2025 WAIRC 00451
INDUSTRIAL MAGISTRATES COURT OF WESTERN AUSTRALIA

CITATION
:
2025 WAIRC 00451



CORAM
:
INDUSTRIAL MAGISTRATE T. KUCERA



HEARD
:
MONDAY, 7 APRIL 2025



DELIVERED
:
TUESDAY, 29 JULY 2025



FILE NO.
:
M 147 OF 2022



BETWEEN
:
JILLIAN DIXON, DEPARTMENT OF MINES, INDUSTRY REGULATION AND SAFETY


CLAIMANT





AND





KAHRAMAN KARAKUYU


FIRST RESPONDENT





AND





DONE KARAKUYU


SECOND RESPONDENT

CatchWords : INDUSTRIAL LAW — pecuniary penalties for numerous award breaches and records contraventions — where respondents failed to keep employment records — s 49D, s 83, s 83E of the Industrial Relations Act 1979 (WA) — application of principles to determine an appropriate penalty — whether any need for specific deterrence — effect of admissions when determining penalty — effect on penalty where no corrective action taken
Legislation : Industrial Relations Act 1979 (WA)
Industrial Magistrates Court (General Jurisdiction) Regulations 2005 (WA)
Instrument : Restaurant, Tearoom and Catering Workers’ Award
Cases referred
to in reasons: : Dixon, Department of Mines, Industry Regulation and Safety v Karakuyu [2025] WAIRC 00039
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 274 CLR 450
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; (2017) 254 FCR 68; (2017) 271 IR 321
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2018] FCA 1563
Trade Practices Commission v CSR Ltd [1990] FCA 762; (1991) ATPR 41-076
Callan v Smith [2021] WAIRC 00216; (2021) 101 WAIG 1155
Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301; (2017) 275 IR 148
Australian Competition and Consumer Commission v Employsure Pty Ltd [2023] FCAFC 5; (2023) 407 ALR 302; (2023) 164 ACSR 103
Fair Work Ombudsman v Han Investments Pty Ltd [2017] FCA 623
Gardos v Baker [2024] WAIRC 128; (2024) 104 WAIG 344
Fair Work Ombudsman v Conn [2010] FMCA 828
Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No 4) [2024] FCA 341
Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2018] FCA 480
Ponzio v B&P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543
Royer v The State of Western Australia [2009] WASCA 139
Result : Pecuniary penalty to be paid
Representation:
Claimant : Mr J. Carroll (of counsel) and with him, Ms I. Inkster (of counsel) as instructed by the States Solicitor’s Office.
Respondents : No appearance



REASONS FOR DECISION
1 In the decision to follow, I provide my reasons for imposing what I regard is an appropriate penalty for a case in which an employer has failed to keep employment records and significantly underpaid one of its employees.
Background
2 The precursor to these reasons, was the decision I issued on 28 January 2025 in Dixon, Department of Mines, Industry Regulation and Safety v Karakuyu [2025] WAIRC 00039 (liability decision).
3 The proceedings to which the liability decision relates (proceedings), were commenced by Jillian Dixon (claimant), who is an industrial inspector from the Department of Mines, Industry Regulation and Safety (DMIRS) under Part III Division 2 of the Industrial Relations Act 1979 (WA) (IR Act).
4 The proceedings were brought against Kahraman Karakuyu (first respondent) and Done Karakuyu (second respondent), who collectively, I will refer to as the respondents.
5 The respondents were the proprietors of Newroz Kebab & Turkish Bakery in East Perth (Newroz), which is both a dine-in and takeaway food outlet. The respondents operated Newroz as a partnership.
6 In the liability decision, I held that the respondents employed Mr Sahin Zeyrek (Mr Zeyrek) to work at Newroz as a cook and to serve customers. Mr Zeyrek worked up to 64.5 hours, 6 days per week. For his work, Mr Zeyrek was paid flat hourly rate of $20 per hour for each hour worked. He was paid weekly and in cash.
7 In respect of Mr Zeyrek’s employment, I made findings in the liability decision that the respondents had engaged in two types of conduct while he worked at Newroz.
8 The first was in respect of the respondent’s failure to keep employment records in accordance with the requirements of s 49D(2) of the IR Act.
9 The second involved numerous breaches of the Restaurant, Tearoom and Catering Workers’ Award (award).
10 In the liability decision, I held the claimant had proved the respondents:
i. contravened the requirements under s 49D(2) to keep employment records on 738 separate occasions between 19 December 2016 and 31 December 2018 (records contraventions); and
ii. during the same period, breached the award 392 times (award breaches) which resulted in Mr Zeyrek being underpaid, in respect of which I ordered the respondents to pay the sum of $102,483.74 (underpayment amount).
The proceedings following the liability decision
11 After the liability decision issued, I made an order requiring the respondents to pay the underpayment amount to the claimant (payment order). The payment order was effective from the same day the liability decision issued.
12 In addition to the payment order, the claimant sought pecuniary penalties for the records contraventions and the award breaches and an order for pre-judgment interest under regulation 12(4) of the Industrial Magistrates Court (General Jurisdiction) Regulations 2005 (WA) in the amount of $37,382.70 (pre-judgment interest).
13 The claimant also sought an order for the payment of her disbursements fixed in the sum of $6,708.22 under s 83C and s 83F of the IR Act (claimant’s disbursements).
14 I directed the parties to each file outlines of submissions on whether a penalty should be imposed and if so, the quantum of the penalty to be paid.
15 I also directed the parties to file submissions on the orders the claimant said I should make requiring the respondents to pay pre-judgment interest and for the claimant’s disbursements.
Penalty Hearing
16 After the parties filed their outlines of submissions, on 7 April 2025, I convened a hearing to hear from the parties on penalty and the further orders that were being sought by the claimant (penalty hearing).
17 Both parties (as directed) filed outlines of submissions before the penalty hearing. Helpfully, the respondents in their outline of submissions neither consented to nor opposed the Court making orders that required the respondents to pay the claimant’s disbursements or pre-judgment interest.
18 On the day of the penalty hearing no one appeared for the respondents. Mr Carroll (of counsel) appeared together with the claimant.
19 Noting the position adopted by the respondents in their submissions, I determined that it was appropriate to make orders for the payment of the claimant’s disbursements and pre-judgment interest.
Principles to determine an appropriate penalty
20 The approach to be followed by the Court when determining an appropriate pecuniary or civil penalty was comprehensively considered by the High Court in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 274 CLR 450 (Pattinson). It involves the application of the following principles:
i. The purpose of civil penalties is in the promotion of the public interest in compliance with statutes by the deterrence of further contraventions of the statute. Pattinson at [9].

ii. Civil penalties are imposed primarily if not solely for the purposes of deterrence. Pattinson at [9] and [15].

iii. The objective when imposing a penalty, is to attempt to put a price on a contravention that is sufficiently high to deter repetition by the contravenor and by others, who might be tempted to contravene a statute. Pattinson at [15] citing Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482 at 506 [55].

iv. An ‘appropriate’ civil penalty will not exceed what is reasonably necessary to achieve the deterrence of future contraventions of a like kind by the contravenor and others. Pattinson at [9].

v. For general deterrence, it is important to send a message that the relevant contraventions are serious and not acceptable. Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; (2017) 254 FCR 68; 271 IR 321, at [98].

vi. An appropriate penalty must strike a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case. Pattinson at [41] and [46]  [47] citing Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; (2016) 340 ALR 25 at [156].

vii. Both the circumstances of the contravener as well as the conduct involved in the contravention may be considered, as both may bear on the need for deterrence. Pattinson at [55].

viii. Identifying the maximum penalty that applies in a statute for the contravention is an important consideration when determining the penalty to be imposed because it serves as a ‘yardstick’ against which the assessment of penalties is generally to proceed. Pattinson at [46]  [47], also see Flick J in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2018] FCA 1563 at [19].

ix. The maximum penalty is not reserved for the most serious examples of contravening conduct. What is required is that there be some reasonable relationship between the theoretical maximum and the final penalty that is imposed. Pattinson at [55].

x. when determining penalty, care must be taken to ensure the maximum penalty is not applied mechanically, instead of it being treated as, one of a number of relevant factors to be considered. Pattinson at [53].

xi. A civil penalty must be ‘fixed with a view to ensuring that [it] is not such as to be regarded by the [contravenor] or others as an acceptable cost of doing business’. Pattinson at [17] citing Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; (2012) 287 ALR 249 at 265 [62].

21 In addition to the principles referred to, the Court, when assessing a penalty of appropriate deterrent value, must also have regard to a further range of nonexhaustive considerations, which French J set out in Trade Practices Commission v CSR Ltd [1990] FCA 762; (1991) ATPR 41076 at [42] (CSR).
22 CSR was adopted and followed by a Full Bench of the Western Australian Industrial Relations Commission in Callan v Smith [2021] WAIRC 00216; (2021) 101 WAIG 1155. After the decision in Callan v Smith issued, CSR was accepted as binding authority in Pattinson. Pattinson at [54].

23 The range of considerations as set out in CSR and Callan v Smith include but are not limited to the following:
(a) the nature and extent of the conduct which led to the contravention/contraventions;
(b) the circumstances in which the contravening conduct took place;
(c) the nature and extent of any loss or damage sustained as a result of the contravention/contraventions;
(d) whether there had been similar previous conduct by the respondent;
(e) whether the contravention/contraventions are properly distinct or arose out of the one course of conduct;
(f) the size of the business enterprise involved;
(g) whether or not the contravention/contraventions were deliberate;
(h) whether senior management was involved in the contravention/contraventions;
(i) whether the party committing the contravention/contraventions had exhibited contrition;
(j) whether the party committing the contravention/contraventions had taken corrective action;
(k) whether the party committing the contravention/contraventions 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; and
(m) the need for specific and general deterrence.
24 These considerations are not to be regarded as a ‘rigid catalogue of matters for attention’ as if it were a legal checklist. The Court is still required to determine the appropriate penalty or penalties in the circumstances of the case before it. Callan v Smith at [91].

25 In matters involving multiple award breaches and/or contraventions civil penalty provisions, Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd trading as New Shanghai Charlestown [2017] FCA 1301; (2017) 275 IR 148 at [36] described a five-step process to determine an appropriate penalty.
It involves:
(1) identifying the individual contraventions noting that each breach of a term of an award and each breach of an obligation is a separate contravention;
(2) considering whether each contravention should be penalised independently or whether ‘some degree of aggregation’ is required arising out of a course of conduct;
(3) considering whether there should be further adjustment to ensure that, to the extent of any overlap, no double penalty is imposed, and that the penalty is appropriate;
(4) considering the appropriate penalty in respect of each final group of contraventions taken in isolation; and
(5) assessing whether the overall penalty is appropriate.
26 The last consideration is commonly referred to as ‘the totality principle’ by which a court is required to carry out a final check of the proposed penalties to ensure that the aggregate sum does not exceed that which is proper for the entire contravening conduct. Australian Competition and Consumer Commission v Employsure Pty Ltd [2023] FCAFC 5; (2023) 407 ALR 302; (2023) 164 ACSR 103 at [52] per Rares, Stewart and Abraham JJ.

27 Although the Full Bench in Callan v Smith did not expressly refer to this five step process, they did apply the principles to be followed within this process.
28 Having set out the methodology to be applied to determine an appropriate penalty, I will now provide a summary of the parties’ submissions on this matter.
Claimant’s submissions
29 The claimant submitted the present case is one in which the respondents have engaged in ‘wage theft’, which involves the systematic and deliberate underpayment of a vulnerable worker in the hospitality industry.
30 It was submitted the respondents had adopted practices to prevent the detection of the wage theft. This included the failure to maintain the requisite employment records and utilising the Newroz accountant to prepare false tax returns for a vulnerable worker.
31 The claimant contended the underpayment amount and the timeframe over which the conduct occurred, were significant. It was submitted the facts and circumstances of the case are demonstrative of knowing and intentional non-compliance.
32 The claimant argued the respondent’s conduct should be viewed as a serious example of systemic wage theft and a disregard for the regulatory regime in which the respondents’ business operated. It was submitted the nature and circumstances of the wrongdoing warrant the imposition of a penalty at the higher end of the scale.
33 On the issue of specific deterrence, the claimant submitted the respondents’ conduct in response to the proceedings did not demonstrate contrition. It was submitted that because the respondents are still involved in the Newroz business, specific deterrence is a significant factor that I should have regard to when determining penalty.
34 The claimant argued that general deterrence in the present case is a factor that weighs heavily in favour of a substantial penalty being imposed. The claimant submitted the respondents’ conduct significantly undermines the effectiveness and purpose of the system of fair wages provided under the IR Act and the award.
35 Noting the number of contraventions, the objective seriousness of these contraventions and the need for general deterrence, particularly in response to the reported prevalence of wage theft in the hospitality industry, it was submitted a penalty in the upper range is appropriate.
Respondent’s submissions
36 In the outline of submissions the respondents’ counsel filed, it was submitted that Newroz in the main, operated as family business, with most of the work performed by members of the respondents’ immediate and extended family.
37 The respondents submitted they were not involved managerially, in the day-to-day operations of Newroz, but accept they bore the ultimate responsibility for the way in which the people they appointed to manage Newroz, conducted their business affairs.
38 While it was conceded the first respondent had some involvement in the business, it was submitted the second respondent was not directly involved in running Newroz. The respondents maintained that their son Hasan Karakuyu (Hasan) ran the business day-to-day.
39 The respondents submitted that because Newroz was operated as a family business, there was informality in the way the respondents dealt with people who were employees. There was a failure to focus on their compliance obligations and a willingness to conduct their business with agreements that had an insufficient regard for their compliance obligations.
40 The respondents submitted that most of the staff who worked at Newroz (including Mr Zeyrek) were treated as though they were members of their extended family. The respondents dispute that any contraventions they committed were intentional or deliberate.
41 Rather, the respondents submitted the award breaches and the records contraventions, were the result of carelessness or ignorance. The respondents submitted that they believed they were treating Mr Zeyrek fairly and lawfully.
42 Regarding the size of the business, the respondents submitted that Newroz was a small business. It was submitted the respondents did not have access to competent or professional advice, whether internally or externally and that this negatively impacted on the respondents’ capacity to appreciate the nature and complexity of their compliance obligations.
43 The respondents submitted there was no need for the Court to impose a penalty for specific deterrence. It was contended that this is because the respondents no longer operate a business or employ anyone.
44 Counsel for the respondents submitted that there is no need for the Court to impose a penalty that will deter them from engaging in further contraventions because there will be no scope or opportunity for the respondents to reoffend.
45 The respondents did not take issue with the claimant’s submission on the need for the Court to impose a penalty for the purpose of general deterrence.
Consideration
46 Having reviewed the parties’ submissions, I now provide my reasons for imposing what I consider to be an appropriate penalty in the circumstances of this case.
47 In determining an appropriate disposition, I have considered the parties’ submissions alongside the various findings that I made in the liability decision.
Records contraventions
48 As a starting point, the requirement for employers to keep accurate employment records under industrial and employment statutes is principally about protecting employees by ensuring they receive their correct entitlements.
49 There is no doubt that proving the number of hours an employee has worked and whether they have been correctly paid under an award or an industrial instrument, is made more difficult, whether for employees, unions or regulators alike, in circumstances where an employer fails to comply with the requirement to keep accurate employment records.
50 This observation was made clear by Barker J when commenting upon equivalent employment records provisions that are contained in the Fair Work Act 2009 (Cth) (FW Act) that were contravened by a hospitality industry employer in Fair Work Ombudsman v Han Investments Pty Ltd [2017] FCA 623 [113]  [114]:
This is an area of employment regulation where, unless record keeping obligations are met, the ability of a regulator, and indeed individual employees, to identify an employer’s breach of employment obligations is made difficult, if not on occasions impossible – as indeed this case emphasises.
The record keeping obligations are directed at ensuring the creation and retention of records as a critical tool in the assessment of compliance with workplace laws. Unless an employer complies with the law, and makes and keeps employment records, an effective safety net for employees is difficult to maintain. The result is that employees are far more vulnerable to exploitation. The job of the [Fair Work] Ombudsman, as regulator, in detecting and protecting employees’ workplace entitlements is reduced in effectiveness.
51 While the law imposes the obligation on employers to keep employment records, there is little doubt the maintenance of such records serves their interests as well. Without accurate employment records, the ability of an employer in an underpayment of wages dispute to demonstrate an employee did not work the hours an employee said they did will, (as in this case) be diminished.
52 Whether the failure to keep time and wages records is the result of poor business practices or an intentional contravention, the result will be the same. The capacity of both parties in an employment relationship to demonstrate an employer’s compliance with minimum employment standards will be significantly hampered by an employer’s failure to keep and maintain accurate employment records.
53 For this reason, there is a strong public interest imperative in ensuring that employers comply with the records keeping requirements under the IR Act.
The nature and number of records contraventions
54 In this matter, the respondents admitted to having committed 738 records contraventions in the period 19 December 2016  31 December 2018 (contravention period).
55 This admission was made in the Statement of Agreed Facts the parties filed before a five-day hearing on liability, that was held in April 2024 (liability hearing).
56 A description of the records contraventions is provided in the table below.
Paragraph of s 49D(2)
Obligation
When does contravention occur?
No. of contraventions in relation to Mr Zeyrek – (19.12.2016 to 31.12.2018)
(a)
Employee’s name and DOB if under 21 years
When the employee’s name (and if applicable age) is not recorded
1
(b)
Industrial instrument that applies (the award)
When an applicable industrial instrument is not recorded
1
(c)
Date on which the employee commenced employment
When the employee’s commencement date is not recorded
1
(d)
For each day:
(i) the time at which the employee started and finished work;
(ii) the periods for
which the employee was paid; and
(iii) details of work breaks including meal breaks.
At least on the day that the employee works and the prescribed details are not recorded
627

The number of days worked by Mr Zeyrek between 19.12.2016 to 31.12.2018.
(e)
For each pay period:
(i) the employee's
designation;
(ii) the gross and net
amounts paid to the
employee under the
industrial instrument;
and
(iii) all deductions and the reasons for them.
Each pay period that the prescribed details are not recorded.
106

The number of full pay periods for Mr Zeyrek between 19.12.2016 to 31.12.2018.
(f)
All leave taken by the employee, whether paid, partly paid or
unpaid.
Each time a period of leave is taken by the
employee and the details are not recorded.
2

In accordance with Mr Zeyrek's evidence that he took one period of unpaid parental leave, and one period of unpaid leave when the business shutdown for renovations.


Total number of contraventions
738
The circumstances in which the records contraventions were committed
57 I described the circumstances in which the records contraventions were discovered in [97]  [136] and [139]  [160] of the liability decision. These paragraphs provide a summary of the evidence regarding the records contraventions, from both the claimant and Brian Ravenscroft, who is also employed by DMIRS as an Industrial Inspector.
58 The respondents provided two excuses as to why they could not produce employment records for the contravention period and why the records they did produce, were inaccurate.
59 Firstly, the respondents claimed they had lost some of their employment records when the Newroz business premises was renovated in 2017 (lost records excuse).
60 For the period after the renovation, the respondents claimed that the responsibility to keep and maintain employment records was delegated to Hasan (delegation excuse). By raising this excuse, the respondents attempted to argue they should not be held responsible for something that was done on Hasan’s watch.
61 As the liability decision reveals, this is not a matter where the respondents were immediately forthcoming when they were initially approached by industrial inspectors from DMIRS to provide copies of their employment records for inspection.
62 On the contrary, this is a case in which the respondents, when asked to produce their employment records were evasive and sought to mislead DMIRS inspectors. The first instance in which the respondents acted dishonestly in this regard was in the provision of an inaccurate time and wages book for inspection.
63 The second was in respect of the business records the respondents provided via their accountants, in response to Notices to Produce, the claimant and DMIRS inspectors issued under s 98(3)(e) of the IR Act (Notices to Produce). I concluded the business records the accountants produced were unreliable.
64 In addition, counsel for the respondents properly made the concession that even if the respondents had been able to provide the claimant with employment records, which they claimed were lost during the renovation, it is likely these records would have been deficient.
65 The respondents’ concession they did not keep employment records for Mr Zeyrek, in the form required under s 49D of the IR Act, was not made until after the proceedings were commenced.
66 By this stage, DMIRS inspectors (which included the claimant) had to waste their time wading through the inaccurate records the respondents did provide, which were not produced without some delay.
67 The level of resources the claimant and other DMIRS inspectors were required to commit, both for an investigation into the award breaches and the proceedings, is a point to which I will return when dealing with the extent to which the respondents cooperated with enforcement authorities.
Award contraventions
68 In the liability decision I noted that pecuniary penalties could only be imposed for award breaches that occurred during the contravention period; a total of 392 across 106 weekly pay periods.
69 The clauses of the award that were breached, the number of contraventions the respondents committed and the amounts by which Mr Zeyrek was underpaid are set out in the table below (award breaches table):
Award clause
Number of contraventions
Resulting underpayment
Clause 9(2) – additional rates for ordinary hours (payment of additional rates where ordinary hours are performed on Saturdays and Sundays)
54
$8,461.50
Clause 10(2) – overtime (payment at overtime rates for overtime worked MondaysFridays and on Saturdays and Sundays)
106
$47,205.24
Clause 13(1)(b) – meal breaks (payment of the loading that applies where a meal break is not provided)
106
$2,086.71
Clause 17(1)(a) – public holidays (observing Christmas Day in 2016 and Christmas Day in 2017 as holidays without deduction of pay)
2
$189.11 and $198.17
Clause 17(2)(a) – public holidays (payment at the rate of double time and half for work performed on public holidays)
16
$5,937.47
Clause 18(6) – annual leave (payment of annual leave and leave loading upon termination)
1
$19,423.74
Clause 21(1) – wages (minimum fortnightly wage payable for a full-time Level 2 employee)
1
$397.62
Clause 26(2) – uniforms and laundering (payment of a fortnightly laundry allowance)
53
$381.60
Clause 27(1) – protective clothing (payment of an allowance where rubber gloves are not provided, when performing particular cleaning tasks and using cleaning agents)
53
$206.70
Total:
392
$84,487.86
70 The award breaches table shows the bulk of the contraventions were in respect of the respondents’ failure to pay the correct penalty rates that applied for work at night and on weekends.
Underpayment amount
71 One of the consequences for the respondents, arising from their failure to keep employment records that I addressed in the liability decision, was the extension of the six-year limitation period that would ordinarily apply to an action to recover any amounts by which an employee was underpaid, under s 82A of the IR Act (limitation period).
72 In the liability decision, I determined that because of the respondents’ failure to provide employment records in response to the Notices to Produce, it was appropriate to extend the limitation period under s 83A(2) of the IR Act, to six years from the date immediately following, the day on which the respondents were required to provide employment records, in accordance with the Notices to Produce.
73 As a result of this finding, the period in which the claimant was allowed to pursue an underpayment of wages claim on Mr Zeyrek’s behalf, was extended from 27 April 2016 to 31 December 2018 (claim period), which is approximately 6 months longer than the contravention period. This allowed the claimant to pursue the respondents for the underpayment of wages that resulted from the 513 award breaches that occurred during the claim period.
74 Notwithstanding this finding, the claimant by virtue of s 82A of the IR Act is only permitted to seek pecuniary penalties for the award breaches that occurred within the usual six-year limitation period. In the present case this means pecuniary penalties may only be imposed for the 392 award breaches that occurred during the contravention period.
75 The difference between the underpayment amount that I ordered the respondents to pay and the underpayment that occurred during claim period, was an amount of $17,995.88. The total amount by which the claimant was underpaid during the contravention period was the sum of $84,487.86.
76 The average weekly underpayment during the contravention period was an amount of $613.81 per week (average weekly underpayment). I calculated the average weekly underpayment by adding the totals for the breaches that occurred the most frequently together and dividing the total by the 106 pay periods that occurred with the contravention period.
77 I did not include the award breach for the non-payment of annual leave and leave loading on termination when calculating the average weekly underpayment. In my view the exclusion of this amount from the calculation, represents a more accurate week to week average by which the applicant was underpaid.
78 The amounts by which Mr Zeyrek was underpaid, whether viewed as a total sum or week to week, were significant.
The size of the respondents’ business
79 It is worth acknowledging, the records contraventions and the award breaches were committed in the context of a small family business, which the respondents started in or around 2001, following their arrival in Australia. Evidence of Kahraman Karakuyu – liability decision at [338]

80 Newroz has, for some time, provided the respondents, their children and members of the extended Karakuyu family, with the means to make a living. I do not doubt that the entire Karakuyu family has worked hard and for long hours in the business.
81 As Newroz grew, the respondents had to employ additional staff, including some from outside the Karakuyu family, providing them with the opportunity for employment or a stepping stone to move on to other things.
82 Despite acknowledging the respondents’ conduct was committed in the context of small family business, I do not accept that it provides a cover for non-compliance with the requirement to keep employment records or permits a level of informality the Court should condone.
83 In Gardos v Baker [2024] WAIRC 128; (2024) 104 WAIG 344 at [85] I noted that while some latitude may, in appropriate circumstances, be given to small business owners by way of mitigation, it should not be viewed as an automatic discounting factor on penalty.
84 Also relevant is Fair Work Ombudsman v Conn [2010] FMCA 828 at [66] in which Burnett FM held that the size and financial resources of a business should not impact upon an employers’ obligations to comply with workplace employment laws and the mere fact a business may be small, should not absolve an employer of their obligation to comply with the law in relation to the employment of its employees.
85 Noting the length of time the respondents and members of their family were involved in the Newroz business, I am not prepared to accept the records contraventions and award breaches were the result of ignorance or carelessness.
86 I also do not accept the respondents did not have access to competent or professional advice. When confronted with the Notices to Produce, the respondents were very quick to involve their accountants.
The circumstances in which the award breaches were committed
87 It is apposite to describe the circumstances in which the award breaches in this matter were committed as falling under the definition of ‘wage theft’.
88 The term ‘wage theft’ was considered and defined by the report Tony Beech, the former Chief Commissioner of the Western Australian Industrial Relations Commission, prepared in relation to the Department of Mines, Industry Regulation and Safety, Inquiry into Wage Theft in Western Australia, Report (2019) (Wage Theft Inquiry Report).
89 For the inquiry, ‘wage theft’ was defined as:
[T]he systematic and deliberate underpayment of wages and entitlements to a worker. Wage Theft Inquiry Report at page 21.

90 At page 7 of the Wage Theft Inquiry Report, Mr Beech made the following observation:
The reasons why systematic and deliberate underpayment of wages and entitlements is occurring include the lack of detection and enforcement of non-compliance, the intention of some employers to maximise financial return, the vulnerability of some workers, and a lack of knowledge of employment conditions by both workers and employers.
Systematic and deliberate underpayment makes it harder for workers to meet day-to-day living expenses, and can affect the individual’s health, and have consequences for the worker’s family. The unfair cost advantage achieved by underpaying businesses can undermine those businesses which are compliant, and this has consequences for the viability of the compliant business, its employees, and in a wider sense for the economy. As a community, we are the poorer because of businesses which systematically and deliberately underpay their employees.
91 In [692] – [697] of the liability decision, I set out some of the critical features of the context in which the respondents committed the award breaches. The circumstances I described, very much align with those under consideration in the Wage Theft Inquiry Report.
Vulnerable employee
92 It is of significance I concluded that even though Mr Zeyrek was at one time close to the Karakuyu family, he was nevertheless a vulnerable worker, in an unequal bargaining position, that was open to abuse.
93 I do not consider the respondents employed Mr Zeyrek solely for benevolent purposes. He was employed because the business wanted staff so Newroz would be open during its advertised opening and closing times.
94 It is my view that Mr Zeyrek was trapped in a situation of the respondents’ making, which commenced in or around 2013, approximately six months after Mr Zeyrek immigrated to Australia from Türkiye. Liability decision at [187].

95 Mr Zeyrek who had limited English and was on a refugee protection visa, was offered work by the first respondent on flat hourly rate of $20 per hour, for which he was paid cash in hand. During his employment with the respondents, Mr Zeyrek paid very little tax and likely underdeclared his earnings to both Centrelink and the Australian Taxation Office (ATO).
96 While the respondents may have suggested to Mr Zeyrek that his ‘cash in hand’ employment arrangements were of benefit to him, they were unlawful. His employment arrangements also trapped Mr Zeyrek in a relationship in which he was very much dependent upon the respondents.
97 Mr Zeyrek’s employment with the respondents lasted for close to 8 years, throughout which he was paid below the award and in cash. The longer the arrangement went on, the greater the level of underpayment and the extent of the deception.
98 When faced with an investigation by DMIRS and the proceedings that followed, the respondents, relying upon the absence of employment records, called upon members of their immediate and extended family, to give evidence disputing that Mr Zeyrek worked the hours he said he did.
99 Although I reached the conclusion in the liability decision, that much of the evidence the respondents’ witnesses gave if not dishonest, was at the very least unreliable, the lengths the claimant had to go through to prove the award breaches, underline the extent to which Mr Zeyrek’s relationship with the respondents was compromised.
The nature and extent of any loss sustained because of the records contraventions
100 In the preceding [50], I touched on the practical difficulty a failure to keep employment records presents in promoting compliance.
101 It follows that the loss resulting from the records contraventions in the present case, mostly arises in the time and public resources that were outlaid on the investigation of Mr Zeyrek’s underpayment of wages claim and in the proceedings that followed.
102 While the claimant did not place a price tag on the amount of time and resources DMIRS spent on reviewing the inaccurate records the respondents provided before the proceedings were commenced, it is reasonable to conclude the public has been put to considerable expense, with both the proceedings and the DMIRS investigation that preceded them.
The nature and extent of any loss sustained because of the award breaches
103 The more tangible and quantifiable loss in this matter is in respect of the award breaches, specifically, the significant amount by which Mr Zyrek was underpaid. As I have indicated, Mr Zeyrek was underpaid by a substantial amount.
104 Mr Zeyrek was deprived of this money in circumstances where he had a wife, a young family and he was the sole breadwinner. During the liability hearing, the Court heard evidence of some of the social and financial impacts the award breaches had on Mr Zeyrek.
105 I do not doubt that Mr Zeyrek’s employment arrangements contributed to the deterioration of his marital relationship. He also had difficulties securing finance to purchase a car and was unable to obtain a home loan. During the liability hearing, Mr Zeyrek’s wife gave evidence the couple were unable to take any holidays together and as a family.
106 The payment of $20 per hour cash in hand, for each hour worked, was not sufficient to discharge the respondents’ obligations under the award, particularly in respect of the requirements for work at night, on weekends, public holidays and at overtime rates.
107 In this matter, there is no guarantee Mr Zeyrek will receive the money that he was underpaid. As I indicated at [728] of the liability decision, Mr Zeyrek has acknowledged that he may be required to make a repayment to Centrelink.
108 It is clear from the liability decision that taxation was not correctly remitted to the ATO and that Superannuation Contributions were not paid on Mr Zeyrek’s behalf. While these matters are not within my direct remit, they are nevertheless a function of the respondents’ conduct, which included the award breaches.
109 Having regard to the matters I have outlined at [103]  [108] above, it is reasonable to infer that the losses to the public purse and to Mr Zeyrek personally, as a result of the award breaches, are more extensive than just the underpayment amounts, the cost of the proceedings and the resources that were used to investigate the award breaches.
Whether or not the records contraventions were deliberate
110 It is my view the records contraventions were deliberate. This is a matter where the respondents had decided to adopt a business practice of not keeping employment records and paying their employees in cash.
111 In the liability decision, I reached the conclusion the respondents’ failure to keep employment records was an entrenched business practice, that likely commenced when the business was established.
112 It is regrettable that as Newroz grew and other family members became involved in the business, the respondents’ employment record keeping practices did not evolve to the standard required under the IR Act.
113 As I indicated earlier in [98], I am of the view the respondents attempted to use the absence of employment records to assist them in their defence of the proceedings.
114 My finding in this regard is very much shaped by the way in which the respondents responded to the Notices to Produce and the way in which the respondents defended the proceedings.
115 Having raised the lost records and delegation excuses, (both of which I rejected in the liability decision) there are two points that are relevant to deciding whether the contraventions were deliberate. First, in raising these excuses, it cannot be said the respondents were unaware of the requirement to keep employment records.
116 Second and more important, the respondents, even with the involvement of Hasan in a management role, were still responsible for ensuring they took reasonable steps to keep and maintain employment records.
117 In the liability decision I indicated that I was not prepared to accept the respondents had discharged their responsibility to keep employment records with the level of diligence required.
118 It is on this basis that I accept the records contraventions (if not intentional) were at the very least, committed with a wilful disregard for the regulatory scheme in which the business operated.
Whether or not the award breaches were deliberate
119 In view of the findings I made in the liability decision, there is no doubt the award breaches, like the records contraventions (if not intentional) were similarly, committed with a wilful disregard for the terms of the award.
120 As a result, I concluded that in the same way the respondents had failed to keep employment records, it was not huge leap to find it they had engaged in the award breaches. Liability decision at [739].

121 I accept the claimant’s submission that the circumstances of this case, can be fairly described as ‘wage theft’. For the respondents, this removes any suggestion the award breaches were the result of carelessness or ignorance.
122 The extent of the underpayment which I have described in the preceding [75]  [78] when viewed in context, is also at a level to support a finding the respondents have engaged in wage theft.
123 Noting the description of ‘wage theft’ that I referred to in the preceding [87]  [89], I also accept that this is a case in which the respondents may be fairly described as having engaged in the systematic and deliberate underpayment of a vulnerable worker.
124 I accept the claimant’s submission that practices were in place to help prevent the detection of the award breaches, which included the failure to keep employment records and using the Newroz accountants to prepare false or misleading tax returns.
Involvement of senior management
125 In the context of a family business that is operated as a partnership, it is reasonable to regard the partners who own it, as the most senior figures with the business.
126 While I acknowledged in the liability decision that the first respondent’s interaction with the claimant and other DMIRS staff, suggested he retained a greater level of authority within the business than what the respondents said he did, with the rejection of the delegation excuse, I regard the respondents as jointly responsible for both the records contraventions and the award breaches.
127 I do not accept that because the second respondent as a silent partner, had little to do with the day-to-day operations of Newroz and left decisions that affected her interests in her husband’s hands, that she should face a separate or diminished penalty for the records contraventions and the award breaches.
128 In the same way the second respondent stood to benefit in equal measure from her ownership stake as a partner in the Newroz business, I consider that it is only appropriate that she be held jointly liable for any penalties for conduct that first respondent conducted (whether lawful or otherwise) on the partnership’s behalf.
Similar conduct
129 There is no evidence the respondents, whether individually or collectively, have previously contravened a civil penalty provision of the IR Act or breached the terms of an award.
130 Despite this, it is my view that when weighed against the other factors I am required to have regard to when determining penalty, the fact the respondents have escaped prior scrutiny is more a matter of luck than something of benefit to them in mitigation.
131 In addition, while a lack of prior contraventions might be viewed as evidence of good character, as Katzmann J held in Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No 4) [2024] FCA 341 at [54] such evidence has no role to play in the fixing of civil penalties unless it suggests that the prospect of future contraventions is unlikely.
132 The matter of whether there is a potential for further contraventions is a matter to which I will return when dealing with whether the respondents have taken corrective action and the issue of specific deterrence.
Cooperation with enforcement authorities
133 In the present case, the assessment of whether the respondents cooperated with enforcement authorities, needs to be viewed in two stages.
134 The first involves an assessment of the extent to which the respondents cooperated with DMIRS in their response to the DMIRS investigation. On this, it cannot be said, having regard to the circumstances in which the records contraventions were committed, (which I described in the preceding [57]  [67]) that the respondents cooperated with enforcement authorities, before the proceedings were commenced.
135 The second stage of this assessment goes to the way in which the respondents conducted themselves after the proceedings were commenced. On this, I accept that the proceedings in so far as they related to the records contraventions, were not contested.
136 I also accept the respondents made a series of concessions, in a Statement of Agreed Facts, and during the proceedings in relation to the award breaches.
137 The matters the respondents conceded on the award breaches variously included the following:
i. that the respondents employed Mr Zeyrek;
ii. if the award applied, that Mr Zeyrek was employed in a ‘Level 2’classification; and
iii. the respondents did not take issue with the claimant’s underpayment calculations.
138 Notwithstanding the concessions referred to, the way in which the respondents defended the remainder of the proceedings in respect of the award breaches, was in no way cooperative and largely negated the mitigatory benefit flowing from their admissions.
139 In denying the award applied to Mr Zeyrek’s employment and by disputing the number of hours Mr Zeyrek said he worked, the claimant was forced to incur costs and utilise public resources in the prosecution of her claim against the respondents.
140 I have also had regard to the following:
i. The respondents were not successful in their attempts contradict Mr Zeyrek and his wife’s evidence regarding Mr Zeyrek’s employment at Newroz.
ii. The number of witnesses the respondents called in their attempt to impugn Mr Zeyrek’s evidence on the number of hours he said he worked, increased the length and the complexity of the proceedings.
iii. I consistently doubted the reliability of the evidence from the respondents’ witnesses.
141 I accept the respondents’ decision to defend the proceedings is not an aggravating factor when determining an appropriate penalty.
142 However, by contesting the proceedings, the respondents are unable to claim anything in mitigation that would otherwise have been available if they had admitted the award breaches before the liability hearing.
Whether the respondents have exhibited contrition
143 In their submissions on penalty, the respondents’ said they regret their failure to conduct their affairs in a compliant way.
144 Despite this, the respondents also said that up to and including the liability hearing, they were convinced they had done the right thing by Mr Zeyrek and believed he was attempting to take money from them that he had not earned. In this regard, it was submitted the respondents were not contrite about the underpayments.
145 Noting my observations regarding the respondents’ response to the proceedings that I touched on in the preceding [136]  [142], I am not persuaded the respondents, even at this stage, are genuinely apologetic or remorseful for their conduct.
146 I am more inclined to the view the respondents have not properly expressed or demonstrated contrition for either the records contraventions or the award breaches.
Corrective action – underpayment amount
147 In this matter, there are two forms of corrective action that I regard as relevant to the assessment of an appropriate penalty. The first is whether the respondents have made any attempts to rectify the underpayment.
148 The second is whether the respondents have implemented a system to keep and maintain employment records.
149 During the penalty hearing, the claimant’s counsel advised the respondents had agreed to a ‘time to pay arrangement’ (time to pay arrangement) and that the respondents had paid their first instalment of $25,000.
150 As recently as Friday 27 June 2025, the Court’s registry staff wrote to the parties and requested an update on whether the respondents had made any further payments under the time to pay arrangement.
151 On Monday 30 June 2025, the claimant’s counsel provided information on the time to pay arrangement and advised that the respondents had been making payments in accordance with the plan.
152 Under the time to pay arrangement the respondents have agreed that they will pay the claimant a total amount of $139,866.44 comprised of the underpayment amount and the pre-judgment interest.
153 As at, 30 June 2025, the total amount the respondents have paid under the time to pay arrangement is the sum of $41,359.20. Commencing on and from 15 July 2025, the respondents have agreed that they will continue to pay $4,000 monthly instalments until the total amount owing under the time to pay arrangement is paid in full.
No evidence of corrective action – employment records
154 In relation to the implementation of a system to keep and maintain employment records, I am mindful there was a change in the ownership of the Newroz business.
155 Counsel for the respondents suggested in his submissions, that for this reason, corrective action involving the implementation of a system to keep and maintain employment records cannot be taken. It was submitted that this is because the respondents no longer operate a business and do not employ anyone.
156 Although I appreciate that with the change in ownership, the respondents may technically be correct in saying the requirements under the IR Act to keep employment records no longer apply to them, there is in my view still scope for the respondents to be involved in similar contravening conduct.
157 During the penalty hearing counsel for the claimant provided a company search from the Australian Securities and Investments Commission, which I accepted into evidence and marked as Exhibit A1.
158 Exhibit A1 reveals the respondents continue to be involved as directors in Karakuyu Pty Ltd (company), which now owns Newroz, to which the provisions of the FW Act apply.
159 While Newroz may no longer be owned by the respondents, evidence of the company’s compliance with the equivalent employment records provisions of the FW Act, would have gone some way to persuading me the respondents had gained some insight into their wrongdoing. It may have also convinced me there was a reduced risk of them reoffending.
160 In the absence of such evidence, there is still a risk, while the respondents remain involved in the company as directors, that they may engage in further contravening conduct.
Specific deterrence
161 In view of the matters I noted in [156]  [160], I consider there is still a need to invoke the principle of specific deterrence in this case.
162 As indicated, I have not been provided with any evidence that demonstrates the respondents have taken sufficient steps to ensure records contraventions, of the type at issue in this matter, will not be repeated.
163 I am concerned that if a penalty with deterrent effect is not imposed, even after the Court has issued orders to recover the underpayment amount and to pay pre-judgment interest, that the respondents in their capacity as directors of the company, may again decide to ‘take the odds’. Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2018] FCA 480 at [17].

164 I am mindful the penalty to be imposed cannot be so high as to be oppressive. It is my view that a pecuniary penalty that operates as both a deterrent to discourage the respondents from engaging in further contraventions and which strikes a balance, by not being greater than what is necessary to achieve this outcome, can and should be imposed.
General deterrence
165 On the issue of general deterrence, the authorities make it clear that if a penalty is to be imposed, it must be set at a level that will not only deter the respondents from engaging in further contravening conduct, but others who may be contemplating taking a similar path.
166 To deter others, who may be in the same or similar position the respondents were in, the penalty imposed cannot be so low that it will be viewed by the respondents or others as an acceptable cost of doing business. Pattinson at [98].
It should also be of a kind that it would likely act as a deterrent in preventing similar contraventions by likeminded persons or organisations. Ponzio v B&P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543 at [93].

167 It is of concern that the conduct under consideration in this case has occurred in the hospitality and takeaway food sector, which is regrettably renown for a high incidence of wage theft. Wage Theft Inquiry Report at pages 7  8; also see Fair Work Ombudsman v DTF World Square Pty Ltd (in liq) (No 4) [2024] FCA 341 at [38]  [39].

168 When invoking the principle of general deterrence, I must have regard to Hasan’s and the other members of the Karakuyu family’s involvement in the records contraventions and award breaches.
169 Having regard to the evidence members of the Karakuyu family gave during the liability hearing, I am concerned there is still the potential for them to be involved in future contraventions of workplace relations laws of a similar kind at issue in this case.
170 In other words, while a penalty needs to be imposed that sends a strong message to employers who are contemplating or may be engaged in wage theft elsewhere, one that is sufficient to discourage other members of the Karakuyu family who are still involved in Newroz, from repeating the respondents’ conduct, is just as important.
Comparison with Callan v Smith
171 I have had regard to the approach that was taken by the Full Bench in Callan v Smith when determining an appropriate penalty, including the quantum of the fine for each award breach, when viewed individually and the total pecuniary penalty that was imposed.
172 I have considered the following:
i. The quantum of the underpayment amount in this case when compared with the underpayment amount at issue in Callan v Smith is almost three times higher.
ii. The respondent in Callan v Smith committed 282 award breaches over two-year period, which is well below the number of award breaches, the respondents committed in this case.
iii. When compared with the award breaches at issue in Callan v Smith, the contravening conduct at issue in this matter is objectively, far more serious.
173 I have also noted the respondent in Callan v Smith admitted to all the award breaches he was alleged to have committed, before enforcement proceedings were commenced and that liability in the case did not have to be decided after a five-day contested hearing.
174 While the Full Bench decided that a total penalty (following adjustments) of $22,704 was an appropriate disposition for the award breaches at issue in Callan v Smith, noting the number and the objective seriousness of the records contraventions and the award breaches in this matter, I do not consider that a global fine close to this amount, would be a just outcome.
Course of Conduct
175 There is little doubt the records contraventions and the award breaches were committed as single and continuing courses of conduct. It is my view the respondents formed a view about how they were going to run their business, which included not keeping employment records or paying in line with the award.
176 In Callan v Smith, the Full Bench acknowledged the ‘course of conduct’ or ‘one transaction’ principles have a role to play in determining penalty. Callan v Smith [58].

177 The Full Bench, following the decision of Owen JA in Royer v The State of Western Australia [2009] WASCA 139 observed that if the particular circumstances call for application of the ‘one transaction principle’ (because there is a sufficient legal and factual interrelationship between the offences), then it is to be applied at the second stage of sentencing, that is after the penalty or sentence for the individual offences or contraventions has been assessed. Callan v Smith [60].

178 Importantly, the ‘one transaction principle does not operate to enable a sentencing court to effectively treat multiple offences as one offence which is to be penalised. Callan v Smith [60].

Penalty to be imposed for the records contraventions
179 For each records contravention that was committed, the maximum civil penalty per contravention under s 83E(1)(a) of the IR Act, that applied during the contravention period, was a fine of $5,000.
180 Applying the principles in Callan v Smith, the theoretical maximum aggregate penalty for all the records contraventions that were committed during the contravention period is very large.
181 By way of example, if I was to take the view that a penalty at the lower end of the range (10%  25%) for each records contravention was justified, it would result in an individual fine of $500 per contravention.
182 However, noting the records contraventions were deliberate, committed over an extended timeframe and there is no evidence the respondents have taken any corrective action, the more appropriate penalty would be a $1,500 fine for each contravention.
183 The penalties per contravention when added together would result in a theoretical aggregate penalty of $1,107,000. While I regard each separate records contravention in this matter as important as the other, this is not a case where a total aggregate fine in this amount would be a just and proportionate response.
184 In this case, the biggest problem with the respondents’ conduct for compliance purposes, is that DMIRS was unable to check if Mr Zeyrek, from week to week, was paid correctly, in accordance with the award, for the hours he worked at Newroz.
185 For each weekly pay period, there were close to six records contraventions committed each week for 106 weeks. The most prevalent are those that relate to the respondents’ failure to keep a record of:
i. Mr Zeyrek’s start and finish times on each day Mr Zeyrek worked during the contravention period (627 contraventions of s 49D(2)(d) of the IR Act); and
ii. what Mr Zeyrek was paid for each pay period (106 contraventions of s 49D(2)(e) of the IR Act).
186 Having regard to the ‘one transaction principle’ it would seem sensible to group the records contraventions together and to set a theoretical maximum penalty by reference to the pattern of conduct that was committed week to week, 106 times.
187 Grouping all the records contraventions together in this way, will ensure there is no double penalty and the aggregate fine to be imposed, would in the circumstances, despite the seriousness of the contraventions, be neither crushing nor oppressive.
188 It is on this basis I would impose a fine of $1,500 for each one of the 106 pay periods that fell during the contravention period. This would equate to a theoretical aggregate penalty of $159,000.
189 It is appropriate to reduce the theoretical aggregate penalty for the records contravention by 20% because the respondents admitted the records contraventions. I accept these admissions to a certain extent, reduced the duration and complexity of the proceedings.
190 In Callan v Smith, the Full Bench noted that reductions for early admissions do not merely act as a reward to an individual respondent, but as an encouragement to other contravening parties to admit contraventions at an early stage. The 20% adjustment I have applied for the respondents’ admissions to the records contraventions is consistent with the reduction that was applied by the Full Bench in Callan v Smith.
191 Having made this adjustment to the theoretical aggregate penalty, I also consider it appropriate to apply the totality principle to ensure the global fine to be imposed for the records contraventions is not so high as to be oppressive.
192 Noting the Full Bench in Callan v Smith applied a further 40% reduction on penalty to give effect to the totality principle, in my view an equivalent percentage should also be applied to the theoretical aggregate penalty in this matter, which would result in a total fine for the records contraventions being fixed in the sum of $76,320.
Penalty to be imposed for the award breaches
193 The maximum potential pecuniary penalty that applied under s 83(4) of the IR Act on the date for each of the award breaches that were committed was a $2,000 fine. Applying the principles in Callan v Smith, it follows that the theoretical maximum penalty for the award breaches committed during the contravention period when viewed cumulatively, was a global penalty of $784,000.
194 The award breaches the respondents have committed are serious and for which, the Court should impose stiff penalties. The award breaches, like the records contraventions were intentional and committed over an extended timeframe.
195 In the circumstances I consider it appropriate that a fine of $300 per award breach be imposed, which would result in an overall theoretical aggregate penalty of $117,600.
196 Although I accept the award breaches, like the records contraventions, were committed as part of single, continuous course of conduct, the amounts by which Mr Zeyrek was underpaid (whether viewed weekly or cumulatively) are such that I do not consider it is appropriate to reduce the theoretical maximum penalty by grouping the award breaches together in the same way I did for the records contraventions.
197 In other words, I regard this as the type of matter in which the Court should be reluctant to exercise its discretion to discount the penalty by reference to the one transaction principle, whether individually or globally, theoretical or otherwise.
198 While the respondents have not demonstrated contrition and there is little that can be argued in mitigation regarding their cooperation with enforcement authorities, I am prepared to apply a discount on the penalty for the effort the respondents have made to date, towards rectifying the amount by which Mr Zeyrek was underpaid.
199 To this end I consider that it is appropriate to apply a 20% discount to the theoretical aggregate penalty for the award contraventions.
200 Like the adjustment to the theoretical aggregate penalty for the ‘totality principle’ that I considered was appropriate for the records contraventions, I also consider that an equivalent reduction should be applied to the theoretical aggregate penalty for the award contraventions.
201 To this end, I will apply a 40% adjustment to ensure the total penalty to be imposed for the award contraventions, when viewed as a whole, is just, appropriate and is a proportionate response to the conduct the respondents have engaged in.
202 Accordingly, it is my view that a total penalty for the award breaches should be fixed in the sum of $56,448.
Conclusion
203 For the reasons set out in the preceding paragraphs, I have concluded that the circumstances of this case, warrant the imposition of a substantial pecuniary penalty.
204 Accordingly, it is in my view appropriate, the respondents be ordered to pay the following:
i. a total penalty of $76,320 for the records contraventions; and
ii. a total penalty of $56,448 for the award contraventions.
205 As it was the claimant who brought the proceedings, it is also appropriate that I make an order under s 83F of the IR Act requiring the respondents pay these penalties to the claimant.



T. KUCERA
INDUSTRIAL MAGISTRATE