Sometimes it really doesn’t pay to be disorganised in business, particularly when you are dealing with our courts or regulatory authorities.
A Melbourne gym and its former director learnt this the hard way* when the business and the former director together suffered total fines of $47,000 from the Fair Work Commission – acting as a good reminder to businesses (and their directors) of the importance of responding quickly to claims made in the Fair Work Commission or other courts, and the true cost of complacency.
This case related to a Fair Work Commission unfair dismissal ruling in response to a claim initiated by the gym’s former receptionist (Ms Nedge), in which the Fair Work Commission ordered that the gym pay $2,200 compensation plus interest to Ms Ndege.
However, Ms Ndege did not receive payment and complained to the Commission. Following her complaint, the Fair Work Ombudsman issued several notices to the business to comply with the order, all of which were ignored.
Last month, the Fair Work Ombudsman initiated proceedings against the gym and its former director and part owner.
Judge John O’Sullivan ordered the gym to pay a $41,182.50 fine and the former director to pay a further $6,426 in penalties, in the Landmark decision – showing that a failure to comply with court orders can result in a far larger penalty, and one that can be also imposed on directors personally.
In his ruling, Judge O’Sullivan said “this was a small business, however, that is no excuse” – providing a timely reminder that no matter how big or small your business, complying with legislation (and with court orders) is no trivial matter.
Whether the gym didn’t understand the order, didn’t agree with the order, or just didn’t have the money to pay the order – the result was something that the business may not have seen coming…
And may now have to spend quite a long time paying off!
* Fair Work Ombudsman v World Gym Sunshine Pty Ltd & Anor [2014] FCCA 2201
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