Thinking | 8 April 2016
Fair Work Ombudsman prosecutes director for unpaid penalties
A former restaurant owner and director who underpaid employees will be forced to pay outstanding penalties after the Federal Circuit Court1 ordered deductions from his salary.
The former director and his company, Sona Peaks Pty Ltd, became the subject of court proceedings last year following repeated failures to pay employees in accordance with the Restaurant Industry Award 2010.
In January 2015 the director was fined $3,000 for refusing to comply with a compliance notice issued by the Fair Work Ombudsman.
The parties agreed to a payment plan and the casual waitress eventually received more than $5,000 in outstanding entitlements.
Six months later the director was fined another $23,715 for his direct involvement in underpaying nine employees more than $11,000.
As of March 2016 the court-imposed penalties remained unpaid.
The Fair Work Ombudsman pursued ‘attachment of earnings’ orders against the former director to recover the unpaid penalties, which amounted to $26,715. In accordance with the Court’s orders, repayments of $500 will be automatically deducted from the former director’s fortnightly pay by his current employer.
An ‘attachment of earnings’ order guarantees that court-ordered penalties owing to the Fair Work Ombudsman are paid. This is the first time the Fair Work Ombudsman has used this type of order to pursue a director through their current employer for unpaid penalties.
This case shows that employers should not ignore compliance notices issued by the Fair Work Ombudsman. To avoid becoming the subject of legal proceedings employers should consider seeking legal advice when responding to notices or requests by the Fair Work Ombudsman and immediately rectify breaches of minimum pay and conditions owing to employees.
This article was written with the assistance of Alix Piatek, Law Graduate.
1Fair Work Ombudsman v Sona Peaks Pty Ltd & Anor (No 3)  FCCA 615 and Fair Work Ombudsman v Sona Peaks Pty Ltd & Anor (No 3)  FCCA 614
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