Courts issue stern warning on businesses that don’t provide documents to the Fair Work Ombudsman

The courts are cracking down on businesses which fail to comply with requests by the Fair Work Ombudsman for staff employment records, with the second company director in the space of a week being slapped with a fine.

The Federal Magistrates Court has fined Antonino Rechichi, of Joondanna, WA, $1,650 for deliberately refusing to provide records for more than nine months. The penalty follows the court’s imposition of a $5,280 fine on Jack Garber, the sole director and secretary of Nerd Group Australia, for his “belligerent” behaviour in failing to produce documentation.

Despite warnings of potential financial penalties, the court found records were only supplied after the Ombudsman commenced legal proceedings against Rechichi and his company, Finetune Holdings.

Proceedings against Finetune Holdings, which formerly operated Rechichi Architects at Northbridge, were stayed after the company went into liquidation.

In his 42-page decision handed down on Tuesday, Federal Magistrate Toni Lucev imposed a penalty of $1,650 against Rechichi, saying his conduct “undermined the utility and effectiveness” of the law.

Under the Fair Work Act, employers must comply with requests from the Fair Work Ombudsman to provide employment records relating to employees and former employees.

The FWO requested employment records from Rechichi’s company late in 2009 after receiving a complaint from an employee that he had been underpaid.

The Ombudsman did not make any application to the court alleging any underpayment of wages and no such finding was made by the court.

In respect of the failure to produce documents, Lucev found “contrition came late” to Rechichi and that his “contrition appears somewhat imperfect; made of necessity and in the face of a fear of an impending penalty, or at least a bowing to the inevitable, rather than being truly contrite”.

A penalty was required to mark disapproval of the conduct in question, but also to act as a warning to others not to engage in similar conduct, he said.

“A primary objective of penalties is deterrence. In imposing civil penalties, deterrence is therefore a significant consideration. It is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend,” Lucev said.

“Employers ought not be impressed with the idea that they can avoid the requirement to produce documents upon request by the Fair Work Ombudsman or fail to co-operate with Fair Work inspectors lawfully exercising their powers under the Fair Work Act”.

Commenting on Garber’s fine, Andrew Douglas, principal at M&K Lawyers, told SmartCompany it is important for businesses to co-operate with the FWO.

“If you are in the right you need to deliver a very clear message to the Ombudsman supported by documentation, but if you are in the wrong there is no point hiding it,” says Douglas.

“The quicker you make disclosure, and the more open you are, the more likely you are to avoid penalties.”

SmartCompany contacted Rechichi but did not receive a response before publication.