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Underpayments

Minimum payments under various Awards, Enterprise Agreements and contracts has been a complex issue in Australia for a long time. This is because negotiations about wages have varied greatly between workplaces, the type of work performed, and the years of experience or level of the employee.

Mistakes have consistently been made in the calculation of wages. This has resulted in underpayment of wages often over many years. It is unlawful to underpay an employee and penalties do apply.

To identify an underpayment is time-consuming and depends on many factors including:

  • Proper classification of the work being done by the employee
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  • The age of the employee
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  • The level at which the employee is performing the work
    –
  • The days on which the work is performed, and the hours on any given day
    –
  • Whether or not allowances (e.g. clothing or meals) apply. These are usually unique to a workplace/industry.
    –
  • Whether an employee has the benefit of an old award because they did not sign up to, or become bound by, a more recent industrial agreement such as an Enterprise Agreement.

When large numbers of employees are involved against big employers (e.g. Coles or Woolworths), the Fair Work Ombudsman has been known to take a keen interest in enforcing the agreement. Where a small employer is concerned, the same rules apply but with less fanfare.

After an underpayment is identified, it can take 6 months for the Fair Work Ombudsman to make a ruling. Often it is a ruling which the employee disagrees with. Whether or not they agree, it is usually left up to the employee to engage their own lawyer to then bring a legal proceeding against the employer for the amount of underpayment.

Underpaid employees should consider whether or not to fast track the process by going straight to a lawyer even though this can be a more expensive process, at least in the beginning. McDonald Murholme offers assistance in the calculation and the legal action to recover underpayments.

Our clients' satisfaction is pivotal to our own success.

  • July 2020

    I wouldn't hesitate to recommend McDonald Murholme. From the initial consultation, right through to the resolution process, the entire team was supportive, knowledgable and approachable and made what can be a difficult situation much easier. Specifically Trent and Alexandra provided a high level of service, and engaged with me in a very personable manner. I am extremely satisfied with the service I received.

  • July 2020

    I couldn't recommend the team from McDonald Murholme more. Mr Sam Nottle was efficient, professional and achieved a wonderful result. If you are questioning whether to go ahead with an employment matter legally, I would urge you to do so. The team at McDonald Murholme made the process easy & reduced all of my anxiety and stress. Thank you again, Mr Nottle & team, I can't express my appreciation enough.

  • June 2020

    I found Arthur Hambas & Katherine Boyles extremely professional & compassionate in my dealings with them. After telling Arthur that I felt the details surrounding my redundancy felt wrong he took on my case & secured me a better payout from my employer. I would not hesitate to recommend Mcdonald Murholme to anyone that has a feeling that something isn't quite right. I greatly appreciate everything you did.

  • May 2020

    Extremely happy with the service received from all the staff members i had to deal with. The lawyer allocated for my case (Michael Kriewaldt) was extremely professional and handled the case very smoothly. Highly recommend their services.

  • May 2020

    I found Arthur Hambas & Katherine Boyles extremely professional & compassionate in my dealings with them. After telling Arthur that I felt the details surrounding my redundancy felt wrong he took on my case & secured me a better payout from my employer. I would not hesitate to recommend Mcdonald Murholme to anyone that has a feeling that something isn't quite right. I greatly appreciate everything you did.

  • April 2020

    The solicitors at the firm were very prompt and actioned my complaint against my employer very quickly. I obtained the result I wanted, in fact, I got a better result than what I had originally asked for. I was very pleased with the results and would highly recommend McDonald Murholme.

  • March 2020

    I would like to say that McDonald Murholme have treated me with nothing but professionalism and also great service. Trent, a principal in the firm is attentive to your needs and will ensure your case is handled with care and mindful consideration to all parameters involved.

Are you being underpaid?

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Frequently asked underpayment law questions

How do I know if I am being underpaid?

To determine if you are being underpaid, you need to find out the correct rate at which you should be paid. This can be affected by a range of factors including, whether you are full-time or part-time, whether you are casual or permanent, whether you are a trainee or apprentice, your age and your qualifications. You can contact the Fair Work Ombudsman to find out if you are entitled to be paid above the National Employment Standards pursuant to a modern award or enterprise agreement.

Can I file an underpayment claim in relation to a former job?

You can bring a claim for historical underpayments, however, this is subject to a six-year time limit under subsection 545(5) of the Fair Work Act 2009 (Cth). For example, an employee who files an underpayment claim on 1 January 2020 can seek an order to recover any underpayments that occurred after 1 January 2014.

I am an independent contractor. Am I eligible to file underpayments claims?

You are more likely to be deemed an independent contractor if you invoice the entity for whom you perform work. This is a matter of negotiation between the independent contractor and the principal and as such, independent contractors are not afforded the same legal protection for pay rates and minimum terms and conditions of employment as employees.

Independent contractors are not entitled to a minimum rate of pay or conditions such as annual leave, personal leave, parental leave, long service leave and redundancy entitlements. Further, independent contractors cannot file a claim with the Fair Work Ombudsman to recover underpayments for work performed and will need to commence legal proceedings in either an eligible court or the Civil and Administrative Tribunal of their state instead.

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