On 26 July 2021, the Fair Work Ombudsman (FWO) successfully secured a pecuniary penalty of $21,500 in the Federal Circuit Court against the operator of a long-haul trucking business based in Melbourne for failing to comply with a Compliance Notice requiring back-payments of entitlements to a former truck driver.
The Federal Circuit Court also ordered that Sapphire Freighters Pty Ltd (Sapphire Freighters) calculate and back-pay approximately $6,000 in outstanding entitlements owed to the driver, plus superannuation.
What happened?
In July 2018, the FWO received a request for assistance from a truck driver who had worked at Sapphire Freighters between December 2016 and January 2018.
Following an investigation, the Fair Work Inspector formed a belief that throughout the driver’s employment with Sapphire Freighters, the company paid him a rate of pay less than required under the Road Transport (Long Distance Operations) Award 2010 and failed to pay certain allowances.
The Fair Work Inspector issued the company with a Compliance Notice in December 2019. The Compliance Notice also alleged that Sapphire Freighters breached the Fair Work Act 2009 (Cth) by failing to pay out accrued annual leave on termination of the driver’s employment.
Sapphire Freighters failed to cooperate with the FWO and ignored the Compliance Notice. Where an employer fails to comply with a Compliance Notice issued by a Fair Work Inspector, the FWO can commence proceedings seeking remedies and penalties for any contravention of an entitlement provision, as well as penalties for failing to comply with a Compliance Notice requiring the back-payment of entitlements, as was the case here.
When the matter came before the Court, Justice Mercuri found that there was no evidence of any contrition, corrective action or cooperation with the authorities by Sapphire Freighters, who did not appear at the penalty hearing.
Justice Mercuri said;
“There is also a strong need for general deterrence particularly in the Road Freight Transport industry which has significant rates of non-compliance with workplace laws”.
The evidence given by the FWO in the proceeding was that the road freight industry generates the second-highest number of disputes dealt with by the FWO, identifying road freight operators in Victoria as the worst offenders.
The Fair Work Ombudsman, Sandra Parker, said;
“When Compliance Notices are not followed, we are prepared to take legal action to ensure hard-working employees receive their lawful entitlements”.
Timely reminder
There have been a number of developments in recent months that all employers, including transport and logistics operators, need to be aware of.
On 16 June 2021, the Fair Work Commission handed down its 2021 Annual Wage Review Decision increasing full-time minimum wage rates in modern awards by 2.5%. The increases to the Road Transport (Long Distance Operations) Award 2020 commenced from the first full pay period starting on or after 1 July 2021.
In Victoria, wage theft became a crime from 1 July 2021. Any employer in Victoria who deliberately and dishonestly underpays employees or withholds employee entitlements faces a fine of up to $218,088 or up to 10 years jail for individuals and a fine of up to $1,090,440 for companies.
Further information
All employers need to properly understand their legal obligations in light of these developments to avoid any possible claims by employees, the imposition of civil penalties or criminal punishment.
If you would like to discuss if these developments impact your business or if you require assistance with understanding your obligations as an employer, please contact a member of our Workplace Relations team.
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