FWO secures penalty against Construction Company

FWO secures penalty against Construction Company

The Fair Work Ombudsman (FWO) has secured a penalty against a construction company for failing to comply with a notice of direction issued under s.35 of the now repealed Building and Construction Industry (Improving Productivity) Act 2016 (the BCCI Act).

The matter was initiated from a complaint by a subcontractor, SAS Flooring Pty Ltd (SAS Flooring), to the Australian Building and Construction Commission (the ABCC) about delays in receiving payments from Auscare Constructions Pty Ltd (Auscare) for work performed at the Goodhew Gardens project in southern Sydney.

As the Federal Labor government has now dissolved the ABCC, carriage of the matter was transferred to the FWO.

On 15 October 2021, the ABCC issued an initial Notice to Auscare and its director, requiring them to provide a report by 8 November 2021 regarding contravening the BCCI by making payments outside the time frames specified in the contract.

Auscare failed to comply with the Notice but claimed the delays were due to the COVID-19 Pandemic impacting the business and resulting in negative cashflow and unavailability of staff because of lockdowns, quarantining and travel restrictions.

Auscare failed several times to respond within the notice periods specified by the ABCC.

Federal Circuit and Family Court of Australia Judge Robert Cameron acknowledged that Auscare released retention monies to SAS Flooring prior to the expiration of the standard building industry 12-month retention provision.

In determining an appropriate penalty, Judge Cameron noted, “the payment failure occurred at a time of particular difficulty for Australian businesses but SAS Flooring’s need to be paid timeously for its work at a time when difficulties of the same sort can be assumed to have affected it too, should not be overlooked. The payments were made within a reasonable time and it has not been suggested that SAS Flooring have been more than usually disadvantaged by receiving payment a couple of months late”.

In imposing a penalty of $5,000, Justice Cameron acknowledged the early admissions of the company and the expression of contrition provided.

Justice Cameron also determined that Auscare was liable to pay the ABCC’s legal costs in the amount of $10,223.

Fair Work Ombudsman v Auscare Constructions Pty Ltd [2023] FedCFamC2G 289 (21 April 2023)

For questions about compliance with contractual payments, 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: 342.0523

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