Victoria retail business fined $40,000 for underpaying employee

Operators of a retail company have been fined almost $40,000 after they underpaid an employee by 40% of her legal requirements.

The operators of a Victoria retail business who have been found by the Fair Work Ombudsman to have underpaid an employee and failed to provide sufficient meal, rest and toilet breaks have been fined almost $40,000.

The Fair Work Ombudsman launched an inquiry into Bad Workwear following a complaint from Aishlinn Carter, who worked for the company for two years between the ages of 18-20. She had worked as a junior sales person for Bad Workwear for several months before being promoted to store manager.

The inquiry found that between May 2010 and November 2012, the employee was underpaid by $56,850 – the underpayments were the result of Carter regularly being paid only $10 per hour, and below the minimum hourly rate required for weekend, evening, public holiday and overtime work, as well as the failure to pay laundry and superannuation entitlements in full.

Judge Suzanne Jones found that the company had paid the employee less than 60% of her total entitlements.

Another issue arose from findings that the business operators had failed to and fulfil pay-slip and record-keeping obligations.

The judge also found that a lack of break allowances prevented the employee from resting or eating properly – even restricting her ability to use the toilet.

It was ruled that the penalties imposed should be set to deter employers in the retail industry from committing similar contraventions.

HC spoke to Lucienne Gleeson, Associate at PCC Lawyers, who had some advice for employers to avoid similar situations arising.

“Employers need to ensure that they know their employees’ basic details so that they get their entitlements right,” she said.

Gleeson outlined the most important things that employers must be aware of:
  1. The minimum wage for each individual within the company
  2. The breaks that are required for employees
  3. Which allowances and penalties must be paid
  4. What superannuation must be paid and when
  5. Which employee records must be kept and for how long
  6. The information that pay slips must contain
“The key reasons for knowing all of this is that the Fair Work Ombudsman has inspectors who can enter premises to inspect employee records at any time,” she told HC. “So it’s really important that employers have all employee records in a legible and accessible form – and these records must be kept for seven years under the Fair Work Act.” 

“A lot of employers don’t actually know that they can be approached and inspected so it’s really important that they know to follow these procedures,” Gleeson added.

Online tools are available on the Fair Work Ombudsman website, which include ‘PayCheck Plus’, which can help to determine the correct award and minimum wages for employees, templates for pay slips and time-and-wages records, and a range of Best Practice Guides. 

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