Ignorance of required pay rates is no defence for employers guilty of underpayments in the eyes of the FWO.
A Gold Coast business was slapped a $76,000 worth of repayment bill to two workers who were subject to underpayments after the employer claimed ignorance of his obligations despite 25 years in business.
PWFV Pty Ltd, which trades as Pacific Avenue Wholesale Fruit and Vegetables, paid a $20 per hour flat rate to the two casual workers who were employed to pick and pack fresh produce for customer orders in the company’s Burleigh Heads warehouse before delivering the orders in refrigerated vehicles.
The company also failed to pay overtime, despite both employees working up to 60-hour weeks and failed to pay early morning shift penalties despite work sometimes starting at 2am. The company also failed to pay casual loading.
As casuals under the Storage Service and Wholesale Award 2010, the workers were entitled to a base casual rate of up to $23.08 per hour, an early morning shift rate of up to $25.38 and up to $41.54 for overtime after the first two hours.
The combined underpayments totalled $76,478.82, with one worker underpaid $50,765.80 across almost three years prior to ending his employment in January 2015.
The second worker was underpaid $25,713.02 across 13 months before leaving the business in March 2015.
Fair Work Ombudsman Natalie James said the case was another reminder that ignorance of required pay rates is no defence for employers guilty of underpayments, regardless of the size of a business or what competitors may be paying.
“Businesses must be aware of all the minimum lawful pay rates their employees are entitled to, including penalty rates, or they will face a nasty repayment bill,” she said.
The Fair Work Ombudsman investigated after the two workers lodged requests for assistance this year. PWFV is directed by Brett Malouf, who fully-cooperated with the investigation.
It has about 10 employees and its customers include restaurants, cafes and juice bars. The company has entered into an Enforceable Undertaking (EU) with the Fair Work Ombudsman this month as an alternative to litigation.
As part of the EU, the company back-paid the two workers with a combined lump sum of $34,000 in October. Weekly repayments of a combined $816.90 commenced on 1 October 2016 and will continue until 30 September 2017.
The company must also commission external audits of its compliance with federal pay and conditions obligations this year and for the next two years. Under the terms of the EU, it will display a notice in the workplace detailing its contraventions and apologise to the two workers.
Malouf has claimed he was ignorant of the legislation and that the company’s rates of pay were based on what its competitors were paying.
The company has told the Fair Work Ombudsman in the EU that it has already taken a range of actions to address the admitted breaches, including updating current employees’ pay rates and engaging lawyers to prepare an employment agreement for employees.
The company will also make a donation of $500 to workplace support service Working Women Queensland. James said the EU encouraged behavioural change and future compliance.
“We use Enforceable Undertakings where we have formed a view that a breach of the law has occurred, but where the employer has acknowledged this, accepted responsibility and agreed to co-operate and fix the problem,’’ James said.
Ensuring an equal playing field for businesses in relation to labour costs in a competitive marketplace was one key component of the Fair Work Ombudsman’s agenda to enforce workplace laws.
“The Fair Work Ombudsman is striving to build a culture of compliance where businesses understand and comply with their lawful obligations,” James said.
