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Compliance and enforcement

Two 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

A large electrical-construction business, employing more than 90 workers, provided a sample of records for 15 employees, who were engaged in different occupations across a wide range of varying classifications. The inspector conducting the audit found no issues with the majority of the records provided, but when reviewing the rates for a casual Level 1 Electrical Worker, covered by the Electrical, Electronic and Communications Contracting Award 2010 (the Award), disclosed an underpayment of $1.85 per hour.

As there were no other contraventions identified, the inspector contacted the business’ accounts manager to advise them of this discrepancy and to request that the records for all employees of this classification be reviewed. The business conducted a full review and identified that 22 employees, over a five-month period, had been underpaid a combined total of $18 711.17 under the Award.

The FWO reviewed the calculations, agreed with the quantum and directed the employer to rectify the breaches. On receiving confirmation of payment, the FWO issued the business with a formal caution.

Two compliance notices were 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 against the respondent. Of the $27 054 total monies recovered in the campaign, $8204 was recovered from two businesses for five employees as a result of compliance notices issued.

Case study – Compliance notice

A small restaurant provided records to a Fair Work Inspector upon request. The restaurant employed three staff members, all covered by the Restaurant Industry Award 2010 (the Award). On reviewing the records, the inspector identified multiple issues for all three employees. Two of the employees, one part-time the other full-time, were engaged on salaried agreements but their base hourly rates were not sufficient enough to cover the salary provisions of the Award. The other staff member was employed as a casual but only received $19.83 per hour for all hours worked, significantly lower than that stipulated in the Award.

In addition to the underpayment the employer had also failed to keep a record of hours worked for all employees, which is a requirement for all casual employees and employees covered by the salaried provision of the Award.

The inspector notified the employer of the breaches and liaised with the employer’s accountant to conduct calculations for the relevant period. Calculations were provided and reviewed by the inspector.

The calculations identified a combined gross underpayment of $7826 for the three employees. Based on the quantum of the underpayments, multiple contraventions of the Award and the failure to fully meet record keeping requirements, the FWO issued the business with a compliance notice. The employer fully complied with the FWO and made the back payments in accordance with the notice.