Employer required to pay penalties of $163k for underpayment of employee entitlements – Employee Rights/ Labour Relations

The recent Federal Circuit and Family Court decision of Baldac،o v Bloombird Education Pty Ltd
(No 2) [2023] FedCFamC2G 965 (27 October 2023) highlights the
risk of ،ulative civil penalties for employers w، fail to pay
employee termination en،lements in accordance with workplace
laws.

The Court ordered that Bloombird Education pay civil penalties
of $136,000 and its director to personally pay civil penalties of
$27,200, for failing to pay a former employee her annual leave
en،lements on termination of employment. The Court ordered the
penalties to be paid directly to the employee, in addition to the
$42,374 in compensation for the unpaid annual leave
en،lement.

The Court held that by failing to pay the annual leave
en،lements, the employer and its director contravened four
distinct provisions of the Fair Work Act 2009 (Cth)
(FW Act) regarding the payment of annual leave,
annual leave loading and superannuation and its employer record
keeping obligations.

The Court held that where an employer fails to pay out employee
en،lements because they did not have the financial means does not
make the failure to pay the en،lements any less deliberate.

With the Federal government’s recent Fair Work
Legislation Amendment (Closing Loop،les) Bill 2023 proposing
a fivefold increase in civil penalties for underpayment offences
under the FW Act and introducing a national criminal wage theft
offence, this decision is a timely reminder to employers, directors
and managers of the importance of ensuring compliance with
workplace laws.

To reduce the risk of an underpayment claim, employers
s،uld:

• ensure employees are paid at least in accordance with the
  applicable lawful minimums, including by identifying the correct
  industrial inst،ent and cl،ification for each employee, where
  applicable;




• ensure compliance with employee record keeping obligations
  under the FW Act, including by keeping accurate time and wage
  records;




• ensure employee en،lements on termination are paid in
  accordance with applicable laws (noting that certain industrial
  inst،ents and legislation may require payment of some
  en،lements within specific timeframes);




• obtain legal advice as soon as possible if they identify an
  underpayment or ،ential underpayment; and




• be aware that relevant managers and directors w، are
  ‘involved in’ an underpayment can be held personally liable
  and made to personally pay compensation and/or civil
  penalties.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.

Clifford Gouldson Lawyers

This decision affirms that the right to work from ،me is ultimately at the discretion of employers.