The Federal Circuit Court has handed down penalties of $200,000 to a company, and a further $40,000 to its sole director, for underpaying an employee and then failing to participate in the underpayment claim proceedings.
An employee claimed that despite bringing the underpayments to the company’s attention, the company continued to underpay the employee, in breach of the Fair Work Act 2009 (Act) and the relevant modern Award.
He alleged he was underpaid in 10 out of 18 pay cycles amounting to $8,000. The company and director failed to participate at all in the Court proceedings, which led the Court to agree with the employee’s submission that by not doing so they “showed an element of contempt for [his] claim". The Court found the company had breached the Act on ten occasions and there was a need for general and specific deterrents in this case as the 19-year-old worker concerned was "young and vulnerable" when engaged by the company. In setting the penalty, the judge said it was "important that employers understand that, if caught, it is very expensive to not properly pay employees"
In addition to the penalties imposed, the employee was awarded $5,272.10 in unpaid wages and a further $3,030.57 in unpaid superannuation entitlements.
This is a reminder to all employers that any claim for the underpayment of wages should be taken seriously and the consequences of ignoring a claim can be very costly.
Boyson v Centre Court Care Pty Ltd & Anor  FCCA 229 (6 February 2020)
Disclaimer: This summary is a guide only and is not legal advice. For more information on employers’ obligations in relation to wages, call NECA Legal (WA) Pty Ltd on (08) 6241 6129 or email email@example.com.