Resources: Blogs

Brace yourself for consequences

Blogs
|

Dentist penalised for non-compliance and personally ordered to rectify underpayments

The Fair Work Ombudsman (FWO) is responsible for ensuring compliance with workplace laws.

The Fair Work Ombudsman (FWO) is responsible for ensuring compliance with workplace laws. It does this by investigating and taking enforcement action against suspected breaches of the Fair Work Act 2009 (Cth) (FW Act).

Under the FW Act, one of the enforcement powers of the FWO is to issue a compliance notice requiring the employer to address contraventions of the FW Act. Failing to comply with this compliance notice has serious consequences and itself constitutes a contravention of a civil remedy provision.

In the matter of Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor [2019] FCCA 1148, the FWO sought an order against the sole director and secretary of the dental practice for his involvement in failing to comply with a compliance notice in relation to the underpayment of a dental technician.

In July 2017, a Fair Work Inspector investigated the dental practice and reasonably believed that it had contravened the Health Professionals and Support Services Award 2010 and the National Employment Standards (NES) by failing to pay the minimum entitlements owing to the dental technician. In February 2018, a compliance notice setting out the details of the contraventions was served on the dental practice and personally served on the director. The compliance notice required the dental practice to rectify the underpayment to the dental technician.

The dental practice did not comply with the compliance notice by the required date and the FWO commenced proceedings in the Federal Circuit Court (the Court).

In the proceedings, while the dental practice admitted it did not comply with the compliance notice, the director denied that he was “involved in” the contravention of the compliance notice. He also submitted that to comply with the compliance notice, he would have had to contribute money to the dental practice to make the payment requirement and there was no obligation on him as a director to do so.

The Court rejected the director’s submissions, finding that the director was involved in the contravention within the meaning of section 550 of the FW Act and was an “intentional participant in the contravention” by the dental practice.

Relevantly, the Court noted that the director received the compliance notice on behalf of the dental practice and was aware of its contents and the compliance date and was the “guiding mind” of the dental practice as its sole director. The Court also considered that the director was “knowingly concerned” in the contravention as there was a “practical connection” between the director’s actions and the contravention – it was the director who decided that the dental practice would not comply with compliance notice.

In Fair Work Ombudsman v Nobrace Centre Pty Ltd & Anor (No.2) [2019] FCCA 2144, the Court ordered that the director pay a penalty of $5,355 for his involvement in the contravention. It noted that the director did not rectify the underpayment, admit liability or demonstrate any remorse. It also held that there was a need for deterrence, stating that:

It is important… that recipients of statutory notices such as Compliance Notices act in accordance with such notices. The efficacy of such notices will be hindered or made redundant if recipients perceive that failure to comply with such notices carries with it no meaningful consequence.

Significantly, given that the dental practice was in voluntary administration, the Court also considered it appropriate to make a personal payment order. The Court ordered that the director personally pay the amount of $32,889.98 plus interest to the dental technician, being the amount sought under the compliance notice for the underpayment.

Lessons for employers

The FWO has different enforcement powers available to use to ensure compliance with the FW Act.

Compliance notices are one enforcement mechanism used by the FWO to quickly resolve underpayment claims. It is important for employers to be aware of the legal significance of these compliance notices and that there are real consequences for failing to comply with them.

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.

Similar articles

FWO secures penalties against bar operator and external accounting firm

Closing time

The Fair Work Act 2009 (Cth) requires employers to keep certain employee records for a period of 7 years. These records are necessary to ensure that employees have been paid their minimum entitlements should an underpayment claim be made.

Read more...

Underpaying employer ordered to pay $475,200 in penalties

Pecuniary penalties no longer a matter of degrees

The Federal Court of Australia has issued one of its first penalty decisions since the High Court of Australia’s decision earlier this year of Australian Building and Construction Commissioner v Pattinson [2022] HCA 13.

Read more...

Employer and director ordered to pay penalties for failure to comply with compliance notice

Compliance is a must

The Fair Work Ombudsman (FWO) regularly engages in enforcement action for contraventions of the Fair Work Act 2009 (Cth) (FW Act). Such enforcement action includes issuing infringement and compliance notices, entering into enforceable undertakings or commencing litigation against companies and others involved in contraventions.

Read more...

Commission confirms inappropriate touching constituted sexual harassment warranting summary dismissal

‘Scuse you

Sexual harassment in the workplace has been the subject of significant reform over the past few years, with an even greater onus on employers now to take proactive measures to minimise or eliminate the risk of sexual harassment in connection with work.

Read more...

Employers delay sinks bid for injunctive relief

Speak now

When seeking to enforce a restraint, it is important that employers seek to enforce the restraint in a timely manner to prevent future or an ongoing breach. Any delay will be considered by the courts when assessing whether it is reasonable to enforce the restraint.

Read more...

Two-year post-employment restraint on hairdresser found to be unreasonable

Splitting hairs

When it comes to drafting post-employment restraints in employment contracts, it is important for employers to consider the purpose of the restraint and whether or not the restraint reasonably serves that purpose.

Read more...

Let's talk

please contact our directors to discuss how ouR expertise can help your business.

We're here to help

Contact Us
Let Workplace Law become your partner in Workplace Relations.

Sign up to receive the latest industry updates with commentary from the Workplace Law team direct to your inbox.