Resources: Blogs

Broken record (keeping)

Blogs
|

The importance of keeping employment records and providing pay slips

Employers can be penalised for failing to keep proper records and for failing to issue their employees with pay slips in a timely manner.

Record keeping - it’s not many people’s favourite pastime, but it is a critical task for every responsible employer.

Under the Fair Work Act 2009 (Cth) (FW Act), employers can be penalised for failing to keep proper records and for failing to issue their employees with pay slips in a timely manner.

The types of records that employers must keep include (but are not limited to) information about the position of the employee (e.g. commencement date and type of employment), their pay, leave, superannuation and any changes to their employment including termination of employment.

Employers must also provide employees with payslips that not only detail the employee’s pay, but also specify the employer’s details such as their ABN and any superannuation contributions made on behalf of the employee.

For many employers, the record keeping and pay slip obligations in the FW Act feel onerous but, as recently described in a decision of the South Australian Employment Tribunal, they are critical for ensuring compliance with workplace laws and enabling employees to understand their entitlements.

In Fair Work Ombudsman v Wuyu Pty Ltd & Ors [2018] SAET 15, two companies and a director were penalised for failing to keep records and to issue employees with payslips.

The two companies operated a number of massage parlours in South Australia that were run by the same director, who was responsible for hiring, paying and managing employees.

In 2012, one of the companies and the director were investigated by the Fair Work Ombudsman (FWO) for failing to keep proper employment records and for failing to issue employees with pay slips. At that time, the FWO issued a fine and provided the company and director with information on how to comply with their obligations.

In 2014, the FWO conducted a follow-up investigation and found that the same company and the director had continued to fail to comply with their record keeping and pay slip obligations. They were issued with a further fine and provided with more material and information on how to comply.

Between 2014 and 2016, the director registered a new company which took over control of some of the massage parlours.

In 2016, the FWO conducted a second follow-up investigation which included the new company as well. The second follow-up investigation found that although the director had been issuing pay slips to some employees for a short period of time following his previous interactions with the FWO, he stopped doing so and only issued pay slips to employees when they asked for them.

In an email to the FWO, the director wrote, “During the past few years, I did not do the records and other things properly, because I am too busy and lazy.” He also wrote, “I do not want to make fake data. Because I do not keep records.”

The FWO commenced proceedings against the two companies and the director on the basis that they had repeatedly failed to comply with their obligations, despite knowing that it was a legal requirement, having been advised of such on numerous occasions by the FWO.

The companies and director admitted to contraventions of the FW Act prior to the hearing of the matter, and so the task of the Tribunal was to determine the appropriate penalties.

The director argued that, although aware of the need to keep records and provide pay slips, he was not aware of how serious his failure to do so was.

The Tribunal found that there was a need for both specific and general deterrence in this case, noting that the conduct of the companies and the director was serious in nature.

The Tribunal found that there was a need to set the penalties at a level that was significant enough so as not to be viewed by either the offending parties or employers more generally as “the cost of doing business.”

The Tribunal also commented that one of the reasons that the actions of the companies and the director were so serious was because their failure to keep records and issue pay slips frustrated the investigation process and meant that the FWO could not establish if any employees had been underpaid or lost other entitlements.

The Tribunal said, “Proper record keeping and the provision of pay slips is essential to ensure there is compliance with workplace laws.”

The companies were ordered to pay $18,000 each in penalties and the director was ordered to pay $7,200 for his vicarious involvement in the companies’ contraventions of the FW Act.

 

Lessons for employers

Record keeping and the provision of pay slips are a non-negotiable reality of being an employer.

The FWO has demonstrated time and again its willingness to pursue employers for offences relating to records and pay slips. In turn, the courts have demonstrated the ongoing intention to set penalties at a level that is more than “the cost of doing business.”

In fact, the introduction of the new “serious contravention” provisions in the FW Act mean that penalties are set to increase and, in future, are likely to be considerably higher than those ordered in this case.

 

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

Court penalises accountant for involvement in employer’s failure to keep employee records

Put your records on

The Fair Work Regulations 2009 (Cth) impose a number of obligations on employers with respect to the making and keeping of employee records and pay slips.

Read more...

How a region banded together to improve employment standards

Group Effort

No employer operates in a silo – all employers operate in complex systems of interrelated stakeholders including employees, customers, other businesses, and regulators who enforce the laws that apply to the employer and their business.

Read more...

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

Brace yourself for consequences

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

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.