Penalties imposed on employer for failure to pay employee entitlements

The Industrial Magistrate has imposed penalties totalling $2,500 on an employer for failure to pay untaken annual leave and payment in lieu of notice.

Reasons for decision

By reasons for decision delivered on 23 April 2021, part of the claim against the respondent was dismissed, however the parties agreed to a portion of the claim being paid to the employee by consent. It was therefore ordered by consent that the respondent pay the employee a total of $2,826.91, a sum made up of agreed annual leave and agreed wages minus a disputed deduction of two weeks’ wages which was the subject of final determination.

The decision can be read here.

Supplementary reasons for decision

The supplementary reasons for decision relate to the employee’s application for payment of pecuniary penalties, interest and costs. The claim for pecuniary penalties relates to the failure of the employer to pay one week’s wages at termination of employment, being a contravention of s 323 of the Fair Work Act 2009 (Cth) (FW Act). Further, the employer failed to pay untaken annual leave at the end of the employment relationship, being a contravention of s 90(2) of the FW Act.

The employee submitted that a total of $2,500 in penalties was proportionate to the contraventions and should be payable to him.

The employee argued that the employment was for a short period of time; the loss suffered by him was not insignificant; there had been no evidence of previous similar conduct by the employer; the actions of the employer were deliberate; and that the employer’s director had been involved in the breaches. The employee conceded that the employer had shown contrition, given the concession in respect to payment of the entitlements at the commencement of trial.

The employer submitted that its conduct could be characterised as falling at the lowest level of seriousness and conceded that the penalties sought by the employee were within the lower range.

Industrial Magistrate Hawkins noted that the following considerations were significant in assessing penalties in this case. These included:

  • Her Honour found that the contraventions could be characterised as the respondent’s ignorance of the law, however noted that ignorance and complacency of the law are not mitigating factors;
  • The two contraventions could be characterised as a single contravention flowing from the respondent’s ignorance and complacency of the law, as well as events that occurred between the parties, which have been set out in Ryan v WA Pallets Pty Ltd [2021] WAIRC 00111;
  • The respondent did not exploit or profit from the non-payment to the claimant;
  • The director of the respondent business has learned from the court process and as such, specific deterrence is low;
  • The offending can be characterised as falling in the lower range and the respondent has shown remorse; and
  • The amounts unpaid to the applicant are not insignificant, and therefore it is not appropriate to impose a caution or no penalty whatsoever.

Hawkins IM was of the view that the conduct in all circumstances is properly categorised in the low range. Her Honour found that imposing penalties in the sum of $2,500 was appropriate. She also awarded a sum of $110.60 in interest and made no order as to costs.

The decision can be read here.