May 22nd, 2024
The Fair Work Ombudsman’s (FWO’s) investigation into deliberate and repeated underpayments at a farming enterprise in regional Victoria has resulted in significant penalties being imposed against both the company and one of its directors.
This company first came to the FWO’s attention after two former employees sought assistance. These employees, neither of whom came from English-speaking backgrounds, had been paid an under-award flat rate for all hours worked despite having a lawful entitlement to minimum rates, overtime, casual loading, and public holiday penalty rates under the applicable Horticulture Industry Award 2010.
Upon receiving this request, the FWO conducted its own investigation and sought payslips and records of hours worked from the employer. While the employer did provide some documentation, the FWO noticed irregularities such as how the amount on the payslips did not align to employees’ true earnings. They further noted that vital records were missing, in contravention of the statutory requirement to make and keep such records for 7 years.
The case was later brought to the Federal Circuit and Family Court, which acknowledged this misconduct from the employer to be “particularly serious”. As a result of the investigation, the Court not only ordered the underpayment of $28,531 over 3 years be rectified but also imposed a fine of $130,806 on the company. Additionally, the general manager was individually fined $28,987 for their attempt to mislead the FWO.
This case not only serves as a stark reminder for businesses to ensure employees are adequately compensated in accordance with the appropriate industrial instrument, but to also comply with Fair Work regulations and to cooperate with inspectors. This is particularly prudent given the recent criminalisation of wage theft under The Fair Work Legislation Amendment (Closing Loopholes) Act 2023, which is effective from January 1, 2025. Ensuring compliance now can prevent severe penalties in the future.
22/05/2024
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