Fines for director and former payroll manager of Brisbane business after Fair Work case results in $143,000 in penalties – SmartCompany

By Alan J. McDonald

A Brisbane based Japanese fine food company has been penalised after the continued underpayment of two workers, despite warnings from the Fair Work Ombudsman. McDonald Murholme Senior Associate Trent Hancock discusses the Federal Court’s decision to penalise individuals in the company, as well as repay the underpaid workers.

See below article for further details.

Fines for director and former payroll manager of Brisbane business after Fair Work case results in $143,000 in penalties – SmartCompany

A Queensland business and its director and former payroll manager have been hit with $143,000 in penalties after the Fair Work Ombudsman (FWO) launched action over the underpayment of two workers, despite previous warnings from the watchdog.

WY Pty Ltd, which operates two Hanaichi Japanese Fine Food outlets in Brisbane, was found to be deliberately underpaying two Taiwanese workers during 2015. The company has been ordered by the Federal Circuit Court to pay back the workers a total of $18,491.

The company itself has been penalised $116,250 as a result of legal action from the ombudsman.

The company’s director and part owner were fined an additional $20,000, while the company’s former payroll and account manager was fined $7000.

While this is not the first time a payroll or human resources manager has been penalised as a result of action by the FWO, employment lawyer and senior associate at McDonald Murholme Trent Hancock told SmartCompany it is unusual.

“It has always been the case that the federal court could impose penalties on those who have been involved in a breach of the Fair Work Act,” Hancock says.

“It’s not the first time a HR or payroll manager has been targeted, but the FWO usually goes after the company’s director.”

Hancock notes the penalties are “on the higher end” of the spectrum.

Both the director and payroll manager were put on notice in 2012 after the watchdog found the employees were being paid unlawfully low rates.

“Despite the warning we issued in 2012, the business continued to recruit and underpay vulnerable overseas workers and had not changed the initial flat hourly rates it was paying in almost four years,” Fair Work Ombudsman Natalie James said in a statement.

“The penalties send a clear message to business operators that if they ignore our warnings to fix up underpayment problems, we are prepared to take legal action and serious consequences will apply.”

The FWO notes the payroll manager was an “accessory to the contraventions”, claiming they were “fully aware” employees were being underpaid.

Hancock believes businesses and employees need to know managerial staff can be penalised by the federal court as result of action by the FWO.

“Business owners and staff should be aware they can be held personally liable if they have knowledge of underpayment occurring and are actively involved,” Hancock says.

“This doesn’t mean just payroll or HR managers. Theoretically, it could be any employee who is charged with paying other employees, as long as they are aware and actively participating.”

The FWO has also secured an unprecedented court order against the business, requiring it to include industry Award details and FWO contact information in all job advertisements released for the next two years.

The business is also required to provide new employees with a copy of the Fair Work Information Statement in their language of choice.

“Provision of the Fair Work Commission Information Statement is normally not a concern for either party, but the FWO is pressing every breach they can find,” Hancock says.

“The company was put on notice and failed to comply, so they haven’t held back.”

SmartCompany attempted to contact Hanaichi Japanese Fine Foods but did not receive a response prior to publication.

Reference: ‘Fines for director and former payroll manager of Brisbane business after Fair Work case results in $143,000 in penalties’, SmartCompany, 24^th January 2017.