This article is part of a regular newsletter. If you wish to receive the newsletter providing information on the latest employee relations news and trends click here and use the “contact us” tab.

My business grows by referrals. I would appreciate it if you would pass my details on to your colleagues, clients or associates who could benefit from my skill set. Defending/Preventing unfair dismissals, policies and procedures, contracts of employment, codes of conduct and more…

I have developed a number of essential resources for people who manage people or advise people who manage people. These essential guides include: the latest Fair Work Information Statement; Is my employee covered by an award? Is my contractor an employee? Examination of the 21-day time limit for unfair dismissals and adverse action claims, Types of employment; report of managing employee risk; unfair dismissal checklist; mandatory employee records checklist; mandatory payslip requirements checklist; wage theft – do not get caught!

These are readily available at gregreiffelconsulting.com.au/resources or click on the following hyperlinks:

Fair-Work-Information-Statement 2020 V2 (Updated following the “Mondelez” decision in the High Court). Every new employee is required to be provided with this document under the provisions of the Fair Work Act 2009.

Is my employee covered by an award (The Fair Work Ombudsman’s account of persons who are not covered by a modern award).You may be surprised by who is and who is not covered by an award.

Employee or Contractor? (Make sure that the “contractor”  you have engaged is not an “employee”.

Extending the 21-day time limit in the FWC. (Updated). When receiving an unfair dismissal or adverse action application, there are VERY strict rules on when the 21-day time limit can be extended.

Casual, temp, etc Special Report Ensure that you employ-right. Given recent Federal Court decisions relating to casuals and past decisions relating to temporary employees, should be read by all people who hire people.

Report on Managing Employee Risk. Managing people risk in your business.

Unfair Dismissal Checklist. Received an unfair dismissal or adverse action claim. Read this. Better still, read it BEFORE you dismiss an employee.

Employee Records checklist This is required under the provisions of the Fair Work Regulations 2009. Heavy fines apply for non-compliance. This is a simple checklist to ensure your business is compliant.

Payslips Checklist This is required under the provisions of the Fair Work Regulations 2009. Heavy fines apply for non-compliance. This is a simple checklist to ensure your business is compliant.

Free eBook – Wage Theft Essential reading for all businesses. Explains in simple terms the extensive powers of the Fair Work Ombudsman to prosecute businesses which underpay its employees.

This article is part of a regular newsletter. If you wish to receive the newsletter providing information on the latest employee relations news and trends click here and use the “Contact us” tab.

My business grows through referrals. I would appreciate it if you would pass my details on to your colleagues, clients, or associates who could benefit from my skill set. Defending/Preventing unfair dismissals, policies, and procedures, contracts of employment, codes of conduct, and more…

SEE also my special report on “Wage Theft” a free resource, by clicking here.

Introduction

The Federal Court has imposed record penalties of $891,000 against the operators of three Hero Sushi takeaway outlets for underpaying workers and providing false records to the FWO.

HSCC Pty Ltd and HSCK Pty Ltd, have each been penalised $225,000 and HSPF Pty Ltd, has been penalised $150,000.

In addition, company directors and owners Deuk Hee “William” Lee and Hokun “Robert” Hwang have each been penalised $85,000, and payroll officers employed at Hero Sushi head office, Chang Seok “Tommy” Lee, Ji Won “Brian” Cho and Jung Sun “Jimmy” Kim, have been penalised $75,000, $16,000 and $30,000, respectively.

Court findings

The Court found that 94 workers across the three Hero Sushi outlets were paid flat rates as low as $12 an hour, resulting in underpayments of $700,832.88 between April 2015 and July 2016. Many of the workers were young overseas workers, including Korean and Japanese nationals on international student and working holiday visas.

The operators also provided Fair Work Inspectors with hundreds of pages of false records across 11 separate occasions, showing inaccurate hours of work and pay rates.

The court found that each of the individuals aided and abetted or were knowingly concerned in some of the company’s breaches of workplace laws.

Comments from the FWO

Fair Work Ombudsman Sandra Parker welcomed the record penalties from the court.

“The penalties imposed against Hero Sushi are the largest ever achieved as a result of a Fair Work Ombudsman litigation and demonstrate that employers who deliberately exploit vulnerable workers will face serious consequences,” Ms Parker said. “Employers need to be aware that penalties for serious falsification of records have been increased since the conduct occurred in this case and any employer engaging in this sort of conduct today can face even higher penalties and sanctions in Court,” Ms Parker said.

“This matter should serve as a warning for all businesses that underpay migrant workers, who may be particularly vulnerable if they have language barriers or be reluctant to seek help due to their visa status. Any workers with concerns about their pay should contact us.”

Discovery made by Fair Work Inspectors

Fair Work Inspectors discovered the underpayments when auditing the Hero Sushi outlets at Kotara in Newcastle and Pacific Fair on the Gold Coast, and the Hero Sushi kiosk at the Canberra Centre during a proactive activity targeting sushi businesses in 2016.

The operators underpaid employees’ minimum hourly rates, casual loadings, penalty rates, overtime, clothing allowances and annual leave entitlements under the Fast Food Industry Award 2010. Superannuation was also underpaid and pay slip laws were breached. In total:

  • 30 employees were underpaid $215,066.45 at the Newcastle outlet
  • 43 employees were underpaid $293,451.26 at the Canberra outlet
  • 21 employees were underpaid $192,315.17 at the Gold Coast outlet.

HSCC Pty Ltd, HSCK Pty Ltd and HSPF Pty Ltd have back-paid all underpaid employees they have been able to locate and paid back-payment amounts for other employees to the Fair Work Ombudsman, which will hold the money in trust for the workers until it can locate them. Many employees are yet to be located, including a number who have left Australia.

The judge’s comments

In his judgment, Justice Geoffrey Flick said, “This is a case about greed and the exploitation of the vulnerable.

“Those in a position to ruthlessly take advantage of others pursued their goal of seeking to achieve greater profits at the expense of employees. In doing so, a great number of false documents were deliberately and repeatedly created with a view to concealing the fraud being perpetrated. Lies were told to cover up the wrongdoing. It was only when the “game was up” that those responsible admitted their misdeeds.”

Judge Flick said that:

“the quantum of the penalties to be imposed has to be such that they are not seen as simply the “cost of doing business” in the fast food industry.”

In addition to the penalties, Justice Flick also ordered the companies to display workplace notices detailing employee rights and entitlements and to commission an external audit of its compliance with workplace laws within 28 days and report the results to the Fair Work Ombudsman.

 

This article is part of a regular newsletter. If you wish to receive the newsletter providing information on the latest employee relations news and trends click here and use the “Contact us” tab.

My business grows through referrals. I would appreciate it if you would pass my details on to your colleagues, clients, or associates who could benefit from my skill set. Defending/Preventing unfair dismissals, policies, and procedures, contracts of employment, codes of conduct, and more…

SEE also my special report on “Wage Theft” a free resource, by clicking here.

Introduction

The Fair Work Ombudsman has secured $264,690 in penalties against a former Sydney entrepreneur, his wife and three companies he operated in response to employees being underpaid more than $1 million.

The Federal Circuit Court has today imposed $62,730 in penalties against Kia Silverbrook and additional penalties against three companies he operated.

IT company Mpowa Pty Limited has been penalised $96,900, solar cell research company Superlattice Solar Pty Ltd has been penalised $40,800 and Priority Matters Pty Ltd, which processed patent applications, has been penalised $51,000.

Janette Lee, who was a director of a company formerly operated by Mr Silverbrook, has also been penalised $13,260 for her role in some of the contraventions.

Backpay plus interest

During the course of the legal actions, commenced in 2013 and 2014, the Fair Work Ombudsman secured $1.15 million (plus interest) in Court-ordered back-payments, which have been made by Mpowa, Superlattice Solar and Priority Matters to 33 underpaid employees.

Penalties and back-pay orders could not be obtained against two other companies formerly operated by Mr Silverbrook, Geneasys Pty Ltd and Silverbrook Research Pty Ltd, – in response to more than $550,000 in underpayments of a further 10 employees – because the companies have been placed into liquidation.

The Fair Work Ombudsman investigation

The Fair Work Ombudsman investigated after receiving underpayment allegations from employees.

The underpayments were primarily the result of employees not being paid wages for periods of up to 10 months in 2013. Individual employee underpayments ranged from $436 to $214,483.

Comments from the FWO

Fair Work Ombudsman Sandra Parker welcomed the court’s penalties.

“Being paid for work performed is a fundamental workplace right and it is completely unlawful for employers not to pay their employees,” Ms Parker said.

“The Court’s penalty should warn all employers that they can face serious financial consequences for breaking workplace laws. Any employees with concerns about their wages should contact us.”

Underpaid employees included engineers, scientists, patent attorneys, patent assistants, patent design assistants, IT professionals and clerical workers.

Court findings

The Court found that Mr Silverbrook and the companies told staff it did not have sufficient funds to pay wages but encouraged them to continue working without pay for many months by repeatedly assuring them funding would be secured and pay would be shortly forthcoming.

Significant financial problems, stress and anxiety

Employees gave evidence that the non-payment of wages caused them significant financial problems, stress and anxiety.

Employees described the impacts on them of being exploited, including having to delay important life decisions such as starting a family, deferring health procedures and inability to sleep.

The judge sends a message

Judge Rolf Driver said:

“A clear message needs to be sent to the public that employees’ entitlements are not negotiable regardless of insolvency or nearing insolvency of the company.”

“It is important to set a meaningful penalty which will deter other employers who find themselves in difficult financial circumstances from requiring employees to continue to attend work and perform work in the hope of improving the employer’s financial position so that funds will become available to pay the employees,”

This article is part of a regular newsletter. If you wish to receive the newsletter providing information on the latest employee relations news and trends click here and use the “Contact us” tab.

My business grows through referrals. I would appreciate it if you would pass my details on to your colleagues, clients, or associates who could benefit from my skill set. Defending/Preventing unfair dismissals, policies, and procedures, contracts of employment, codes of conduct, and more…

SEE also my special report on “Wage Theft” a free resource, by clicking here.

Introduction

The Australian Broadcasting Corporation (ABC) has backpaid over $11.9 million to more than 1,800 current and former casual staff and entered into an Enforceable Undertaking (EU) with the Fair Work Ombudsman.

An investigation was launched after the ABC reported to the FWO that it had found instances where casual employees had not received entitlements under its enterprise agreements.

Fair Work Inspectors

Fair Work Inspectors identified that some casual staff were receiving flat rates of pay insufficient to cover entitlements including overtime, penalty rates and some allowances, and in some cases, employees were paid less than the minimum hourly rate.

In total, 1,907 ABC employees were underpaid $12,029,038, most between October 2012 and February 2019. As at 27 May 2020, the ABC has back paid $11,983,950 to 1828 employees. The broadcaster has paid affected workers 5.25 per cent interest on back-payments, superannuation, and 5.25 per cent interest on superannuation.

Comments by the FWO

Fair Work Ombudsman Sandra Parker said that an EU was considered appropriate after the ABC took immediate steps to rectify the error and improve its systems to ensure future compliance.

“Enforceable Undertakings are provided for under the Fair Work Act and can be utilised for employers who self-disclose non-deliberate, though still serious, breaches to the Fair Work Ombudsman. We expect employers who self-disclose non-compliance to fully cooperate with our investigations, fast track all back-payments and take remediation action,” Ms Parker said.

Enforceable Undertakings are enforceable by a court

The terms of the EU are enforceable by a court.

“Under the Enforceable Undertaking, the ABC has committed to improving workplace practices across its whole workforce and will invest significantly in improved systems and processes, which will benefit its current and future employees,” Ms Parker said.

“The ABC will also engage and pay for an independent expert, approved by the FWO, to conduct annual audits of its workplace compliance for the next three years. In addition, the ABC must implement an electronic record-keeping and rostering system, and train payroll and HR staff.”

Seriousness of the contraventions

In recognition of the seriousness of its contraventions, the ABC will also make a contrition payment of $600,000. This payment is consistent with FWO’s approach to other similar self-reported breaches of the Fair Work Act and takes account of what a court might have imposed by way of civil penalties.

The contrition payment, like a penalty ordered by a court, will be paid into the Commonwealth’s Consolidated Revenue Fund for the benefit of the broader Australian community.

“While the extent and duration of the underpayments are disappointing, the FWO acknowledges the ABC’s remediation efforts, such as its comprehensive back payment initiatives and its commitment to avoid a repeat of this failure,” Ms Parker said.

“In cases such as this where the breaches are not the result of deliberately unlawful conduct, the FWO’s focus is on ensuring employees get their entitlements paid to them as quickly as possible. Through the investigation and Enforceable Undertaking, lessons are learned and systems put in place to avoid such serious underpayments in the future.”

“When taken as a whole, these kinds of Enforceable Undertakings strike the right balance between ensuring repayment to employees and encouraging employers to come forward and take appropriate remediation action,” Ms Parker said.

“The Fair Work Ombudsman saw no justification in treating a public statutory company differently from any private sector company – all employers must comply with Australia’s workplace laws.”

“Contrition payments provide a deterrent to non-compliance, which is commensurate with a penalty that a court might impose, but without the cost and delay of drawn out litigations,” Ms Parker said.

Affected ABC staff

Affected ABC staff worked across the country in roles including camera operators, make-up artists, graphic designers, production managers, directors, producers, reporters and presenters.

Underpayments ranged from $7 to $180,000, with full remediation to occur by 31 July 2020. The broadcaster will also calculate and back-pay entitlements owed to a small number of breakfast shift producers due to time sheet errors, and some misclassified technology staff.

Annual audits

In addition to the annual audits, the ABC must engage and pay for an external expert to complete a broader review of its workplace compliance and will implement the expert’s recommendations. It will also place notices on its intranet, corporate website, LinkedIn and Twitter channels.

This article is part of a regular newsletter. If you wish to receive the newsletter providing information on the latest employee relations news and trends click here and use the “contact us” tab. My business grows by referrals. I would appreciate it if you would pass my details on to your colleagues, clients or associates who could benefit from my skill set. Defending/Preventing unfair dismissals, policies and procedures, contracts of employment, codes of conduct and more…

Schedule free Consultation here.

Introduction

A nationwide Fair Work Ombudsman audit of 1217 businesses in industries including hospitality, domestic construction, retail, manufacturing and administration services has recovered $1,326,125 for underpaid employees.

The audit process

The FWO initiated the audit, which commenced in 2018, after data consistently showed many businesses were failing the ‘basics’ of workplace law compliance: paying staff their correct rates, providing proper payslips, and keeping proper employment records.

Nearly half of the businesses audited (583) failed to get these workplace law basics right. Of these non-compliant businesses, 70 per cent underpaid their workers, while 30 percent failed their recording keeping and payslip obligations.

Hospitality, namely fast food, restaurants and cafes, was the least compliant industry (61% non-compliant) of all businesses audited by the FWO.

Fair Work Ombudsman

Fair Work Ombudsman Sandra Parker said the results were a wakeup call to employers that they need to prioritise workplace law compliance.

 

“Nearly three quarters of employers that breached the law said they weren’t aware of the rules, which is not an excuse. Businesses are failing the basic requirements of being a responsible employer if they are not carrying out adequate due diligence before hiring.”

 

“The Fair Work Ombudsman has free resources on our website that assist businesses to comply with the law. Any employers with queries about pay and conditions and their lawful obligations to their employees should contact us for free advice,” Ms Parker said.

 

In response to the workplace law breaches, Fair Work Inspectors issued 24 on-the-spot fines totalling $32,980 in penalties, 457 contravention letter, 56 formal cautions, and 47 compliance notices.

 

The FWO also entered into an Enforceable Undertaking with Super Max Coffee Pty Ltd (trading as Mitte Café). The employer back paid $37,520 to 32 employees and committed to engaging an external professional to conduct audits of employee entitlements and fix any further underpayments.

 

Eight employers remain under investigation for serious non-compliance discovered during these audits. The FWO is considering appropriate compliance and enforcement responses in these matters, which may include legal proceedings and large penalties.

Introduction

Employers who deliberately underpay or don’t pay their workers will face up to 10 years jail under new laws introduced into the Victorian Government.

The Wage Theft Bill 2020

The Wage Theft Bill 2020 will establish new criminal offences targeting employers who deliberately withhold wages and other employee entitlements.

Employers who dishonestly withhold wages, superannuation or other employee entitlements, will face fines of up to $198,264 for individuals, $991,320 for companies and up to 10 years jail.

Offences will also capture employers who dishonestly falsify employee entitlement records, such as payroll records, or who dishonestly fail to keep employment records.

The new record keeping offences are aimed at employers who attempt to conceal wage theft by falsifying or failing to keep records. They ensure employers will not be able to avoid being held accountable through dishonest record keeping practices.

A new policeman on the block

The legislation will establish the Wage Inspectorate of Victoria as a statutory authority with powers to investigate and prosecute wage theft offences.

Employers who make honest mistakes or who exercise due diligence in paying wages and employee entitlements will not be guilty of wage theft offences under these laws.

The Government also mooted that it will also make it faster, cheaper and easier for employees to recover the money they are owed through the Magistrates’ Court as part of reforms to be introduced in the future.

The Government’s Attitude

The Attorney-General Jill Hennessy warns:

“Employers who steal money and entitlements from their workers deserve to face the full force of the law, which will include substantial fines or jail time for the worst offenders.”

“This problem is systematic – that’s why our laws will apply beyond wages and include allowances, gratuities, superannuation and other accruals such as leave, as well as ensuring directors and officers are held to account.”

And the Minister for Industrial Relations Tim Pallas agrees:

“The existing legal regime has failed to prevent the exploitation of Victorian workers by unscrupulous employers.”

“These laws and the new inspectorate body will hold employers accountable – workers should never be put in a situation where they need to make a complaint just to be paid properly.”

Are you at risk of the ever-increasing presence of the Fair Work Ombudsman? Contact me for an audit on your employment practices. This could save you $tens of thousands! My business grows by referrals. I would appreciate it if you would pass my details on to your colleagues, clients or associates who could benefit from my skill set. Defending/Preventing unfair dismissals, policies and procedures, contracts of employment, codes of conduct and more…

Check out my FREE eBook on Wage Theft

This article is part of a regular newsletter. If you wish to receive the newsletter providing information on the latest employee relations news and trends click here and use the “contact us” tab.

Schedule free Consultation here.

 

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List of enforceable Undertakings secured by the Fair Work Ombudsman in the last six months of 2019

As a “teaser” to my Special Report” on wage theft, I have listed the Enforceable Undertakings entered into by businesses with the FWO for past six months.

An enforceable undertaking (EU) is a written agreement between the FWO and someone who has not followed an Australian workplace law (eg. an employer). EUs are used to fix a problem and make sure it doesn’t happen again.

EU’s are used instead of taking an employer to court. This may occur where:

  • An investigation has shown that workplace laws have not been followed;
  • The employer is prepared to voluntarily fix the issue; and
  • They agree to preventative actions for the future.

Looking for employers advice? Your first call with me is free and with no obligations. Get In Touch

Lifestyle Solutions Ltd. Date of undertaking: December 2019. $6.36 million.

Lifestyle Solutions Ltd has entered into a Court-Enforceable Undertaking with the Fair Work Ombudsman after self-disclosing underpayments for 124 current and former employees. An internal audit found underpayments of overtime, Saturday and Sunday rates. Lifestyle Solutions has agreed to back-pay affected employees a total of $6.36 million in wages, superannuation and interest.

MOS Burger Australia Pty Ltd. Date of undertaking: December 2019. $1.12 million.

MOS Burger Australia Pty Ltd has entered into a Court-Enforceable Undertaking with the Fair Work Ombudsman after an investigation found contraventions of the Fast Food Industry Award 2010. It found that the company had paid unlawfully low flat rates to workers and misclassified some employees as part-time when they were in fact casuals. The employer has back paid $1.12 million to 285 former and current Queensland workers.

Under the Enforceable Undertaking, MOS Burgers Australia must fund external auditors to check pay and conditions for workers employed in 2019 and 2020 and rectify any underpayments. The company must also register with the My account portal and ensure all senior managers and human resources, recruitment and payroll staff complete training on workplace laws.

Couriers Please Pty Ltd. Date of undertaking: November 2019. $382,065 over an 8-year period.

Couriers Please Pty Ltd entered into a Court-Enforceable Undertaking with the Fair Work Ombudsman after underpaying staff $382,065 over an 8-year period. [Ed: It is my belief that the statute of limitation is six years?].

Under the Court-Enforceable Undertaking, they must:

  • Display notices at the workplace and online detailing their breaches and information about employee entitlements.
  • Register with My account and complete online courses for employers.
  • Fund workplace relations training for their payroll and human resources staff.

Sean and Eddy Pty Ltd. Date of undertaking: October 2019. $36,745.

Sean and Eddy Pty Ltd, trading as Coffee Club, has entered into a Court-Enforceable Undertaking with the Fair Work Ombudsman after Fair Work Inspectors found a migrant worker was paid below the minimum award pay rate, and not receiving penalties. The employer has paid back the employee a total of $36,745 and will improve their payroll process and undertake external audits to ensure that all staff are paid correctly in the future.

Catalyst Child and Family Services Ltd. Date of undertaking: October 2019. $200,000.

Catalyst Child and Family Services Limited entered into a Court-Enforceable Undertaking with the Fair Work Ombudsman after they self-disclosed that they underpaid up to 200 current and former employees. The organisation alerted the regulators after a review found it had underpaid overtime rates, allowances for shift, on-call and sleepover allowances and made errors in classifying employees since it began operating in 2013. They will back-pay workers approximately $200,000 after breaching Australia’s workplace laws.

Luxottica Retail Australia Pty Ltd. Date of undertaking: September 2019. $2,294,496.

Luxottica Retail Australia Pty Ltd, trading as Sunglass Hut, has entered into a Court-Enforceable Undertaking with the Fair Work Ombudsman after self-disclosing that it underpaid 620 current and former employees. Sunglass Hut underpaid workers a total of $2,294,496 in overtime wages, with individual underpayments ranging from $4 up to $42,912.

Thales Australia Limited. Date of undertaking: October 2019. $7.44 million.

Thales Australia Limited entered into a Court-Enforceable Undertaking with the Fair Work Ombudsman after they self-disclosed that they had paid annual salaries below what employees were entitled to under the applicable enterprise agreements. This led to underpayments of minimum wages, overtime, annual leave entitlements and superannuation. The employer has back-paid $7.44 million to 407 current and former employees that were underpaid.

T J D Sayoco Pty Ltd. Date of undertaking: August 2019. $27,086.

T J D Sayoco Pty Ltd, trading as Han’s Cafe Mandurah, entered into an EU with us after Fair Work inspectors found staff were being paid below the minimum award pay rates, and not receiving penalties and overtime rates. The employer has paid back their employees a total of $27,086 and will improve their payroll process and undertake external audits to ensure that all staff are paid correctly in the future.

MADE Establishment Pty Ltd. Date of undertaking: July 2019.

MADE Establishment Pty Ltd entered into an EU with the Fair Work Ombudsman when representatives of MADE Establishment at their own initiative notified the FWO that they had identified non-compliance. This led to underpayment contraventions under the Restaurant Industry Award 2010.

George Calombaris and Made Establishment Admit to $7.8 Million Staff Underpayment, which comes with a $200,000 fine and more.