08 Sep UNDERPAYMENT OF WAGES: PAYSLIPS
“Without proper payslips employees are significantly disempowered, creating a structure within which breaches of the industrial laws can be easily perpetrated.”
Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd [2012] FMCA 258 at [67]
Underpayment of wages by employers often occurs in conjunction with non-compliance of record-keeping and payslip requirements under the Fair Work Act 2009 (Act) and the Fair Work Regulations 2009 (Regulations). The importance of these requirements is highlighted in the recent case of Fair Work Ombudsman v A & K Property Services Pty Ltd & Ors [2019] FCCA 2259.
Facts
The First Respondent operated two sushi take away stores. The Second, Third and Fourth Respondents were directors of the First Respondent. This case was brought by the Fair Work Ombudsman (FWO) on behalf of nine employees of the First Respondent. Each of the employees was a foreign national who was residing in Australia and subject to visa requirements. Over three months, the First Respondent failed to adhere to minimum payment standards under the Fast Food Industry Award 2010 (Award) by paying the employees flat rates of between $16 and $22. Importantly, the contraventions of the Respondents included:
a. Failing to make and keep employee records, in contravention of section 535(1) of the Act, as required by regulations 3.32, 3.33, 3.34, 3.36 and 3.37 of the Regulations; and,
b. Failing to provide pay slips within one working day of paying an amount to those employees, in contravention of s 536(1) of the Act.
Decision
The judge highlighted the importance of specific and general deterrence, especially in situations where there are contraventions relating to employee records and payslips. In doing so, he quoted from the explanatory memorandum to the Fair Work Amendment (Protection Vulnerable Workers) Act 2017 (Cth), providing “without reliable employee records, employees may be unable to prove their case and recover their minimum entitlements at law” (Further information about this amendment to the Act is available here).
The judge emphasised the importance of payslips in the context of this case. Despite the fact the employer was presently complying with their legal obligations under the Act and the Regulations, their past actions were “plainly grossly reckless”. The court made the following orders for penalties:
a. $108,000 for the First Respondent;
b. $10,600 for the Second Respondent;
c. $3,550 for the Third Respondent; and,
d. $3,550 for the Fourth Respondent.
Lessons
The lessons from this case are relevant for employers. Employers must ensure they understand and comply with obligations under modern awards, enterprise agreements, the Act, and the Regulations. Correct payslips must be provided.
Employees should always ensure that they receive a payslip from their employers within one working day of being paid. Employees should check pay and recording of pay is correct.
If you wish to read more information on underpayment of wages, please see our articles: Fair Work Act: Underpayment of Wages and Underpayment of Wages: Record-Keeping and Award Compliance.
If you need advice or assistance, submit an online enquiry or call Crawford de Carne Lawyers today.
Written by Angus Macpherson.
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