In making public judgments available to the public and published online, courts and tribunals have an educative function.

The published decisions inform employers and employees alike of expected behaviours, the need to comply with laws and the consequences of failing to abide by minimum conditions.

By becoming aware of court rulings, the courts trust that other business’ will be deterred from acting in a similar fashion by imposing fines and penalties. This is such a case.

A small bakery business (and its owner) have been hit with fines, compensation and damages totalling more than $300,000 after the “deplorable” exploitation of a young worker with an intellectual disability who went almost two years without being paid.

The Federal Circuit and Family Court heard evidence that the Sydney bakery initially paid the then-16-year-old $10 cash an hour during her first seven weeks in mid-2021 but then failed to pay her at all during her continued employment until April 2023.

The casual retail assistant in that time lived with the business owner in her flat above the bakery on three separate occasions for a total of nine months, while ultimately being required to give the owner $18,000 for rent and a holiday, as well as to balance the till float and pay the night baker.

In June 2025 Judge Papadopoulos ordered Village Bakery Balgowlah Heights and its owner to pay back the $18,000, in addition to another $18,000 for belongings the owner refused to allow the worker to retrieve from her flat, and another $54,000 for unpaid wages and superannuation.

The judge delivered a blow to the business and its owner in December, when he handed down his penalty judgment.

In that judgment, the judge closely considered whether the defendants’ conduct met the statutory definition of serious contravention at s557A of the Fair Work Act, paving the way for heavier penalties.

“Section 557A provides that a contravention is a serious contravention if the person knowingly contravened the provision and the conduct was part of a systematic pattern of conduct relating to one or more persons,”…

“This is not a case of isolated or inadvertent non-compliance…

“The breaches occurred over an extended period, in circumstances where the [owner] exercised direct control over the financial operations of the [bakery], including its payroll and related record-keeping functions.

“Further, the [owner’s] demands for the [worker] to pay business expenses and personal costs for the benefit of the employer were made expressly and repeatedly, and were satisfied by the [worker].

“These facts establish that the respondents knew the essential circumstances of their conduct and intended that it occur.

“The ongoing, repeated, and deliberate nature of these contraventions demonstrates not only that the respondents were aware of the breaches, but also a pattern of consistent disregard for the statutory obligations owed to the [worker].”

With the worker’s lawyer seeking maximum penalties of $3 million to $4 million, Judge Papadopoulos found the underpayments “indefensible” in relation to an adult employee.

However, he held them “particularly egregious when regard is had to the [worker’s] age and limited capacity, and the very limited period during which she received any remuneration during the term of her employment with the [bakery]”.

“Context matters and to characterise the conduct relevant to the contraventions in this matter as being blameworthy or deplorable is, frankly, an understatement given the relevant context here.”

“The relevant conduct involves the respondents knowingly taking advantage of the [worker], who at the time of the contraventions was a teenager with an intellectual disability, for their own commercial gain.

“Such conduct represents a profound breach of trust; the [owner] invited the [worker] to reside with her, then prevailed upon [her] to pay for goods and services to conduct the [bakery’s] business and to pay expenses for the benefit of the [owner] and her family members.

“The respondents’ financial gain was achieved at the [worker’s] expense: she lost substantial time and, more gravely, $18,080.60 of her own money as a direct consequence of this exploitation.

“This is a significant sum for any award-covered employee, and particularly for a teenager.

“These matters weigh heavily in my assessment of penalty.”

Finding also that the owner “actively evaded ” being served notice of the case, “misrepresented her whereabouts, and refused to participate in the proceedings”, Judge Papadopoulos said such conduct should attract “substantial” penalties.

“The need for deterrence is heightened having regard to the [worker’s] extreme vulnerability and the [owner’s] deliberate exploitation of that vulnerability for personal gain.

“The penalty must have sufficient sting to ensure the [owner] is deterred from engaging in similar misconduct and workplace exploitation in the future.”

Considering also payslip and record-keeping breaches, the judge imposed total penalties of $160,000 on the bakery and $75,000 on the owner, to be paid to the worker.

Lessons for employers

While there may be a short-term gain in depriving employees of their legitimate minimum conditions, such as cash flow improvements, ultimately if there is non-compliance and the law catches up then major penalties can be enforced, meaning an almost certain death blow to the business. Make sure you stay on top of the award and NES entitlements.