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FWO confirms crackdown on wage thieves of all sizes

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
19 June 2020 2 minute readShare
Fair Work Ombudsman

The Fair Work Ombudsman is not backing down on its tough approach to underpayments, sanctioning both an entrepreneur and a larger employer within the space of a couple of days.

The FWO announced on Friday that, as part of an enforceable undertaking, the Australian Broadcasting Corporation (ABC) has back-paid over $11.9 million to more than 1,800 current and former casual staff.

A day earlier, the FWO confirmed it has collected $264,690 in penalties against a former Sydney entrepreneur in response to employees being underpaid more than $1 million, underlining that its tough approach does not discriminate based on the size of a business.

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During its investigation into the ABC, the FWO found that a total 1,907 employees were underpaid $12,029,038, most between October 2012 and February 2019.

Fair Work Ombudsman Sandra Parker said that an EU was considered appropriate after the ABC took immediate steps to rectify the error and improve its systems to ensure future compliance.

 

“Enforceable undertakings are provided for under the Fair Work Act and can be utilised for employers who self-disclose non-deliberate, though still serious, breaches to the Fair Work Ombudsman,” Ms Parker said.

“We expect employers who self-disclose non-compliance to fully co-operate with our investigations, fast-track all back-payments and take remediation action.”

In recognition of the seriousness of its contraventions, the ABC is also expected to make a contrition payment of $600,000 into the Commonwealth’s Consolidated Revenue Fund for the benefit of the broader Australian community.

“While the extent and duration of the underpayments are disappointing, the FWO acknowledges the ABC’s remediation efforts, such as its comprehensive back-payment initiatives and its commitment to avoid a repeat of this failure,” Ms Parker said.

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She explained that the Fair Work Ombudsman saw no justification in treating a public statutory company differently from any private sector company.

“Contrition payments provide a deterrent to non-compliance, which is commensurate with a penalty that a court might impose, but without the cost and delay of drawn-out litigations,” Ms Parker said.

No wages for up to 10 months 

Underpayments instigated by the Sydney entrepreneur were taken to the Federal Circuit Court after it was discovered that employees had not been paid wages for periods of up to 10 months in 2013.

The court found that the entrepreneur and his companies had told staff they did not have sufficient funds to pay wages but encouraged them to continue working without pay for many months by repeatedly assuring them funding would be secured and pay would be shortly forthcoming.

In announcing the decision to sanction the entrepreneur, his wife and three companies he operated, Judge Rolf Driver said: “A clear message needs to be sent to the public that employees’ entitlements are not negotiable regardless of insolvency or nearing insolvency of the company.

“It is important to set a meaningful penalty which will deter other employers who find themselves in difficult financial circumstances from requiring employees to continue to attend work and perform work in the hope of improving the employer’s financial position so that funds will become available to pay the employees.”

Ms Parker welcomed the court’s penalties.

“Being paid for work performed is a fundamental workplace right and it is completely unlawful for employers not to pay their employees,” she said.

“The court’s penalty should warn all employers that they can face serious financial consequences for breaking workplace laws. Any employees with concerns about their wages should contact us.”

FWO confirms crackdown on wage thieves of all sizes
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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