'The director, a lawyer, had been provided with extensive information,' says court
The Federal Circuit and Family Court recently dealt with a case involving a Sydney-based law firm and its director, who faced penalties for failing to comply with a Fair Work Ombudsman's (FWO) Compliance Notice.
The notice required the firm to back-pay entitlements to a former employee who worked as a personal assistant and legal secretary.
The worker was employed by the law firm El Baba Lawyers (EBL), on a full-time basis from July 2020 to February 2021. Following a request for assistance from the affected worker, the FWO investigated the matter.
A Fair Work Inspector issued a Compliance Notice to the law firm in March 2021, believing that the worker had been underpaid minimum wages owed under the Legal Services Award 2020.
The law firm only back-paid the worker after the FWO commenced legal action. The Federal Circuit and Family Court imposed penalties of $12,000 against the law firm and $2,400 against the firm's sole director, Mona El Baba, who was involved in the contravention.
Employer’s ‘unreasonable’ belief
The court said that it was “prepared to accept that El Baba genuinely believed that EBL owed no wages to the [worker] and, for that reason, she believed that EBL had done all it was required to do to comply with the Compliance Notice.”
However, it added that such belief was “unreasonable.”
“The FWO provided to El Baba detailed information which showed that EBL had not paid [the worker] in full the wages to which he was legally entitled; and El Baba did not articulate to the FWO, and has not articulated in her affidavit, the reasons for which she did not accept as correct the views the FWO had expressed to her and which finally found expression in the Compliance Notice,” it said.
In its penalty judgment, the Court described the $2,950 underpayment of the worker as "a significant amount" and noted the lengthy delay of 13 months before the law firm eventually back-paid the worker after the Compliance Notice was issued.
‘Wilful refusal to comply’ with FWO
The Court rejected the director's submission that she had meaningfully engaged with the FWO, instead finding that the breach was a "wilful refusal to comply with the Compliance Notice based on an unreasonable belief."
It stated that the director, a lawyer, had been provided with extensive information by the FWO to enable her to identify the alleged contravention and understand the firm's obligations under the Compliance Notice.
"Employers should be on notice that their deciding not to comply with a compliance notice on the basis of nothing more than their unreasoned and unreasonable belief that they are not obliged to do so will result in their being met with a significant penalty," the Court warned.
