FWO secures penalties against employer for failure to settle underpayments and provide payslips

FWO secures penalties against employer for failure to settle underpayments and provide payslips

The proprietor of a racing business has received penalties in the Federal Circuit and Family Court of Australia for failing to comply with statutory notices arising from a Fair Work Ombudsman (FWO) investigation into the incorrect payment of wages.

The initial investigation identified that the employer, Ms JS, who trades as Vengeance Performance Horses in regional Victoria, underpaid two employees and did not provide a payslip as required by legislation.

The employer is a sole trader who operates a business involving retraining retired racehorses predominantly for equestrian purposes. The underpayments included amounts for wages, overtime, and incorrect classifications. The employees were engaged under the Miscellaneous Workers Award 2000.

In February 2021, a Fair Work Inspector commenced an investigation into the business following complaints from two former employees, Ms H and Ms S.

The Inspector formed a reasonable view that the employer had contravened the provisions of the Award. With respect to Ms H, she had been incorrectly classified and was underpaid for Saturday overtime rates, amounting to an estimated loss of $1,900.00 over a six-month period. With respect to Ms S, she had suffered an estimated loss of $230.00 over a three-month period.

Ms JS, the proprietor of the business, was initially cooperative with the FWO. She acknowledged that entitlements were outstanding and promised to repay in full the amounts owed as soon as she had the funds to do so. She claimed that her business had suffered a significant downturn in revenue due to the COVID-19 lockdowns.

An initial payment of $500 was received by Ms H on 18 April 2022. No further payments were received from the business, no outstanding payslips were issued, nor did she respond to written requests from the FWO to settle the matter.

As noted by Judge Amanda Mansini,

“In all of the circumstances, I am satisfied that the Respondent was aware of the Compliance Notices and the consequences of failure to comply. The decision of the Respondent not to comply was deliberate … the Respondent’s conduct demonstrates a failure to recognise the seriousness of her non-compliance with a statutory notice and a failure to properly acknowledge the loss suffered by the employees”.

Judge Mansini imposed a penalty of $6,600 on the employer, representing 25% of the maximum penalty for each contravention.

The case again highlights the significant penalties that the courts will impose on employers who do not cooperate with relevant authorities when faced with wage claims from current or former employees.

Fair Work Ombudsman v JS [2022] FedCFamC2G 478 (20 June 2022)

For questions about compliance with awards or agreements, wage claims, the FWO, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 WAL LAW, 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.

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