The Construction, Forestry and Maritime Employees Union  (claimant) lodged an originating claim in the Industrial Magistrates Court (Court) alleging Qube Ports Pty Ltd (respondent) contravened a clause in two enterprise agreements – the Qube Ports Pty Ltd Port of Port Hedland Enterprise Agreement 2016 (EA 2016) and the Qube Ports Pty Ltd Port of Port Hedland Enterprise Agreement 2020 (EA 2020) (the Agreements) – by failing to pay an employee overtime rates in hourly increments for work exceeding 12 hours in a shift. In doing so, the claimant alleged that the respondent committed two contraventions of ss 50 and 323 of the Fair Work Act 2009 (Cth) (FWA) due to its non-compliance with the Agreements, each constituting a breach of a civil remedy provision. The claimant sought orders for payment of $15,007.70 owing under the Agreements, pre-judgment interest, and the imposition of civil penalties for the contraventions totalling $131,460 – being 35% of the maximum penalty for each contravention – with any penalties payable to the claimant.

The respondent conceded that it had inadvertently failed to pay the Employee overtime rates in accordance with clause 7.3 of the Agreements between 12 April 2019 and 5 August 2024 thereby contravening ss 50 and 323 of the FWA. Following an internal review, the respondent calculated the shortfall to be $16,569.95 (gross) which it paid, going beyond what was sought in the claim.  The respondent contended that the error arose due to an inadvertent payroll system misconfiguration rather than deliberate conduct and submitted that it only became aware of the issue upon receipt of the claim, as it had not been raised through the Agreements’ dispute resolution process. The respondent denied that any further orders were necessary. The key issue for the Court was the appropriate penalty for the admitted contraventions.

In support of an order for a pecuniary penalty the claimant submitted that the penalty sought was necessary for deterrence in circumstances where the contraventions were not an isolated oversight but a sustained, systemic failure to properly remunerate the employee, the respondent was a persistent offender with a history of non-compliance with ss 50 and 323, and, as a large multinational, ought to have adequate systems and resources to ensure compliance. The claimant further contended that meeting its legal obligation after the claim was lodged was not mitigatory, and that any materially lower penalty would be ineffective for a company of the respondent’s size and would, in effect, disadvantage compliant employers.

The respondent submitted that a nominal penalty was appropriate, emphasising that it had rectified the underpayment, was unaware of the inadvertent system configuration error, and that neither the claimant nor the employee had raised the issue through the dispute resolution procedure. It further contended that there was no intention to contravene the FWA, and that it had taken corrective action to update and enhance its workplace management system through automation and more rigorous consistency checks. In those circumstances, it submitted that a higher penalty was not warranted.

The Court found that the four contraventions arose from a single course of conduct namely an unintended payroll misconfiguration involving the same employee at the same port and under the same clause of the Agreements. Applying the common law course of conduct principles, it held that the contraventions stemmed from a single underlying failure, such that any penalty should avoid “double punishment” for what was, in substance, the same conduct.

The Court found that the imposition of a civil penalty would do little to advance deterrence, as the contraventions were not deliberate or designed to avoid statutory obligations. While the respondent had a prior history of contraventions of ss 50 and 323 of the FWA, those matters involved different factual circumstances. While the Court noted the respondent’s size and complex operations, it gave weight to the absence of senior management involvement and its strong cooperation, prompt rectification (including payment exceeding the claimed amount), contrition, and system improvements. The Court acknowledged that the employee suffered no loss beyond delayed payment (which was remedied), however, emphasised that responsibility for accurate payroll systems rests with the employer, and that some penalty remained necessary for deterrence, albeit significantly below the penalty sought by the applicant.

The Court emphasised the need for both specific and general deterrence, noting that even inadvertent contraventions arising from carelessness or system deficiencies warrant sanction to promote compliance and proper payroll governance. The Court characterised the respondent’s conduct at the lower end of seriousness and, applying established penalty principles (including totality and avoidance of double punishment), imposed a reduced aggregate penalty of $9,600 (significantly below the theoretical maximum of $375,600) payable to the claimant. Although no further compensation order was required given the underpayment had been remedied, the Court awarded $2,982 in pre-judgment interest to reflect the delay in payment.

The full decision can be read here.