FWO secures penalties against residential builder for underpaying apprentice

FWO secures penalties against residential builder for underpaying apprentice

FWO secures penalties against residential builder for underpaying apprentice

A residential building business and its director have both received financial penalties in the Federal Circuit and Family Court of Australia for failing to fully comply with compliance notices arising from a Fair Work Ombudsman (FWO) investigation into allegations of underpayment of wages and failing to reimburse training fees.

Mr Chris Douvos operates a residential building business, JACZ Holdings Pty Ltd (JACZ), and is the sole director and shareholder. The business has operated in the Melbourne area for over 35 years and has experience in townhouse projects, new home builds, extension and masonry brickworks.

JACZ employed a second year full-time bricklaying apprentice between 2 March 2021 and 9 January 2022. The apprentice was employed under the terms of the Building and Construction General On-site Award 2020.

A Fair Work Inspector commenced an investigation into the business following complaints from the apprentice alleging the business had failed to reimburse training fees, underpaid minimum rates of pay, and failed to pay him during certain periods.

Following the investigation, the inspector formed the view that the majority of claims were substantiated. The FWO issued a compliance notice against the business on 8 July 2022. The business failed to comply.

As of 29 May 2023, the business had not made any payments to the apprentice as required by the compliance notice.

By July 2023, he was paid $444 towards the reimbursement of training fees, but the business failed to reconcile the outstanding amounts.

No other payments have been made to date.

The FWO communicated with the business on several occasions, outlining the process to be followed.

In evidence before Deputy Chief Judge Patrizia Mercuri, Mr Douvos claimed that he had been suffering from several medical conditions that affected his judgement and contributed to the ongoing non-compliance towards the apprentice’s substantiated claims.

Nevertheless, the Deputy Chief noted that the business appears to be still operating as well as employing other staff. As she noted with some concern, “the respondents have not produced any evidence that they have changed their systems or introduced different practices to ensure that a similar issue does not arise in the future”.

Taking into account all of the relevant circumstances, the Deputy Chief imposed a penalty of $16,500 against the business and $3,300 against Mr Douvos.

Apprentices are one of the most complex forms of employment in Australia, with employment contracts, training contracts, statutory training conditions, fair work laws, Awards, and much more.  We encourage employers to seek advice with regard to apprentices.

Fair Work Ombudsman v JACZ Holdings Pty Ltd [2024] FedCFamC2G 108 (14 February 2024)

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 0417 622 178, 1300 WAL LAW 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: 415.0324

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