receipt of income on a part-time basis of approximately $1,700 per fortnight.
9 Prior to 2 September 2021, the Claimant had lodged and served written submissions dated 11 June 2021. Mr Jodha has not lodged any submissions.
Submissions On Penalty From The Claimant
10 The Claimant referred to the particulars of claim in respect to the contravening conduct. In summary, the Claimant alleged that at all material times Mr Jodha was the Trustee for the Brar Family Trust and held the business name of Indian Garden Restaurant and operated a restaurant under that name at North Perth (the Restaurant).
11 Although not set out in the particulars of the claim, the parties confirmed that Mr Jodha had purchased the Restaurant in or about October 2019, and started trading, in or about November 2019.
12 The Claimant’s particulars of claim referred to two inspections that occurred on 5 December 2019 and 1 July 2020.
13 On 5 December 2019, the Claimant, with another industrial inspector, attended the Restaurant and spoke with staff members. Mr Jodha was not present. An employee who had confirmed that he had been employed at the Restaurant as a full-time cook for approximately nine months, was handed Notice 1, issued pursuant to s 98(3)(e) of the Act. Notice 1 was issued for the purpose of ascertaining whether Mr Jodha had observed the provisions of the Act and the Restaurant, Tearoom and Catering Workers’ Award (the Award) in relation to employees of the Restaurant. Notice 1 required Mr Jodha to provide the Department of Mines, Industry Regulation and Safety (DMIRS) ‘with specified records relating to all employees of the Restaurant for the period 1 August 2019 to 4 December 2019’ Originating Claim lodged 29 March 2021 [16].
and required that those documents be produced by 10 January 2020.
14 On 6 December 2019, the Claimant received a telephone call from Mr Jodha. Mr Jodha confirmed that he had received Notice 1 and intended to provide the records as soon as possible. Despite this assurance, Mr Jodha did not provide any records to DMIRS by 10 January 2020 or at all.
15 On 1 July 2020, the Claimant again attended the Restaurant, accompanied by two other industrial inspectors, pursuant to s 98(1) of the Act. Mr Jodha was not present at the Restaurant but approximately half an hour later he contacted the Claimant. Mr Jodha confirmed that he had not sent any employment records to DMIRS because he had been busy and had given all the records to his accountant with instructions to provide them to DMIRS. As a result, Mr Jodha was advised that ‘a new notice to produce records would be served on him and his accountant’ Originating Claim lodged 29 March 2021 [26].
via email on 2 July 2020, with a due date of 16 July 2020. As a result, Notice 2 was issued pursuant to s 98(3)(e) ‘of the Act for the purpose of ascertaining whether [Mr Jodha] had observed the provisions of the Act and the Award in relation to employees of the Restaurant’. Originating Claim lodged 29 March 2021 [28].
Notice 2 required Mr Jodha to provide DMIRS with the records by 16 July 2020.
16 On 9 July 2020, in discussions with another industrial inspector, Mr Jodha confirmed that he would provide the requested documents by 16 July 2020. Again, Mr Jodha did not provide the records as required by Notice 2 by 16 July 2020 or at all.
17 At this stage, despite Notices 1 and 2 being issued to Mr Jodha by the Claimant and the Orders, Mr Jodha has failed to provide the relevant documents.
18 The Claimant submits that the powers and functions of industrial inspectors support the objects of the Act to ensure that employees’ rights are observed by employers and that obstruction of industrial inspectors is serious and undermines the operation of the Act.
19 The Claimant submits that the Act ‘requires employers to keep time and wages records for their employees and industrial inspectors are empowered by the Act to require the production of [those] records to ensure that employers are meeting their obligations, including paying employees their entitlements’. Section 49D and s 98(3)(e) of the Act; The Claimant’s Submissions lodged 11 June 2021 [6].
The failure to produce employment records makes it difficult, if not impossible, to ‘determine whether an employer has complied with their obligations under the Act and [any] relevant award, and prevents industrial inspectors from carrying out investigations and taking any appropriate enforcement action on behalf of employees’. The Claimant’s Submissions lodged 11 June 2021 [7].

20 The Claimant submits that the action taken by him occurred in the course of a proactive compliance campaign focussing on cafes and restaurants, and that Mr Jodha’s conduct has frustrated the efforts of the industrial inspectors to determine whether employees of the Restaurant have been paid correctly.
21 As a result, the Claimant submits that both specific and general deterrence are key factors in determining the relevant penalty.
22 In respect to specific deterrence, the Claimant submits that:
(a) Mr Jodha has continually been uncooperative with industrial inspectors;
(b) Mr Jodha has failed to demonstrate contrition and take corrective action;
(c) Mr Jodha’s actions were repeated and deliberate in that he was in communication with industrial inspectors in respect of Notices 1 and 2 and was aware of what was required; and
(d) Mr Jodha ‘has demonstrated … disregard for his obligations as an employer under the Act’. The Claimant’s Submissions lodged 11 June 2021 [10](d).

23 As to general deterrence, the Claimant submits that any penalty that is imposed should be meaningful so as to deter others ‘from committing similar contraventions, and to emphasise the importance of assisting and co-operating with industrial inspectors who are carrying out their duties under the Act’. The Claimant’s Submissions lodged 11 June 2021 [13].
As such, the Claimant maintains that a penalty should ‘have a significant deterrent effect on other employers in the café and restaurant sector, which has been identified as having a high level of non-compliance with [employer] obligations, and a higher likelihood of systematic and deliberate underpayment of wages and entitlements’. The Claimant’s Submissions lodged 11 June 2021 [14]; See Campaign Evaluation Report – Café and Restaurant Proactive Compliance Campaign October 2019 to October 2020, Department of Mines, Industry Regulation and Safety, 4; 2019 Report of the Enquiry into Wage Theft in Western Australia, Tony Beech, 90.

24 The Claimant submitted that it had no information as to Mr Jodha’s capacity to pay but noted that it understood that the Restaurant was not operating. However, at the hearing on 2 September 2021 Mr Jodha, as previously stated, confirmed that he had a capacity to pay, even if on time to pay arrangements, and was in receipt of income of approximately $1,700 per fortnight. Mr Jodha advised, however, that he had no other assets.
25 As to prior non-compliance, the Claimant was not aware that Mr Jodha had previously contravened a civil penalty under the Act.
26 As to the range of penalty, the Claimant maintained that where there was no previous history of contraventions, the starting point is on the lower end of the scale. Nonetheless, the Claimant submitted that Mr Jodha’s repeated and continuing disregard for the Act, as well as the importance of general deterrence, called for the penalty in the mid-range for each contravention.
Determination
27 Schedule 2 and sch 3 attached set out the jurisdiction practice and procedure of the Western Australian Industrial Magistrates Court (IMC) and the relevant legislation and authorities concerning pecuniary penalties. As stated in sch 3, a non-exhaustive range of considerations apply in determining whether the particular conduct calls for the imposition of a penalty and if so the amount. Generally, those non-exhaustive considerations are:
(a) the nature and extent of the conduct which led to the breaches;
(b) the circumstances in which the 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 any similar previous conduct by the respondent;
(e) whether the breaches are properly distinct or arose out of one course of conduct;
(f) the size of the business involved;
(g) whether or not breaches were deliberate;
(h) whether senior management was involved in 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 enforcement authorities;
(l) the need to ensure compliance with minimum standards by the provision of an effective means for investigation, enforcement of employee entitlements; and
(m) the need for specific and general deterrence.
28 Further, as found in Callan v Smith [2021] WAIRC 216.
regard must be given to the maximum penalty which ‘serves as a “yardstick” against which the assessment of penalties is generally to proceed’. Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The BKH Contractors Case) (No 2) [2018] FCA 1563 [19].
It is also necessary to identify the separate contraventions. See Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113.

Nature and extent of conduct and the circumstances in which it occurred
29 The two contraventions consisted of Mr Jodha’s failure to comply with Notices 1 and 2 which sought employment records be provided to DMIRS. Notice 1 required the documents be provided by 10 January 2020 and Notice 2 required the documents be provided by 16 July 2020. Both notices were of the same type and sought the same relevant documents relating to all employees of the Restaurant for the period 1 August 2019 to 4 December 2019. Despite the notices seeking documents for that period, it is important to also note that it was accepted by the Claimant that, Mr Jodha did not commence the business or the Restaurant until October 2019.
30 Without the relevant documents, it cannot be ascertained whether any employees of the Restaurant have been paid correctly. Further, the contraventions cumulatively extended over a significant period. Notice 1 having been provided to Mr Jodha on 5 December 2019. Mr Jodha was aware of Notice 1 by at least by 6 December 2019. Notice 2 was provided to Mr Jodha on 2 July 2020.
31 It is accepted that these contraventions occurred at a time that Mr Jodha had commenced a new business. However, the contraventions have remained in place for a significant period of time and in circumstances where Mr Jodha had indicated he would endeavour on numerous occasions to comply with Notices 1 and 2, but has failed to do so.
32 Given these factors, the penalty for each contravention lies in the mid to high range.
Nature and extent of any loss or damage sustained
33 Although there is no quantum to any loss or damage suffered by the Claimant, the continuing non-compliance with Notices 1 and 2 impacts upon DMIRS’s ability to ascertain whether Mr Jodha has met his obligations under the Act, including paying his employees their full entitlements. This factor indicates a penalty for each contravention in the mid to high range.
Similar previous conduct
34 There is no information which shows that Mr Jodha has previously contravened a civil penalty provision under the Act. This factor indicates a penalty where the starting point is at the lower end of the range.
Whether the breaches are distinct or arose from one course of conduct
35 Notices 1 and 2 were of the same type. Both notices required the provision of the same documents. Notices 1 and 2 were provided on different dates and required compliance by different dates. Applying the principles in relation to the course of conduct or one transaction, the contraventions arose out of the same course of conduct, in that Mr Jodha failed to provide the relevant documents sought in Notices 1 and 2 and this contravention continues. Consequently, this should result in an adjustment when aggregating the individually assessed penalties. Callan v Smith [2021] WAIRC 216 [96], [97].

The size of the business enterprise involved
36 This is not a factor that can be ascertained as there is little or no information before the Court as to the extent of Mr Jodha’s business. Further, as provided in Callan v Smith, [2021] WAIRC 216 [103].
the Full Bench of the Western Australian Industrial Relations Commission found that the size of the business should not weigh in favour of diminishing a penalty that should otherwise be assessed.
Deliberateness of contraventions
37 This is a not neutral factor. Mr Jodha was aware of Notices 1 and 2 and had been aware for a significant period of time. In failing to provide the relevant documents for a significant period of time and continuing, it can be inferred that the contraventions were deliberate. This factor therefore lies in the mid to high range.
Corrective action, contrition and co-operation
38 Mr Jodha did not admit the contraventions and it required the Claimant to seek orders by way of default judgment. As at 7 September 2021, Mr Jodha had still not provided the relevant documentation to the Claimant. Nonetheless, on 2 September 2021, Mr Jodha indicated to the IMC that he would comply with the Orders. Even if this could be categorised as some form of admission, the continued lack of compliance by the non-provision of the relevant documents suggests the admission was disingenuous. I therefore afford no discount to this factor.
Specific and general deterrence
39 The evidence established that Mr Jodha had been continually uncooperative with the Claimant for a considerable period. As previously found, the obstructions were repeated and deliberate and despite communications with various inspectors the relevant documents have not been produced. I accept that in failing to provide the relevant documents has impeded the Claimant in carrying out the objects of the Act which as previously stated is to ensure employees’ rights are observed by employers.
40 There is no evidence that Mr Jodha has ceased trading, accordingly a component for specific deterrence is required in respect to the possibility of continuing contraventions of the Act.
41 Like all contraventions, general deterrence is an important factor. A civil penalty promotes the public interest in compliance with the law as found in Callan v Smith. [2021] WAIRC 216 [107], [108].
It is accepted that a penalty should include a significant component for general deterrence and should constitute a significant element in the assessment of penalty to deter other employers from similar conduct. These factors lie in the mid to high range.
Financial position of the respondent
42 The financial position of a person against whom an order is made may be relevant. In this case, Mr Jodha has accepted that he has the capacity to pay, however, as pointed out in Commissioner of Taxation v Arnold (No. 2), [2015] FCA 34 [200] - [203].
in most cases this factor will not carry great weight in the assessment of penalty.
Assessment Of Penalty
43 Weighing the above matters, the penalty for each contravention is as follows:
Contravention
No. of Contraventions
Penalty per Breach
Amount
Section 102(1)(a) of the Act – 10 January 2020
1
$3,250
$3,250
Section 102(1)(a) of the Act – 16 July 2020
1
$3,250
$3,250


Total
$6,500
Adjustments
44 I am satisfied the separate contraventions can be considered as a single course of conduct. Having assessed the individual penalties, it is appropriate to determine if an adjustment be made so that if there is an overlap between separate contraventions a double penalty is not imposed. I am satisfied that it is appropriate to make an adjustment which calls for a reduction of 40% on each contravention. Applying then the totality principle, to ensure that multiple penalties are appropriate and proportionate and considering the conduct as a whole, I am satisfied that the aggregate penalty of $3,900 is appropriate and requires no further adjustment.
Costs
45 In addition to that penalty applying the decision of Callum v Smith [2021] WAIRC 216.
costs sought by the Claimant of $187 by way of disbursements should also be awarded.
Orders
46 It is therefore ordered as follows:
1. Mr Jodha shall pay to the Claimant a penalty of $3,900.
2. Mr Jodha shall pay to the Claimant costs of $187.



J. HAWKINS
INDUSTRIAL MAGISTRATE


Schedule 1 – The Orders



Schedule 2 – Jurisdiction And Procedure Of The Western Australian Magistrates Court (IMC)
[1] The IMC has the jurisdiction conferred by the Act and other legislation. Section 83E of the Act confers jurisdiction to impose a penalty if a person contravenes a civil penalty. Section 102(3) of the Act provides that a contravention of s 102(1) of the Act is a civil penalty provision. In the case of an employer, organisation or association the IMC may impose a penalty for a contravention of a civil penalty provision, not exceeding $5,000.
[2] The standard of proof to be applied in ‘determining whether there has been a contravention of a civil penalty provision is the standard observed in civil proceedings’: s 83E(8) of the Act. However, the contravention has already been determined by entry of the orders made in default of the lodging of a response and appearance on 19 May 2021.
[3] Accordingly, the powers, practice and procedure of the IMC in these proceedings are the same as if the proceedings were a case under the Magistrates Court (Civil Proceedings) Act 2004 (WA): s 81CA(2) of the Act. Accordingly, in exercising the jurisdiction to impose a penalty, the IMC is exercising a civil jurisdiction and the standard of proof is therefore on the balance of probabilities. When in these reasons I say that I am satisfied, that means I am satisfied on the balance of probabilities.

Schedule 3 – Pecuniary Penalty Orders And Section 83E(1) Of The Industrial Relations Act 1979 (WA)
[1] Section 83E(1) of the Act provides that the IMC may impose a penalty on a person not exceeding $5,000 in the case of an employer, organisation or association, and $1,000 in any other case, if the Court is satisfied a contravention of a civil penalty provision has occurred. The Act allows the Court to order a penalty be paid directly to a ‘person directly affected by the conduct to which the contravention relates’ or to the applicant or Treasurer: s 83F(2) of the Act.
[2] 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 [388] in the following terms:
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. (citations omitted)
[3] 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.
[4] 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 [91].
[5] Applying the principles set out in Callan v Smith [2021] WAIRC 216, when properly construed, s 83E(1) of the Act prescribes the maximum penalty that is to be applied to any single contravention of a civil penalty provision.
[6] ‘Multiple contraventions’ may occur because the contravening conduct done by an employer:
(a) resulted in multiple contraventions of a single civil penalty provision or resulted in the contravention of multiple civil penalty provisions;
(b) was repeated; and
(c) was done with respect to multiple employees.
[7] Where multiple contraventions occur, it may be necessary to consider the principles in relation to course of conduct or one transaction rule and consider whether it is appropriate to make an adjustment by way of a reduction for each contravention: Callan v Smith [111].
[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 [47] - [52]; Callan v Smith [112].
[9] The task of fixing the penalty is a process of ‘instinctive synthesis’ having regard to the circumstances of the case and the need to maintain public confidence in the statutory regime.
[10] In his paper on civil penalty contraventions delivered to an ‘Employment Law Symposium: Your Guide to Workplace Law 2011’, Law Society of Western Australia (30 November 2011), Gilmour J of the Federal Court of Australia observed that:
Determining penalties is not a matter of precedent. There is no tariff. Regard must be had in fixing a penalty to the individual circumstances of a case and should not be determined by a line by line comparison with another case. In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 295 Buchanan J said:
‘The facts of the instant case should not be compared with a particular reported case in order to derive therefrom the amount of the penalty to be fixed. Cases are authorities for matters of principle; but the penalty found to be appropriate, as a matter of fact, in the circumstances of one case cannot dictate the appropriate penalty in the different circumstances of another case.’
This proposition was supported in ABCC v CFMEU (No 2) (2010) 199 IR 373 at [11] per Barker J and upheld by the Full Court on appeal in McDonald v Australian Building and Construction Commissioner [2011] FCAFC 29.