Breaking employment laws is never smart. As a director
and HR manager recently learned, assuming that the consequences of
cutting corners will fall just on the company can give a costly
false sense of security.
Oz Staff Career Services, which supplies cleaners to other
businesses, had the practice of deducting an "administration
fee" and meal allowances from its staff. That's a big no
no under the Fair Work Act, as any deduction must be both
authorised by, and for the benefit of, the employee.
To make matters worse, when the Fair Work Ombudsman (FWO) caught
wind of the dodgy deductions and asked for pay records as part of
its investigation, conveniently, Oz Staff supplied a bunch that
didn't record the deductions. Another strike as the Fair Work
Act requires all employers to keep employee records, including in
relation to pay, that aren't false or misleading. Trying to
deceive the government workplace watchdog was obviously not the
brightest idea either.
There was no question that Oz Staff had breached the Fair Work
Act but the FWO went after its director and HR manager too.
Under the Fair Work Act, individuals involved in various
contraventions can be hit with personal fines. The Oz Staff execs
argued that the FWO couldn't prove that they had actual
knowledge of the contraventions and therefore, they weren't
"involved". The Court said that's just silly.
The HR manager was, well, the human resources manager, and
across the employment affairs of Oz Staff, including wage
deductions and employment records. As for the director, he was Oz
Staff's only director, its CEO, and had overall management of
the business. The Court held that it was beyond doubt that the two
were knowingly involved in the contraventions. An important lesson
for those who think willful blindness will be their savior.
The actual penalties will be dished out later this year but the
director and HR manager are facing personal fines of up to $10,800
We do not disclaim anything about this article. We're
quite proud of it really.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).