South Australia company fined $200K after $2.5 million underpayment

by Chloe Taylor01 Dec 2014
Adelaide company Lifestyle SA was fined $196,000 recently after legal action taken by the Fair Work Ombudsman showed it had underpaid employees by more than $2.5 million.

Lifestyle SA manages a network of retirement villages in South Australia.

The FWO began legal proceedings against the organisation in 2012, following allegations that Lifestyle SA had underpaid 35 employees a total of around $1.1 million in wages, casual loadings, penalty rates and annual leave entitlements – and it still owed many workers superannuation.

After media coverage of the legal action later that year, the FWO received additional complaints from Lifestyle SA employees, and filed an amended Statement of Claim which alleged that the total underpayment was $2.3 million plus superannuation.

The largest individual underpayment was $264,725, and eight employees had been underpaid by over $100,000, all of which occurred between March 2006 and February 2011.

The underpayments were the result of Lifestyle SA paying employees a flat rate of $50 per shift to be pager monitors – the company initially denied liability, claiming that the monitors were not performing work unless they were responding to a callout. Lifestyle SA also claimed that it was acting on workplace relations advice.

Eventually, Lifestyle SA admitted liability and paid the employees the amounts that they were owed from the underpayments and superannuation.

Justice John Mansfield handed down the penalty, accepting that the company’s breaches were not deliberate, but stating that Lifestyle SA had failed to adequately consider its proper obligations to its employees.

“It is important to send a clear signal to the community at large, and specifically to employers, regarding the importance of complying with Australian workplace laws,” Mansfield said.
 

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