Written Agreement, Annual Leave Cash-Out, and Payslip Failures in a Fuel Retail Franchise: How Should a Court Set Civil Penalties When Underpayments Are Remedied Before Proceedings?
Introduction (Mandatory Fixed Text) Based on the authentic Australian judicial case Applicant v First Respondent [2025] FedCFamC2G 1372 (ADG 391 of 2023), this article disassembles the Court’s judgment process regarding evidence and law. It transforms complex judicial reasoning into clear, understandable key point analyses, helping readers identify the core of the dispute, understand the judgment logic, make more rational litigation choices, and providing case resources for practical research to readers of all backgrounds.
Chapter 1: Case Overview and Core Disputes
Basic Information
Court of Hearing: Federal Circuit and Family Court of Australia (Division 2)
Presiding Judge: Judge Brown
Cause of Action: Civil penalty proceeding under the Fair Work Act 2009 (Cth) concerning contraventions of National Employment Standards, a modern award obligation, and payslip obligations; including accessorial liability.
Judgment Date: 29 August 2025
Core Keywords:
Keyword 1: Authentic Judgment Case
Keyword 2: Fair Work Act 2009 (Cth) civil penalties
Keyword 3: Vehicle Repair, Services and Retail Award 2020 part-time agreements
Keyword 4: Annual leave on termination and leave loading
Keyword 5: Payslip compliance and vulnerable workers
Keyword 6: Accessorial liability and general deterrence
Background
This was not a trial about whether breaches occurred. The employer entity (First Respondent) and its manager (Second Respondent) admitted contraventions affecting three part-time console workers at a suburban fuel and convenience outlet operating long hours, seven days a week. The proceeding was a penalty hearing: the Court’s task was to decide what financial penalties should be imposed after liability had already been established by admissions and an agreed factual foundation.
The admitted contraventions fell into three clusters that often appear together in workplace compliance matters: missing written part-time agreements, unpaid accrued annual leave on termination, and late payslips. A further and sharper contest sat behind the penalty figures: how should the law treat a manager who says the payroll accountant was meant to handle compliance, and how should penalties be calculated when the underpayments were later rectified before proceedings were commenced?
Core Disputes and Claims
The legal focus was not “did the employer breach the law”, but “what penalty best achieves the statutory purpose of deterrence without becoming oppressively severe”.
Applicant’s position:
1) Declarations of contravention.
2) Pecuniary penalties against the First Respondent for the admitted breaches of ss 44, 45 and 536 of the Fair Work Act 2009 (Cth).
3) Pecuniary penalties against the Second Respondent as an accessory under s 550 of the Fair Work Act 2009 (Cth) in relation to particular contraventions.
4) Orders that penalties be paid to the Commonwealth.
Respondents’ position:
1) Penalties should be substantially reduced because this was a first contravention, the underpayments were remedied before proceedings, the business had ceased operating, and the failures were said to be inadvertent and connected to reliance on external payroll providers.
2) The grouping of contraventions should be approached to avoid an inflated maximum penalty frame, and the resulting penalties should be at the very low end.
The Court’s practical problem: calibrate penalties to uphold public compliance objectives, especially in an industry with known non-compliance risks, while accounting for rectification, cooperation, and financial capacity.
Chapter 2: Origin of the Case
The business context mattered. A fuel outlet is a high-hours, relatively low-skill retail environment where staffing is often modular: short shifts, repeated rosters, and a workforce that can include temporary visa holders seeking predictable hours.
The First Respondent operated a franchised outlet. The Second Respondent performed managerial responsibilities including recruitment, rostering, payroll inputs, and employment administration. Three part-time employees worked relatively stable hours under the relevant modern award.
The litigation did not begin with a complaint by the employees. The trigger was a wider regulator investigation into compliance issues within a network of fuel outlets. Inspectors attended the premises, requested time and wage records, and later required additional documents including accountant records and bank material. The investigation produced findings that the First Respondent had failed to do three basic things that industrial regulation treats as foundational: document part-time hours in writing, pay out accrued annual leave when employment ends, and issue payslips within the statutory timeframe.
Detail Reconstruction
A predictable part-time arrangement is meant to be transparent. In a properly run system:
1) The part-time arrangement is reduced to writing at engagement: days, start and finish times, meal break timing, and the rule that variations must be in writing.
2) If employment ends, annual leave accrual is calculated and paid out promptly, including leave loading where applicable.
3) Payslips are issued as a routine administrative control so employees can verify rate, hours, gross and net pay, and loadings.
The evidence revealed a compliance gap at each step. The employees were reportedly working around 15 hours per week during weekdays, a pattern consistent with part-time work with reasonably predictable hours. Yet no written part-time agreements were given. Payslips were not provided within one day of payment across a series of pay events. When employment ended, accrued annual leave was not paid within the required timeframe.
Conflict Foreshadowing
The decisive moment in this type of matter is often not the underpayment itself, but the regulator’s discovery that the administrative scaffolding is missing. When payslips are absent and agreements are not recorded, the system becomes difficult to audit and easy to abuse, even if the employer insists there was no intention to exploit. That is why, by the time the penalty hearing arrived, the dispute shifted to accountability: whether the manager could meaningfully distance himself from contraventions by pointing to outsourced payroll support, and how much “sting” a penalty must carry to deter similar practices across a sector.
Chapter 3: Key Evidence and Core Disputes
Applicant’s Main Evidence and Arguments
1) Statement of agreed facts as the evidentiary foundation, treated as not in dispute pursuant to s 191 of the Evidence Act 1995 (Cth).
2) Workplace inspector evidence describing investigation steps, site visits, and record requests.
3) Records showing the absence of written part-time agreements as required by clause 10.3 of the Vehicle Repair, Services and Retail Award 2020.
4) Calculations of unpaid accrued annual leave on termination, including leave loading, and the later rectification payment.
5) A schedule of payslip failures across multiple dates, establishing repeated non-compliance with s 536 of the Fair Work Act 2009 (Cth).
6) Submissions emphasising vulnerability of workers in the sector, the role of payslips as a compliance control, and the need for general deterrence.
Respondent’s Main Evidence and Arguments
1) Affidavit evidence from the manager explaining his responsibilities and describing reliance on external accountants to generate payroll outputs and payslips via MYOB.
2) Evidence of rectification: payment of annual leave entitlements before proceedings were commenced.
3) Evidence of cooperation: production of records, admissions, and avoidance of a contested liability hearing.
4) Evidence of personal and business circumstances: closure of the franchise arrangement, unemployment, legal costs incurred, and completion of compliance training.
5) Submissions characterising the contraventions as inadvertent errors rather than deliberate exploitation, and arguing for a low penalty given low risk of re-offending.
Core Dispute Points
1) Grouping: how to apply the “course of conduct” concept under s 557 of the Fair Work Act 2009 (Cth) for the award and National Employment Standards breaches, and how to avoid artificial outcomes while recognising distinct obligations.
2) Accessorial liability: whether the manager was “knowingly concerned” by act or omission within s 550, and what level of knowledge is required.
3) Deterrence calibration: how to reconcile rectification and cooperation with the statutory purpose of discouraging similar non-compliance, particularly in a high-risk industry.
4) Proportionality in the civil penalty sense: striking a reasonable balance between deterrence and oppressive severity, consistent with modern authority.
Chapter 4: Statements in Affidavits
Affidavits in penalty proceedings serve a dual role: they provide an evidentiary narrative for mitigation and they frame the moral and practical context through which a Court undertakes “intuitive synthesis” in determining a civil penalty.
How Each Side Built a Persuasive Statement
Applicant’s affidavit strategy:
The regulator’s affidavits focused on objective compliance facts: the operational setting, the investigation steps, the record requests, the amounts owing, and the repeated payslip failures. This style emphasises that civil penalties are not merely about compensation but about enforcing a public regulatory scheme.
Respondents’ affidavit strategy:
The manager’s affidavits sought to narrow culpability by describing the contraventions as a systems failure arising from reliance on professional payroll support. The narrative highlighted: lack of intent to exploit, immediate correction upon awareness, reputational consequences, personal stress, and changed circumstances suggesting low re-offending risk.
Comparing Competing Expressions of the Same Fact
Fact in issue: payslips were not provided within one working day.
Respondents’ framing:
The payroll system could generate payslips; the belief was that the accountant would distribute them; no employee asked for them; therefore the omission was inadvertent and not designed to conceal underpayment.
Applicant’s framing:
Regardless of who pressed the send button, the employer and manager retained responsibility. A “wholesale failure” to provide payslips disempowers employees and weakens the industrial safety net, particularly for vulnerable workers.
The legal boundary:
The Court treated the reliance narrative as a mitigation context, not a liability shield. In civil penalty law, outsourcing does not outsource responsibility.
Strategic Intent Behind Procedural Directions
A penalty hearing built on agreed facts narrows the dispute efficiently. The Court’s procedural approach rewarded cooperation but also preserved deterrence. The agreed factual foundation prevented drift into speculative contested histories and forced the parties to argue within a disciplined framework: penalty factors, grouping logic, and deterrence balance.
Chapter 5: Court Orders
Before the final orders, the Court’s procedural arrangements reflected the typical pathway for civil penalty matters with admissions:
1) Pleadings filed and later amended as admissions crystallised.
2) Agreement to produce and rely upon a statement of agreed facts, reducing the need for a contested liability hearing.
3) Listing for a penalty hearing with affidavit evidence and submissions directed to penalty principles, grouping, maximum penalties, and mitigation.
4) Consideration of declarations, penalty orders, payment to the Commonwealth, and liberty to apply in the event of non-compliance.
Chapter 6: Hearing Scene: Ultimate Showdown of Evidence and Logic
The hearing’s “showdown” was not a theatrical battle over who was telling the truth about what happened on the shop floor. It was a structured contest about legal responsibility, and the weight that should be given to certain mitigation themes in a regulatory setting.
Process Reconstruction: Live Restoration
The central dynamic was this:
1) The Respondents accepted contraventions but sought to translate “mistake + rectification + cooperation” into “minimal penalty”.
2) The Applicant accepted “first offender + rectification” but insisted the penalty must still deter, especially in an industry with elevated non-compliance and a workforce that can be reluctant or unable to complain.
The Court tested whether the Respondents’ reliance on accountants was truly exculpatory or merely explanatory. The crucial logical fault line was responsibility: a manager who controls rostering and pay inputs remains accountable for the compliance outputs. If the Court were to accept a broad “I thought the accountant would do it” mitigation, it would weaken the enforcement scheme, because the most common non-compliance pathway in small business is precisely inadequate attention to payroll systems.
Core Evidence Confrontation
The decisive evidence was not contested testimony but the admitted pattern:
1) No written part-time agreements as required by clause 10.3 of the award, which exists to prevent unpredictable variation and exploitation of part-time employees.
2) Annual leave on termination was not paid promptly, and workers waited a substantial time before rectification.
3) Payslips were not provided within one day on multiple occasions, weakening employee ability to verify compliance and detect entitlements such as leave accrual.
Judicial Reasoning
The Court’s penalty reasoning was anchored to deterrence and to a realistic appreciation of industry risk. The Court accepted that this was not a case of brazen exploitation, but also determined that “careless error” does not neutralise deterrence in industrial law.
Blockquote of determinative reasoning:
“Incorporated entities cannot know anything as they are artificial construction not sentient beings. Such entities acquire knowledge through the actions and responsibilities of their sentient managers or proprietors. In the industrial setting, in my view, the concept of managerial knowledge is to be given a broad construction… In the vernacular, the buck stopped with him.”
Why that mattered:
This passage closed the door on the core mitigation attempt to shift responsibility to external accountants. It reinforced that accessorial liability and corporate knowledge are assessed through managerial role and practical connection, not by a narrow inquiry into whether the manager personally knew every legal nuance.
A second decisive judicial statement clarified the public policy dimension:
“In the industrial context, it is to be emphasised that lack of care and ignorance of the law can be no excuse.”
Why that mattered:
The Court treated ignorance as a factor that may explain how contraventions occurred but not as a justification to soften deterrence to the point where penalties become an acceptable business cost.
Chapter 7: Final Judgment of the Court
The Court made declarations that the First Respondent contravened:
1) Section 45 of the Fair Work Act 2009 (Cth) by failing to make written part-time agreements in accordance with clause 10.3 of the Vehicle Repair, Services and Retail Award 2020.
2) Section 44 of the Fair Work Act 2009 (Cth) by failing to pay accrued but untaken annual leave on termination pursuant to s 90(2) of the Fair Work Act 2009 (Cth).
3) Section 536(1) of the Fair Work Act 2009 (Cth) by failing to give payslips within one working day of paying amounts.
The Court also declared that the Second Respondent was involved within s 550(1) in particular contraventions, and therefore taken to have contravened those provisions.
Penalty orders:
1) The First Respondent was ordered to pay a pecuniary penalty of AUD $35,000.00.
2) The Second Respondent was ordered to pay a pecuniary penalty of AUD $3,500.00.
3) Penalties were to be paid to the Consolidated Revenue Fund of the Commonwealth within 60 days.
4) Liberty to apply was granted on seven days’ notice if orders were not complied with.
Chapter 8: In-depth Analysis of the Judgment: How Law and Evidence Lay the Foundation for Victory
Special Analysis
Special Analysis 1: This Was a Penalty Case About System Integrity, Not Just Dollar Loss
The unpaid leave amounts were not enormous in absolute terms, but industrial regulation treats the integrity of records and payslips as the spine of enforcement. The Court treated payslip failures as serious because payslips enable employees to know what they have been paid and to detect discrepancies. In sectors with vulnerable workers, payslip non-compliance can operate as a practical barrier to enforcement even where the underlying hourly rate is not grossly deficient.
Victory point: The Applicant’s focus on structural compliance, rather than only shortfall amounts, aligned with the statutory purpose of civil penalties.
Special Analysis 2: Industry Context Elevated General Deterrence
The Court accepted evidence and submissions that the retail fuel sector exhibits higher rates of non-compliance, with a workforce profile that may include student visa holders who are less likely to complain and less likely to understand leave entitlements. This context amplifies general deterrence: penalties must signal to similar employers that lax payroll practices are not tolerated even where rectification later occurs.
Victory point: The Applicant framed the case as part of a sector-wide compliance challenge, which supported a meaningful penalty.
Special Analysis 3: Rectification Helped, But Did Not Rewrite the Contravention
The Respondents paid the leave amounts before proceedings were commenced. That was relevant to cooperation and contrition. But the Court treated rectification as a mitigation factor, not as a basis to minimise penalties to token levels. A penalty regime that collapses whenever a contravener pays after regulator involvement risks encouraging a “wait to be caught” compliance culture.
Victory point: The Applicant maintained that rectification after regulator detection still requires deterrent penalties.
Judgment Points
Judgment Point 1: Accessorial Liability Turns on Practical Connection and Managerial Role
The Court emphasised that involvement under s 550 includes being knowingly concerned by act or omission, and that managerial knowledge in the industrial setting is construed broadly. The Court adopted established authorities describing the test as requiring knowledge of essential facts and intentional participation, while clarifying that the accessory need not know the conduct was a contravention.
Blockquote of determinative reasoning:
“In the vernacular, the buck stopped with him. He should have known more exhaustively about the need to provide written agreements and pay annual leave on termination… In addition, the onus was on him to ensure payslips had been issued within time.”
Why that mattered:
The manager’s responsibility for payroll inputs and employment administration supplied the practical connection. Reliance on accountants did not break the chain.
Judgment Point 2: Grouping Under s 557 Must Avoid Artificial Outcomes
The Court treated grouping as a tool to prevent double punishment for the same criminality, but warned against groupings that would produce capricious results. The reasoning drew on appellate guidance that separate obligations in an award should be treated distinctly, and that treating multiple separate award breaches as a single contravention can undercut the statutory intent of effective penalties.
The practical lesson: Grouping arguments must be tied to the substance of obligations breached, not merely to the convenience of a single “course of conduct” narrative.
Judgment Point 3: Civil Penalty Calibration Is “Intuitive Synthesis” With Deterrence at the Forefront
The Court approached penalty as an evaluative synthesis, considering multiple relevant factors without applying a rigid mathematical formula. Yet the Court anchored the synthesis to deterrence, consistent with the modern view that civil penalties are primarily protective and preventive rather than retributive.
Legal Basis
Key Statutory Provisions Applied
1) Fair Work Act 2009 (Cth) s 45: prohibition on contravening a modern award term, engaged by failure to comply with clause 10.3 of the award.
2) Fair Work Act 2009 (Cth) s 44 and s 90(2): National Employment Standards compliance and entitlement to payment of accrued but untaken annual leave on termination.
3) Fair Work Act 2009 (Cth) s 536 and Fair Work Regulations 2009 (Cth) rr 3.45–3.46: payslip obligations and required content and timing.
4) Fair Work Act 2009 (Cth) s 546: power to impose pecuniary penalties and payment to the Commonwealth.
5) Fair Work Act 2009 (Cth) s 539: civil remedy provisions and maximum penalties.
6) Fair Work Act 2009 (Cth) s 550: accessorial liability for involvement in contraventions.
7) Fair Work Act 2009 (Cth) s 557: “course of conduct” grouping for certain contraventions.
8) Evidence Act 1995 (Cth) s 191: agreed facts taken not to be in dispute.
9) Acts Interpretation Act 1901 (Cth) s 15AB: use of extrinsic materials where ambiguity arises, relevant to interpreting grouping provisions in context.
10) Crimes Act 1914 (Cth) s 4AA: penalty unit values relevant to maximum penalty calculations.
Evidence Chain
Evidence Chain 1: Written Part-Time Agreements
Conclusion: The First Respondent contravened s 45.
Evidence: admissions; absence of written agreements; award clause 10.3 requirements (hours each day, days, start and finish times, variations in writing, overtime treatment, meal break timing).
Evidence Chain 2: Annual Leave on Termination
Conclusion: The First Respondent contravened s 44 by failing to comply with s 90(2).
Evidence: admissions; calculations of accrued untaken leave and leave loading; termination dates; later rectification payment after regulator involvement.
Evidence Chain 3: Payslips
Conclusion: The First Respondent contravened s 536(1).
Evidence: admissions; schedule of pay events; repeated failure to issue payslips within one working day.
Evidence Chain 4: Accessorial Liability
Conclusion: The Second Respondent was involved under s 550 in particular contraventions.
Evidence: managerial responsibilities; admissions in agreed facts; affidavit admissions; practical connection through payroll oversight and responsibility for compliance outputs.
Judicial Original Quotation
The Court’s key penalty philosophy, synthesising deterrence and oppressive severity, was shaped by modern civil penalty authority:
“Penalties have to be fixed at a meaningful level, not set at a level at which their imposition… can be seen as an acceptable cost of doing business… In short, penalties must hurt…”
Why that mattered:
This statement made the Court’s destination clear. The Respondents’ proposed figures risked signalling that compliance failures could be cheaply absorbed, particularly where detection was regulator-driven rather than complaint-driven.
A further decisive statement captured the balance the Court was required to strike:
“The approach I propose to take is to adopt as the starting point 15% of the maximum penalty; which I will discount… Given the nature of the offending and the financial circumstances… I will reduce the total amounts… In my view, these remain very significant penalties… and will provide a significant level of general deterrence.”
Why that mattered:
This demonstrated the Court’s structured discretion: start from a deterrence-meaningful baseline, recognise cooperation through discounting, then adjust to avoid oppressive severity given business cessation and unemployment, without collapsing the penalty into a token amount.
Analysis of the Losing Party’s Failure
The Respondents did not “lose” the liability case because it was admitted. Their failure was strategic: they sought penalties so low that the Court considered them inconsistent with general deterrence in an industry where compliance risk is elevated and where vulnerable workers may not complain.
Key reasons their position was rejected:
1) Over-reliance on inadvertence: the Court accepted lack of deliberate exploitation but treated “careless error” as insufficient to significantly reduce deterrence.
2) Outsourcing narrative: reliance on accountants did not shift responsibility; the manager’s role supplied practical connection and broad managerial knowledge.
3) Under-weighting industry context: the Court accepted that general deterrence was heightened in the retail fuel context.
4) Proposed penalties risked becoming a cost-of-doing-business figure, undermining the regulatory purpose of the Act.
5) Grouping submissions risked artificial reduction of contraventions in a way inconsistent with the distinct legal character of separate obligations.
Reference to Comparable Authorities
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13: The High Court emphasised the centrality of deterrence in civil penalty regimes and rejected the notion that maximum penalties are reserved for the worst category in the same way as criminal sentencing; penalties must strike a reasonable balance between deterrence and oppressive severity.
Rocky Holdings Pty Ltd v Fair Work Ombudsman [2014] FCAFC 62: The Full Court explained the purpose and limits of “course of conduct” grouping, cautioning against capricious outcomes and recognising the distinct legal character of separate award obligations.
Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd [2012] FMCA 258: The Court highlighted that payslips are a critical empowerment tool; without them employees are disempowered, facilitating contraventions and impeding enforcement.
Key to Victory
The Applicant’s most effective components were:
1) A disciplined evidentiary foundation through agreed facts, removing distractions and forcing the case onto penalty principles.
2) A strong deterrence narrative grounded in industry risk and worker vulnerability.
3) A coherent accessorial liability case: managerial responsibility and practical connection, not personal legal sophistication.
4) A penalty framework that gave weight to cooperation without allowing rectification to neutralise deterrence.
Implications
1) If you employ part-time staff with stable rosters, writing down the arrangement is not bureaucracy for its own sake. It tends to be the difference between a predictable job and a vulnerable one where conditions can drift without accountability.
2) Payslips are not just paperwork. They are the employee’s regular “receipt” of their working life. When payslips disappear, it becomes relatively harder for a worker to notice entitlements such as leave accrual, and relatively easier for mistakes to persist.
3) Paying money later, after the regulator becomes involved, can still leave an employer exposed to substantial penalties. Rectification is important, but it tends to be treated as mitigation rather than a reset button.
4) Managers who run payroll processes cannot assume that outsourcing removes responsibility. If you control rostering and pay inputs, the law tends to treat you as practically connected to compliance outputs.
5) A penalty is not only about punishing one employer. It is also a signal to every similar business deciding whether to invest in compliance systems or to “hope it’s fine”. The Court’s role is to make obeying the law the cheaper and safer choice.
Q&A Session
Q1: If employees never complained, why did the regulator bring the case?
Because enforcement of workplace minimum standards is not complaint-dependent. Regulators can conduct proactive, industry-wide investigations, obtain records, and commence civil penalty proceedings where contraventions are established. In industries where workers are less likely to complain, proactive enforcement becomes a central integrity mechanism.
Q2: Does paying the underpaid amount before court proceedings prevent penalties?
No. Paying outstanding entitlements is important and tends to reduce the penalty because it demonstrates corrective action. But the contravention has still occurred. The Court may impose penalties to deter future non-compliance and reinforce the strength of the regulatory scheme.
Q3: Can a manager avoid liability by saying the accountant was responsible for payroll?
It tends to be difficult. Courts commonly treat payroll compliance as an employer responsibility that cannot be outsourced. If a manager is practically connected to the contravention through their role and omissions, they may be found involved under s 550 even if they did not personally understand every legal detail.
Appendix: Reference for Comparable Case Judgments and Practical Guidelines
1. Practical Positioning of This Case
Case Subtype
Industrial Relations Compliance Prosecution: Modern Award Part-Time Agreement Failures, Annual Leave on Termination Non-Payment, and Payslip Timing Breaches.
Judgment Nature Definition
Final Judgment in a Civil Penalty Proceeding: Penalty Hearing following admissions and a statement of agreed facts.
2. Self-examination of Core Statutory Elements
③ Employment and Workplace Disputes (Industrial Relations Law)
Core Test: Award Compliance and Civil Remedy Contraventions
Step 1: Identify coverage and applicability of the modern award.
A modern award applies if the employer’s business and the employee’s duties fall within its scope. For console and retail fuel outlet work, this tends to involve awards covering retail fuel operations and console work. Once the award applies, each substantive obligation is enforceable through the civil remedy scheme.
Step 2: Identify whether the employment is part-time with reasonably predictable hours.
A part-time characterisation tends to arise where the employee works less than 38 ordinary hours per week and has reasonably predictable hours. Predictability is not an afterthought; it is the feature that triggers the award’s insistence on recording the arrangement.
Step 3: Test compliance with written part-time agreement requirements.
Where the award requires an agreement in writing at engagement, the compliance checklist tends to require written agreement on:
1) hours worked each day,
2) which days the employee will work,
3) actual starting and finishing times each day,
4) that any variation must be in writing,
5) that time beyond agreed hours is paid at overtime rates, and
6) meal break timing and duration.
A failure to provide such a written agreement tends to support a contravention of s 45 where the award term is breached.
Step 4: Test National Employment Standards compliance for annual leave on termination.
Annual leave accrues progressively during employment. On termination, accrued but untaken annual leave must be paid out in accordance with s 90(2) of the Fair Work Act 2009 (Cth). Where an award provides additional requirements such as timing and leave loading, those requirements should also be checked. A failure to pay on termination tends to support a contravention of s 44 by contravening the National Employment Standards.
Step 5: Test payslip timing and content compliance.
Payslips must be given within one working day of payment and must include required information under the Fair Work Regulations 2009 (Cth), including employer and employee identification, pay period, gross and net amounts, and relevant loadings and allowances. Late or absent payslips tend to be treated as serious because they undermine verification and enforcement.
Step 6: Consider accessorial liability exposure for individuals.
Under s 550, an individual may be taken to have contravened if they were involved, including by being knowingly concerned by act or omission. A practical compliance test tends to ask:
1) Did the person have knowledge of the essential facts of the conduct?
2) Did their role and actions connect them practically to the contravention?
3) Were they an intentional participant in the conduct, even if they did not know it was unlawful?
In management contexts, responsibility for payroll and rostering often creates the practical connection.
Core Test: Unfair Dismissal Under the Fair Work Act 2009 (Cth)
This case was not an unfair dismissal matter. However, for public guidance, the core unfair dismissal framework commonly requires:
1) a dismissal,
2) a valid reason related to capacity or conduct,
3) notification of that reason,
4) an opportunity to respond, and
5) an overall assessment of whether the dismissal was harsh, unjust or unreasonable.
These elements tend to be assessed on the facts of the termination process, not only the employer’s intention.
Core Test: General Protections
This case was not a general protections claim. For context, a typical test asks whether adverse action was taken because a person exercised a workplace right, with a reverse onus of proof framework often shaping how evidence is assessed.
Core Test: Sham Contracting
This case was not a sham contracting dispute. For completeness, sham contracting analysis often turns on the reality of the relationship, including control, tools, financial risk, and the capacity to work for others.
3. Equitable Remedies and Alternative Claims
Even in industrial contexts, there can be adjacent legal pathways when statutory routes do not fully address a dispute. These are not substitutes for Fair Work Act compliance, but they may arise depending on the facts.
Procedural Fairness
In regulator investigations or administrative decisions, procedural fairness focuses on whether a person had an opportunity to be heard and whether there was apprehended bias. While civil penalty prosecutions are conducted in court with procedural safeguards, procedural fairness principles may become relevant if a party challenges investigative decision-making or the fairness of processes leading to enforcement action.
Ancillary Claims
Where an employee’s statutory claim struggles due to jurisdictional limits or time constraints, ancillary pathways can sometimes include:
1) contractual claims where a contract exists and can be enforced consistently with the statutory framework,
2) misleading conduct claims in limited circumstances where representations about pay or conditions were made in trade or commerce, and
3) restitutionary or unjust enrichment claims in rare cases where benefits were retained without lawful basis.
These pathways tend to be fact-sensitive and may carry relatively high risk if they attempt to re-litigate matters already captured by a comprehensive statutory scheme.
Equity-Style Doctrines in Employment Settings
Promissory estoppel and related doctrines can sometimes arise where a clear promise about employment benefits is made and relied upon to the employee’s detriment. However, in wage matters, courts tend to prefer the statutory framework as the primary compliance and enforcement mechanism. Estoppel arguments may be relatively high risk if they conflict with minimum statutory rights or attempt to bargain them away.
4. Access Thresholds and Exceptional Circumstances
Regular Thresholds
1) Payslip timing: within one working day of payment.
2) Annual leave on termination: payment of accrued untaken leave is required by the National Employment Standards, and awards may impose additional timing obligations.
3) Part-time agreement at engagement: where the award requires written agreement, compliance tends to be assessed at the commencement of employment and at each variation if the award requires variations to be in writing.
4) Civil penalty exposure: contraventions of civil remedy provisions can attract penalties, and corporations face multiplied maximums.
Exceptional Channels
1) Grouping of contraventions: where multiple contraventions arise out of the same course of conduct and meet statutory criteria, grouping may operate, but it tends to be constrained by the distinct legal character of separate obligations.
2) Penalty mitigation: rectification, cooperation, contrition, and low re-offending risk can reduce penalties, but they tend not to eliminate penalties where deterrence remains necessary.
3) Financial capacity: limited capacity to pay may be considered to avoid oppressive severity, but it tends to be of limited weight where it risks undermining general deterrence for small business sectors.
Suggestion: Do not abandon a potential compliance response simply because the business is small or because the error was inadvertent. Regulators and courts tend to treat small business compliance as central to system integrity because small businesses comprise a large share of employers.
5. Guidelines for Judicial and Legal Citation
Citation Angle
It is recommended to cite this case in legal submissions or debates involving:
1) penalty calibration in Fair Work Act civil penalty matters where contraventions are admitted and rectified after regulator involvement;
2) the role of general deterrence in sectors with vulnerable workers and elevated non-compliance;
3) accessorial liability for managers who are practically connected to payroll and employment administration;
4) grouping methodology under s 557 and avoidance of artificial outcomes.
Citation Method
As Positive Support:
Where your matter involves admitted contraventions, remedial payments made after regulator engagement, and arguments about reliance on accountants, this authority can support the proposition that responsibility remains with management and penalties must retain deterrent sting.
As a Distinguishing Reference:
If the opposing party cites this case to argue for higher penalties, you can distinguish where your matter involves deliberate exploitation, falsified records, higher underpayment quantum, coercion, repeat offending, or obstruction of investigators, all of which tend to aggravate penalty.
Anonymisation Rule
Do not use the real names of the parties. Use procedural titles such as Applicant, First Respondent, and Second Respondent when discussing this judgment.
Conclusion
This case shows that workplace compliance is built from small, concrete actions that make the system auditable: write the part-time agreement, issue payslips on time, and pay out leave on termination. When those basics fail, the Court’s role is not only to correct one employer’s mistake, but to protect the integrity of the industrial safety net for everyone, especially workers who are least able to complain.
Golden Sentence: Everyone needs to understand the law and see the world through the lens of law. The in-depth analysis of this authentic judgment is intended to help everyone gradually establish a new legal mindset: True self-protection stems from the early understanding and mastery of legal rules.
Disclaimer
This article is based on the study and analysis of the public judgment of the Federal Circuit and Family Court of Australia (Applicant v First Respondent [2025] FedCFamC2G 1372), aimed at promoting legal research and public understanding. The citation of relevant judgment content is limited to the scope of fair dealing for the purposes of legal research, comment, and information sharing.
The analysis, structural arrangement, and expression of views contained in this article are the original content of the author, and the copyright belongs to the author and this platform. This article does not constitute legal advice, nor should it be regarded as legal advice for any specific situation.
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