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 per breach.
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