You could be at risk of exposure to legal action from underpaying your staff – whether inadvertently or intentionally! A recent case highlights that if you are a Director and you fail to ensure that your workplace practices are compliant with workplace law, you, as well as the business, could be penalised. Ensure you have received the right advice in relation to pay rates and proper workplace practices to minimise your risk.
A current matter before the Federal Court of Australia highlights the enormous cost that failing to comply with legislative requirement might have on businesses and their directors.
In this case, the Fair Work Ombudsman (FWO) have commenced legal action against cleaning company, Pioneer Personnel, following investigations into their alleged short-changing of employee’s paycheques.
The FWO is seeking to enforce costly penalties against the company and its sole Director, based on claims that it contravened the Fair Work Act when it failed to pay nine of its employees more than $18,000 in wages and entitlements between April and November 2015.
If the Court determines the allegations to be true, Pioneer Personnel will be forced to repay the outstanding amounts, as well as a penalty of up to $51,000 per contravention of workplace laws. In addition, Pioneer Personnel’s Director could cop fines of up to $10,200 per contravention.
Although, in this instance, Pioneer Personnel appeared to be acting in flagrant disregard for any workplace laws, having previously been warned by the FWO that they were committing potential breaches, similar situations could arise under far more innocent circumstances.
In many instances, non-compliance issues may arise in relation to minimum wages; overtime rates; penalty rates; annual leave entitlements, and public holiday pay. Additionally, in industries where an award applies, contravention might occur where award conditions are not strictly adhered to.
Another key factor to consider in determining whether your business practices are compliant is whether you have properly categorised your workers as employees, who may be entitled to additional incentives, or contractors. This is a confusing area that many businesses inadvertently contravene, so it is important to ensure you have received the right advice.
Whilst this matter does not provide any revolutionary insights, it does provide an important one: Invest in ensuring your practices and policies are compliant now to save yourself and your business enormous cost – financial, reputational and emotional – later.
If you would like to check if you have any risks in this area, advice about employment contracts, dealing with contractors or compliance issues, click here now to book a time for a free 15 minute discussion with us.
Disclaimer: The material contained on this website is provided for general information purposes only and does not constitute legal advice. You should not depend upon any information appearing on this website without seeking legal advice. We do not guarantee that the contents of this website will be accurate, complete or up-to-date.
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