In the recent Federal Circuit Court of Australia’s decision in Fair Work Ombudsman v Lu’s Healthcare Pty Ltd & Anor [2016] FCCA 506 (Massage Case) massage parlours were warned that failure to comply with the obligations under modern awards and applicable employment laws will not be tolerated.
In the Massage Case, two massage therapists were paid a percentage of the fee for each massage they performed, rather than the rates of pay that were prescribed by the Health Professionals and Support Services Award 2010 (Health Award). As a result of the failure by Lu’s Healthcare Pty Ltd (the Company) to comply with the Health Award, one therapist was underpaid $33,000 and the other was underpaid $21,000.
In addition to not paying employee’s correctly, the Company “fined” employees and deducted amounts from the employee’s take home pay in accordance with the “in house code of conduct.” For example, “fines” included:
If an employee resisted “hard work” they would be put “back on apprenticeship again.”
As a result, the Court penalised the Company $112,860 and the director a further $5,940 for failing to comply with its obligations under both the Health Award and under the Fair Work Act 2009 (Cth).
This case serves as a reminder for all employers that if there is a modern award that is applicable to the industry the employer operates in – the employer must pay in accordance with the modern award.
In circumstances where an employer wishes to offer an incentive/bonus scheme - this must be in addition to the minimum rates of pay that have been prescribed by the modern award.
Finally, as noted above, in the Massage Case, employees were “fined” by their employer and deductions were made from their take home pay.
Employers are permitted to make deductions in accordance with law and/or as agreed with the employee in writing. If an employee’s conduct is not acceptable, employers are not permitted to “fine” an employee, instead the employee should be disciplined and their conduct addressed in accordance with the relevant policy/procedure.
Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.
