A recent Federal Circuit Court decision demonstrates that the Fair Work Commission (‘FWC’) is taking the underpayment of workers’ wages and entitlements seriously.

During the three years that Gail Keen was a casual employee of New Image Photographics Pty Ltd (‘New Image’) she was underpaid $19,314 due to New Image’s disregard for the minimum wage, including the right to casual loading.  Though given the opportunity by the Fair Work Ombudsman to rectify the underpayment, New Image declined. 

In May 2013, the Fair Work Ombudsman pursued the matter in the Federal Circuit Court where New Image was not only ordered to back-pay outstanding wages plus interest, but the company and its sole director were fined $42,900 and $10,560 respectively for breaching its duties under the old Workplace Relations Act 1996.  This amount represents 80% of the maximum penalty.

Under sections 539 and 546 of today’s Fair Work Act 2009, a breach of a civil remedy provision regarding the minimum wage can attract penalties of up to $51,000 for companies and $10,200 for individuals. 

This decision demonstrates the FWC’s “no tolerance” approach to employers who fail to guarantee minimum employee entitlements.  It also reiterates an employer’s positive obligation to stay on top of minimum wage entitlements, of great significance as we come to the end of the financial year.  Under section 285 of the FWA the FWC must conduct an annual wage review, often released at the end of June, to come into effect on the first full pay period after1 July 2013, often increasing employee’s minimum wage entitlements. 

If you find that you have been underpaying employees, swiftly rectify the problem.  In the words of Acting Fair Work Ombudsman Michael Campbell, receiving minimum wage entitlements is “a fundamental right for every worker”.  The FWC will not look kindly on those who consciously violate it.

Click the link below to read the case: http://www.austlii.edu.au/au/cases/cth/FCCA/2013/209.html