The Fair Work Ombudsman (FWO) has sent a clear message to all employers that it will come down hard on underpayments.
In an open letter published on the FWO’s website late last year, the FWO cautioned employers that their options for avoiding underpayment obligations by sending a company into liquidation are becoming significantly limited.
This letter coincides with the courts imposing significant penalties on companies and their directors for failure to comply with minimum rates of pay and entitlements. The 7-Eleven underpayment scandal resulted in a record penalty against a Brisbane 7-Eleven franchisee of $403,348. This amount include an individual penalty imposed on the director of $68,058. More recently, Pizza Hut has come under fire for underpaying its delivery drivers as little as $5.70 per hour, with the FWO conducting an audit of the Pizza Hut franchise.
Employers need to be aware of the consequences of underpayment which includes both repayment of the underpayments and penalties. In this climate, employees are also going to be more alive to these issues and aware of their rights.
For a link to a recent article on the Pizza Hut scandal please click here.