A security contractor in regional Queensland has been penalised $90,000 by the Federal Circuit Court in Brisbane after failing to back-pay four employees nearly $10,000.
The operator of Mordel Pty Ltd, Douglas Kidd, was fined $15,000 for failing to pay four security guards for short periods of work completed in 2013.
His company, which trades as Spartan Security Group, was also whacked with an additional $75,000 penalty as a result of legal action by the Fair Work Ombudsman.
The business has been ordered to pay the former employees a total of $9704, with one employee owed more than $4000 for about three weeks’ work.
The employee watchdog took legal action against Spartan Security Group after it failed to adhere to two compliance notices issued by Fair Work inspectors, which ordered two of the employees to be paid.
Subsequent investigations found record-keeping laws were also breached by Spartan Security Group.
Sarah Lock, principal consultant at Workplace Law Specialists Brisbane, told SmartCompany this case is another example of an SME being brought to its knees because of non-compliance.
“In this particular case these underpayments seem not to be just a case of a genuine mistake, oversight or the owner not knowing the law,” she says.
“As we all know, ignorance of the law is no excuse. The compliance notices issued by the Fair Work Ombudsman are a much better and cheaper alternative to fixing a problem than going to the time and expense of fighting this in a more formal setting.”
Lock says it is essential that business owners make every effort to inform themselves of the rights of their employees.
“There are a number of options that business owners can access to ensure workplace compliance,” Lock says.
“Audit employment contracts and letters of employment, calculate the correct hourly rate and classification under awards using the Fair Work Ombudsman’s pay calculator, and partner with a good law firm or consultancy that specialises in employment law. They will work with you to provide a more robust framework to give you the checks and balances required to minimise the financial fallout from lack of compliance and understanding of the legislative minefield.”
Fair Work Ombudsman Natalie James said in a statement the court’s decision sends a strong message to employers who fail to pay employees correctly.
“Legal actions such as this also assist employers who are doing the right thing by their employees, because it helps them to compete on a level playing field,” she said.
SmartCompany contacted Spartan Security Group but did not receive a response prior to publication.
Broede Carmody is a former senior SmartCompany reporter. Before this, he was a co-editor of RMIT University’s student magazine Catalyst.
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