In a recent decision of the Federal Circuit Court (Fair Work Ombudsman v Tac Pham Pty Ltd & Anor 2020] FCCA 3036), a café and its general manager were ordered to pay penalties exceeding a combined total of $230,000 following contraventions of the Fair Work Act 2009 (Cth) (FW Act) described by the Court as being brought about by ‘deliberate indifference’ to obligations arising under the FW Act and the Restaurant Industry Award 2010 (Award).
The case was the first successful prosecution for an alleged breach of the serious contravention provision set out in s 557A of the FW Act, and is illustrative of the Court’s approach to penalty in such matters.
The facts
The first respondent, Tac Pham Pty Ltd (TPPL), had operated a café since 2013. The second respondent, Cuc Thi Thu Pham (Ms Pham) was the general manager of the business.
In January 2017, TPPL was the subject of an audit by the Fair Work Ombudsman (FWO). The audit resulted in findings that TPPL had underpaid 25 employees during the period between 22 December 2014 and 20 December 2015 (Initial Contraventions).
In June 2017, proceedings were commenced in the Federal Court against TPPL and Ms Pham in relation to the Initial Contraventions. Although the underpayments had been rectified prior to proceedings being commenced, TPPL and Ms Pham admitted multiple contraventions of the FW Act and Award, including:
- failures to pay minimum Award rates of pay;
- failures to pay Saturday, Sunday, public holiday and late night penalty rates;
- failures to pay split shift allowances; and
- failures to provide employees with pay slips which included the information required by the Fair Work Regulations.
On 20 February 2018, the Federal Court delivered its judgment and ordered that:
- TPPL pay a pecuniary penalty of $37,500;
- Ms Pham pay a pecuniary penalty of $7,500; and
- all persons with managerial responsibility of TPPL (including Ms Pham) attend training within three months in relation to compliance with wages and entitlements under the Award, and accrual and payment of entitlements under the FW Act.
On 20 May 2018, Ms Pham and her husband (who is the director of TPPL) attended the training ordered by the Federal Court.
On 30 May 2018, a FWO inspector attended TPPL’s premises as part of a national compliance monitoring campaign and issued TPPL with a notice to produce documents. The documents produced by TPPL revealed that TPPL had underpaid 11 employees during the period between 25 September 2017 and 8 April 2018 (Subsequent Contraventions). In other words, TPPL continued to underpay its employees while being prosecuted for the Initial Contraventions and after the judgment had been handed down in relation to the Initial Contraventions.
On 19 December 2019, the FWO commenced further proceedings against TPPL and Ms Pham in relation to the Subsequent Contraventions. Again, although the underpayments had been rectified prior to proceedings being commenced, TPPL and Ms Pham admitted multiple contraventions of the FW Act and Award, including:
- failures to minimum Award rates of pay;
- failures to pay casual loading;
- failures to pay Saturday, Sunday, public holiday and late night penalty rates;
- failures to pay split shift allowances;
- failures to pay employees for a minimum number of hours for work performed on a public holiday;
- a failure to pay a casual employee for a minimum of two hours’ work for a shift;
- failures to provide parttime employees with a part time work agreement;
- failures to provide pay slips to employees within one working day of payment of wages; and
- failures to provide employees with pay slips which included the information required by the Fair Work Regulations.
The FWO further alleged that the failures to pay minimum Award rates of pay and failures to provide employees with pay slips which included the information required by the Fair Work Regulations were serious contraventions within the meaning of s 557A of the FW Act.
