Melbourne builder fined over back payments

The Fair Work Ombudsman has secured court orders for a combined $44,108.50 in penalties and compensation against the operators of a Melbourne building business and its director.

18 May 2022 

The Federal Circuit and Family Court has imposed an $18,658 penalty against L.E.C. Builders & Designers Pty Ltd, based at Carrum Downs, and a $3,396 penalty against the company’s sole director, Luke John Elliot.

The penalties were imposed due to L.E.C. Builders & Designers failing to comply with a compliance notice that required calculation and back payment of entitlements to a young, full-time construction worker the company had employed. Mr Elliot was involved in the breach.

In addition to the penalty, the court has ordered L.E.C. Builders & Designers to pay $22,054.50 in compensation to the worker, plus interest, for loss suffered by the worker because of the failure to comply with the compliance notice. This amount reflects the amount the employer would have paid if it had complied with the compliance notice.

Fair Work Ombudsman Sandra Parker said business operators that fail to act on compliance notices need to be aware they can face court-imposed penalties on top of having to back pay workers.

“When compliance notices are not followed, we are prepared to take legal action to ensure workers receive their lawful entitlements,” Ms Parker said.

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The FWO investigated after receiving a request for assistance from the affected worker, who had worked for the company between May 2019 and June 2020, when he was aged 19 to 20.

A Fair Work Inspector issued a compliance notice to L.E.C. Builders & Designers in December 2020 after forming a belief that the worker had been underpaid entitlements under the Building and Construction General On-site Award 2010, including his minimum hourly rates, fares and travel pattern allowance and annual leave entitlements.

In imposing the penalty, Judge John O'Sullivan said the failure to comply with the notice was a serious matter and that “recipients of such notices should be left under no misapprehension about their obligations to comply”.

“There is clearly a need for a penalty to be imposed on the respondents in this case to show that their behaviour is unacceptable, will not be tolerated and to serve as a deterrent to future contraveners,” Judge O'Sullivan said.

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