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Employer cops $400,000 payout for industrial relations breaches

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By Brenton Allen, Lawyer, MST Lawyers 

On 1 April 2016, the Federal Circuit Court ordered an employer to pay more than $465,000 in compensation and pecuniary penalties to a former tea-attendant as a consequence of it underpaying Award entitlements and engaging in unlawful adverse action in breach of section 340 of the Fair Work Act.

In addition to persistent underpayments of annual leave loading, overtime and weekend and public holiday penalty rates across a period of approximately 5 years, the company had altered the employee’s position from full-time to part time after he lodged a workers’ compensation claim in March 2012. The company had reduced the employee’s working hours as a consequence of the extra costs imposed by the requirement to have an injury management plan pursuant to NSW workers’ compensation laws. In a judgement dated 30 March 2015, the Court found this conduct to constitute unlawful adverse action.  

The Court ordered the company to pay the following compensation and penalties to its ex-employee:

  1. $415,698.55 representing underpayments of annual leave loading, overtime rates and weekend and public holiday penalty rates during the period 26 July 2007 to 1 July 2012;
  2. $25,000 representing a penalty in respect of the underpayments;
  3. $16,500 representing a penalty in respect of the company’s unlawful adverse action;
  4. $7,000 representing a penalty in respect of the company’s failure to maintain employment records and provide payslips; and
  5. $5,000 representing the company’s failure to pay notice.

The decision serves as an important reminder to employers of the risks faced in not complying with Award entitlements and altering an employee’s position for exercising a workplace right.

For further information, please contact our Employment Law and Workplace Safety team on +61 3 8540 0200 or by email to workplace@mst.com.au.