Fair Work Commission Imposes Substantial Fine on Employer

A building subcontractor has been fined $145,000 and ordered to backpay $150,000 to more than a dozen employees, after a finding that the subcontractor used a labour hire company to attempt to circumvent its employment obligations. 

The Federal Court of Australia, in Director, Fair Work Building Industry Inspectorate v Foxville Projects Group Pty Ltd [2015] FCA 492 (21 May 2015), found that the subcontractor, Foxville Projects Group, underpaid employees and failed to credit their annual leave, personal leave and other entitlements. Further, the subcontractor maintained insufficient records and neglected to provide employees with a Fair Work Information Statement. Many of those employees were vulnerable in the sense that they did not speak fluent English which, according to Flick J, made Foxville's failure to inform them of their legal rights as required under section 125 of the Fair Work Act 2009 (Cth) more serious.

Justice Flick considered that various factors were relevant to the assessment of penalty. His Honour found that Foxville had adopted a "cavalier attitude" to its workplace obligations, and distanced itself from employees via a labour hire company which it did not supervise and which had minimal involvement with the employees. This increased the assessment of Foxville's culpability. Further, Flick J took into account the need to deter Foxville specifically and other employers generally from failing to comply with their workplace obligations and distancing themselves from employees to avoid their obligations via labour hire companies. 

Thanks to associate Michael Whitbread and graduates Talia Calgaro and Stephanie Crosbie for their assistance in the preparation of this Update.