Director receives significant penalties for underpayment of entitlements

Director receives significant penalties for underpayment of entitlements

Director receives significant penalties for underpayment of entitlements

The Federal Court has imposed significant penalties upon the director of several construction companies for failing to pay an employee multiple entitlements.

A construction labourer, Mr A, sought action for non-payment of entitlements, naming three respondents, Ractors Pty Ltd, Straightline Construction Co Pty Ltd, and Mr Tarkan Gulenc, a director of both companies now in liquidation.

Mr A is a refugee with a limited understanding of English.

Mr A was an employee of Ractors from around 24 June 2019 to 18 April 2021 and an employee of Straightline Construction from around 19 April 2021 to 2 May 2021.

He was employed as a labourer on a permanent full-time basis.

He commenced proceedings for non-payment of entitlements on 28 June 2022 against Ractors and Straightline Constructions; however, following their legal demise, he amended his application to pursue Mr Gulenc, a director of Straightline and the sole director of Ractors.

Mr Gulenc did not participate in the hearings on the matter.

Mr A presented evidence before Justice Heather Riley that he was owed $49,229.50 in earnings plus $1,470.04 in superannuation from his employment with the related companies.

His monetary claims against the companies included:

  • failure to pay the minimum hourly wage;
  • failure to provide minimum hours;
  • failing to pay prescribed overtime;
  • failure to pay the prescribed overtime meal allowance;
  • failure to pay the prescribed superannuation contributions;
  • failure to pay the prescribed site allowance;
  • failure to pay fares and travel allowance on RDOs;
  • failing to correctly pay for Melbourne Cup Day;
  • failure to pay annual leave and leave loading.

The court was told that.

“Gulenc hired Mr A and had him sign documents which, though unreadable to Mr A, presumably set his rate of pay together with other conditions … Gulenc was cognisant of his contravening conduct, as was his instruction to Mr A to refrain from providing payslips to the union and to contact him if any such request was made”.

Justice Riley determined,

“This was clearly a scheme to avoid scrutiny of unlawful conduct … it can be inferred that Gulenc deliberately engaged in avoidance of obligations under the relevant industrial instrument and the FW Act”.

In considering the monetary penalties to be imposed on Mr Gulenc, Justice Riley noted,

“The conduct was serious, and there are few mitigating factors. The contraventions continued for a long period of time. There was no indication of remorse. There was no admission of liability or cooperation, and Gulenc has not participated meaningfully in the proceedings”.

She determined the appropriate total penalty against Mr Gulenc to be $124,488.

A v Ractors Pty Ltd (in liquidation) [2023] FedCFamC2G 946 (20 October 2023)

For questions about award or enterprise agreement entitlements, wage claims, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 925 529, 0417 622 178 or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

Ref: 395.1123

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