In the last few years, the Fair Work Ombudsman (FWO) has become increasingly vigilant in pursuing small to medium sized employers who are not compliant with their obligations in relation to employee entitlements, in particular the payment of wages.
The FWO is increasingly willing to take Court action against employers who are failing to comply with their obligations arising under the Fair Work Act 2009 (Cth) and any applicable awards. Recent judgments from the Federal Courts also show that Judges are prepared to hand down orders for large penalties where there have been serious contraventions.
For example, in March, April and June this year, penalties were imposed by Federal Courts as a result of FWO prosecutions of: $188,100 for the underpayment of trolley pushers; $160,000 for the sham contracting and underpayment of IT workers; and $408,000 for the underpayment of 7-Eleven workers. These penalty orders were made in addition to orders that the underpaid workers be paid their outstanding entitlements.
Further, in more than 50% of prosecutions commenced by the FWO against employers in the financial year ending on 30 June 2015, the FWO also sought penalties against individuals involved in the employer’s contravention, such as human resource managers, operations managers and directors.
Given the increasing vigilance in this area of employee entitlements, employers and their directors and managers are strongly encouraged to conduct regular compliance audits and staff training to avoid exposing themselves to civil penalties and back payment orders.