FEDERAL CIRCUIT COURT OF AUSTRALIA
SPONZA v COAL FACE RESOURCES PTY LTD & ANOR	[2015] FCCA 1140	

Catchwords: 
INDUSTRIAL LAW – Contraventions of Fair Work Act – assessment of compensation – whether accessory should be ordered to pay compensation – fixing of pecuniary penalties.	

Legislation:
Crimes Act 1914, s.4AA
Fair Work Act 2009, ss.12, 44, 87(1), 90(2), 96, 97, 99, 323(1), 340(1), 539(2), 550(1), 550(2), 545, 545(1), 546(1), 557(1), 557(2), 793
Federal Circuit Court of Australia Act 1999, s.18
Federal Circuit Court Rules 2001, rr.13.03A(2), 13.03B(2)(c)
Workers Compensation Act 1995 (Qld), s.151	

Fair Work Ombudsman v Fed Up Deli & Catering Pty Ltd [2012] FMCA 738
McIlwain v Ramsey Food Packaging Pty Ltd (No 4) (2006) 158 IR 181
Scotto v Scala Bros Pty Ltd [2014] FCCA 2374	

Applicant:	SAMANTHA SPONZA	

First Respondent:	COAL FACE RESOURCES PTY LTD	

Second Respondent:	JASON MOULTRIE	

File Number:	BRG 1133 of 2014	

Judgment of:	Judge Jarrett	

Hearing date:	27 April 2015	

Date of Last Submission:	27 April 2015	

Delivered at:	Brisbane	

Delivered on:	7 May 2015	

REPRESENTATION
Solicitor for the Applicant:	Mr Zielinski	

Solicitors for the Applicant:	Minter Ellison	

No appearance for the first respondent	

No appearance for the second respondent	

ORDERS
THE COURT DECLARES THAT:
(1)	the first respondent has breached the contract of employment with the applicant made on 22 March, 2013 in that it:
(a)	failed to pay to her wages due under the contract for the following periods:
(i)	9 June 2014 – 22 June 2014;
(ii)	7 July 2014 –	20 July 2014;
(iii)	21 July 2014 – 3 August 2014;
(iv)	1 September 2014 – 14 September 2014;
(v)	15 September 2014 – 28 September 2014;
(vi)	29 September 2014  – 12 October 2014; and
(vii)	13 October 2014 – 26 October 2014;
(b)	failed to pay to her superannuation contributions due under the contract for the periods set out in declaration (1)(a) hereof;
(2)	the first respondent contravened s.323(1) of the Fair Work Act 2009 (Cth) in that it failed to pay to the applicant, as was required by s.323(1) of the Fair Work Act, wages for the periods set out in declaration (1)(a) hereof;
(3)	the first respondent contravened s.44 of the Fair Work Act in that it:
(a)	failed to pay to the applicant, pursuant to s.99 of the Fair Work Act,  the amount of her base rate of pay for her ordinary hours of work for the following days:
(i)	18 July 2014;
(ii)	26 September 2014;
(iii)	29 September 2014;
(iv)	30 September 2014;
(v)	1 October 2014;
(vi)	17 October 2014; 
(vii)	20 October 2014
(viii)	21 October 2014;
(ix)	22 October 2014; 
(x)	23 October 2014; and 
(xi)	24 October 2014;
(b)	failed to pay to the applicant, pursuant to s.90(2) of the Fair Work Act  the amount of her accrued but unpaid annual leave.
(4)	the first respondent contravened s.340(1) of the Fair Work Act in that it took adverse action against the applicant because she exercised a workplace right;
(5)	the second respondent was, for the purposes of s.550(1) of the Fair Work Act, involved in each of the contraventions the subject of declarations (2), (3)(a), (3)(b) and (4) herein.
THE COURT ORDERS THAT:
(6)	The first respondent pay the following  damages for breach of contract to the applicant:
(a)	$28,269.22 for accrued but unpaid gross wages; and
(b)	$9,778.17 for accrued but unpaid superannuation payments.
(7)	The first and second respondents, jointly and severally, pay to the applicant pursuant to s.545(1) of the Fair Work Act:
(a)	$28,269.22 for accrued but unpaid gross wages; and
(b)	$7,662.68 for accrued but untaken annual leave payments.
(8)	The first respondent pay a pecuniary penalty:
(a)	for its contravention set out in declaration (2) above of $25,500;
(b)	for its contravention set out in declaration (3)(b) above of $17,000; and
(c)	for its contravention set out in declaration (4) above of $25,500.
(9)	The second respondent pay a pecuniary penalty:
(a)	for his contravention set out in declaration (2) above of $5,100;
(b)	for his contravention set out in declaration (3)(b) above of $3,400; and
(c)	for his contravention set out in declaration (4) above of $5,100.
(10)	The penalties ordered against the first respondent in order 8 hereof be paid to the Commonwealth within 28 days of the date of this order.
(11)	The penalties ordered against the second respondent in order 9 hereof be paid to the applicant, or at her direction, within 28 days of the date of this order.
(1)	
FEDERAL CIRCUIT COURT 
OF AUSTRALIA 
AT Brisbane	
BRG 1133 of 2014
Samantha Sponza	
Applicant

And

Coal Face Resources Pty Ltd	
First Respondent
Jason Moultrie	
Second Respondent

REASONS FOR JUDGMENT
1.	In these proceedings the applicant claims declarations that the first respondent has contravened certain provisions of the Fair Work Act 2009 (Cth), declarations that the second respondent was involved in those contraventions and is liable for them, orders for the payment of compensation by the first and second respondents for the alleged breaches and the imposition of penalties on each of the respondents for the alleged contraventions.  
2.	The respondents have not appeared in the proceedings. The respondents are in default for the purposes of rule 13.03A(2) of the Federal Circuit Rules 2001 (Cth).  The applicant applies for judgment pursuant to FCCR 13.03B(2)(c) and relief in the terms sought in her amended statement of claim filed on 27 April, 2015.
3.	The proceedings were commenced on 11 December, 2014 by the filing of an application and statement of claim.  On 23 February, 2015 I made a substituted service order for the service of the initiating documents on the second respondent. 
4.	On 25 February, 2015 and in compliance with the order, the application and statement of claim were served upon the second respondent.  On the same day, a copy of the application and statement of claim was sent to the first respondent’s registered office.  I am satisfied that the respondents have been served with the application and statement of claim in this matter.
5.	By correspondence sent on 24 March, 2015 the first and second respondents were notified that their failure to file a response and defence in the application was a non-compliance with both the Federal Circuit Court Rules and an order that I made about the filing of those documents on 23 February, 2015.  The respondents were put on notice that if they did not file a response and defence by 27 March, 2015 the applicant would seek default orders in respect of the relief claimed in her application and statement of claim.   
6.	The respondents have not participated in the proceedings in any way.  As I have set out above the respondents are in default within the meaning of FCCR 13.03A(2).  In the circumstances, the Court may give judgment against the respondents for the relief that the applicant appears entitled to on the statement of claim and that the Court is satisfied it has power to grant.  
7.	When the matter came before me on 27 April, 2015, the applicant sought, and I granted leave to amend the statement of claim to correct some minor errors in the original statement of claim.  It was my view then, and I remain of the view, that those amendments cannot prejudice the respondents even though they have not been foreshadowed to them.
8.	Ordinarily, to proceed to default judgment pursuant to FCCR 13.03B(2)(c), no evidence is necessary.  However, in these proceedings the applicant seeks the imposition of pecuniary penalties on the respondents for their contraventions of the Fair Work Act.  In Fair Work Ombudsman v Fed Up Deli & Catering Pty Ltd [2012] FMCA 738 I summarised the principles relating to an order for default judgment under FCCR 13.03B(2)(c) (rule 13.03B(2)(c) of the Federal Magistrates Court Rules 2001 as they then were):
	13.	An order for default judgment under rule 13.03B(2)(c) does not require proof by evidence of the Applicant’s claim; it is sufficient if there is a basis for the relief sought on the face of the Statement of Claim: Arthur v Vaupotic Investments Pty Ltd [2005] FCA 433 at [3], cited in Australian Building and Constructions Commissioner v Abbot (No.3) [2011] FCA 340, [11] and Australian Competition and Consumer Commission v Yellow Page Marketing BV (No.2) [2011] FCA 352 [14].
	14.	The general rule is that an application under FMCR 13.03B(2)(c) is determined on the face of the facts pleaded in the Statement of Claim alone. However, where discretionary relief is claimed, the Court can and should receive evidence relevant to the exercise of its discretion: ACCC v Yellow Page Marketing at [61] - [63], citing Australian Competition and Consumer Commission v Dataline.net.au Pty Ltd (2006) 236 ALR 665 at [48]-[51].  The Court may make binding declarations based on deemed admissions: AGCC v Dataline.net.au Pty Ltd [2007] FCAFC 146.
9.	The applicant seeks discretionary relief in the form of civil penalties against both respondents, as well as declaratory relief.  Accordingly, the applicant has filed an affidavit in support of the facts pleaded in her statement of claim. 
The applicant’s claims
10.	Ms Sponza is a qualified geologist.  She was employed by the first respondent from 5 March, 2013 as a senior exploration geologist.  
11.	The second respondent has been the first respondent’s sole director and secretary since the first respondent was registered on 2 February, 2010.
12.	Prior to commencing work for the first respondent, Ms Sponza was employed by Moultrie Database & Modelling – another business that Ms Sponza understood was owned and operated by the second respondent and another person called Jason Keys.
13.	In March, 2013 Ms Sponza was informed that Moultrie Database & Modelling would no longer operate.  Staff of that business were either made redundant, or offered jobs within the second respondent’s other companies.  Ms Sponza’s employment was moved to the first respondent at that stage.  
14.	Ms Sponza was employed with the first respondent pursuant to a written contract of employment signed on 22 March, 2013 a little after her employment commenced with the first respondent.
15.	According to the terms of her contract she was to receive a gross base salary of $105,000 per year, plus superannuation.  The contract also provided that the first respondent “guarantee[d] that [I] … receive as a minimum, [my] base gross salary and superannuation component” and that her wages were to be paid fortnightly.  
16.	Ms Sponza worked for the first respondent from the company’s office at 22/1015 Nudgee Road, Banyo from 5 March, 2013 until 9 September 2014.
17.	On 9 September, 2013 the first respondent was forced to vacate the office that it occupied.  When Ms Sponza asked the second respondent why the first respondent was required to vacate the office, he said words to the effect of “the building is owned by one of my companies that went into liquidation”.  Ms Sponza and others who worked for the first respondent packed some computers, files and personal belongings and the locks were changed on that day.  She was given access (under supervision) at a later date to retrieve the rest of the first respondent’s property.
18.	Thereafter, Ms Sponza was directed by the second respondent to work from home on a full time basis. She took her day-to-day instructions from the second respondent via telephone, email and face-to-face meetings.  
19.	On 5 June, 2014 Ms Sponza spoke to the second respondent in respect of what, if any, impact the liquidation of companies in which the second respondent was interested would have on the first respondent.  The second respondent advised her that he had made arrangements for Ms Sponza to provide consultation services to a joint venture partner of the first respondent, International Coal, as part of her role with the first respondent.  He told her that International Coal had agreed to pay the first respondent’s fees in advance, which would cover Ms Sponza’s salary.
20.	Ms Sponza commenced providing consultation services for International Coal shortly after 5 June, 2014. 
21.	Until June, 2014 Ms Sponza’s fortnightly pay was usually paid into her bank account by the Wednesday after the end of the relevant pay fortnight.  While her pay for the fortnights ending 25 May and 8 June, 2014 had been paid five days late, Ms Sponza expected her pay for the fortnight of 9 to 22 June, 2014 to be paid by Wednesday, 25 June, 2014.  However, she has never received her pay for that fortnight. 
22.	On 3 July, 2014 Ms Sponza met with the second respondent to discuss a variety of matters relating to her work.  During the meeting, the second respondent told Ms Sponza that he intended to review her salary.  According to Ms Sponza’s evidence, an exchange to the following effect then took place:  
	The second respondent: I have researched the job market and there is nothing out there.  Your pay is too generous.
	Ms Sponza: What do you plan to change my salary to?
	The second respondent: We will have to sit down and discuss it at a later date. 
23.	Ms Sponza then asked the second respondent whether he could provide an indication of when she would receive her outstanding pay for the fortnight of 9 to 22 June, 2014.  The second respondent said to her words to the effect:
	I spoke with [International Coal] yesterday evening.  They assured me that they would pay their invoice shortly.  As soon as I get paid for the invoice, I will transfer your pay. 
24.	Ms Sponza next met with the second respondent on 7 July, 2014.  She again asked the second respondent when she would receive her pay for the fortnight of 9 to 22 June, 2014.  The second respondent said to her words to the effect: “I’m waiting for [International Coal] to pay their invoice” and “I will shortly pay your wages”.  
25.	Ms Sponza received her pay for the fortnight of 23 June to 6 July, 2014 on Thursday, 10 July, 2014 (one day later than expected).  
26.	Ms Sponza expected to receive her pay for the fortnight of 7 to 20 July, 2014 on Wednesday, 23 July, 2014.  However, she has never been paid for that fortnight. 
27.	Ms Sponza met with the second respondent on 22 July, 2014, during which she raised with the second respondent that she had not been paid for two fortnights of work (that is, the fortnights ending 22 June and 20 July, 2014).  The second respondent said words to the effect: “I’m still waiting on that invoice from [International Coal], I’ll pay you as soon as they pay it”.
28.	During the meeting, the second respondent said that he would change Ms Sponza’s wage payment cycle so that Ms Sponza would receive her salary monthly, rather than fortnightly.  Ms Sponza agreed to the change in payment cycle, though the change was not recorded in writing.  The second respondent also said words to the effect: “I will review your salary and we will have a meeting about it soon”.  
29.	By 6 August, 2014 Ms Sponza had not received payment for her wages for the fortnight ending 22 June, 2014 or the fortnights ending 20 July, 2014 and 3 August, 2014. 
30.	Accordingly, on 6 August, 2014 Ms Sponza wrote an email to the second respondent asking him to meet with her to discuss rectifying the underpayments.  Although she sent the email to an email address that she habitually used to correspond with the second respondent she did not receive a response to the email. 
31.	Ms Sponza spoke with the second respondent by telephone on 21 August, 2014.  By that time, Ms Sponza had not received 8 weeks’ pay (including the fortnight of 4 to 17 August, 2014 which was to be incorporated in the pay month of 4 to 31 August, 2014). 
32.	During the telephone conversation, an exchange to the following effect took place: 
	Ms Sponza: When will my underpayments be rectified?
	The second respondent: Four weeks have been transferred into your account; you should get it shortly.  
	Ms Sponza: Why have only four weeks been paid, rather than the full eight weeks?
	The second respondent: I had to pay wages for an ex-employee and some bills.  I’m unsure when I will be able to pay your other four weeks; you should expect future salary payments to be irregular or late.
	Ms Sponza: That’s unacceptable.
	The second respondent: That’s just how it is, if you find it unacceptable feel free to resign. 
	Ms Sponza: I won’t resign.
33.	The second respondent also said words to the effect: “I will have to revise your salary because I am unable to afford your current pay rate”.  In reply, Ms Sponza said words to the effect: “If you are unable to afford my salary or guarantee payment on time then perhaps I should be made redundant?”, to which the second respondent said: “I won’t be making you redundant; if you’re unhappy with the situation then you can resign”, or words to that effect. 
34.	Ms Sponza received payment for the two fortnights of 4 to 31 August, 2014 on 21 August, 2014. 
35.	Ms Sponza met with the second respondent on 11 September, 2014.  As part of that meeting, she asked the second respondent about when the first respondent would invoice International Coal and about the payment of her wages.  The second respondent said words to the effect: “I haven’t invoiced [International Coal] yet, remind me about it later in the week”.  Ms Sponza sent a follow up text message to the second respondent about invoicing International Coal on 17 September, 2014 but she received no response. 
36.	Ms Sponza spoke with the second respondent again on 24 September, 2014 and she asked about the progress of paying her outstanding wages.  The second respondent replied with words to the effect: “I’ll get onto it this week”.
37.	Ms Sponza expected to receive her wages for the fortnights of 1 to 14 and 15 to 28 September, 2014 on 1 October, 2014.  However, she has never received payment for those wages.  
38.	Ms Sponza spoke with the second respondent by telephone and in person on 7 October, 2014, during which she asked him when she would receive payment for her outstanding wages.  The second respondent said words to the effect: “I’ll discuss the matter with [International Coal] tomorrow and let you know when you can expect to be paid”.
39.	Ms Sponza formally wrote by email to the second respondent on 9 October, 2014 regarding her unpaid wages.  Although she was frustrated with the first respondent’s and the second respondent’s failure to pay her wages, she understood that the company was facing some financial difficulties at the time.  However, she also expressed her expectations regarding the rectification of her unpaid wages.  The second respondent did not reply to her email.
40.	Ms Sponza sent a text message to the second respondent on 14 October, 2014 following up a response to her email.  Ms Sponza did not receive a response to that text message. 
41.	Ms Sponza made a formal complaint to the Fair Work Ombudsman on 16 October, 2014 regarding her outstanding wages.  At 9.08am on 17 October, 2014, she sent a further email to the second respondent regarding her outstanding wages.   
42.	Ms Sponza did not receive a direct response to her email.  However, at 11.57am on 17 October, 2014, she received an email from the second respondent that requested that she provide a variety of documents relating to and summaries of more than 50 individual tasks and projects that she had worked on for the first respondent since August, 2013.  The second respondent also requested that Ms Sponza respond in 50 separate emails.  However, none of the materials requested were relevant to her pay dispute.  The email is in the following terms:
	Sam,
	I am in the process of finalizing expenditure for numerous annual reports.
	In order to complete these task please provide the following information. Please email the file/s and the location of the file/s on the CFR directory for each task. Please ensure that each task is a separate email and named according in the subject of the email. I have worked backwards from the timesheets you have  submitted.
	The project code table that you are using on your timesheets.
	All the annual reports you have been working on.
	EPC 2286 Don Juan
	EPC2332 Mount Panorama
	EPC2318 Wild Horse Swamp
	EPC2292 Clermont
	EPC2299 Terrick Terrick
	EPC2290 Logan Downs
	EPC2291 Aramac
	Written summary of the change of details for WA.
	All update maps.
	All reports you have worked on for EPC2327 (eg exploration report, tender document ect.).
	Written summary on the road reserve process and all documentation that has been sent to the council.
	Copy of ALL variation letters (CFR11-0034, CFR11-0038, CFR11-0039, CFR11-0040, CFR11-0037 ect).
	Copy of the MRF submission for WA tenements.
	Copy of the Bundaberg geological review – EPC 2195.
	Copy of the Annual report and expenditure statement for EPC 2195.
	Copy of the Consuelo drilling cost estimates and exploration plan maps.
	Copy of notice of entries for EPC2291.
	Copy of the surrender forms.
	Surrender documents for EPC2299.
	Consuelo historical data review (all information found).
	Copy of the Exec summary write up (CFR11-0061).
	Copy of the letter to Bidjara people – site clearances EPC2327.
	Copy of the landholder details for Consuela (this was for Glenn’s site visit).
	Copy of the cataloguing and digitized Consuelo data.
	Copy of historical data Consuelo.
	Copy of the maps, docs and tables sent to Eden (28/5/14).
	Copy of the Consuelo project summary/time budget and seismic maps.
	Copy of Consuelo historical HHs for CQ data, and geophysic, CQ data table.
	Copy of South Australia information (ZHU14-001). Who/what is this.
	Copy of the information on the drop box complied on the 04/03/14.
	Copy of the research about company directors (CFR12-003).
	Copy of the EPC client contact project (CFR14-0001).
	Copy of the data package sent to Agra on the 17/02/14.
	Summary of the file transfer project (CFR12-0112).
	Copy of the edited QLD map with project summaries (22/01/14).
	Copy of the tenure brochures. (CFR14-001).
	Copy of the mines project (CFR13-007), 16/12/13.
	Copy of the updated Consuelo EP (CFR13-0007).
	Copy of data compiled from spreadsheets into master spreadsheet. (03/12/13).
	Copy of vizmap data complied.
	Copy of results of the company subsidiaries reseach. (CFR13-0007).
	Copy of EPC spreadsheet (CFR12-0117), 19/11/13.
	Copy of Springsure ET report (CFR12-0110).
	Copy of QLD coal mine data project (CFR13-0007).
	Copy of maps edited on the 15/11/13.
	Copy of work completed between 21/10/13 and 25/10/13.
	Copy of brochure images (CFR12-00052).
	Copy of maps, reports and seismic sections printed on 13/10/13.
	Copy of all the maps, plans and reports generated between 14/10/13 and 18/10/13.
	Copy of the valuation report for Consuelo CFR-0049.
	Copy of maps and HD search for records of basalt 03/10/13.
	Copy of the reports reviewed and historical data found for Consuelo between 10/09/13 and 13/09/13.
	Copy of information given to Andrew on the 29/08/13.
	Copy of relinquishment map/table/report.
	Copy of letter sent to Bidjara on the 22/08/13.
	Copy of information placed in drop box for Mark Biggs on 22/08/13.
	Sam please send 51 separate emails. In the subject box please use “CFR information 1”, “CFR information 2” ect. As previously discussed please attach the relevant files to each email and also state the file path as to where the file/s are located on the CFR server.
	This information is required so we have proof of the expenditure for the different projects.
	Please complete these tasks starting from number 1 immediately. Ensure once each task has been completed that they are emailed to myself.
	I would expect that you should be able to complete the first 20 today and the remaining ones Monday and Tuesday next week.
	Cheers Jason.   
43.	Ms Sponza found the second respondent’s approach extremely upsetting.  The information that the second respondent sought was extensive.  Notwithstanding the second respondent’s statement in his emails that this information was required for “finalizing (sic) expenditure for numerous annual reports”, Ms Sponza did not believe, based on her professional experience, that providing such information was necessary or practical.  No such request had ever previously been made of her by the second respondent or the first respondent.  Ms Sponza was concerned that the second respondent’s email was an attempt by him to challenge her performance, although he had never before had any issues with her work. 
44.	Shortly after Ms Sponza received the second respondent’s email she visited her general practitioner, who recommended that she take personal leave due to stress.  Her doctor certified her as unfit for work from Friday 17 to Friday 24 October, 2014.  Ms Sponza replied to the second respondent’s email on 17 October, 2014 and provided him with a medical certificate from her doctor.  
45.	On 21 October, 2014 Ms Sponza wrote a further email to the second respondent.  In the email, she set out the background to her wages claim and the amount that she believed she was owed by the first respondent.  She also set out her concerns about the second respondent’s 17 October, 2014 email. 
46.	The second respondent did not respond to her email.  On 27 October, 2014 he wrote to her once again asking that she provide the information that he had requested in his 17 October, 2014 email and that she should do so before completing any other work. 
47.	Ms Sponza replied to the second respondent on the same day.  She asked him to clarify the reason for the request and to respond to her letters regarding her unpaid wages.  Ms Sponza also provided the second respondent with a further medical certificate which certified that she was unwell from 27 to 31 October, 2014 inclusive.  
48.	Ms Sponza made an application for workers’ compensation on 3 November, 2014.  That application was accepted and WorkCover provided her with income support retrospectively to cover the period of 27 October, 2014 to 3 March, 2015 (when she was certified as being fit to return to work). 
49.	Ms Sponza has never received her wages for the fortnight of 29 September to 12 October and 13 to 26 October, 2014.
50.	On 6 November, 2014 Ms Sponza wrote a letter addressed to the second respondent at 9 Glorious Court, North Lakes, Queensland 4509.  Ms Sponza also sent the letter to the second respondent’s email account and the registered address of the first respondent.  The letter set out in detail the background of her wages complaint and how Ms Sponza believed that the second respondent and the first respondent had both breached relevant provisions of the Fair Work Act.  Ms Sponza advised the second respondent in the letter that the Fair Work Ombudsman had scheduled a mediation of her wages claim for 11 November, 2014 and that Ms Sponza reserved her rights to file court proceedings if her wages claim could not be resolved. 
51.	Ms Sponza also set out in the letter her concerns that she had not been paid personal leave while she was ill and could not work on: 
a)	18 July 2014;
b)	26 September 2014;
c)	29 September 2014;
d)	30 September 2014;
e)	1 October 2014;
f)	17 October 2014; 
g)	20 October 2014
h)	21 October 2014;
i)	22 October 2014; 
j)	23 October 2014; and 
k)	24 October 2014.
52.	Ms Sponza had, in respect of each of the above absences, given notice to the second respondent by text message, email or telephone as soon as practicable of her absence.  She also notified the second respondent of the period or expected period of her absences.  
53.	As at the date of her letter on 6 November, 2014 to the second respondent, Ms Sponza had calculated her total wage underpayments to be $24,230.80 gross.
54.	Ms Sponza received no response to her letter of 6 November, 2014.  The second respondent did not attend the Fair Work Ombudsman’s conciliation.  
55.	Ms Sponza instructed her solicitors to write to the second respondent on 6 March, 2015 giving him notice that his failure to respond to any of her correspondence in respect of the wages claim or the present proceedings showed that he did not intend to be bound by the contract and that she accepted his repudiation.    
56.	At the time of accepting the second respondent’s repudiation, Ms Sponza had (on her calculations) accrued 151.8 hours of untaken annual leave, amounting to $7,662.68 in gross wages.
57.	A summary of her unpaid wages is, I find, as follows:
From 	To 	Pay Due 	Amount	
9 June 2014	22 June 2014	25 June 2014 	$4,038.46	
7 July 2014	20 July 2014 	23 July 2014	$4,038.46	
21 July 2014	3 August 2014 	6 August 2014	$4,038.46	
1 September 2014	14 September 2014	1 October 2014 	$4,038.46	
15 September 2014 	28 September 2014	1 October 2014	$4,038.46	
29 September 2014 	12 October 2014 	29 October 2014	$4,038.46	
13 October 2014 	26 October 2014 	29 October 2014	$4,038.46	
Total:			$28,269.22	

58.	On or around 20 October, 2014 Ms Sponza contacted the superannuation fund into which she had directed that the first respondent make superannuation contributions.  Ms Sponza enquired whether the superannuation contributions to which she was entitled had been made.  Ms Sponza was advised that the last contribution into her account was for the September quarter of 2013.   
59.	Accordingly, based on the minimum applicable superannuation contribution percentages that have applied to her employment with the first respondent, the first respondent owes Ms Sponza $9,778.13 in superannuation, calculated in the following way: 
(base annual salary x applicable superannuation percentage) x (number of quarters of financial year paid/total number of quarters in financial year)

Financial year 2013/2014: 

(105,000 x 9.25%) x (3/4) = $7,284.375

Financial year 2014/2015

(105,000 x 9.5%) x (1/4) = $2,493.75

Contraventions of the Fair Work Act
60.	I am satisfied that the first respondent has contravened s.323(1) of the Fair Work Act in that it did not pay in full to Ms Sponza the amounts payable to her in relation to the performance of her work at least monthly.  Each of the seven occasions upon which Ms Sponza was not paid her fortnightly wage was a separate contravention of the Fair Work Act.  However, the first respondent has the benefit of s.557(1) of the Fair Work Act.  By reason of that subsection, I am bound to treat those seven contraventions as a single contravention of the Act.
61.	Moreover, the first respondent’s conduct was a breach of the contract of employment.  She has not received $28,269.22 in gross wages and $9,778.17 in superannuation, which was due under the contract. 
62.	Ms Sponza was entitled to take personal leave: s.97 of the Fair Work Act.  For each year of service with the first respondent she was entitled to 10 days of paid personal leave that accrued progressively during a year of service and which accumulated from year to year: s.96 of the Fair Work Act.     If she took any of that leave so accumulated, the first respondent was obliged to pay her at her base rate of pay for her ordinary hours of work in the period so taken: s.99 of the Fair Work Act.
63.	The entitlements and obligations arising pursuant to ss.96, 97 and 99 of the Fair Work Act are part of the National Employment Standards provided for in Part 2-2 of the Fair Work Act.  An employer must not contravene a provision of the National Employment Standards: s.44 of the Fair Work Act.  On each of the occasions set out in paragraph 51 hereof that the first respondent did not pay Ms Sponza on a day on which she took personal leave, the first respondent contravened s.44 of the Fair Work Act.  However, by reason of ss.557(1) and 557(2) of the Fair Work Act, these multiple contraventions must be taken to be one contravention.
64.	At the time of accepting the second respondent’s repudiation of her employment contract, Ms Sponza had (on her calculations) accrued 151.8 hours of untaken annual leave, amounting to $7,662.68 in gross wages.  She was entitled to accrue such leave: s.87(1) of the Fair Work Act.  She was entitled to payment for accrued but untaken leave at the conclusion of her employment: s.90(2) of the Fair Work Act.
65.	The entitlement arising pursuant to s.90(2) of the Fair Work Act is part of the National Employment Standards provided for in Part 2-2 of the Fair Work Act.  The first respondent contravened s.44 of the Fair Work act when it did not pay Ms Sponza for her accrued but untaken annual leave when her employment contract came to an end.
66.	I accept that the second respondent was involved in the first respondent’s contraventions of ss.44 and 323(1) of the Act within the meaning of s.550(2) of the Fair Work Act.  He is therefore to be taken to have contravened those provisions: s.550(1) of the Fair Work Act.
67.	I accept that the first respondent also contravened s.340(1) of the Fair Work Act in that it took adverse action against Ms Sponza when she sought to exercise a workplace right to make a complaint or inquiry in respect of her unpaid wages to the second respondent.  The emails written by the second respondent in response to Ms Sponza’s complaints (on 17 October, 2014 and 27 October, 2014) were I am satisfied calculated to alter Ms Sponza’s position to her prejudice.  Even though the emails were written by the second respondent, the first respondent is taken to have engaged in that conduct: s.793 of the Fair Work Act.
Compensation for breaches of the Fair Work Act

68.	Section 545 of the Fair Work Act relevantly provides that: 
	(1) The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.
	(2) Without limiting subsection (1), orders the Federal Court or Federal Circuit Court may make include the following:
	…
	(b) an order awarding compensation for loss that a person has suffered because of the contravention;
	…
69.	The applicant submits that compensation orders for breaches of ss.44, 323, and 340 of the Fair Work Act be ordered jointly against both the first and second respondents for the sum of $28,269.22 for gross wages and $7,662.68 for accrued but untaken leave.  The applicant submits that the wide scope of s.545 of the Fair Work Act gives the Court the discretion to make a compensation order against the second respondent as an accessory to the first respondent’s breaches.  
70.	In that regard, Cameron J in Scotto v Scala Bros Pty Ltd [2014] FCCA 2374 held at [496] – [497] that while the equivalent to s.545 in the Workplace Relations Act 1999 did not “accommodate the idea that anybody other than the employer in question will be liable for underpayments … the relevant provision in the Fair Work Act is materially different”.   In that case, his Honour held that he had the power to order that compensation for the non-payment of overtime and accrued leave entitlements be shared between the corporate entity that employed the relevant applicant and its sole director, who was an accessory to its breaches (at [498]).
71.	The applicant suggests that the paucity of cases in which compensation orders have been sought and granted against accessories may relate to the weight given by the Fair Work Ombudsman to the Explanatory Memorandum accompanying s.550 of the Fair Work Act.  The Explanatory Memorandum is in the following terms: 
	2177. However, while a penalty may be imposed on a person involved in a contravention, the clause does not result in a person involved in a contravention being personally liable to remedy the effects of the contravention. For example, where a company has failed to pay, or has underpaid, an employee wages under a fair work instrument, the director is not personally liable to pay that amount to the employee.
72.	I accept that the Explanatory Memorandum is not consistent with the plain reading of s.545, which is unambiguous and does not seek by its terms to confine the ordinary meaning of the provision.  Cameron J’s interpretation of s.545 does not lead to a result that is manifestly absurd or unreasonable.  It is not plainly wrong and I should follow that interpretation.
73.	The applicant seeks a declaration that the first respondent has breached the contract of employment between she and the first respondent.  I see no reason not to make that declaration.  She seeks orders for compensation against both respondents that includes the payment of amounts for superannuation.  Her entitlement to superannuation is both a statutory right (arising under the Superannuation Guarantee Charge Act 1992) and a contractual right – it is also an express term of the contract.  It is not an entitlement that arises under the Fair Work Act.  It is difficult to see therefore, why an order for compensation under that Act should include an amount for unpaid superannuation.  I am able to make an order for that sum against the first respondent on the applicant’s contract claim (pursuant to s.18 of the Federal Circuit Court of Australia Act 1999).
Penalty
74.	The applicant has made, with respect, helpful submissions as to the pecuniary penalties that should be imposed in this matter.  
75.	The applicant has established that the first respondent has contravened s.44 of the Fair Work Act on two occasions – once when it failed to pay Ms Sponza for personal leave that she took (on eleven different occasions) and once when it failed to pay to her accrued but unpaid annual leave at the conclusion of her employment.  She has also established that the first respondent contravened s.323(1) of the Fair Work Act when it failed to pay her wages on the seven occasions set out above.  I also accept that the first respondent has contravened s.340(1) of the Fair Work Act. 
76.	The second respondent is also taken to have contravened the Act in the same way because he was involved in the first respondent’s contraventions for the purposes of s.550(1) of the Fair Work Act.
77.	Each of the above contraventions carries the maximum penalty of $51,000 for the first respondent and $10,200 for the second respondent: ss.12, 539(2) and 546(1) of the Fair Work Act and s.4AA of the Crimes Act 1914 (Cth).
78.	The contraventions pleaded in the statement of claim have occurred against the background of the first respondent undergoing financial stress.  This was clear to the applicant, who requested information from the second respondent that would assure her that the first respondent was able to continue providing her with work and payment for it.  Such assurances were provided by the second respondent, who advised the applicant that he had arranged for her to provide consultancy services to a joint venture partner of the first respondent, and that the fees charged to the joint venture partner would pay her wages.
79.	However, within a fortnight, the first respondent committed the first of the pleaded contraventions by not paying the applicant’s wages.  The second respondent foreshadowed a reduction in the applicant’s pay and sought to change the frequency of her payments.
80.	Following further queries in respect of her unpaid wages, the second respondent effectively told her that he was prioritising other ex-employees’ wage payments, as well as bills that were due, and that ‘future salary payments [would] be irregular or late’. 
81.	When the scale of underpayments became oppressive and the applicant formalised her complaint in respect of them, the respondents undertook action that led the applicant to perceive that the respondents were attempting to impugn the applicant’s performance by directing her to provide extensive information that was neither necessary nor practical.  It is difficult to see what other purpose might have been achieved by the respondents’ actions.  
82.	Once the applicant was unable to continue working for the first respondent due to her illness (accepted by WorkCover as having arisen out her employment), the respondents cut all ties with her and failed to respond in any way to her wage complaints.    
83.	The respondents’ breaches amount to a wholesale refusal to comply with obligations to the applicant under her contract of employment, and the Fair Work Act.  A non-payment of $28,268.22 in gross wages would have a significant effect on any employee.  It has clearly had an adverse effect on the applicant’s emotional state. 
84.	The respondents have not only ignored their obligations to the applicant, but have comprehensively ignored the processes of this Court and the role that the Fair Work Ombudsman plays in the resolution of wage disputes.  
85.	I accept that they have demonstrated no contrition for their conduct but rather acted in a deliberate, calculated and cynical way.  The second respondent entirely controlled the actions of the first respondent and took no corrective action to remedy the effects of his conduct on the applicant.  The second respondent obfuscated in respect of the applicant’s wage complaint until the stress and anxiety associated with the respondents’ actions caused her to be unfit for work.  The respondents never showed any genuine intention to remedy their actions but rather expected that the applicant would not seek to enforce her legal rights.  
86.	All employers, whether they be small or large, have an obligation to pay their employees the wages that are due to them.  No employer can overcome financial difficulties by underpaying their employees.  This is particularly so in this case.  I infer that the second respondent used the applicant to earn income for her work from the first respondent’s joint venture partner in order to plug financial holes in its, or the second respondent’s business affairs. 
87.	I accept that the Court should mark its disapproval of the respondents’ conduct.  There is a clear need in this case for specific deterrence and for penalties to be levied against both respondents.  
88.	Before imposing penalties for the contraventions, it seems to me appropriate to further aggregate the contravention of s.44 for failure to pay wages for personal leave with the contravention of s.323(1) for failure to pay wages.  The two contraventions overlap in that the days on which Ms Sponza took personal leave were also days within the periods for which she claims non-payment of her basic wages.  It is appropriate that the first respondent is not punished twice for the same conduct.  To accommodate that, I propose not to impose any penalty for the breach of s.44 relating to the unpaid personal leave.
89.	In respect of the contravention of s.323(1) of the Fair Work Act for failing to pay ordinary wages, I assess a penalty of $25,500 for the first respondent and a penalty of $5,100 for the second respondent.
90.	In respect of the contravention of s.44 of the Fair Work Act for failing to pay accrued but untaken annual leave, I assess a penalty of $17,000 for the first respondent and a penalty of $3,400 for the second respondent.
91.	In respect of the contravention of s.340(1) of the Fair Work Act for taking adverse action against Ms Sponza when she exercised a workplace right to make an enquiry about her unpaid wages, I assess a penalty of $25,500 for the first respondent and a penalty of $5,100 for the second respondent.
92.	In aggregate therefore, the penalties assessed against the first respondent total $68,000 and the penalties assessed against the second respondent total $13,600.  I am not satisfied that those total penalties ought to be further reduced. 
Payment of penalties 

93.	The applicant seeks an order that the penalties be paid to her.  I have power to make that order.  In McIlwain v Ramsey Food Packaging Pty Ltd (No 4) (2006) 158 IR 181 Greenwood J said  at [108]:
	…the imposition of a penalty under the Act is designed fundamentally to serve the public interest in acting as a deterrent to the particular respondents and others generally from engaging in conduct of the kind the subject of the findings.  In circumstances where an order has been made for compensation for both economic loss and a non-economic component concerning the disturbance, dislocation and loss of secure employment suffered by the individuals, there seems to be no good policy reason why the individuals should additionally have the benefit of an order for the payment to them of the penalty.
94.	The applicant submits that in the context of the present matter, the applicant’s direct loss as a result of the first and second respondents’ breaches is easily quantifiable and has been pleaded.  However, the indirect and non-economic components associated with the respondents’ conduct (resulting as they did in the applicant seeking medical assistance for stress and anxiety) are less easily calculated.  In addition, and in accordance with s.151 of the Workers’ Compensation Act 1995 (Qld), the applicant was only able to receive 85% of her full wages during the period of 27 October to 4 March, 2015 (while she was receiving workers’ compensation payments).   But be those matters as they may, the function of an order for the payment of penalties to the applicant is not to provide a measure of compensation for those matters.
95.	Nonetheless, the applicant will have expended money in prosecuting her case in what is generally seen as a no costs jurisdiction.  In the circumstances, I accept the applicant’s submission that it would be appropriate to make an order that any penalties payable by the second respondent be paid to the applicant.  However, I decline to make an order that the penalties imposed on the first respondent be paid to the applicant.  To do so would, I think, visit upon the applicant a windfall.  Those penalties must be paid to the Commonwealth.
Conclusion
96.	In my view, Ms Sponza is entitled to the following relief:
a)	a declaration that the first respondent has breached the contract of employment with Ms Sponza;
b)	a declaration that each of the respondents are taken to have contravened s.323(1) of the Fair Work Act;
c)	a declaration that each of the respondents are taken to have contravened s.44 of the Fair Work Act on two occasions as discussed above;
d)	a declaration that each of the respondents are taken to have contravened s.340 of the Fair Work Act;
e)	an order pursuant to ss.545 of the Fair Work Act that the first and second respondents, jointly and severally, pay compensation to the applicant for the contraventions pleaded in the amended statement of claim, such compensation consisting of: 
i)	$28,269.22 for accrued but unpaid gross wages; and
ii)	$7,662.68 for accrued but untaken annual leave payments;
f)	An order that the first respondent pay damages for its breach of contract, such damages consisting of: 
i)	$28,269.22 for accrued but unpaid gross wages; and
ii)	$9,778.17 in accrued but unpaid superannuation payments; 
g)	an order pursuant to s.546 of the Fair Work Act that the respondents pay penalties pursuant to part 3-1, item 1 of the table in s.539(2) of the Fair Work Act for a contravention of s.44 of the Fair Work Act;
h)	an order pursuant to s.546 of the Fair Work Act that the respondents pay penalties pursuant to part 3-1, item 10 of the table in s.539(2) of the Fair Work Act for a contravention of s.323(1) of the Fair Work Act;
i)	an order pursuant to s.546 of the Fair Work Act that the respondents pay penalties pursuant to part 3-1, item 11 of the table in s.539(2) of the Fair Work Act for a breach of s.340 of the Fair Work Act; 
j)	an order pursuant to s.546(3) that the penalties ordered to be paid by the second respondent be paid to the applicant; and
k)	an order pursuant to s.546(3) that the penalties ordered to be paid by the first respondent be paid to the Commonwealth.
I certify that the preceding ninety-six (96) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 7 May, 2015.

Associate:  

Date:		7 May 2015