The Industrial Magistrate has imposed a penalty of $4,280 on an employer for underpayment of wages.

Background

The employee commenced a claim for underpayment of wages against his employer on 10 February 2021. Upon the employee’s application for default judgement, orders were made on 16 April 2021 that the employer pay him $4,927.58 plus interest. As part of this claim, the employee also sought payment of a pecuniary penalty. That part of the claim was adjourned to hear from the parties in respect to penalty.

Submissions on Penalty

The employees’ claim for pecuniary penalty relates to the failure of the employer to pay him in the role of a ‘Security Officer Level 1’ in accordance with Security Services Award 2010 (Cth) (the Award). The underpayments are alleged to have occurred between 6 January 2020 and 30 August 2020, being a total of 107 underpayments. The total of underpayments amounted to $4,927.58. In his submissions, the employee alleged that this was a contravention of s 45 of the Fair Work Act 2009 (Cth) (FW Act).

Allowing for issues of totality, the employee submitted that a penalty of $5,000 was proportionate to the overall offending and should be payable to him.

The employee argued that the contraventions were not for an insignificant period of time and amounted to 107 contraventions; the loss suffered was not insignificant for an employee at his level; there had been no evidence of previous similar conduct by the employer; the contraventions arose from a consistent course of conduct; the employer’s director was involved in the breaches; the employer acted deliberately; and the employer did not engage in the court process nor was there any evidence that the employer has changed their ways.

The employer did not appear in the proceedings or lodge any submissions in respect to the claim for a pecuniary penalty.

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

• In the absence of any comment from the employer, the contraventions in respect to underpayment of wages could be characterised as a disregard for the law;

• The contraventions could be properly characterised as a single contravention which flowed throughout the term of employment arising from the same course of conduct in weekly underpayment to the employee;
• Lack of evidence that the employer exploited or profited from that underpayment; and
• Specific deterrence is not a significant factor as the employer had advised that it lacks the funds to make any payments and will be pursuing deregistration soon.

Hawkins IM was of the view that the conduct in all circumstances is properly categorised as falling at the lower end of offending. Her Honour found that imposing penalties in the sum of $4,280 for the failure to pay wages in full pursuant to s 45 of the FW Act, was the appropriate penalty.

The decision can be read here.