Misconduct the ‘worst possible case’

The Federal Court has ordered a company to pay $96,000 in penalties and the owner $19,200 after finding both entities had engaged in deliberate conduct regarding employees’ rights. The court found the company failed to provide ten former employees with their severance package, annual leave on termination of their employment and the requisite notice. The employer evaded these obligations by moving employees from one internal entity to another.

FWO argued that separate penalties should apply to each breach. However the court decided that two or more breaches of an ‘applicable provision’ or ‘term’ of an award, which arise from the same conduct, should be treated as a single breach. The judge stated that the employer’s failure to comply with legal obligations to provide severance, accrued leave entitlements and notice should be recognised as three separate types of breaches.  In accordance with current legislation, the court ordered that the employer should pay $32,000 and the owner $ 6,400 for each of the three types of breach identified. The total of these penalties comes to just $1,200 short of the maximum penalty rate in the case of a corporation and individual, on the nature of the breaches conducted.

This case demonstrates that FWO has the capacity, power and willingness to investigate employers thoroughly, and to delve into corporate structures if need be to determine employee entitlements.

Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408 (20 April 2012)