Posts: Underpayment

The director and Chief Executive Officer of a group of four sushi restaurants which operated in NSW, the Australian Capital Territory and the Northern Territory was recently ordered to pay $1.6 million for her involvement in contraventions of the Fair Work Act 2009 (Cth) by the Federal Court of Australia.

The Fair Work Act 2009 (Cth) requires employers to keep certain employee records for a period of 7 years. These records are necessary to ensure that employees have been paid their minimum entitlements should an underpayment claim be made.

The Federal Court of Australia has issued one of its first penalty decisions since the High Court of Australia’s decision earlier this year of Australian Building and Construction Commissioner v Pattinson [2022] HCA 13.

In response to the COVID-19 pandemic, the Full Bench of the Fair Work Commission amended the Clerks – Private Sector Award 2020 in March 2020 to include temporary measures to facilitate working from home arrangements.

The Queensland Government recently passed legislation amending the Criminal Code Act 1899 (the Code) to criminalise wage theft by employers in Queensland.‍The Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (the Bill) was introduced to the Queensland Parliament in response to a Report released in 2018 by the Queensland Parliamentary Education, Employment and Small Business Committee following an inquiry into wage theft in Queensland. The Report identified critical issues in wage theft as well as deliberate action taken by employers to frustrate employees’ attempts to recover entitlements.

In June 2015, Judge Jarrett of the Federal Circuit Court of Australia found that a Northern Queensland-based tour company and its owner had underpaid five employees and contravened the Fair Work Act 2009 (Cth).

Workplace bullying can be extremely serious and should not be tolerated by employers.

The Fair Work Ombudsman (FWO) is responsible for ensuring compliance with workplace laws.

No employer operates in a silo – all employers operate in complex systems of interrelated stakeholders including employees, customers, other businesses, and regulators who enforce the laws that apply to the employer and their business.

Fair Work Ombudsman’s (FWO’s) successful prosecution of a hotel operator and its owner who took adverse action against two employees because of their Chinese race and Malaysian extraction.

Settlement agreements, terms of settlement, deeds of release or release and undertakings are all terms which are used interchangeably to refer to the binding and confidential agreements.

It is estimated that there is over $70,000 in unpaid wages owing to employees, and many of those are international workers on visas who are not eligible for the government-funded Fair Entitlements Guarantee scheme.

Issues arise when casual employees are engaged on a long-term basis, have regular and systematic hours and a reasonable expectation of ongoing employment.

Since the introduction of the modern award system in 2010 many employers have found it difficult to understand the complex requirements. In fact, the Fair Work Ombudsman reported that for the 2013-2014 financial year it recovered more than $23 million for 15,483 workers.

The Federal Circuit Court of Australia recently found a director and two managers of a company which operated a Victorian BP Service station personally liable for the underpayment of wages and breaches of the Fair Work Act 2009.

Department store Myer has come under increased pressure from the Fair Work Ombudsman (FWO) after it declined to enter into a voluntary compliance deed with the regulator.

The Director of Sona Peaks Pty Ltd (in liquidation) which traded as an Indian food restaurant in Victoria was recently ordered by the Federal Circuit Court of Australia to pay a total of $26,715 (plus interest) by way of an Attachment of Earnings Order to his wages with his new employer Metro Trains Melbourne Pty Ltd.

In the recent Federal Circuit Court of Australia’s decision in Fair Work Ombudsman v Lu’s Healthcare Pty Ltd & Anor [2016] FCCA 506 (Massage Case) massage parlours were warned that failure to comply with the obligations under modern awards and applicable employment laws will not be tolerated.

It has recently been reported that celebrity fashion designer, Johanna Johnson who has designed gowns for Madonna and Christina Hendricks is being pursued in court by the Australian Taxation Office (ATO) and former employees for more than $1 million. The amount includes at least $300,000 in owed superannuation that had not been paid to employees for many years.

In a recent Federal Circuit Court decision, Fair Work Ombudsman v Commercial and Residential Cleaning Group Pty Ltd & Ors [2017] FCCA 2838, Judge Lucev ordered significant penalties against a Perth cleaning company and two of its directors.

The Fair Work Ombudsman (FWO) continues to successfully prosecute and investigate businesses that exploit workers from overseas. In a recent investigation of a Perth restaurant, the FWO found that two overseas workers had been underpaid by their employer to the tune of $13,822. After admitting to a number of contraventions, the employer agreed to enter into an enforceable undertaking with the FWO to make good.

In recent years, the Fair Work Ombudsman has made it clear that it is prepared to prosecute not only employers, but also individuals and third parties ‘involved in’ contraventions of the Fair Work Act 2009 (Cth) (FW Act). Most recently, the FWO was successful in its prosecution of a Chinese restaurant as well as its sole director, its human resources manager and its store manager for various breaches of the FW Act, which resulted in 85 employees being underpaid a total of $583,688.68 over a 16 month period.

Airtasker is the most recent operator in the “gig” economy facing allegations of sham contracting and underpayment for work performed.

The Western Australian Industrial Magistrates Court’s (the Court) decision in Simone Jade Stewart v Next Residential Pty Ltd [2016] WAIRC 00756 (16 September 2016) (Stewart’s Case) is a warning for employers to carefully review their current employment contracts, especially for award covered employees who are employed on an “annual salary” in accordance with an award term.

Last month, the Fair Work Ombudsman (FWO) launched unprecedented legal action in the Federal Court against a large mushroom farm that paid hundreds of its employees based on how much they picked at a rate of 60 to 80 cents per kilogram. It is alleged that the employees had been exploited and underpaid almost $650,000 in eight months.

Earlier this month, the Fair Work Ombudsman (FWO) announced that cleaners working at hotels run by Oaks Hotels & Resorts Limited (Oaks), a major operator of more than 43 properties across Australia, have been back paid a total of $1.9 million.

Earlier this year, we told the tale of the of the trolley collectors in Once upon a trolley – an ongoing saga involving underpayments, vulnerable workers and the Fair Work Ombudsman’s (FWO’s) scrutiny of labour supply chains. In that blog, we focussed on an enforceable undertaking that involved Coles supermarkets and the FWO. Now, Woolworths have come to the trolley collectors’ party, this time in the form of a Proactive Compliance Deed with the FWO.

In its first ever underpayment prosecution relying on the race discrimination provisions of the Fair Work Act 2009 (Cth) (FW Act), the Fair Work Ombudsman has successfully established that two employees of Chinese descent and Malaysian extraction were underpaid because of their race and/or national extraction.

In most cases, a finding of deliberate non-compliance by a business will result in the imposition of a hefty fine by a court (a pecuniary penalty order). It is also not uncommon to see courts issue other orders such as requiring non-compliant businesses to undergo external audits or requiring managers to undergo specific training. The Federal Circuit Court of Australia has recently utilised the wide scope of this power in Fair Work Ombudsman v Greenan (No. 2) [2017] FCCA 2059.

It is no secret that the Fair Work Ombudsman (FWO) has been cracking down on employers breaching their employment obligations under the Fair Work Act 2009 (Cth) (the FW Act) and exploiting vulnerable workers in order to gain financial and competitive advantage. Indeed, the Federal Government is very close to passing a Bill through Parliament that will not only impose much harsher penalties on employers but will also increase the FWO’s powers to investigate this type of behaviour.

Student accommodation provider UniLodge faced reports this month that it deducted a total amount of $74,336.00 for “rent” over the period October 2011 to April 2016 from the combined salary of two of its onsite caretakers.

Sham contracting and the exploitation of vulnerable workers have been hot topics recently following a series of high profile cases including the likes of 7Eleven, Baiada Poultry and Quest Serviced Apartments. The Fair Work Ombudsman (FWO) continues its crusade, investigating and litigating claims related to worker exploitation in supply chain arrangements.

The plight of trolley collectors has been a focus of the Fair Work Ombudsman (FWO) for many years, and the Australian Industrial Relations Commission before that. In 2011, the FWO shifted its focus to the end users of the trolley collecting supply chain – big supermarkets.

Recenty, MAdE Establishment Group (the Group) and its celebrity chef director and founder went public with a mea culpa that it underpaid the wages of at least 162 employees across its Melbourne restaurants.

The FWO has stressed that workers (i.e. labour hire and employees) must be paid the correct wage in accordance with the Horticulture Award. It is likely that the FWO will be closely monitoring the horticulture industry (and other industries where visa holders are predominately employed) given the high incidences of exploitation that have recently been reported in the media.

Superannuation payments and calculations can be a tricky thing for employers, of all sizes, to get right. These challenges came to light last month when the Financial Sector Union of Australia (FSU) claimed that 7,000 part time staff did not receive their full super entitlements from the Commonwealth Bank of Australia (CBA), with claims dating as far back as 2009.

The Federal Circuit Court of Australia’s decision in Fair Work Ombudsman v Rubee Enterprises Pty Ltd & Anor [2016] FCCA 3456 (Rubee’s Case) has penalised a cafe in Albury NSW $532,900 for exploiting five foreign employees. This is the largest fine ever ordered as a result of legal action by the Fair Work Ombudsman (FWO).

This is the first decision in which the FWO has secured penalties against a master franchisor for its involvement in contraventions of the FW Act.

Underpayment and sham contracting in the labour supply chain has been the focus of much of the Fair Work Ombudsman’s (FWO) and the media’s attention this year. The FWO has conducted a number of campaigns and inquiries into industries where the use of labour hire and independent contractors is prevalent. In some circumstances, it has taken legal action where workers have been underpaid minimum wages and conditions.