Employers should be aware of a number of recent decisions in which significant penalties have been imposed on employers who are found to have underpaid employees under award requirements. Under the Workplace Relations Act 1996 (Cth) which covers all trading corporations, fines of up to $33,000 per breach can be imposed for failure to pay employees under the Australian Fair Pay and Conditions Standard and applicable awards and registered agreements.
The Federal Office of Workplace Services has prosecuted a number of employers for underpayment and the Federal Magistrates Court and Melbourne Magistrates Court have handed down significant penalties in January and February 2007, as shown by the following examples: - Pangaea Bar and Restaurant in Canberra was ordered to pay $64,000 in penalties in addition to over $4,000 in outstanding wages and interest owing to two Filipino employees who held subclass 457 work visas to work in Australia for award breaches;
- Artistcare Pty Ltd, a Victorian art supplies retailer, was ordered to pay a $33,000 penalty for underpayments of $3,611 for two employees under two Victorian awards. The penalty included $16,500 for breaches of minimum rates of pay provisions and $16,500 for breaches of annual leave provisions;
- Sydney based franchise POW Juice Pty Ltd was ordered to pay penalties of $49,500 for underpayment of 22 young employees in addition to outstanding monies of $5,019 and interest. In this case, the vulnerability of young adults and children was a significant factor for the Magistrate in determining the penalty.
All courts spoke of the importance of complying with awards and legislation and the necessity to impose penalties of a deterrent nature. THE LESSON: Employers should check to make sure that they are complying with any applicable awards in their workplace. Consideration should be given to the availability of collective agreements and Australian Workplace Agreements where award terms are particularly complex or onerous. FOR MORE INFORMATION: Contact Rob Stevenson or Gillian Holmes at Nathan Lawyers Tel: 07 3846 7322 Email:
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2007 Bulletin Archive