Freight distribution business penalised by FWO for failure to comply with Compliance Notice

14 October 2022

The Fair Work Ombudsman (FWO) succeeded in seeking a penalty against the operator of a freight distribution business for a failure to comply with a Compliance Notice.

The business was operated by a sole trader who was the direct recipient of the $3,500 penalty imposed by the Federal Circuit and Family Court. The owner, Ms Christine Louise Callaghan was held personally liable for her failure to:

  • Comply with a Compliance Notice requiring her to back pay four employees who were employed from February 2016 to June 2021; and
  • Rectify the $20,684 in underpayments to the workers, plus superannuation.

As a result, the Court subsequently ordered Ms Callaghan to back pay the full underpayment amount with interest. While she had partially back paid the employees since the FWO commenced these proceedings, she had failed to pay the full amount as required.

The Compliance Notice was issued in September 2021 after a belief was formed that workers had been underpaid on a range of entitlements including the applicable Award rates for full-time, casual employees, accrued but untaken annual leave at the end of employment and payment-in-lieu-of notice which is required under the Road Transport and Distribution Award 2020, the Road Transport and Distribution Award 2010, the Clerks – Private Sector Award 2020, the Clerks – Private Sector Award 2010, and the National Employment Standards.

The media release issued by the FWO quoted Judge Humphries who stated that in this matter imposing a penalty was appropriate as he determined that “the matter was serious” and that “the freight transport industry has been highlighted as an area where there is some significant non-compliance” suggesting that the FWO and the Courts will take evidence of broader industry non-compliance into account when imposing penalties on individual operators.

Key takeaways for employers

If you discover that your business has or may have not been paying employees correctly, it is strongly recommended that you:

  • seek legal advice as soon as possible, particularly if the FWO are involved; and
  • do not ignore Compliance Notices or otherwise fail to co-operate with the FWO.

A failure to full comply with a Compliance Notice or simply ignoring it can lead to a FWO prosecution and the imposition of penalties which are in addition to any back pay that must be paid to employees. The maximum penalty for a failure to comply with a Compliance Notice is $33,300 for a body corporate and $6,660 for an individual.

Please contact one of our Workplace Relations team members if you would like to discuss questions that are specific to your workplace.

Disclaimer: This publication contains comments of a general nature only and is provided as an information service. It is not intended to be relied upon, nor is it a substitute for specific professional advice. No responsibility can be accepted by Rigby Cooke Lawyers or the authors for loss occasioned to any person doing anything as a result of any material in this publication.

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