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Fair Work Ombudsman cottons on to underpayments for employee training

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The Fair Work Ombudsman (FWO) has reported that major retailer Cotton On has back-paid staff more than $278,000 after it was discovered that the company had failed to pay staff for attending training outside working hours.

In addition to back-paying employees, the company has also been required to:

  • post an apology to staff (signed by the Chief Executive Officer) at all of its stores, on its website and on the company’s Facebook wall
  • ensure its human resources managers undertake workplace relations compliance training within three months
  • provide a written report to the FWO each year for the next three years to illustrate that staff are being paid correctly and identifying any proactive compliance measures.

Failure to pay employees for attendance at training and staff meetings is a common issue of non-compliance by retailers.  Where employees are required to attend training or staff meetings outside their rostered hours of work, consideration must also be given to minimum engagement requirements under any applicable award or registered agreement which may require that employees are paid for a minimum period of time.

Another related non-compliance issue for retailers is the non-payment of employees for cashing up following the closure of a store at the end of trade.  In 2008, A-Mart All Sports was required to back-pay employees and was subject to a further $52,800 penalty after the FWO found that they had enforced a strict policy that employees be present at work 30 minutes prior to commencement of trade and to remain for between 15 and 30 minutes following closing without pay.

The key lesson for employers is to ensure that in any instance in which employees are required to attend the workplace (including any work related exercise offsite) by their employer, such time must be treated as time worked and paid accordingly.

Further information on employee wage entitlements and or compliance with the Fair Work Act 2009, please contact one of our Workplace Relations lawyers.

Author: Katrina Sweatman