CCBR Business Review

19 B U S I N E S S T I P S THERE IS A definite change in approach - both by the Fair Work Ombudsman and the Federal Court - to prosecuting and penalising breaches of awards, even for something as simple as paying an enti- tlement late or failing to issue payslips. There have been two recent deci- sions of the Federal Court which have emphasised the very significant penalties that can now attach to underpayment of wages. The cost of civil penalties being imposed by the Federal Court are now at a level which can crush a small busi- ness. Even more concerning, the Fair Work Ombudsman are very aggressive in their prosecutions. In December 2017, the Federal Court in Melbourne handed down a deci- sion in relation to the underpayment of overtime by a small plumbing company in relation to an apprentice over a three month period. The court found that the employee had been asked to work a significant amount of overtime for which he was not adequately paid. Secondly, that the employer had not bothered registering the apprenticeship and therefore the employee should have been paid as a labourer. There were a variety of other technical breaches that arose from that set of facts. Significantly, the employer, Pulis Plumbing, did not have any prior findings against it in relation to breaches under the Fair Work Act. Despite being a “first offence”the court imposed a $100,000 fine on the busi- ness and a $21,500 fine upon the director plus the repayment of the outstanding amounts. The court took into account the fact that the worker was only 20 years old and the employer had held out the prom- ise of an apprenticeship. In another decision this month, the court looked at the responsibility of #LOVINGMUSICLOVINGLIFE 80,600 people on the Coast tune in weekly * *Xtra Insights Survey 1 2017 released Sept 19, 2017 Underpaying an award entitlement? Avoid it at all costs – the penalties are now frightening! a director personally in relation to a breach involving the payment of a flat fee by a security company. The pay- ment of the flat fee translated into a number of breaches under the award. Even though it was one decision, it amounted to 12 different breaches of the Act and the award. At first instance, the Federal Circuit Court made a deci- sion that - although there were 12 breaches - because it arose under one decision of the director, only one fine could be imposed upon the director. On appeal, this was overturned and Justice Bromwich of the Federal Court found that because the one decision (i.e. to pay a $25 flat rate) gave rise to up to 12 different breaches, each of them could attract a penalty. This decision led to a potential fine of nearly $50,000 upon the director – personally – in addition to the repay- ment of the outstanding amounts and a much larger fine upon the company. Get the right advice – not from the workplace but from a competent employment lawyer. Unfortunately, given the risks, any other source cannot be relied upon. By Warwick Ryan, Partner, Hicksons Lawyers CENTRAL COAST BUSINESS REVIEW FEBRUARY 2018