A warning to business directors and employers: don't short
change your staff or you could personally end up out-of-pocket! In
June 2016, a Gold Coast security business and its sole director
were hit with penalties totalling $308,000 for the deliberate
underpayment of eight security guards. These penalties are the
highest achieved by the Fair Work Ombudsman in Queensland and are
around 13 times the amount of the $22,779 underpaid to the eight
employees over a three-month period in 2014. This case is a
pertinent reminder that Fair Work will seek court orders against
individual owners and directors who are directly responsible for
contravening the Fair Work Act 2009 (Cth)
The case: Fair Work Ombudsman v Step Ahead Security
Services Pty Ltd & Anor  FCA 1482
On 17 June 2016, the Fair Work Ombudsman won proceedings against
Step Ahead Security Services (SASS) for failure to
pay employees the award rate. The Federal Circuit Court took into
account that SASS was in the process of winding up, underpayments
were deliberate, no apologies were made and the underpayments were
outstanding with no evidence that the payments would be
SASS was penalised $257,000 and its sole director, Owen Jennings
was personally penalised $51,400. The Court agreed with the Fair
Work Ombudsman's submissions that the penalties need to be
significant enough to deter future contraventions of the FWA.
Warnings to employers, managers and HR staff
This case sets a strong precedent that employers, managers and
human resources staff can be personally liable for a company's
breach of the FWA. You can be personally liable if you are involved
in a contravening act despite not knowing that the act constitutes
a contravention. Ignorance of your obligations under the FWA does
not constitute a defence.
Additionally, winding up a company does not prevent the Fair
Work Ombudsman from seeking payment from the directors for
underpayments of employees. In order to avoid hefty penalties and
contravening the FWA, your payments must comply with industry codes
and your employees must receive the right entitlements.
At Bryks Lawyers, we can help you comply with your
obligations under the Fair Work Act 2009 (Cth). Contact our team
today to get the conversation started.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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