A case brought by the Fair Work Ombudsman this month is a reminder to small businesses that they are not immune from hefty fines for non-compliance with workplace regulations.    

The employer  – a small business running a deli and catering service, now in liquidation – underpaid two minimum wage apprentices over the course of their 18 month employment. The court imposed a penalty of almost $20,000 on the director of the employer.  

It did not appear as if the employer had deliberately set out to underpay his employees or deprive them of other entitlements such as annual leave and leave loading. Rather, the court observed that the employer did not understand or properly apply the minimum wage rates of pay and other entitlements protected by legislation. The court said that the size of a business, its financial capacity and resources (including a lack of access to human resources advice) are not relevant to the consideration of the size of the penalty to be imposed for a breach of regulations. The court said that employees have a right to expect that employers will meet minimum employment standards. And where that expectation is not met, they must impose a “meaningful penalty”.      

The penalty is to be paid to the two employees to compensate them for underpayment of their wages. 

Obtaining professional advice is a small price to pay compared with the consequences of non-compliance. If you want to ensure your business complies with all relevant legislation and award conditions, please don’t hesitate to call us.
Guest post by Andrew Gordon, Solicitor, BlandsLaw

Dominic Woolrych

Dominic is the CEO of LawPath, dedicating his days to making legal easier, faster and more accessible to businesses. Dominic is a recognised thought-leader in Australian legal disruption, and was recognised as a winner of the 2015 Australian Legal Innovation Index.