Payroll Blog

3 Examples of Fair Work Non-Compliance to Watch Out For in 2021

Fair Work Non-Compliance

Every business owner knows that complying with the Australian Fair Work system is vital to their success. However, many business owners, either on purpose or due to a genuine misunderstanding, still fail to meet the requirements of the Fair Work Act 2009.

These offences range from the underpayment of staff to the exploitation of migrant workers, inaccurate record keeping, exposing workers to health and safety risks, and influencing an employee’s decision to join a union or participate in industrial action. Regardless of the offence, it’s vital that business owners have a clear understanding of not just the minimum employment rights of their workers, but also the specific entitlements as they apply to their industry award or enterprise agreement.

To help you better understand the different types of employment offences, here are a few recent, real-life examples of the Fair Work Ombudsman (FWO) investigating and pursuing legal action against offending businesses.

Underpayment of Adult Apprentice and Part-Time Minimum Wage Entitlements [1]

According to an FWO report from 28 January 2021, the FWO commenced legal action in the Federal Court against the operator of a hairdressing salon on the Gold Coast.

The operator, Ms Hala Dib, reportedly underpaid three employers – two part-time, one adult apprentice – below the minimum wage rates of the Hair and Beauty Industry Award 2010 for work performed between April and May 2019. The FWO also discovered, after issuing two Compliance Notices, an additional employee, a 16 year old salon assistant, was not paid at all for work performed between June and July 2019. Penalties for the two alleged contraventions were up to $6,300 per contravention.

Under the Hair and Beauty Industry Award 2010, junior full-time and part-time employees under 16 years of age must be paid an hourly rate of $10.89, including $14.48 on Saturdays (between 7am and 6pm) and $21.78 per hour on Sundays.

To determine the correct current minimum wage rate as it applies to your award or industry, use the official Fair Work Ombudsman Pay Calculator. Alternatively, payroll software and outsourced payroll services from E-Payoffice can help you meet your minimum payment requirements, with far less time and hassle.

Exploitation of Overseas Workers [2]

Another FWO report on 28 January 2021 revealed they had commenced legal action in the Federal Court against a major waste company for the alleged underpayment of vulnerable migrant workers to the tune of nearly $200,000.

The FWO alleged that Polytrade Employment Services underpaid five employees a total of $194,249 for work performed at Polytrade’s waste management facilities in Dandenong and Hallam. The workers at the time were on protection or bridging visas pending approval for applications for protection visas, after arriving in Australia as refuges from southern Asia. They each spoke minimal English.

Speaking on the severity of underpaying migrant workers, FWO representative Ms Parker said, “The Fair Work Ombudsman treats cases involving allegations of underpayment of migrant workers particularly seriously. These workers can be vulnerable if they are unaware of their entitlements or reluctant to complain due to their visa status.”

Under the Fair Work Act 2009, all people working in Australia, including foreign workers, are entitled to basic human rights and protections in the workplace. Any employers who engage with foreign workers must ensure they comply with both Australian workplace and immigration workplace laws.

Click here for more details on how to lawfully employ Visa holders and migrant workers in Australia.

Falsified Pay Records [3]

On 14 December 2020, the FWO commenced legal action in the Federal Court against the former operators of a café in the Perth CBD, alleging it had falsified employee payment and record times.

After receiving underpayment allegations through the Anonymous Report Tool, the FWO sent the café a Notice to Produce (NTP) documents. However, on two separate occasions, the café owners allegedly provided inspectors with falsified records in relation to time and wage payments, so as to convince inspectors that their employees were paid a higher wage than what they really were.

Furthermore, the café owners directed their employees to lie to the inspectors, claiming they were being paid up to $29 per hour, when in reality, the employees were paid only $15 to $16 per hour.

Speaking on the matter, FWO representative Sandra Parker said, “Employers need to be aware that we have experienced inspectors who have various methods for determining whether the records they are provided during an investigation are legitimate.”

For more information on how to maintain and submit accurate records and payslips, click here.

Stay on Top of Your Payroll

These are just some of the many instances of non-compliance with the Fair Work Act 2009 in recent times.

Keep in mind, whether an act of non-compliance is deliberate or not, the FWO – as well as affect employees and their union – can initiate federal court proceedings to claim compensation and civil penalties for non-compliance with the Fair Work Act.

For this reason, it’s vital that your payroll system is up-to-date and compliant with the latest standards, as well as maintaining accurate records and calculating the correct wages and entitlements for each type of employee.

If you’d like to reduce the risk of non-compliance in your business, consider upgrading your existing payroll systems to E-Payoffice’s dedicated payroll software or outsourced payroll services.

Our comprehensive payroll services are designed to take the stress out of managing your payroll, assist you with Award Interpretation and time capturing, and ensuring that your workforce are paid the correct wages and entitlements – all in line with the latest industry-specific and national employment standards. 




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