Record-keeping obligations have been thrown into the spotlight as the Fair Work Ombudsman commences the first legal action under new reverse onus of proof laws.
FWO tests new reverse onus of proof for record-keeping obligations
The FWO has instituted proceedings in the Federal Circuit Court against A & K Property Services Pty Ltd utilising new reverse onus of proof laws that require employers to disprove underpayment allegations in court when they have failed to keep adequate time and wages records or issue pay slips.
Company directors Yong Sim Kim, Hyn Jun Kang and Jungpyo Lee, who operate two ‘Sushi 79’ fast food outlets at Ipswich and the Sunshine Coast, face allegations that between October and December 2017, they breached workplace laws by failing to keep proper time and wages records, and failed to issue pay slips to employees.
The FWO alleges that nine workers across the two outlets were underpaid a total of $19,467 in entitlements under the Fast Food Industry Award 2010.
The workers were allegedly underpaid minimum ordinary hourly rates, weekend penalty rates and overtime rates. Allegedly, the employees were also not provided with superannuation, and their annual leave and personal leave entitlements were not accrued.
A & K Property Services faces penalties of up to $63,000 per contravention.
Mr Kim, Mr Kang and Mr Lee are facing penalties of up to $12,600 for their alleged involvement in the leave contraventions and, in addition to those contraventions, Mr Kim is facing penalties of up to $12,600 for his involvement in the record-keeping and pay slip breaches.
Acting Fair Work Ombudsman Kristen Hannah said the new legal provision, available for conduct occurring after September 2017, would close a loophole that allowed employers to avoid facing the courts.
“In the past some employers had avoided facing litigation by FWO because they had breached their record-keeping obligations, and we could not present sufficient evidence in court to prove underpayments,” Ms Hannah said.
“Employers should be on notice that this loophole is now closed and the Fair Work Ombudsman will make full use of the new laws to protect vulnerable workers.
“Businesses who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse need to disprove allegations of underpayments in court.”
The majority of the alleged underpayments have been rectified, but the FWO is seeking an order for backpayment of allegedly unpaid superannuation entitlements.
The matter is listed for a directions hearing in the Federal Circuit Court in Brisbane on 25 March 2019.