Underpayment Case Results in Enormous Fine for Business

 Judge Manousaridis of the Federal Circuit Court handed down a decision last week involving a payment dispute between the Fair Work Ombudsman and Her Fashion Box Pty Ltd.

The transgressions involved 11 contraventions of both the Fair Work Act 2009 (Cth) and the Graphic Arts, Printing and Publishing Award 2010. They ranged from failing to pay the minimum rate of pay, failure to pay annual leave and annual leave loading, and failing to pay overtime. In total, the business was ordered to pay $274,278 with Ms Purkis (the director of HFB) ordered to pay $54,855.

Her Fashion Box had hired one of the applicants (Ms Va) as an intern. His Honour reasoned when correctly classified under the Award the total hours she worked for the business amounted to $7,162.71. Her Fashion Box only paid Ms Va $1,000. Indeed, Ms Va was not the only employee who had been under payed in this way. HFB was ordered to provide compensation for three other employees who had been similarly wronged.

Ms Va and the other applicants were owed overtime as well as annual leave and annual leave loading. In summing up, his Honour addressed the significant financial penalties the Court had imposed:

There is no doubt that the penalties, when viewed individually and as an aggregate, are substantial. Unfortunately, the contravening conduct in response to which I have assessed the penalties constitutes serious and sustained contraventions of important provisions of the FW Act. In my opinion, substantial as the penalties I have assessed are, I am satisfied they are appropriate and proportionate to the contravening conduct.

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