A recent investigation by the Fair Work Ombudsman
(FWO) has highlighted the importance of compliance
with industrial instruments and manager training. The investigation
into a retailer with over 30 stores in Queensland, New South Wales,
South Australia, Victoria and Western Australia has led to the
discovery that 877 employees were underpaid a total of $1.376
million between March 2006 and March 2010.
An employee made a complaint to the FWO alleging underpayment.
The retailer voluntarily reimbursed the employee who complained to
the FWO however, during the course of the investigation, the FWO
asked the retailer to conduct an audit to identify whether any
other employees had been underpaid.
During the self-audit, the retailer identified a practice where
employees in some stores were required to attend work without being
paid. This occurred when employees were required to attend team
meetings, or when employees were required to attend their
workplace, before and after their rostered shifts without receiving
payment. The employer identified underpayments totalling $1,376,281
over a seven year period.
The retailer has explained that the contraventions occurred due
to a breakdown in management communication, which it has since
sought to rectify through the provision of training and compliance
What were the consequences?
The retailer agreed to reimburse the employees who had been
underpaid. The retailer also entered an enforceable undertaking
with the FWO. Under the terms of the enforceable undertaking, the
retailer was required to:
reimburse all underpaid staff in full within two months
send a written apology to all affected employees
conduct a paid meeting to explain the contravention to all
existing employees affected by the breach
issue a memo to all employees, which is to be displayed in all
stores and posted on the retailer's website for 30 days
place an advertisement in The Australian in which the retailer
will apologise for the breach and advise the public that it has
taken corrective action
ensure all store managers attend workplace relations training
commission the preparation of a workplace relations compliance
manual for distribution to all staff
pay $120,000 to the Working Women's Centre Queensland to
assist with the promotion of compliance with Commonwealth workplace
report to the FWO on the pay and conditions of its employees at
the end of each financial year for the next three years
report to the FWO with details of the implementation of systems
and processes designed to ensure ongoing compliance with workplace
Key lessons for employers
The retailer has apologised for its breaches, which it says were
inadvertent and the result of a failure in management
communication. However, the cost to the business of rectifying
these breaches was quite significant, especially in the current
economic climate. This situation may have been avoided by the
provision of training to managers on workplace relations laws and
an overview of the rights and responsibilities of employers under
the Fair Work Act 2009 (Cth), steps which the retailer is
now required to undertake.
Employers should take a proactive approach to managing
employment issues and to reduce their business risks through
workplace training. Gadens Lawyers offers a range of customised
training packages to meet the needs of organisations, including
training on workplace relations laws and industrial
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
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