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Compliance and enforcement

Seventeen formal cautions were issued. Formal cautions are issued when the FWO has found non-compliance. The written warning puts a business on notice that future non-compliance could result in the FWO seeking financial penalties. If the FWO becomes aware of any further instances of non-compliance, the fact that the business was issued with a formal caution will be taken into account in deciding whether to commence civil proceedings against the business, and it may be used as evidence in any penalty determinations. 

Case study – Formal caution

An inspector identified an underpayment for a casual employee from a selected restaurant. The business had only five employees and four of them were permanent.

In this instance it was found that the casual employee was not receiving their casual loading as prescribed in the Restaurant Industry Award 2010 (the Award). The employer had not realised that there was a difference between permanent and casual employment and paid the casual employee the same as the rest of the employees.

In addition, as the casual employee was working set hours, the employer failed to record their hours of work. The employer was co-operative and rectified a minor underpayment of $266 as the staff member had only recently commenced their employment.

The inspector provided information to the employer on the different employment classifications and pay rates from the Award. A formal caution was issued on the business.

Eight infringement notices were issued. An infringement notice is a fine given to a business for non-compliance with record-keeping or pay slip requirements of the Act and the Regulations. A total of $1610 in infringement notices was issued during the campaign.

Case study – Infringement notice

A Fair Work Inspector audited a local restaurant that had previously been found non-compliant in relation to pay slip requirements. The business had received advice and assistance from the FWO on this matter. 

The business employed eight employees who were covered by the Restaurant Industry Award 2010 (the Award). All employees received their correct minimum entitlements as per the Award, however the pay slips failed to meet the content requirements as stipulated in the Regulations.

As the employer had failed to address the issue from the previous audit and continued to issue non-compliant pay slips after receiving advice from the FWO, the inspector issued a $180 infringement notice.

One compliance notice was issued. A compliance notice is a written notice legally requiring a business to rectify breaches of the Act. Failure to comply with a compliance notice results in the FWO commencing legal proceedings. A total of $5206 was recovered from one business for 22 employees as a result of the compliance notice issued.

Case study – Compliance notice

A restaurant that the FWO had previously audited and provided advice and assistance to was selected for a follow up audit. It was a larger business that employed 28 casual employees.

On reviewing the sample of records provided, the inspector conducting the audit noted that some casual employees were not receiving the correct rate of pay as per the Restaurant Industry Award 2010 (the Award). The inspector notified the employer, provided them with the correct rates and directed the business to conduct calculations for all employees for a period.

Calculations were provided and reviewed. It was found that 22 of the employees had been underpaid. The remaining six had received their minimum entitlements as per the Award as they were paid a higher rate in senior positions. The employer thought the rates being paid were adequate, but had not checked the Award.

In total, a gross amount of $5206 was owed to 22 employees. The employer fully complied with the compliance notice and made the required back payments.

The FWO commenced proceedings against two companies, Global Trading and Investment Group Pty Ltd and Yang Brothers Investment Pty Ltd.

The FWO commences legal proceedings in instances where there is both sufficient evidence and public interest. Litigation is the most significant enforcement tool used by the FWO and is reserved for matters involving allegations of serious non-compliance and where a penalty is considered warranted. 

Case study – Litigation

During an audit, Inspectors interviewed four casual employees employed by a cafe. These employees provided information which raised concerns about breaches of the Act.

Following an investigation by Inspectors, the FWO commenced legal proceedings in the Federal Circuit Court of Australia. The FWO alleged that the business failed to keep required records of amounts paid to the employees and failed to make a record of hours worked by the casual employees. The FWO also alleged that the business failed to issue some employees with pay slips, and that pay slips issued to one employee were not issued within the required timeframe and did not include all of the information required by law. The FWO alleged that the director of the business at the relevant time was involved in the alleged contraventions.

The business and the former director admitted the alleged contraventions. On 27 November 2017, the Court imposed penalties of $47 000 on the business and $9800 on the former director. These penalties included a discount for admissions and co-operation. In imposing penalties, the court considered it significant that the director had interacted with the FWO’s predecessor in relation to alleged compliance issues at another of his businesses.