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The Fair Work Ombudsman (FWO) has secured a $6,400 penalty in court against an electrical contracting company in Melbourne’s south-east, which failed to fully back pay its worker in quick succession.
The FWO, through the Federal Circuit and Family Court, has imposed a penalty against BSW Electrical Services, operating out of the Mornington Peninsula region, Melbourne. The penalty came after the company failed to comply with a compliance notice, which required it to back pay entitlements owing to a worker who was employed on a full-time basis.
The employee worked for the company between 2015 to March 2022. During the seven-year period, the worker eventually was owed $14,000, remuneration he only received in full after the FWO commenced legal action. The FWO investigated after receiving a request for assistance from the affected worker.
Fair Work Ombudsman Anna Booth said business operators that fail to act on compliance notices need to be aware they can face penalties in court on top of having to back pay workers the amount they owe.
“When compliance notices are not followed, we will continue to take legal action to protect employees. Employers who fail to act on these notices risk substantial penalties,” said Booth.
“Any employees with concerns about their pay or entitlements should contact us for free advice and assistance.”
An inspector issued a compliance notice to BSW Electrical Services in March 2023 after forming a belief the worker was, in fact, not paid his accrued but untaken annual leave entitlements when his employment ended.
Judge Amanda Mansini, who oversaw the case, said a penalty was needed to deter both the company and other employers from committing similar contraventions.
“In my view, there is a need for general deterrence in this matter to emphasise the importance of an effective compliance framework and at a sufficient level to impress upon other employers in the electrical services industry the importance of complying with legal obligations owed to the employees,” said Judge Mansini.
Recently reported on HR Leader, another employer, albeit on a much larger scale, was caught by the FWO underpaying staff on extremely low flat rates while also underpaying their annual leave entitlements.
A $120,960 penalty was imposed against Australian franchisor and popular bubble tea chain Chatime Australia. From this, 152 employees – including 41 junior workers aged below 21, and 95 visa holders – were underpaid a total of $162,533. Of the 95 visa holders, a vast majority of them were international students.
Similar to Mansini’s comments, Judge Nicholas Manousaridis, who oversaw the Chatime case, claimed the penalties had to be severe to send a signal to other employers.
“Penalties should be set to signal to persons who manage companies that they will be met with substantial penalties if, through their neglect, they permit companies they manage to contravene terms of an award or any other industrial laws or instruments that might apply,” said Judge Manousaridis.
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Annual leave refers to a term of paid vacation or time off, often accruing after four weeks of work per year (pro rata for part-time employees). Only full- and part-time employees typically accumulate annual leave.
Kace O'Neill
Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.
