2025 WAIRC 00924
INDUSTRIAL MAGISTRATES COURT OF WESTERN AUSTRALIA


CITATION
:
2025 WAIRC 00924



CORAM
:
INDUSTRIAL MAGISTRATE D. SCADDAN



HEARD
:
WEDNESDAY, 8 OCTOBER 2025



DELIVERED
:
WEDNESDAY, 12 NOVEMBER 2025



FILE NO.
:
M 94 OF 2024



BETWEEN
:
CONSTRUCTION, FORESTRY AND MARITIME EMPLOYEES UNION


CLAIMANT





AND





OSM AUSTRALIA PTY LTD


RESPONDENT

CatchWords : INDUSTRIAL LAW – FAIR WORK – Assessment of pecuniary penalties for contraventions of Fair Work Act 2009 (Cth) – Contravention of an enterprise agreement – failure to offer permanent employment within the timeframe provided
Legislation : Fair Work Act 2009 (Cth)
Instrument : OSM Australia Pty Ltd and MUA Offshore Oil and Gas Enterprise Agreement 2023
Cases referred
to in reasons: : Construction, Forestry and Maritime Employees Union v OSM Australia Pty Ltd [2025] WAIRC 00349
Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2018] FCA 480
Construction, Forestry, Maritime, Mining and Energy Union v OSM Australia Pty Ltd [2022] WAIRC 00713; (2022) 102 WAIG 1298
The Australian Workers’ Union v OSM Australia Pty Ltd [2024] WAIRC 00853; (2024) 104 WAIG 2172
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 274 CLR 450
Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (No 2) [2018] FCA 1211; (2018) 70 AILR 102-975
Construction, Forestry and Maritime Employees Union v Qube Ports Pty Ltd [2025] FCA 208
Australian Building and Construction Commissioner v Powell (No 2) [2019] FCA 972
Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191
Result : Penalty imposed
Representation:
Claimant : Ms S. Sayed (of counsel)
Respondent : Mr S. Rogers (of counsel)



REASONS FOR DECISION (PENALTY)
1 On 13 June 2025, the Industrial Magistrates Court of Western Australia (the Court) published reasons for decision in respect of the preferred construction of cl 12.5(a) and cl 12.5(b) of the OSM Australia Pty Ltd and MUA Offshore Oil and Gas Enterprise Agreement 2023 (OSM Agreement) (Liability Decision). CFMEU v OSM Australia Pty Ltd [2025] WAIRC 349 (Liability Decision).

2 In the Liability Decision, the Court found that OSM Australia Pty Ltd (OSM) breached cl 12.5(a) of the OSM Agreement by failing to provide five casual employees with offers to convert to permanent employment within four weeks of registration of the OSM Agreement, and, therefore, contravened s 50 of the Fair Work Act 2009 (Cth) (FWA).
3 However, the Court found OSM called for expressions of interest within the timeframe provided for in cl 12.5(a) of the OSM Agreement, and the Court was not satisfied that the Construction, Forestry and Maritime Employees Union (CFMEU) proved OSM contravened cl 12.5(b) of the OSM Agreement.
4 This is the decision with respect to the appropriate penalty, if any, to be imposed for OSM’s contravention of s 50 of the FWA.
Evidence
Claimant
5 The claimant relied upon a witness statement of George Gakis (Mr Gakis) signed on 5 September 2025 with two attachments. Exhibit 1 – Witness Statement of George Gakis signed on 5 September 2025 with two attachments.
Mr Gakis was a witness in the Liability Decision.
6 Mr Gakis states he was copied into an email dated 4 April 2025 Exhibit 1 at GG2-01.
from the claimant to Warren Harrower (Mr Harrower), one of OSM’s witnesses in the Liability Decision. In the email, the claimant asked, ‘could you advise whether OSM is admitting the breach and agrees to a penalty to be assigned by the Court?’ Exhibit 1 at paragraph 5.

7 Mr Gakis states Mr Harrower replied, ‘OSM does not concede that it breached the terms of the Agreement’. Exhibit 1 at paragraph 5.

8 Mr Gakis also attaches to his witness statement the ‘latest’ General Purpose Financial Statement for OSM filed at ASIC, which he says demonstrates OSM’s net profit after income tax expense for the financial year ending 31 December 2023 was $2,430,174. Exhibit 1 at GG2-02.

OSM
9 OSM relied upon a witness statement of Ilana Jewson (Ms Jewson) dated 21 August 2025. Exhibit 2 – Witness Statement of Ilana Jewson signed on 21 August 2025.
Ms Jewson was also a witness in the Liability Decision.
10 Ms Jewson’s evidence expands on her evidence in the Liability Decision, at [44] to [47], by including the duty period and off-duty period for each affected employee:
At relevant times:
(a) Jeffrey Badger was engaged aboard the Siem Aquamarine. The swing immediately before he commenced permanent employment was as follows:
(1) Duty Period – 14 February 2024 to 12 March 2024;
(2) Off-Duty Period – 13 March 2024 to 8 April 2024;
(3) Permanency commencement: 9 April 2024.
(b) Richard Badger was engaged aboard the Siem Thiima. The swing immediately before he commenced permanent employment was as follows:
(1) Duty Period – 30 December 2023 to 23 January 2024;
(2) Off-Duty Period – 24 January 2024 to 27 February 2024;
(3) Permanency commencement: 28 February 2024.
(c) Matthew Duguid was engaged aboard the Siem Aquamarine. The swing immediately before he commenced permanent employment was as follows:
(1) Duty Period – 10 January 2024 to 13 February 2024;
(2) Off-Duty Period – 14 February 2024 to 13 March 2024;
(3) Permanency commencement: 14 March 2024.
(d) Mitch Keighram was engaged aboard the Siem Aquamarine. The swing immediately before he commenced permanent employment was as follows:
(1) Duty Period – 10 January 2024 to 13 February 2024;
(2) Off-Duty Period – 14 February 2024 to 13 March 2024;
(3) Permanency commencement: 14 March 2024. Exhibit 2 at [5].

Submissions 
11 Both parties refer to the law in respect of the determination of an appropriate pecuniary penalty for contraventions of the FWA. I do not intend to recite the parties’ reference to the applicable law. Schedule I to these reasons sets out a summary of those principles. 
Claimant 
12 In summary, the claimant submits that:
(a) there is no basis for the respondent to assert the parties were in dispute or that the CFMEU did not raise the issue of timeliness at any time prior to the proceedings;
(b) the contravention arose out of the conduct of senior management, where the claimant says Mr Harrower and Ms Jewson were involved in the ‘current matter’;
(c) OSM demonstrates no remorse or contrition, and cannot rely on there being no purported loss suffered by an employee;
(d) OSM failed to accept liability, at least with respect to cl 12.5(a) of the OSM Agreement, to avoid the need for a hearing, albeit OSM assisted in the preparation of a statement of agreed facts;
(e) OSM has a corporate culture of breaching enterprise agreements and, therefore, must have a heightened awareness of the risk it took from an erroneous construction where it has previously been found to have contravened s 50 of the FWA;
(f) Mr Gakis proposed a ‘simpler process’ in his email of 20 December 2023, and OSM did not cooperate and engaged in careless conduct;
(g) any penalty must be fixed at a meaningful level, which is not seen as the cost of doing business and deter others from ‘cutting corners’; and
(h) OSM has sufficient profits to pay a significant penalty.
Respondent
13 In summary, OSM submits no penalty should be imposed and if a penalty is imposed, it should be at the lower end.
14 OSM supports its principal submission as follows:
(a) OSM’s position was made known to the claimant during the agreement making process, the circumstances of which are referred to in the Liability Decision;
(b) OSM did not ‘set out’ to contravene the OSM Agreement, and fulfilled the obligation to make five casual employees permanent, albeit the offer to do so fell outside of the timeframe provided in cl 12.5(a) of the OSM Agreement;
(c) there is no evidence of any ill intent on the part of OSM or that it flagrantly disregarded its obligations under the OSM Agreement;
(d) OSM refers to Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2018] FCA 480 (Hail Creek) in support of the imposition of no penalty or, alternatively, a penalty at the lower end of the scale;
(e) there is no evidence of any loss or damage resulting from the contravention and the five employees did not suffer any disadvantage as a result of the delay in making the offers of permanent employment;
(f) OSM had, so far as it was able, ‘remedied’ the contravention before this claim was commenced;
(g) while OSM has prior contraventions, the nature and circumstances of those contraventions do not serve to aggravate or increase what may be an appropriate penalty in this case;
(h) the contravention arose from the same decision-making process in respect of each employee, namely OSM erroneously forming the view that it was only required to call for expressions of interest by 19 January 2024 (or within four weeks of the registration of the OSM Agreement);
(i) while OSM it is not financially impecunious, that it would face difficulties in paying any penalty ordered, this also should not serve to aggravate or increase what may be an appropriate penalty in this case;
(j) the Liability Decision found the contravention arose as a result of an honestly, but erroneously, held view about the timing of the obligation under cl 12.5(a) of the OSM Agreement, and there is no evidence to demonstrate the contravention was a deliberate act designed to defeat the objects of the FWA;
(k) there is no evidence of the involvement of senior management;
(l) ultimately, OSM complied with the obligation to make five casual employees permanent and did so prior to the proceedings being commenced;
(m) OSM’s decision to defend the claim was an improper act, when it was partially successful; and
(n) the primary objective of deterrence is not necessarily met where OSM rectified its error before the claim was commenced, there is no evidence of malicious intent or reckless disregard for industrial laws, and there is no evidence of a course of conduct that establishes OSM considers contraventions and penalties an acceptable cost of doing business.
The Nature, Extent and Circumstances of the Conduct
15 The Liability Decision made findings of fact and made reference to the evidence the Court accepted.
16 This included accepting Mr Harrower’s evidence concerning the nature of the conversations between him and Mr Gakis about the way in which cl 12.5(a) and cl 12.5(b) of the OSM Agreement was to be implemented. Liability Decision at [28] to [30] and [50].

17 Even though the Court accepted Mr Harrower’s evidence, ultimately the Court did not accept OSM’s suggested construction of cl 12.5(a) of the OSM Agreement for other reasons.
18 However, Mr Harrower’s evidence is relevant to the circumstances in which the contravening conduct occurred. That is, OSM did comply, in part, with cl 12.5(a) of the OSM Agreement but considered it had a common understanding with the claimant’s representative of the difficulties in making offers of permanent employment by 19 January 2024.
19 By calling for expressions of interest within time, it is apparent that OSM was not trying to escape its overall obligation to make five casual employees permanent. As observed in the Liability Decision, given the lack of clarity surrounding the process associated with assessing and offering permanent employment, it was open to OSM to determine the process and the period in which it left open the call for expressions of interest. In leaving open the time for employees to submit an expression of interest until 15 January 2024, OSM put itself under pressure to comply with the end date of 19 January 2024 to make offers of permanent employment, albeit this gave employees the best opportunity to ensure they submitted their expressions of interest.
20 OSM did make the offers of permanent employment to the five successful applicants between 19 and 29 February 2024, and all successful applicants commenced immediately following their relevant off-duty period (or in one case after returning from parental leave).
21 The contravening conduct was not widespread and was confined to the five successful applicants under a particular term of the OSM Agreement, and, unless such a term is replicated in a future enterprise agreement, is highly unlikely to occur again.
Course of Conduct
22 There does not appear to be any dispute between the parties that the contravention forms one breach of cl 12.5(a) of the OSM Agreement notwithstanding five employees were affected and is, therefore, one contravention of s 50 of the FWA. That is, OSM’s failure to make offers of permanent employment to convert five casual employees to permanent employees arose from its failure to do so within the timeframe provided in cl 12.5(a).
Deliberate Conduct
23 There is no evidence OSM engaged in deliberate conduct to circumvent industrial laws or deprive the affected workers of an offer for permanent employment. If that was the case, OSM would not call for expressions of interest and take steps to ensure that employees had a fair opportunity to submit their expressions of interest. OSM understood it was obliged to give five casual employees permanent employment, but they did not account for required the time frame to make the offers by 19 January 2024.
24 Unlike in Hail Creek there is no evidence OSM should have been on notice or have had a heightened awareness of the risk it took from an erroneous construction because it had previously been found to have contravened the same term of the OSM Agreement and had pecuniary penalties imposed: Hail Creek at [18].
25 There is no evidence that some other dispute resolution process had been invoked and there was an attempt to resolve the parties’ competing interpretation of cl 12.5(a) of the OSM Agreement. In that sense, OSM cannot have been said to have ‘taken the odds’ that its conduct if not would, then might, contravene s 50 of the FWA.
26 In those circumstances, I am not satisfied that OSM engaged in any deliberate conduct, and consequently it did not deliberately contravene s 50 of the FWA.
Similar Previous Conduct
27 OSM has been found to have contravened s 50 of the FWA on two previous occasions. See Construction, Forestry, Maritime, Mining and Energy Union v OSM Australia Pty Ltd [2022] WAIRC 713; (2022) 102 WAIG 1298 and The Australian Workers’ Union v OSM Australia Pty Ltd [2024] WAIRC 853; (2024) 104 WAIG 2172.

28 On the first occasion, the claimant conceded that OSM’s contravention was the result of an inadvertent error on the part of an inexperienced payroll employee, which was not brought to OSM’s attention until the claimant lodged the claim in the Court. Upon the claim being lodged, OSM immediately rectified the error by making out-of-cycle payments to the employees. A penalty of $1 was imposed on 12 October 2022.
29 On the second occasion, OSM’s contravention was in relation to over cycle payments for four employees. The parties were in prior dispute about the interpretation of the relevant term of the enterprise agreement and following the commencement of proceedings, the respondent admitted the contravention and rectified the contravention by paying the relevant amounts to the four employees. A combined penalty of $1,700 was imposed on 27 September 2024.
30 There are some similarities between the circumstances of this claim and OSM’s second contravention occasion. However, there are notable differences, namely in relation to this claim there was no history of any prior dispute between the parties and OSM had remedied their contravention before the commencement of proceedings. That is, OSM proceeded on the basis that their interpretation of the timing in cl 12.5(a) of the OSM Agreement was correct and had completed in the process of offering permanent employment before the issue was raised by the claimant by the lodgement of these proceedings.
Applicable Maxima
31 The maximum penalty with respect to a contravention of s 50 of the FWA by OSM is 300 penalty units, given the respondent is a body corporate. The penalty unit value at the time of the contravention was $313. Therefore, the theoretical maximum is $93,900.
Size of the Respondent and Involvement of Senior Management
32 OSM accepts that it is not financially impecunious or that it would face difficulties in paying any penalty ordered.
33 Noting the circumstances of the contravention, OSM’s size and financial status, in my view, is a neutral factor in assessing the appropriate penalty to be imposed.
34 The claimant asserts Mr Harrower and Ms Jewson constitute the involvement of senior managers in the contravention. Mr Harrower’s evidence in the Liability Decision is that he is OSM’s Employee Relations Manager and was involved in the negotiation of the OSM Agreement with the claimant. He details his understanding of cl 12.5 of the OSM Agreement as a result. Liability Decision at [23] to [30].
Ms Jewson’s evidence in the Liability Decision is that she is OSM’s Employee Operations Manager responsible for the management of OSM’s crewing operations team, dealing with union officials and day-to-day management of employees on vessels. Liability Decision at [34].

35 Beyond their job title including the word ‘Manager’, the scope of their duties within OSM is unclear or unknown. Ms Jewson’s duties appear limited to the ‘on the ground’ running of an aspect of the business and unrelated to higher levels of running the overall business. The Court’s knowledge of Mr Harrower’s involvement in the running of the business is his involvement in negotiating an enterprise agreement. This is not sufficient for the court to find on the balance of probabilities that senior management was involved in the contravention, notwithstanding the claimant’s assertion to the contrary.
Cooperation, Contrition and Corrective Action
36 OSM cooperated in the legal proceedings. The parties prepared a statement of agreed facts.
37 Unlike in Hail Creek, and as stated above, there is no evidence OSM elected to take the risk its conduct would contravene s 50 of the FWA and could have mitigated the risk by seeking some other form of dispute resolution. There were competing constructions of cl 12.5(a) and cl 12.5(b) of the OSM Agreement and nothing before the Court suggests OSM was on notice of the issue prior to the proceedings being commenced in July 2024. Notably, OSM had remedied the contravening conduct prior to the institution of the proceedings with all five casual employees commencing permanent employment February, March and April 2024.
38 While the claimant cannot be criticised for commencing the proceedings, nor can OSM be criticised for defending a reasonable argument in response, particularly where OSM was, in part, successful in defending the claim and had partially complied with cl 12.5(a) of the OSM Agreement.
39 I do not accept, nor was it accepted in the Liability Decision, that the email from Mr Gakis raised an issue with respect to the timing of the offers of permanent employment. As stated in the Liability Decision, at [20], ‘[o]n 20 December 2023, Mr Gakis emailed [Ms Jewson], Employee Operations Manager for the respondent, raising the members’ concerns about the application process.’ (emphasis added) Ms Jewson stated in her evidence that Mr Gakis did not raise any concern with the timing of offers. Liability Decision at [39].

40 The claimant seeks to rely upon an email from the claimant’s legal representative to Mr Harrower copied to Mr Gakis dated 4 April 2025, where the legal representative asks if OSM will admit the breach and agree to a penalty. The claimant suggests that Mr Harrower’s reply in not admitting the breach is evidence of either its lack of contrition or its unreasonableness in continuing to litigate the proceedings. This cannot be accepted. This email was sent approximately three weeks prior to the hearing on 30 April 2025 when each parties’ position was well settled. As it transpires, OSM was partially successful in defending the proceedings and it cannot be said its defence of the claim was unreasonable.
41 In these circumstances, it is difficult to see what relevance contrition has, particularly where the contravening conduct was addressed well before the proceedings commenced. Further, the contravening conduct is unlikely to be repeated given it involved the interpretation of a particular term of the OSM Agreement, which the Court considered suffered from drafting deficiencies. See Liability Decision at [95].

Loss of Damage Suffered
42 There is no evidence that the affected workers suffered loss or damage, or prejudice. This is properly described as a neutral factor in determining the appropriate penalty to be imposed.
Deterrence
43 The claimant calls for a significant penalty.
44 OSM says, consistent with comments made by the High Court in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 274 CLR 450 (Pattinson) at [55], the conduct the subject of the contravention does not bear a reasonable relationship to the maximum penalty where the conduct arose out of the respondent’s genuine belief about its construction of cl 12.5(a) of the OSM Agreement, the contravention was not deliberate.
45 In Pattinson, at [71], the majority judgment concluded that a court’s ‘real task under s 546’ is ‘fixing the penalty which it considers fairly and reasonably to be appropriate to protect the public interest from future contraventions of the [FWA]’ where, at [58], ‘the maximum penalty is intended by the [FWA] to be imposed in respect of a contravention warranting the strongest deterrence within the prescribed cap’. To that end, both the circumstances of the contravention(s) and the respondent’s circumstances may be relevant to the assessment as to whether the maximum level of deterrence is required.
46 In Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (No 2) [2018] FCA 1211; (2018) 70 AILR 102-975 (also referred to in Pattinson at [26]), Tracey J stated at [20]:
[T]he maximum penalty may be appropriate for a person who has repeatedly contravened the same or similar legislative provisions despite having been penalised regularly over a period of time for such misconduct. The gravity of the offending, in such cases, is to be assessed by reference to the nature and the quality of the recidivism rather than by comparison of individual instances of offending: see Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 1462 at [8] (Jessup J). Relevant matters will include the number of contraventions which have occurred over a period, whether the ongoing misconduct is the result of conscious decisions, whether the repeated contravenor has treated the payment of penalties as a cost of doing business and whether any attempt has been made to comply with the law as declared by the Court.
The Respondent’s Circumstances
47 Unlike in Pattinson, there was no discernible policy by OSM to not convert five casual employees to permanent employment.
48 Further, this was not a case of carelessness or negligence by OSM. The best description is that OSM was misguided in its application of cl 12.5(a) of the OSM Agreement.
The Circumstances of the Contraventions
49 There is overlap between the circumstances of the contraventions and OSM’s circumstances.
50 That is, there is no evidence the contravention was an industrial strategy pursued without regard for the law.
51 The consequence of considering the above factors is that I am not satisfied in relation to the contravention that a significant penalty ‘is reasonably necessary to deter further contraventions of a like kind.’ Pattinson at [61].

Determination
52 In this case, specific deterrence has less, but not no, role to play with respect to OSM’s contravention. That is, the contravention arose out of a dispute about the interpretation and application of a term of an enterprise agreement, which had already been implemented by OSM by the time the proceedings commenced. The likelihood of a similar contravention occurring in the future is minimal. To the extent that OSM has previously contravened s 50 of the FWA, such contraventions resulted in a nominal penalty of $1 and a very modest penalty of $1,700.
53 This leaves the issue of general deterrence.
54 Comments made by Feutrill J, at [94], in CFMEU v Qube Ports Pty Ltd [2025] FCA 208 have some relevance:
Contraventions are not only the consequence of intentional or deliberate conduct but carelessness, oversight and inadvertence. Part of deterrence involves encouraging employers to implement and maintain systems, policies, procedures and a culture aimed at preventing careless, unintentional or ignorant contraventions of the Act. Therefore, the size and spread of an employer’s operation is not a reason for diminishing corporate responsibility for historical contraventions as these may be indicative of systemic or underlying failings in corporate systems, policies, procedures and culture and, therefore, of an ongoing and enhanced risk of future contraventions.
55 However, while his Honour’s comments may have been directed to specific deterrence, the tenure of these comments is applicable to any employer so as to ensure compliance with industrial laws.
56 Guidance may also be derived from Bromberg J in Australian Building and Construction Commissioner v Powell (No 2) [2019] FCA 972 at [28] to [30], referring to Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191 (at [176]):
It is a fundamental principle, at the core of the judicial power to impose a penalty, that the imposition is for the contravention in question. Prior contraventions, even so many and often so serious as the Union may have engaged in in the past, is a factor which may be taken into account in determining the appropriate quantum for the contravention; it cannot be taken to lead to a penalty that is disproportionate to the gravity of the instant contravention. The maximum is for the worst category of cases.
57 Further, his Honour stated, at [30]:
The well settled principles most recently expressed in Parker call for a structured approach to the imposition of a penalty on a contravener with a history of contraventions, the object of which is to ensure that the contravener does not ‘suffer the fact of being sanctioned anew for past contraventions’ (at [341]). First, the Court must identify the applicable range of penalties for that contravention without regard to the contravener’s prior history of contraventions. Having done that, the Court should then take into account that history in assessing where, within the applicable range, the penalty should fall. (original emphasis)
58 His Honour later agreed with the applicant’s contention and stated, at [34] and [35]:
[T]here is no general principle that, if a person contravenes a civil penalty provision on a genuine but mistaken view on an arguable question of law, there should be no penalty. Whether or not a penalty should be imposed will always depend on all of the circumstances considered principally by reference to the need for specific and general deterrence.
It is well settled and not in contest that an honest and reasonable belief may be a relevant mitigating or ameliorating factor in determining whether or not a penalty is to be imposed and, if so, the extent of the penalty imposed. (citations omitted)
59 I am not satisfied that this is an occasion where imposing no penalty is appropriate. However, I am satisfied that given all of the factors referred to above, this is a contravention for which a penalty at the lower end of the scale is appropriate.
Penalty to be Imposed
60 Taking all of these factors in to account, the appropriate penalty aimed to secure compliance by deterring repeat contraventions, if not of this type, then of future different contraventions, is $2,000.
61 I do not consider any further reduction to be warranted to account for an imbalance between oppression and deterrence.
62 I note OSM’s submission that any pecuniary penalty should be paid to the Commonwealth, and not the claimant. ts 11.
I do not consider that there is anything before the Court which suggests it should be awarded other than to the successful initiating party. Accordingly, the payment of the pecuniary penalty should be paid to the claimant.
Conclusion
63 Pursuant to s 546(1) of the FWA, where the Court is satisfied that the respondent has contravened a civil penalty provision, the respondent is to pay a pecuniary penalty in the amount of $2,000.
64 Pursuant to s 546(3)(b) of the FWA, the pecuniary penalty is to be paid to the claimant.



D. SCADDAN
INDUSTRIAL MAGISTRATE

Schedule I: Pecuniary Penalty Orders Under the Fair Work Act 2009 (Cth) 
Pecuniary Penalty Orders 
[1] The FWA provides that the Court may order a person to pay an appropriate pecuniary penalty if the Court is satisfied that the person has contravened a civil remedy provision: s 546(1) of FWA. The maximum penalty for each contravention by a natural person, expressed as a number of penalty units, set out in a table found in s 539(2) of the FWA: s 546(2) of the FWA. If the contravener is a body corporate, the maximum penalty is five times the maximum number of penalty units proscribed for a natural person: s 546(2) of the FWA. 
[2] The rate of a penalty unit is set by s 4AA of the Crimes Act 1914 (Cth): s 12 of the FWA. The relevant rate is that applicable at the date of the contravening conduct: 
Date of Contravening Conduct
Penalty Unit
January to February 2024
$ 313
[3] The purpose served by penalties was described by Katzmann J in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 (Grouped Property Services) at [388] in the following terms (omitting citations): 
In contrast to the criminal law, however, where, in sentencing, retribution and rehabilitation are also relevant, the primary, if not the only, purpose of a civil penalty is to promote the public interest in compliance with the law. This is achieved by imposing penalties that are sufficiently high to deter the wrongdoer from engaging in similar conduct in the future (specific deterrence) and to deter others who might be tempted to contravene (general deterrence). The penalty for each contravention or course of conduct is to be no more and no less than is necessary for that purpose.
[4] In Pattinson [42], the plurality confirmed that civil penalties ‘are not retributive, but rather are protective of the public interest in that they aim to secure compliance by deterring repeat contraventions’. However, ‘insistence upon the deterrent quality of a penalty should be balanced by insistence that it “not be so high as to be oppressive”’: [40], citing NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285. 
[5] In Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 [14], Tracey J adopted the following ‘nonexhaustive 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: 
(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 were 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. 
(m) The need for specific and general deterrence. 
[6] The list is not ‘a rigid catalogue of matters for attention. At the end of the day the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations.’ (Buchanan J in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 (Australian Ophthalmic Supplies) [91]). 
[7] Although these factors provide useful guidance, the task of assessing the appropriate penalty is not an exact science: Commonwealth v Director, Fair Work Building Inspectorate [2015] HCA 46; (2015) 258 CLR 482 [47]. The Court must ultimately fix a penalty that pays appropriate regard to the contraventions that have occurred: Pattinson [19]. ‘[A] court empowered by s 546 to impose an “appropriate” penalty must act fairly and reasonably for the purpose of protecting the public interest by deterring future contraventions of the Act.’ Pattinson [48]. 
[8] ‘Multiple contraventions’ may occur because the contravening conduct done by an employer:
(a) resulted in a contravention of a single civil penalty provision or resulted in the contravention of multiple civil penalty provisions; 
(b) was done once only or was repeated; and 
(c) was done with respect to a single employee or was done with respect to multiple employees.
[9] The fixing of a pecuniary penalty for multiple contraventions is subject to s 557 of the FWA. It provides that two or more contraventions of specified civil remedy provisions by an employer are taken be a single contravention if the contraventions arose out of a course of conduct by the employer. Subject to proof of a ‘course of conduct’, the section applies to contravening conduct that results in multiple contraventions of a single civil penalty provision whether by reason of the same conduct done on multiple occasions or conduct done once with respect to multiple employees: Rocky Holdings; Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832 [22] (White J) The section does not apply to cases where the contravening conduct results in the contravention of multiple civil penalty provisions (example (a) above): Grouped Property Services [411] (Katzmann J). 
[10] 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 [47] - [52]. 
[11] Section 546(3) of the FWA also provides: 
Payment of penalty
The court may order that the pecuniary penalty, or a part of the penalty, be paid to: 
(a) the Commonwealth; or 
(b) a particular organisation; or 
(c) a particular person. 
[12] In Milardovic v Vemco Services Pty Ltd (No 2) [2016] FCA 244 [40] - [44], Mortimer J, in light of Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; (2016) 239 FCR 336, summarised the law: (omitting citations) 
[T]he power conveyed by s 546(3) is ordinarily to be exercised by awarding any penalty to the successful applicant. … [T]he initiating party is normally the proper recipient of the penalty as part of a system of recognising particular interests in certain classes of persons … in upholding the integrity of awards and agreements the subject of penal proceedings. Where a public official vindicates the law by suing for and obtaining a penalty, it is appropriate that the penalty be paid to the Consolidated Revenue Fund. Otherwise, the general rule remains appropriate, that the penalty is to be paid to the party initiating the proceeding, with the Gibbs [Gibbs v The Mayor, Councillors and Citizens of City of Altona [1992] FCA 553; 37 FCR 216] … exception that the penalty may be ordered to be paid to the organisation on whose behalf the initiating party has acted. (original emphasis)