As part of an ongoing campaign, the Fair Work Ombudsman (FWO) will be taking a hard line with employers “who have significant compliance issues and cannot demonstrate that they made a diligent effort to understand what Award or industrial instrument applies to their workplace”, states Natalie James, FWO. “Employers must be aware that we are prepared to take enforcement action in response to reckless, deliberate or repeated breaches of pay and record keeping laws,” she said.
The FWO announced today it has assisted three workers employed by businesses in the Newcastle/Hunter region of NSW to recover $38,000 in unpaid wages and entitlements.
In one matter, a young labourer in Lake Macquarie was back-paid $25,220 after he was underpaid as a result of being incorrectly classified as an apprentice.
The labourer was initially employed on a casual basis and was paid the correct entitlements under the Manufacturing and Associated Industries and Occupations Award. The labourer and his employer then agreed that the labourer would commence an apprenticeship; however the employer failed to properly complete the paperwork and registration process required to enter into a formal training arrangement.
The employer then commenced paying the labourer the lower, applicable apprenticeship rates of between $9 and $12.08 for ordinary hours and $13.50 to $24.16 for overtime hours for a period of about a year.
As the employer had failed to complete the steps required to enter into a formal training arrangement, the employer was lawfully required to pay the worker the full Award rates that applied to his employment position.
These three examples highlight a growing trend of the Fair Work Ombudsman being increasingly prepared to use its enforcement powers against employers to rectify underpayment issues. These recent cases should be a timely reminder for all businesses, big and small, to be vigilant in making sure their payroll systems and other procedures are in order.
“It is rare to see employers deliberately flouting the law, and in most cases ABLA comes across, the employer honestly believed they were doing things correctly and had the right systems in place”, comments Kyle Scott, Director. “They are then surprised to discover that a few small payroll issues across their business resulted in significant underpayments of many thousands of dollars over time. These kinds of inadvertent and unforeseen issues can then have a huge impact on their business once they are discovered. So prevention should always be the priority with these types of issues.”
To ensure your business is in order, take the time to review your policies and procedures relevant to your industry Award, as well as classification and pay rates, allowances, overtime and penalty rates. Workplace compliance is a tricky business – to ensure you don’t miss anything, let the experts take a look. Get in touch today with one of our employment law experts.