Fishy business practices lead to large fine for underpayments

The Fair Work Ombudsman continues to send a strong message to employers – the underpayment of employees will not be tolerated.

The underpayments

The former owner of the Red Salmon restaurant, Abdul Hafeez Bilwani, together with his company, Finn Fish Pty Ltd has been fined over $190,000 in a recent Federal Circuit Court decision.

An investigation by the Fair Work Ombudsman revealed thirteen of the Red Salmon’s employees were underpaid a combined total of $26,707, over a three-and-a-half month period in 2015. Six of these employees were under the age of 21.

The employees did not receive causal loading, annual leave entitlements, overtime and/or weekend penalties and public holiday rates in accordance with the Restaurants Industry Award 2010 (Award) which governed their employment.

Message to business operators

The message to employers is clear – comply with the minimum entitlements in accordance with modern awards or face significant penalties.

To avoid the Fair Work Ombudsman from knocking on your door, you should:

1. ensure your employment agreements refer to the correct modern award. The incorrect classification of an employee and/or application of a modern award can result in the underpayments and ultimately, back pay claims, hefty penalties and reputational damage to your business;
2. be diligent in maintaining accurate employment records and pay slips. The Fair Work Ombudsman has the power to inspect your business’ records, issue fines and prosecute your business where serious non-compliance issues are uncovered; and
3. where you have identified underpayments in your business, immediately take appropriate steps to rectify the underpayments and put measures in place to ensure there is no reoccurrence.

Macpherson Kelley regularly assists clients with meeting their legal obligations with respect to minimum wages and entitlements, record keeping and with the preparation of legally compliant employment agreements.

For more information about how we can assist your business, please contact our Employment, Safety and Migration team.

This article was written by George Haros, Principal Lawyer and Annabelle Uebergang, Lawyer – Employment, Safety and Migration.