Classification of Employees pursuant to Modern Awards

The Fair Work Ombudsman has been busy prosecuting businesses and directors for the underpayment of wages. Many of the cases which have been pursued are due to companies failing to adequately class its employees pursuant to a Modern Award which is a requirement pursuant to s 45 of the Fair Work Act 2009 (Cth) (the Act).

Employees which are covered by a modern award need to be classified to a specific level where a modern award covers an individual’s occupation, skill and competency. In a recent decision, the Fair Work Ombudsman proceeded to take legal action against the Henna Group Pty Ltd in the Federal Magistrates Court. It was successfully proven by the Fair Work Ombudsman that the Henna Group had a history of underpaying staff. Consequently, The Henna Group was ordered to pay the underpayment of wages and entitlements which amounted to approximately $16,000. In addition, they were ordered to pay an additional $33,000.00 for each contravention amounting to $165,000.00. In its judgment, the Federal Magistrates Court held that there was a history which indicated there was a deliberate disregard of industrial obligations and therefore the director and senior manager were also taken to have contravened the Act in their own capacity resulting in each individual being fined a further $30,000.00.

Tips

• If you are a director or senior manager, you must be aware of the essential clauses contained in the Act otherwise, you can personally be held liable;
• It is highly recommended to co-operate with the Fair Work Ombudsman during investigations otherwise they may proceed to seek civil penalties against you; and
• You should consider obtaining legal advice in the early stages of the investigation because the evidence you supply to the Ombudsman can be used against you in any future Federal Magistrate Court proceedings to enforce civil penalties against you.

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This article is not legal advice and should not be relied upon as legal advice. All articles found on this website are intended to provide informative information, nevertheless, in many instances legislation and case law has been simplified and/or paraphrased. If you would like personal legal advice based on your current circumstances, you should contact MurdockCheng Legal Practice for a free consultation.