By

Mike Toten

Mike Toten is a freelance writer, editor and media commentator.

After a lawyer “unreasonably” argued that the Fair Work Ombudsman (FWO) made a mistake in concluding that her firm had underpaid an employee, a court has fined the lawyer $2,400 and her law firm $12,000 for her uncooperative approach towards the proceedings.

Facts of case

After the employee, a Legal Secretary, complained to the FWO about underpayment of wages, the lawyer (a Director of the firm) claimed that the employee was “mostly incompetent” and had resigned without giving notice, and disputed the FWO’s award classification of him. She claimed that his sudden resignation entitled the employer to withhold up to four weeks’ pay. The employee had claimed that he was dismissed and then offered re-employment as a casual employee (the Director counter-claimed that the offer was part-time two days per week).

After exchanges of correspondence, the FWO concluded that the employee was underpaid and issued a compliance notice. When the employer failed to comply, the FWO commenced breach proceedings against both the firm and the Director in the Federal Circuit and Family Court. 

The Director claimed that she had “meaningfully engaged” with the FWO and had not ignored the compliance notice. However, she did not seek to have the notice reviewed, instead insisting that the firm had complied by paying the employee and continuing to maintain that it was entitled to withhold four weeks’ pay because of his “resignation without notice”. 

Decision

The Court disagreed, however, finding that the employer had been wilfully non-compliant and the beliefs the Director had expressed (as above) were unreasonably held. It also rejected her “small business without HR support” defence. 

The penalties imposed by the Court did not include specific deterrence, as the Court regarded it as unlikely that deliberate re-offending would occur. However, it said that the Director and law firm should have sought further advice and assistance in relation to meeting the compliance notice, instead of asserting an “unreasonable and unreasoned” belief that they did not need to comply.

It fined the law firm $12,000 and the Director $2,400.

What this means for employers

If the FWO issues a compliance notice that you either disagree with or need further information about, the best approach is to contact the FWO to seek the extra information and/ or present your case -- or seek to have the FWO review the decision if you have some relevant further information to present. 

Simply refusing to comply because you believe the decision is wrong may result in increased penalties.

The case provides some insight into the factors courts will take into account when calculating penalties for non-compliance.

Read the judgment

Fair Work Ombudsman v El Baba Lawyers Pty Ltd [2024] FedCFamC2G 143 (23 February 2024)