Could you be liable for a penalty? Fair Work penalties are not just for business

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These days it is common knowledge that if your business is not adhering to the law, the business is likely to be subject to a financial penalty. But what many people are only now realising is that when it comes to employment law, responsible individuals can also face hefty financial penalties. And don’t think the administrator in payroll will be copping a fine for failing to pay the proper rate on overtime hours – it is the major decision makers in the business that are seen to be responsible in the eyes of the law.

In a recent case, two pilots employed by Broome Helicopter Services were found to have been underpaid by more than $15,000 in total over just a six month period. The company allegedly underpaid the minimum hourly rate, annual leave payments, and other entitlements, failed to reimburse telephone calls made for the company, and failed to comply with record-keeping, staff roster and payslip regulations. The Fair Work Ombudsman commenced legal proceedings in the Federal Circuit Court in Perth against the company and the sole director.

Both the company and the company director will potentially face fines – up to $33,000 per breach for the company, and up to $6,600 per breach for the director as the responsible individual.

The Fair Work Ombudsman has a general reputation of fairness – there are many cases in which a company has been found to have underpaid a worker, but not been penalised by a court because they were cooperative in the investigation and voluntarily paid back wages owed to employees. Companies and individuals are more likely to face court when they are re-offenders, non-cooperative, or purposefully breached the regulations.

However, in this situation, the director failed to pay back the wages even after Fair Work inspectors became involved. His lack of cooperation was reported as a significant factor in taking the case to a Federal court.

If you find that you and/or your company are being investigated by Fair Work, the best thing to do is to cooperate with investigators and make a genuine effort to rectify the wrong as soon as possible. You could save yourself and the business time, money, and negative media exposure by avoiding judgement of the matter in a Federal court.

Not sure if you and your business are complying with Fair Work? Contact My HR Adviser to carry out a Fair Work Compliance Check. We can also provide advice and interpretation on modern awards, levels, and penalty rates to ensure you are paying your staff correctly.