Published: 17 December 2015
Author: Ryan Carlisle Thomas
Court imposes heavy fine for pay breaches as a deterrent
The Federal Circuit Court has ordered that a small engineering company pay one of its former employees $36,000 in financial penalties for failing to pay wages and provide pay records.
The action was fought on behalf of the employee, Martin Ridge, by Ryan Carlisle Thomas.
Mr Ridge initially obtained a judgement against his employer for failing to pay annual leave and loadings, unpaid long service leave and interest totalling $19,156.
Then on 9 December, the Court ordered the Company to pay a penalty of almost double the amount of the claim itself.
The judgement is interesting because of the Court’s ruling that it wanted to deter other employers engaging in similar conduct.
The finding is important because it reinforces the obligations of employers under the Fair Work Act to provide their employees with proper pay records and payslips.
Mr Ridge worked fulltime as a truck driver with Abard Engineering Pty Ltd between 10 October 2003 and 14 October 2014.
He was covered by the Road and Transport Distribution Award.
Abard Engineering had an obligation under the Fair Work Act to supply employee records and payslips and to pay annual leave and annual leave loading to Mr. Ridge, which they did not do.
Nor did they provide him with payslips which contained all the required information such as employers name, his name, the period of pay, the date on which payment is to be made, the gross amount and net amount after tax.
Mr. Ridge came to us to help him force Abard Engineering to comply. When they refused to do so, we brought proceedings the company to Court.
The employer never appeared at any of the hearings to defend his claim.
As a result, the firm was found to have breached of the Fair Work Act and ordered to pay a financial penalty of $36,000.
In making its decision the Court made the following points.
- The payslip breaches occurred over a long period of 11 years and refused to provide the employee records despite a clear request from the solicitors.
- The fact that this was a small business was irrelevant to the Court’s decision, emphasising the fact that obligations apply to all sizes of organisations.
- The Court cited previous cases where small businesses have no less an obligation to meet minimum employment standards than large corporate employers.
- The Court also took a dim view of senior management’s obvious awareness of the breach.
Lessons for employers and workers
It is imperative that employers adhere to their obligations under the Fair Work Act and do not ignore the obligation to provide their employee’s with proper pay records and payslips.
As an employee, you are entitled to seek records from your employer, no matter how large or small the business may be.
If you need any advice or representation regarding failure by your employer to pay you your proper entitlements, you should seek legal advice.