So, you’ve had a Fair Work Commission finding made against you…
Unfortunately, in the course of doing business, things won’t always go your way. You may find yourself on the wrong side of claims relating to your employment of others, including general protections, unfair dismissals, and underpayments claims. While you maybe in a position to defend these claims, you should always be prepared for the worst-case scenario.
There are a number of remedies that the Fair Work Commission (the Commission) may order against you as a result of a hearing, including reinstatement of the disgruntled employee to their position and/or compensation amounts. While these orders may be unpleasant as a business owner, if you do not abide by the Commission’s decision, you may incur further penalties on your business.
What’s the worst that can happen?
If a business owner is aggrieved by a decision or is simply unable to make payments due to their financial situation, they may elect to ignore a Compliance Notice issued by the Commission in the hopes of deferring payment to a more convenient time, or potentially avoiding it altogether. This tactic, however, is likely to incur severe penalties under the Fair Work Act 2009 (Cth) (the Act).
Section 546 of the Act allows the Commission to impose a pecuniary penalty of up to $31,500 (as of October 2022), if a business owner ignores or fails to observe a Compliance Notice. This amount can be ordered as payable in addition to previous orders. Recent cases within the Commission have reinforced this position. In the matter of Fair Work Ombudsman v Get Plucked Holdings Pty Ltd [2022] FedCFamC2G 807, the Commission found that ignoring multiple Compliance Notices across two separate underpayment claims attracted a penalty of $20,000. This is particularly noteworthy, as the combined underpayment claims totalled less than $5,000, i.e., not even a quarter of the penalty imposed for non-compliance. Get Plucked is a small business, but this did not shield the company from a large fine. In making its decision, the Commission alluded to the need for ‘specific and general deterrence’ as a reason for the size of the penalty.
The lesson we can learn from the Get Plucked case is this, as a matter of public policy, the Fair Work Ombudsman is taking a hard-line approach on businesses which are non-compliant and is willing to commence proceedings to obtain significant penalties. It seems that this policy stands firm regardless of the size of the business or the quantum of the underpayment.
What can you do?
Prevention is always the best cure, and we strongly recommend that at the outset of any claim made against you or your business you seek advice from a qualified lawyer (i.e. us!), to assist you in defending claims and mitigating any compensation you may be ordered to pay.
Failing this, ensure that you always pay the amounts ordered by the Commission once a Compliance Notice has been issued, to avoid additional penalties being imposed on your business. If you are concerned that your business will struggle to meet the financial obligations imposed by the court, it is better to try implement a payment plan than ignoring the notice altogether, or you may find yourself in more trouble than you started with!
If you require any advice about a claim made against your business, or would like advice in regard to an issued Compliance Notice, please contact JFM Law on (02) 9199 8597 to speak to one of our qualified and helpful people, or you can email us at wehelp@jfmlaw.com.au.
The information contained in this post is current at the date of publishing – 6 May 2024.