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‘Deliberate’ staff underpayment dealt hefty penalty

Adam Zuchetti
Adam Zuchetti
15 November 2017 1 minute readShare
Penalty

More businesses are on the receiving end of harsh penalties for wage underpayment, as former operators of two hospitality businesses are fined over $150,000 for their deliberate actions.

Husband and wife Mark and Gemma Gumley, the former operators of a delicatessen at Dalyellup and a cafe in Bunbury, both in south western WA, were fined $3,000 and $12,000 respectively after the Federal Circuit Court found them guilty of 14 breaches of the Fair Work Act.

Mr Gumley received a lesser penalty after being found to have been involved in only two of the offences, while Ms Gumley was found to have been involved in all but one.

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As well as the fines for the couple personally, their company Koojedda Carpentry was slapped with a fine of $139,995.

According to the Fair Work Ombudsman, the offences relate to eight workers – including two chefs – being underpaid between June 2013 and September 2014, to the tune of $20,036. Six of the workers were not paid at all. Payslips were also not issued on a regular basis.

 

Both businesses have since ceased trading.

“It is now almost notorious that there are significant pockets of non-compliance in relation to the payment of wages and entitlements, either at all or correctly, in the restaurant and hospitality industry,” Judge Lucev noted in his verdict.

“The court notes that there was evidence in these proceedings as to the significant activity undertaken by the Fair Work Ombudsman in endeavouring to deal with and ensure that employers paid employees in the restaurant and hospitality industry their correct wages and entitlements.”

Acting Fair Work Ombudsman Kristen Hannah said it was not the first time the couple had fallen afoul of the law, with back-pay having previously been secured for underpaid workers, indicating the actions were deliberate rather than accidental.

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“Business operators who continue committing [law breaches] after intervention from the Fair Work Ombudsman are engaging in a pattern of behaviour that clearly needs to be dealt with through serious enforcement action,” Ms Hannah said.

“Operators ought to be warned; Fair Work inspectors do follow-up checks on businesses and those who choose to ignore our advice can expect to face court.”

It is not the first time a company has been found guilty of not paying employees at all, with a Perth cleaner and his business handed fines of more than $300,000 only last month for withholding wages for six employees.

‘Deliberate’ staff underpayment dealt hefty penalty
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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