Case: Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Outcome: followed
In Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 Mowbray FM identified "a 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". Those considerations were derived from a number of decisions of this Court. I gratefully adopt, as potentially relevant and applicable, the various considerations identified by him. They were: &#8226; The nature and extent of the conduct which led to the breaches. &#8226; The circumstances in which that conduct took place. &#8226; The nature and extent of any loss or damage sustained as a result of the breaches. &#8226; Whether there had been similar previous conduct by the respondent. &#8226; Whether the breaches were properly distinct or arose out of the one course of conduct. &#8226; The size of the business enterprise involved. &#8226; Whether or not the breaches were deliberate. &#8226; Whether senior management was involved in the breaches. &#8226; Whether the party committing the breach had exhibited contrition. &#8226; Whether the party committing the breach had taken corrective action. &#8226; Whether the party committing the breach had cooperated with the enforcement authorities. &#8226; The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and &#8226; The need for specific and general deterrence. The parties accepted that these considerations should guide the exercise of my discretion in the present proceeding. 15 The various breaches of Award terms which occurred in this case can all be traced to a single source. That source was the decision, made by the first respondent, to offer Mr Paynting employment at an hourly rate. Mr Paynting accepted that offer. Throughout the relevant period Mr Paynting was paid, either at the originally agreed rate, or, subsequently, at higher agreed rates. The wages paid to Mr Paynting were calculated on the basis of the agreed hourly rates. Over a period of a little more than five years this led to the underpayment of $96,664.76 in wages which would have been paid to him had the Award requirements been observed. This underpayment represented about a third of Mr Paynting's wages entitlement under the Award. The amount is significant. Although the shortfall was paid in full to Mr Paynting in April 2007 he was deprived of the financial benefits which timely payment of the correct wages would have provided. 16 The respondents operate their business, in what was described in argument as, "an informal partnership". The first respondent ceased formal eduction at the end of Year 8; the second respondent at the end of Year 9. The business operates from a base in rural Victoria. The first respondent is one of six drivers employed in the business. The second respondent works one day a week in the business attending to the payment of wages and accounts rendered. Day to day administration is in the hands of an employed manager. The turnover of the business has fluctuated over time. Between 1996 and 2006 the turnover in each year has fallen within the range of $1.2 million to $1.5 million. The average operating profit over this period, prior to any drawings by the respondents, has been $64,383 per year. In order to make good the underpayment to Mr Paynting it was necessary for the business to extend its overdraft. Apart from an accountant, the business had no external professional advisers. In particular, it did not retain anyone with expertise in industrial law. The respondents were not members of any employer or industry association. 17 The respondents gave uncontradicted evidence that, at all relevant times, prior to June 2006, they were unaware of the existence of the Award or of its application to their business. This was despite the fact that a series of certified letters which related to the making of the Award and its predecessors and the respondency of the business to it was sent to their business address. There was no evidence as to why this correspondence did not come to the respondents' attention or, if it did, why they had overlooked it. Counsel for the respondents accepted that there were avenues available to them which would have enabled them to ascertain their obligations had they been aware of those avenues and minded to utilise them. In these circumstances I infer that the respondent's ignorance of their obligations under the Award, on the view most favourable to them, was the result of carelessness and inadvertence. 18 As already noted the underpayments totalled $96,664.76. They occurred over a period of a little over five years and represented approximately one third of the amount to which Mr Paynting was entitled.