Retailer penalised $75k over underpayment

19 December 2014

The operators of a retail business in regional Victoria have been fined a total of $75,900 for underpaying a casual employee almost $30,000.

Westlink International Pty Ltd, which trades as Glenelg Auction Centre at Portland, has been fined $66,000, while manager and part-owner Brian O’Halloran has been penalised a further $9900. 

The company has also been ordered to back-pay the employee $29,792 it underpaid him, plus interest, within 90 days.

The fines, imposed in the Federal Circuit Court, are the result of an investigation and legal action by the Fair Work Ombudsman.

Inspectors found that the casual employee, then aged in his 40s, had been significantly underpaid between 2007 and 2010 as a result of being paid flat hourly rates starting at $15 and later increasing to $20.

This resulted in underpayment of his casual loadings and penalty rates for weekend and public holiday work, for which he was entitled to receive more than $30 an hour in some instances.

The employee was also not paid-out his accrued annual leave entitlements after he resigned.

Delivering her decision on the Fair Work Ombudsman’s litigation, Judge Norah Hartnett described the conduct as “serious”, saying it involved “a substantial underpayment of basic entitlements to a low paid worker which occurred over a significant period of time”.

Judge Hartnett found the fact that the underpayments had been outstanding for years and had still not been rectified was “particularly concerning” and represented “an avoidance of responsibility”.

“The employee has suffered in trying to recoup monies owed to him,” she said.

Judge Hartnett also found that Westlink International and O’Halloran did not take any steps to determine the correct pay rates for the employee, even after he told them the pay rate he was receiving was not good enough.

She found that the underpayments had effectively reduced the company’s wage costs, thereby giving it a competitive advantage in the retail industry.

“The retail industry is highly competitive,” Judge Hartnett said.

“I accept that there is a need for general deterrence in the retail industry and that it is important in the public arena to confirm that employers such as (Westlink International) must not evade their Workplace Relations law obligations – even in circumstances where they may have, from time to time, cash flow problems.

Judge Hartnett also noted that Westlink International had back-paid $8264 to an underpaid employee at Glenelg Auction House in 2008 after a Workplace Ombudsman investigation.

She said the warning given to the company at that time “did not result in sufficient steps being taken to prevent further contraventions”.

Fair Work Ombudsman Natalie James said extensive efforts were made to resolve the most recent underpayment matter co-operatively, but litigation was commenced after the company failed to back-pay the worker.

Ms James says the penalty sends a message that underpaying employees and refusing to promptly rectify the matter is serious conduct and will not be tolerated by the Courts or the community.

“We will not hesitate to take action to ensure employees receive their basic minimum entitlements,” Ms James said.

“Successful litigations such as this also benefit employers who are complying with workplace laws, because it helps them to compete on a level playing field.”

Ms James says the Fair Work Ombudsman can assist employers with accurate, reliable information and encouraged businesses to access the Agency’s free tools and resources.

Online tools available at www.fairwork.gov.au include PayCheck Plus to determine the correct award and minimum wages for employees, templates for pay slips and time-and-wages records as well as a range of Best Practice Guides.

The Fair Work Ombudsman is currently urging employers and employees to check the pay rates and entitlements that apply over Christmas and the New Year.

Many businesses continue to trade over Christmas and New Year and staff working over these holidays will be entitled to applicable penalty rates.

The Fair Work Ombudsman has updated the Public holidays section of its website with a list of holidays in each State and Territory and information about pay rates for employees working on these days.

Employers and employees seeking advice or assistance should visit the website or contact the Fair Work Infoline on 13 13 94. A free interpreter service is available by calling 13 14 50.

Follow Fair Work Ombudsman Natalie James on Twitter @NatJamesFWO external-icon.png, the Fair Work Ombudsman @fairwork_gov_au External link icon or find us on Facebook www.facebook.com/fairwork.gov.au External link icon.

Sign up to receive the Fair Work Ombudsman’s media releases direct to your email inbox at www.fairwork.gov.au/mediareleases

Media inquiries:

Ryan Pedler, Assistant Media Director
Mobile: 0411 430 902
ryan.pedler@fwo.gov.au

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