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The Federal Circuit Court has relied upon the recently-introduced “protecting vulnerable workers” legislation to impose a heavy penalty on a company and its director who underpaid an apprentice employee and failed to keep time and wages records.

The new “protecting vulnerable workers” legislation:

  • increased penalties by up to 10 times for serious contraventions
  • strengthened the Fair Work Ombudsman’s evidence gathering powers
  • reversed the evidentiary onus in underpayment claims where employers fail to make and keep time and wages records

In FWO v Pulis Plumbing Pty Ltd & Anor:

  • the employer underpaid an apprentice employee by almost $27,000
  • the employer was unable to explain why it underpaid the apprentice or why it failed to keep time and wages records for the apprentice’s hours of work
  • in the absence of such records the Federal Circuit Court relied upon detailed records kept by the apprentice of his working hours
  • the company’s contained refusal to pay the apprentices wages was stated to be ‘nothing short of avarice’
  • the company’s contraventions were regarded as serious and higher penalties were imposed based upon the new statutory provisions
  • a penalty of $100,000 was given to the employer company
  • a penalty of $21,500 was given to the director

The decision is a warning that employers must always be vigilant that they:

  • know what industrial agreements apply at their workplace
  • properly apply all provisions of such industrial agreements including when Modern Award rates change
  • ensure employment agreements are consistent with applicable legislation and industrial instruments
  • maintain comprehensive time and wages record systems
  • take any complaints of underpayment seriously
  • properly investigate and remedy any underpayments
  • undertake regular audits to identify whether any underpayments have occurred
  • seek early assistance from an employment lawyer if any advice or assistance is required – including where a union or Fair Work Ombudsman comes knocking!