Underpayments: New Reverse Onus of Proof Laws Put to The Test.
In a deliberate warning to employers, the Fair Work Ombudsman has commenced the first legal action involving new reverse onus of proof laws that require employers with inadequate employment records to disprove alleged underpayments.
It has launched proceedings in the Federal Circuit Court against an operator of two fast food outlets. The FWO has also instigated proceedings against the company’s directors.
Fair Work inspectors audited the company, based on the Sunshine Coast, in 2018 as part of targeted auditing activity.
According to the FWO, nine workers across the two outlets were underpaid a total of $19,467 in entitlements. It is alleged they were not paid minimum ordinary hourly rates, weekend penalty rates, overtime rates or superannuation, and that their annual leave and personal leave entitlements were not accrued.
It also alleged the company breached workplace laws by failing to issue pay slips and keep proper time and wages records between October and December 2017.
The company faces penalties of up to $63,000 per contravention. The directors are facing penalties of up to $12,600 for their alleged involvement in the leave contraventions. Additionally, one of the directors is facing penalties of up to $12,600 for his involvement in the recordkeeping and pay slip breaches.
The matter is listed for directions hearing in the Federal Circuit Court in Brisbane.
What This Means For Employers In The Tree Contractor Industry
Well, this is the first legal action to be taken using new reverse onus of proof laws introduced late last year. Under these laws, employers who do not meet record-keeping or pay slip obligations and cannot give a reasonable excuse will need to disprove allegations in wage claims made in a court.
The reverse onus of proof applies to breaches of the National Employment Standards, a modern award or an enterprise agreement, and the reverse onus of proof laws can be found listed under section 557C of the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017.
This Act applies to conduct that occurred after it came into effect on September 15, 2017. It also includes provisions increasing penalties for ‘serious contraventions’ and banning employers for asking for ‘cashback.’
According to the acting Fair Work Ombudsman, the FWO plans to make full use of the new laws.
The FWO noted that in the past some employers had avoided facing litigation by the FWO because while they had breached their record-keeping obligations, there was not sufficient evidence present to prove underpayments in court.
Put simply, businesses who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse will need to disprove allegations of underpayments in court.
I can assure you this is not a scare mongering exercise but a very real danger for some businesses in our industry that have not kept their knowledge of award/ payroll conditions and record keeping documentation up to date in recent times.
I would urge you to contact TTIA and get your house in order on this issue. We provide an in-house wages and payroll audit service by qualified staff.