A fast-food franchise signed a Proactive Compliance Deed in 2012 with the Fair Work Ombudsman to ensure that it was following Australian workplace laws.
The self-audit of the employment records has revealed that the company will have to repay $645,253 to 3,140 employees who were underpaid. According to the Fair Work Ombudsman, more than 1,200 current and former employees had been back-paid a total of $346,285 by 27 August 2014.
The Proactive Compliance Deed was first proposed to the fast-food outlet after the Fair Work Ombudsman identified a problem with the way their franchise agreement was interpreted.
Following an investigation in 2011, it was found that the pay rates stated in the agreement were lower than the relevant award. The investigation by the Fair Work Ombudsman was prompted by a number of complaints from franchise employees.
In a 19 June 2014 report on the deed, the company states that it was "never their intention to underpay their employees" and it was their understanding that they were "meeting their employer obligations".
This case should serve as a reminder to businesses that it is important to get your wage obligations right from the very beginning, otherwise there may be serious repercussions.
Awards and enterprise agreements mean that employees have varying pay rates according to their classification and are entitled to different allowances and penalty rates. This makes it a hard task for employers to figure out the minimum pay rates they are required to pay employees.
However, it is crucial for employers to get it right. Employers who are found to have not met their obligations will have to repay workers that have been underpaid, and are at risk of prosecution and penalties by the Fair Work Ombudsman for any acts of non-compliance with the Fair Work Act.
If you need clarification on your obligations as an employer in Brisbane or Redlands or are concerned you might not be meeting the necessary requirements talk to an employment lawyer.