The Fair Work Commission has imposed financial penalties on a small engineering company which failed to provide a former employee with the correct wages and pay records in accordance with its obligations under the Fair Work Act 2009 (Cth) (the Act).  In doing so, the Commission held that it wanted to deter other employers from engaging in similar conduct.

What happened?

The employee worked full time as a truck driver for the employer for 11 years.  When the employee left the business in October 2014, he was not paid his annual or long service leave entitlements.  The employee was owed 11 weeks annual leave, annual leave loading of 17.5% and long service leave that had accrued over 11 years.

The employee had not been given regular payslips during his 11 year employment, and the employer refused to provide payslips as requested on his departure.  

The employee brought proceedings in the Federal Circuit Court of Australia, seeking the imposition of penalties for certain contraventions of the Act.

The employer was a small business. The employer did not appear at, or participate in, any of the hearings to defend the claim. The Commission was satisfied that the employer had been properly served and chose not to participate in the proceedings.

What did the Commission decide?

The employer was found to have breached the Act and was ordered to pay a financial penalty of $36,000 to the employee, in addition to the employee’s annual and long service leave entitlements of $19,156.

The Commission, in reaching its decision, viewed the multiple failures to provide payslips as a single breach of the Act, with each failure to pay the employee’s accrued entitlements treated as a further breach.

The Commission determined that given the size of the business, senior management was likely involved in the breaches. Additionally, the Commission concluded the employer had shown no contrition, co-operation or corrective action, and therefore there was a need for general deterrence.

In imposing the financial penalties, the Commission noted that small businesses have the same obligation to meet minimum employment standards as large corporate employers.

Lessons for employers

It is imperative that employers comply with their obligations under the Fair Work Act, including by providing their employees with proper pay records and payslips. Employees are entitled to ask for their records from their employer, regardless of business size. Employers should keep accurate and up to date records for at least 7 years to ensure that they are able to provide payslips and pay records to employees if they are requested.