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Why sloppy record-keeping cost this employer more than he imagined

By Charles Power on February 12th, 2018

 

Employers who fail to comply with statutory requirements to keep time and wages records will be slapped with higher penalties if prosecuted for underpayment. In Fair Work Ombudsman v Pulis Plumbing Pty Ltd & Anor (2017) an apprentice worked 201 hours of overtime before he was dismissed after only three months. The employer underpaid him nearly $27,000 in that three-month period.

The apprentice kept a record of his own hours and used these records to fill in his timesheets and provided them to his employer.

The apprentice was first told that he would be paid overtime “separately”, and on two occasions he was paid a cash sum.

But two weeks before Christmas, he was dismissed.

The apprentice sent polite text messages to his former employer requesting payment of his outstanding wages.

On 22 December he received a response text: “I’ll put it in your account”.

A follow up text on Christmas Eve received the reply “Stop doing my head in”, to which the apprentice responded, “Pardon? When are you going to pay me what you owe me?” to which employer’s response was, “Seriously, f**k off. When I’m ready”.

The Fair Work Ombudsman (FWO) issued legal proceedings against the employer who was unable to produce time and wage records. This meant the Court relied on the employee’s records of the hours worked, even though they were generalised and vague. The Court also imposed a penalty of $20,000 on the employer for breaching payslip and record-keeping requirements.

The Court noted:

“Given the statutory requirements upon employers with respect to record-keeping, it appears to me that, ordinarily, a Court would accept even the most slight and generalised evidence of an employee as to the hours of employment in circumstances where an employer does not produce appropriate records… in future if the employer fails to keep time sheets and provide payslips the employer has the burden of disproving an employee’s claim about hours worked and payments made.”

As a result of sloppy compliance with requirements for employee records and payslips, this employer was unable to dispute an employee’s assertions about hours worked. In addition, it was ordered to pay a significant fine.

At the hearing, the sole director and shareholder of the employer company argued he should receive no penalty or at least a lesser penalty because ultimately the penalty imposed on the company would be sheeted home to him by way of reduced profit.

The Court rejected this argument and said the fundamental purpose of the Fair Work Act, to ensure the protection of the workers, would be undermined if the hands and brains of a company were not answerable personally for breaches of the Act, which he had perpetrated.

The director/shareholder had sought to conduct his business through a corporate entity, which had given him advantages of taxation and limited liability. However, if the company he controls breaches the Fair Work Act, then both he and the company should be penalised.

The updated Wages chapter in the Employment Law Practical Handbook explain in greater detail how to meet your obligations under the Fair Work Act in relation to wages and payslips, overtime and personal leave. The new Modern Awards chapter explains how awards record the minimum conditions ofemployment for workers they cover and that these conditions are enforceable under the Fair Work Act 2009 (Cth) (FW Act).

Check out all you need to know about awards (did you know there are 122 modern awards listed at www.fairwork.gov.au?) in the Handbook. You can learn about awards and how to avoid penalties for breaches of the FW Act on an obligation-free trial. Request a trial today.

 





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