$450,000 fine for disregard of workplace laws

The Fair Work Ombudsman has secured a total of $450,000 in penalties against the operators of a retail gift shop in Victoria, for displaying “deliberate disregard” of workplace laws in underpaying three workers.

The retailer, which sells motorsport and general merchandise and souvenirs, has been penalised $375,000. In addition, the company’s sole director and owner has been penalised $75,000.

The Federal Circuit and Family Court imposed the penalties in response to the employer underpaying three workers a total of $40,000 and breaching laws relating to pay slips and employment records. The owner was involved in all contraventions.

The Fair Work Ombudsman (FWO) investigated the matter after receiving requests for assistance from the underpaid workers. The investigation found the workers were paid unlawfully low flat hourly rates of $20.00 on weekdays and $25.00 to $27.00 on weekends. The workers were entitled to hourly rates of up to $26.76 on weekdays, up to $37.47 on Sundays and up to $53.53 on public holidays.

The breaches related to entitlements owed under the General Retail Industry Award and the Fair Work Act’s National Employment Standards (NES), including casual minimum wages, overtime rates, annual and personal leave entitlements, and penalty rates for weekend and public holiday work.

The penalties applied in this matter suggest this employer has been wilfully negligent. And on multiple occasions. Many employers will read the Fair Work Ombudsman’s Media Release on this matter and think “well that’s not me…I try and do the right thing, and I know I pay above the Award”. And while that’s an admirable approach, it’s one not likely to protect you from consequences if it turns out you don’t have the right employee records in place.

Smart place to start? Ensure you hold a record of the Award covering each employee’s role as well as their Award classification (level) for their current position. And that part of your annual HR review process involves a review of classifications for each person in your team. If you’re under the impression an Award doesn’t apply to your employee, think again…this is not as common as many employers believe. Why is this step important? Because each Award classification links to a minimum rate of pay. When you have the Award and classification documented correctly from the outset and your hold records confirming you’ve undertaken an annual review of remuneration, an employee is less able to claim they are owed an amount in excess of this.

Next steps? Here’s three to tick off your list:

1. If you pay Award-covered employees an annualised salary, or any sort of contractual offsetting arrangement, ensure you hold full records of how the employee is “better off overall” under this arrangement. The employee should also be provided a written record of better off overall calculations. This arrangement (and your records confirming this) needs to be reviewed at least annually.
2. Pay your employees the loadings, overtime, penalty rates and allowances listed in their covering Award…including the oft-forgotten annual leave loading. How many allowances are there? Depends on the Award: the Clerks Award has 13, there’s 18 in the Health Professionals and Support Services Award and the Building and Construction Award has 79. Lesson? Get familiar with the Award (or Awards) covering your employees so you know what you’re obligated to pay.
3. That payslips are issued on time – and that means provided to an employee within 1 working day of pay day, even if an employee is on leave – and that these contain the information under law: currently 10 minimum line items.

We don’t have to tell you how hectic things can get when you’re running a business. Last thing any employer needs is to have to scramble around looking for records when FWO calls in response to an employee lodging a complaint around some aspect of their remuneration. Our tip? Get the right information for your business then make a start on rectifying any gaps between what you have and what you need. Need some help getting your house in order? Call Bare Bones Consulting today.