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Multiple lessons for employers

by | Jun 21, 2023 | C1: Commitment, C2: Capability, C3: Competency, Fair Work, Human Resources, News, Wage Obligations

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A recent case in the Fair Work Commission has produced far greater consequences than might have been anticipated by an employer who faced an unfair dismissal dismissal claim from a 67 year old worker who had been employed since 2010 before being sacked in February. 

The Evidence

The employer claimed that the worker was sacked for a variety of reasons such as disposing of produce, bullying, threatening and making racist comments to other staff, being rude to customers and taking time off for health reasons. 

However, the employee denied the reasons given by the employer and said that he hadn’t been told why he was sacked. He told the Fair Work Commission that he was told by his employer to take a week off while new staff were trained and that turned into 5 weeks during which time he wasn’t paid and was denied annual leave.

Then he said he was sacked without being told why.

The Compliance Complications 

There was firstly, the question of whether the employee was unfairly dismissed and, based on the evidence, he clearly was on both substantive and procedural grounds.

There were then a number of compliance issues that emerged in the course of proceedings in that the employee claimed that:

  • Throughout the period of his employment, he had been paid a flat rate of $13.50 per hour which is well below award rates and the federal minimum wage
  • He had illegally been stood down without pay and denied annual leave 
  • He had not been paid any notice or his final leave entitlements on termination of employment
  • He had only ever received one payslip over the whole course of his employment

Other factors

In considering unfair dismissal claims, the FWC will have regard to whether the termination is harsh, unjust and unreasonable. In the absence of a valid reason or process, the termination is clearly unjust and unreasonable.

Taking into account the employee’s age and length of service, termination would also be seen to be especially harsh, perhaps even if there had been a valid reason.

The Outcomes 

FWC Deputy President Ian Masson accepted the employee’s evidence, noting that the employer had not challenged it. 

He awarded the maximum compensation available ie 6 months wages which amounted to more than $20,000 based on award rates at the time of termination.

The employer has also been referred to the Fair Work Ombudsman for investigation and enforcement action relative to the reported underpayments of wages.

Those investigations won’t be restricted to this ex-employee’s case as there would clearly be a probability that other workers have also been underpaid.

As a result, the employer will be likely to have a substantial underpayment bill to pay as well as the prospect of very significant fines for breaches of the Fair Work Act.There could also be issues around superannuation (referral to the Australian Taxation Office) and wage theft (referral to Wage Inspectorate Victoria). 

The Lessons

This an extreme case where the employer has clearly done the wrong thing on a number of counts but it does underline the importance of ensuring that:

  1.  You have your house in order in terms of your compliance with employment laws, minimum wages and modern awards.
  2. You implement fair and demonstrable processes for dealing with performance and conduct issues so that you can demonstrate the fairness of any termination of employment that you might have to enact.
  3. You have access to competent professional advice on employment matters and you access that before taking such significant action as terminating employment.

We can assist with all of that. For you free first consultation, contact us on 1300 108 488 or use the “Tell us what you need help with” box below and we will give you a call.

 

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