2026 WAIRC 00123
INDUSTRIAL MAGISTRATES COURT OF WESTERN AUSTRALIA


CITATION
:
2026 WAIRC 00123



CORAM
:
INDUSTRIAL MAGISTRATE D. SCADDAN



HEARD
:
WEDNESDAY, 18 FEBRUARY 2026



DELIVERED
:
FRIDAY, 6 MARCH 2026



FILE NO.
:
M 84 OF 2025



BETWEEN
:
CHRISTOPHER APLIN, DEPARTMENT OF LOCAL GOVERNMENT, INDUSTRY REGULATION AND SAFETY


CLAIMANT


AND

DOWNINGS PTY LTD
FIRST RESPONDENT



AND





MR JOSEPH GERRARD LENNY


SECOND RESPONDENT




CatchWords : INDUSTRIAL LAW – Industrial Relations Act 1979 (WA) – Imposition of civil penalties – Contravention of civil penalty provision – Failure to comply with compliance notice issued by an industrial inspector – Involvement of sole director and secretary in contravention
Legislation : Industrial Relations Act 1979 (WA)
Long Service Leave Act 1958 (WA)
Fair Work Act 2009 (Cth)
Industrial Magistrates Court (General Jurisdiction) Regulations 2005 (WA)
Cases referred
to in reasons: : Fair Work Ombudsman v Downings Pty Ltd (t/as Fremantle Pharmacy) [2025] FedCFamC2G 1122
Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557
Australian Building and Construction Commission v Pattinson [2022] HCA 13; (2022) 274 CLR 450
NW Frozen Foods Pty Ltd v Australian Competition & Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285
Kelly v Fitzpatrick [2007] FCA 1080
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560
Fair Work Building Industry Inspectorate, Director v Commonwealth [2015] HCA 46; (2015) 258 CLR 482
Milardovic v Vemco Services Pty Ltd (No 2) [2016] FCA 244
Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; (2016) 239 FCR 336
Result : Civil penalties imposed
Representation:
Claimant : Ms S. Walsh (of counsel)
Respondents : Mr J. Lenny (in person) and as director of the first respondent



REASONS FOR DECISION
Background
1 Christopher Aplin (Mr Aplin), an Industrial Inspector with the Department of Local Government, Industry Regulation and Safety (Industrial Inspector or claimant) issued a compliance notice, pursuant to s 84Q(1) of the Industrial Relations Act 1979 (WA) (IR Act), to Downings Pty Ltd, (the first respondent) requiring the payment of $7,251.52 to its former employee, Ahmed Gedawy (Mr Gedawy), for long service leave entitlements under the Long Service Leave Act 1958 (WA) (LSL Act) (the Compliance Notice).
2 Joseph Gerrard Lenny (the second respondent) is the sole director and secretary of the first respondent, and the Industrial Inspector asserts that, as a result, the second respondent was the ‘controlling mind of the first respondent and was “by act or omission, directly or indirectly, knowingly concerned in or party…”’ Originating claim at [24].
to the first respondent’s failure.
3 On 16 July 2025, the Industrial Inspector lodged an originating claim alleging that:
(a) the first respondent contravened s 84T(1) of the IR Act, by failing to comply with the Compliance Notice by 7 March 2025, and seeks the imposition of a civil penalty pursuant to s 83E(1)(a) of the IR Act:
(b) the second respondent was involved in the first respondent’s contravention and was taken to have contravened s 84T(1) of the IR Act pursuant to s 83E(1B) of the IR Act, and seeks the imposition of a civil penalty pursuant to s 83E(1)(b) of the IR Act; and
(c) the amount required to be paid in accordance with the Compliance Notice remains outstanding, and seeks the amount be paid by the first and second respondents pursuant to s 84T(4)(b) of the IR Act, and they be jointly and severally liable to pay the amount.
(the Claim)
4 The Industrial Inspector also seeks an order for disbursement costs pursuant to s 83E(11) of the IR Act.
5 On 10 September 2025, the Industrial Inspector made an application for default judgment following the first and second respondents’ failure to lodge with the Industrial Magistrates Court (Court) responses to the Claim (the Application).
6 The second respondent appeared on behalf of himself and the first respondent at the hearing of the Application, and he did not oppose orders being made to enter judgment in default in respect of the amount owed to Mr Gedawy and an amount for the payment of costs.
7 Accordingly, on 10 October 2025, the Court made orders as follows:
(1) Pursuant to regulation 8(2) of the Industrial Magistrate’s Court (General Jurisdiction) Regulations 2005 (WA) and section 84T(4)(b) of the IR Act, judgment is entered against the first and second respondents and they pay the claimant the amount of $7,251.52 and are jointly and severally liable to pay the amount; and
(2) The first and second respondents pay the disbursements incurred by the claimant in the amount of $308.00 and are jointly and severally liable to pay such disbursements.
8 The remainder of the Claim was programmed to a penalty hearing. These are the Court’s reasons for the imposition of a civil penalty.
9 Schedule I of these reasons outlines the provisions of the IR Act and principles relevant in determining the imposition of a civil penalty (if any) for the first and second respondents’ contraventions.
Evidence
10 The claimant relied upon affidavits of:
(a) Paul David Callaghan (Mr Callaghan) affirmed 4 November 2025;
(b) Mr Aplin affirmed 5 November 2025; and
(c) Mr Gedawy affirmed 5 November 2025.
11 The first and second respondents relied upon an affidavit of the second respondent sworn on 3 December 2025.
12 The parties’ evidence was accepted by the Court and was uncontroverted.
13 The substance of the evidence of Mr Aplin and Mr Callaghan goes to the interactions they had, in their capacity as industrial inspectors, with the second respondent and the first and second respondents’ accountant to enforce payment of Mr Gedawy’s long service leave entitlement under the LSL Act upon the termination of his employment.
14 Mr Gedawy was employed from 24 March 2011 to 16 April 2023 as a pharmacist and worked in the business, Fremantle Pharmacy (Fremantle Pharmacy). Mr Gedawy resigned from his employment. Exhibit 3 – Affidavit of Ahmed Abou Bakr Gedawy affirmed 5 November 2025 at [1].

15 In July 2011, the first respondent took over Fremantle Pharmacy becoming the owner of the business and Mr Gedawy’s employer. Exhibit 3 at [3].
Mr Gedawy reported to the second respondent.
16 Upon the termination of his employment, Mr Gedawy had accrued 438.5 hours in long service leave entitlements and 875.21 hours in annual leave entitlements. The annual leave entitlement is the subject of a decision in Fair Work Ombudsman v Downings Pty Ltd t/as Fremantle Pharmacy [2025] FedCFamC2G 1122 (Downing). Exhibit 2 – Affidavit of Christopher Aplin affirmed 5 November 2025 at [20].

17 Despite repeated requests for the payment of the long service leave entitlement, including requests made to the first and second respondents’ accountant, the equivalent amount to be paid upon termination of employment remained unpaid, prompting Mr Gedawy to make a complaint to the relevant State government department on 17 May 2023 (the Complaint). Exhibit 3 at [9] to [10]; [13].

18 The Industrial Inspector, Mr Aplin, investigated the Complaint and determined Mr Gedawy was entitled to $17,251.52 in long service leave, with payment occurring upon termination of his employment. Exhibit 2 at [8].

19 The Complaint was conciliated with the second respondent agreeing to pay an (unspecified) amount owed for the long service leave entitlement in fortnightly instalments. Mr Gedawy received five instalments of $2,000 from the first respondent between June and 1 September 2023. The total amount paid was $10,000 with $7,251.52 remaining outstanding. Exhibit 2 at [7] and Exhibit 3 at [15].

20 Mr Gedawy also made a complaint to the Fair Work Ombudsman (FWO) regarding unpaid annual leave and superannuation, which the Industrial Inspector became aware of in September 2024. Exhibit 2 at [16].

21 On 7 February 2025, the first respondent was issued the Compliance Notice, which was also brought to the attention of the second respondent. Exhibit 2 at [18].

22 On 4 March 2025, the second respondent sent an email to the Industrial Inspector, informing him that Fremantle Pharmacy had been sold and the first respondent would ‘not be in a position to comply’ with the Compliance Notice as the ‘company had no source of income and no assets’. Exhibit 2 at [19].

23 On 5 March 2025, Mr Callaghan, General Manager, Compliance Branch in the Private Sector Labour Relations Division of the Department of Local Government, Industry Regulation and Safety, sent an email to the second respondent reminding him of the first respondent’s obligation under the Compliance Notice and that financial incapacity was not considered a reasonable excuse for non-compliance. Exhibit 1 – Affidavit of Paul David Callaghan affirmed 4 November 2025 at [6].

24 On 7 March 2025, Mr Callaghan received an email from the second respondent stating ‘Downings has no assets or income’ and that he could ‘do nothing more than keep you informed of what is happening.’ Exhibit 1 at [7].

25 The second respondent asserts that the first respondent was already in distress at the time of Mr Gedawy’s resignation. The second respondent worked seven days a week to ‘turn the business around.’ He was in weekly contact with Judo Bank to salvage the business and Fremantle Pharmacy lost a major contract from which it was unable to recover. Exhibit 4 – Affidavit of Joseph Lenny sworn on 3 December 2025 at [1].

26 Judo Bank sold ‘the business’ at a loss and there are no remaining assets. The first respondent no longer trades and will be wound up and the second respondent has a complaint with ‘AFCA’ over the handling of the situation by Judo Bank that is currently with the ‘Ombudsman’. The first respondent ceased trading in June 2024 after the ‘business name’ was sold. Exhibit 4 at [2].

27 Following the decision in Downing, the second respondent paid the personal fine imposed upon him by the Federal Circuit and Family Court of Australia. The first respondent is unable to pay the fine imposed upon it in Downing. Exhibit 4 at [3].

Submissions
28 The claimant referred to the law in respect of the determination of a civil penalty for contraventions of the IR Act. I do not intend to recite the parties’ references to the applicable law.
29 In summary, the claimant submits that:
(a) Section 84T(1) of the IR Act is a civil penalty provision for the purposes of s 84E of the IR Act.
(b) Pursuant to s 83E(1) of the IR Act, where it is proven that a person contravenes a civil penalty provision, the Court has power to impose as follows:
in the case of a body corporate —
(i) if the contravention is a serious contravention — $930 000; or
(ii) if the contravention is not a serious contravention — $93 000;
in the case of an individual —
(i) if the contravention is a serious contravention — $180 000; or
(ii) if the contravention is not a serious contravention — $18 000.
(c) The Claim did not allege the contravention was a serious contravention in which case the relevant civil penalties are a maximum of: $93,000 for the first respondent; and $18,000 for the second respondent.
(d) The compliance notice provisions in the IR Act were introduced by s 56 of the Industrial Relations Legislation Amendment Act 2021 (WA) and the Explanatory Memorandum before the Legislative Assembly in respect of the Bill stated:
Division 5 – Compliance notices
452. Division 5 comprises new sections 84O to 84V and enables an industrial inspector to give a person a compliance notice in relation to a contravention of an entitlement provision. Division 5 reflects s 716 of the FW Act.
453. Compliance notices provide industrial inspectors with another mechanism for achieving compliance as an alternative to taking enforcement proceedings. As with enforceable undertakings, whether or not it is appropriate for an inspector to give a compliance notice will depend on the circumstances of the case, as well as broader public interest considerations.
30 The respondents did not make any formal submissions although the second respondent apologised on behalf of the respondents and said that he had been working as hard as he could to keep the business afloat.
The Nature, Extent and Circumstance of the Conduct
31 The claimant submits that there was a single contravention by each of the respondents: the first respondent’s failure to comply with the Compliance Notice; and the second respondent’s involvement in the failure to comply.
32 There is no evidence before the Court suggesting the issue is widespread and the first respondent’s business is no longer operating.
33 The Industrial Inspector refers to the respondents’ general attitude during the investigation where the respondents’ failed to comply with a Notice to Produce records and failed to respond to correspondence from 29 September 2023. Exhibit 2 at [9] to [13].

34 Following the issuance of a second Notice to Produce records to the first respondent and to the respondents’ accountant, some of the records were provided by the respondents’ accountant. Exhibit 2 at [13].

35 The claimant submits that an amount remains unpaid for almost three years, and the second respondent knowing of the Compliance Notice and knowing the amount remained unpaid has not taken sufficient steps to comply with the Compliance Notice and to pay the remaining amount of the long service leave entitlement.
36 The first respondent did not comply with the Compliance Notice, and the second respondent did not take sufficient steps to ensure compliance by the first respondent. While the second respondent, on behalf of the first respondent, did initially engage with the Industrial Inspector and paid $10,000 of Mr Gedawy’s long service leave entitlement, there was limited engagement after 1 September 2023, and an amount remains outstanding.
Deliberate Conduct
37 The claimant submits that it is open to find the contravention by the first and second respondents are deliberate, where the second respondent informed the Industrial Inspector that the first respondent would not be able to comply with the Compliance Notice.
38 The claimant’s submission needs to be considered in light of the fact that the second respondent’s limited correspondence to the Industrial Inspector was couched in terms of the first respondent being unable to comply with the Compliance Notice, not that it would not comply with the Compliance Notice.
39 Accordingly, while the effect is the same, I do not accept that the first and second respondents flagrantly disregarded the Compliance Notice, but rather they were unable to comply because the first respondent was no longer trading; had no income or assets; it had been sold by Judo Bank and the second respondent informed the Industrial Inspector as much. Exhibit 2 at [19].

Similar Previous Conduct
40 The claimant referred to the decision in Downing and says that the respondents have been the subject of legal action following a failure to comply with a compliance notice (in the federal jurisdiction) issued by the FWO.
41 Some care should be exercised in considering the effect of Downing. The investigation by the FWO commenced at approximately the same time as the Complaint. The explanation given by the second respondent in Downing was the same as the explanation given in response to the Claim. This is hardly surprising given the conduct arose from the same factual background with the FWO dealing with annual leave and superannuation under the Fair Work Act 2009 (Cth) (FWA) and the Industrial Inspector dealing with long service leave under the IR Act and LSL Act.
42 The first and second respondents’ prior non-compliance under the FWA is, in essence, the same non-compliance under the IR Act. Given the timing and the surrounding circumstances, the first and second respondents were in no better position to comply with the Compliance Notice than they were in response to the FWO.
43 This is not to say the first and second respondents’ non-compliance with the Compliance Notice is acceptable or reasonable, only that care needs to be taken when assessing the previous conduct.
Applicable Maxima
44 The maximum penalty with respect to the first respondent is $93,000 and with respect to the second respondent is $18,000.
45 In Downing, at [30], the maximum penalty for similar conduct under the FWA for the first respondent was noted to be $41,250 and for the second respondent it was noted to be $8,250.
Involvement of Senior Management
46 The second respondent, as the sole director and secretary of the first respondent, was involved in the contraventions.
Cooperation, Contrition and Corrective Action
47 The first respondent did not and has not complied with the Compliance Notice. The second respondent has had limited engagement with the Industrial Inspector after 1 September 2023 but did pay $10,000 to Mr Gedawy towards decreasing the total amount of the long service leave entitlements owed. However, the remaining amount is outstanding.
48 The first and second respondents did not contest the Application and have participated in the penalty hearing. The second respondent has apologised.
Loss or Damage Suffered
49 Mr Gedawy’s consequential loss is reasonable and remains unpaid.
50 Mr Gedawy also asserts that he has suffered personal stress, depression, and anxiety. He says his mental health issues have been made worse by the ongoing non-payment of his legal entitlements where he was or is the main ‘breadwinner’ for his family. Exhibit 3 at [5] to [6].

Deterrence
51 The purpose served by penalties was described by Katzmann  J in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 at [388] in the following terms (omitting citations): 
In contrast to the criminal law, however, where, in sentencing, retribution and rehabilitation are also relevant, the primary, if not the only, purpose of a civil penalty is to promote the public interest in compliance with the law. This is achieved by imposing penalties that are sufficiently high to deter the wrongdoer from engaging in similar conduct in the future (specific deterrence) and to deter others who might be tempted to contravene (general deterrence). The penalty for each contravention or course of conduct is to be no more and no less than is necessary for that purpose.
52 In Australian Building and Construction Commission v Pattinson [2022] HCA 13; (2022) 274 CLR 450, at [42], the plurality confirmed that civil penalties ‘are not retributive, but rather are protective of the public interest in that they aim to secure compliance by deterring repeat contraventions’. However, ‘insistence upon the deterrent quality of a penalty should be balanced by insistence that it “not be so high as to be oppressive”’: [40], citing NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285. 
53 As recognised in Downing with respect to a similar provision under the FWA, the purpose of compliance notices under the IR Act is to ensure compliance with the IR Act and to ensure employers comply with their obligations under industrial laws. A compliance notice is an important tool for industrial inspectors in their enforcement role and are an alternative to taking enforcement proceedings. Downing at [16].

54 Again, as recognised in Downing and consistent with the FWA, the Western Australian Parliament has incentivised compliance where a person is not taken to admit or found to have contravened an entitlement provision where the compliance notice has been complied with. Section 84S(2) of the IR Act.
Further, an industrial inspector cannot apply for an order under s 83 of the IR Act if, amongst other things, a person has complied with a compliance notice.
55 Finally, there are two qualified pathways to lawful ‘non-compliance’: establishing a reasonable excuse under s 84T(3) of the IR Act; or an application to, and determination by, the Court for review under s 84U(1) of the IR Act. Neither of these pathways apply to the first and second respondents.
56 Accordingly, general deterrence is, arguably, the most important factor with respect to the imposition of a civil penalty for noncompliance with the Compliance Notice.
57 Specific deterrence in this case is less significant where the first respondent has ceased trading and is likely to be deregistered in the near future, and the second respondent is, in reality, not wellplaced to resume business. Further, prior to the issuance of the Compliance Notice, the second respondent took steps to reduce the amount of the long service leave entitlements owed to Mr Gedawy.
Determination
58 Having regard to all of the factors discussed, including the applicable maxima, I am satisfied the pecuniary penalty to be imposed on:
(a) the first respondent is $30,000; and
(b) the second respondent is $4,000.
59 I also note that the claimant seeks to have any penalties be paid to him in presumably his official capacity under s 83F(2)(b) of the IR Act, although I also note that pursuant to s 83F(2)(a) of the IR Act, it is also open to make an order for any penalty to be paid to a person directly affected by the conduct to which the contravention relates, namely Mr Gedawy. But for the entering of default judgment on 10 October 2025, where the first and second respondent are jointly liable for payment of $7,251.52, I would have been inclined to order payment of the penalty imposed on second respondent to be paid to Mr Gedawy.
Orders
1. Pursuant to s 83F(1) and s 83F(2)(b) of the IR Act, the first respondent is to pay a penalty of $30,000 to the claimant.
2. Pursuant to s 83F(1) and s 83F(2)(b) of the IR Act, the second respondent is to pay a penalty of $4,000 to the claimant.




D. SCADDAN
INDUSTRIAL MAGISTRATE



Schedule I: Contravening Civil Penalty Provisions Under the Industrial Relations Act 1979 (WA) 
Civil Penalty Orders 
[1] The IR Act provides that if a person contravenes a civil penalty provision, the Court may order a person to pay a civil penalty: s 83E(1) of the IR Act.
[2] The maximum penalty for each contravention by body corporate if the contravention is a serious contravention is $930,000 or if it is not a serious contravention it is $93,000: s 83E(1)(a)(i) and (ii) of the IR Act. If the contravener is a natural person and the contravention is a serious contravention, the maximum penalty is $180,000 or if it is not a serious contravention it is $18,000: s 83E(1)(b)(i) and (ii) of the IR Act.
[3] In Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 [14], Tracey J adopted the following ‘nonexhaustive range of considerations to which regard may be had in determining whether particular conduct calls for the imposition of a penalty, and if it does the amount of the penalty’ which had been set out by Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7: 
(a) The nature and extent of the conduct which led to the breaches. 
(b) The circumstances in which that conduct took place. 
(c) The nature and extent of any loss or damage sustained as a result of the breaches. 
(d) Whether there had been similar previous conduct by the respondent. 
(e) Whether the breaches were properly distinct or arose out of the one course of conduct. 
(f) The size of the business enterprise involved. 
(g) Whether or not the breaches were deliberate. 
(h) Whether senior management was involved in the breaches. 
(i) Whether the party committing the breach had exhibited contrition. 
(j) Whether the party committing the breach had taken corrective action. 
(k) Whether the party committing the breach had cooperated with the enforcement authorities. 
(l) The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements. 
(m) The need for specific and general deterrence. 
[4] The list is not ‘a rigid catalogue of matters for attention. At the end of the day the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations.’ (Buchanan J in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 (Australian Ophthalmic Supplies) [91]). 
[5] Although these factors provide useful guidance, the task of assessing the appropriate penalty is not an exact science: Fair Work Building Industry Inspectorate, Director v Commonwealth [2015] HCA 46; (2015) 258 CLR 482 [47]. The Court must ultimately fix a penalty that pays appropriate regard to the contraventions that have occurred: Pattinson [19]. ‘[A] court empowered by s 546 to impose an “appropriate” penalty must act fairly and reasonably for the purpose of protecting the public interest by deterring future contraventions of the Act’: Pattinson [48]. 
[6] The totality of the penalty must be re-assessed in light of the totality of the offending behaviour. If the resulting penalty is disproportionately harsh, it may be necessary to reduce the penalty for individual contraventions. Australian Ophthalmic Supplies [47] - [52]. 
[7] The Court may order the payment, or part payment, of the penalty imposed to be paid to a person directly affected by the conduct to which the contravention relates, or to the applicant, or to the Treasurer: s 83F(2)(a) to (c) of the IR Act.
[8] In Milardovic v Vemco Services Pty Ltd (No 2) [2016] FCA 244 [40] - [44], Mortimer J, in light of Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; (2016) 239 FCR 336, summarised the law as it relates to similar provisions under the FWA: (omitting citations) 
[T]he power conveyed by s 546(3) is ordinarily to be exercised by awarding any penalty to the successful applicant. … [T]he initiating party is normally the proper recipient of the penalty as part of a system of recognising particular interests in certain classes of persons … in upholding the integrity of awards and agreements the subject of penal proceedings. Where a public official vindicates the law by suing for and obtaining a penalty, it is appropriate that the penalty be paid to the Consolidated Revenue Fund. Otherwise, the general rule remains appropriate, that the penalty is to be paid to the party initiating the proceeding, with the [Gibbs v The Mayor, Councillors and Citizens of City of Altona [1992] FCA 553; 37 FCR 216] … exception that the penalty may be ordered to be paid to the organisation on whose behalf the initiating party has acted. (original emphasis) 
[9] If the Court was to make an order for the payment of a civil penalty to a person directly affected by the conduct to which the contravention relates, the Court must take into account any other compensation that the person has received or is likely to receive in respect of the conduct concerned: s 83F(3) of the IR Act.
[10] Where the Court by an order made under s 83E and imposes a penalty or costs, pursuant to s 83F(1) of the IR Act the Court must state in the order:
(a) the name of the person liable to pay the penalty or costs; and
(b) the name of the person to whom is penalty is, or costs are, payable.