The Chief Industrial Magistrate's Court of NSW has recently ordered a sole director to pay backpay and penalties for an employee where the employer company failed to pay. The case is a reminder that the Workplace Ombudsman may pursue individual company directors who think they can avoid their workplace obligations if their businesses are dissolved.
The Court had initially made orders in March 2008 against the employer company, Neophone Pty Ltd. The amounts were not paid and the company was wound up. The sole director, Mr Troussov, left the country in April 2008 on an "overseas trip" and had not returned to Australia at the time of hearing in late August. The Workplace Ombudsman applied for orders to be made personally against Mr Troussov. The Workplace Relations Act provides for personal liability for breaches of the civil remedy provisions of the Act where the person has been "knowingly concerned in or party to the contravention". In this case, the court found that Mr Troussov was intimately involved in the business and the breaches, was the director, owner and operator of the business and the conduct of the company was his conduct. The court considered that Mr Troussov's failure to return and his failure to participate in the proceedings showed a lack of remorse or contrition. In the circumstances, the court ordered that Mr Troussov pay a total of $11,200.00. Employers, and particularly smaller employers who have a "hands on role" in their company, should keep in mind that they may be personally liable for the payment of proper entitlements to employees. Unless you intend to leave the country permanently (and that may not be a complete answer), it pays to ensure that correct wages and entitlements are being paid to employees. |
Employers