Disparaging conduct in an underpayment case results in severe fines

The Fair Work Ombudsman (FWO) has secured over $40,000 in penalties against My IT Partner Pty Ltd (My IT Partner) after commencing legal action in June 2023 for failing to comply with a Compliance Notice.

The Compliance Notice required the company to address wage underpayment and related entitlements for a worker over a two-year period. Despite this, the company failed to comply with the notice. Here, our experts explain the ins and outs of this case and the behaviour that led to maximum penalties being imposed.

The details of the case: how bad behaviour worsened the penalties

The Compliance Notice revealed that the company had been paying a worker at a rate below the Level Two Engineer classification rate under the Miscellaneous Award 2020. It mandated the company to calculate and compensate for the underpayment covering the period from April 2020 to August 2022. This also included unpaid accrued annual leave and additional superannuation contributions tied to the underpaid wages and leave. 

My IT Partner came under fire for its behaviour during legal proceedings, after the sole director and shareholder of My IT Partner sent an email to the FWO, claiming that pursuing the matter further would not be in the FWO’s best interest.

Judge Sandy Street described this email as defiant, sarcastic, and reflective of a deliberate effort to ignore the company’s legal obligations. He noted that the message displayed an intentional and ongoing failure to engage with the Compliance Notice and the FWO. Additionally, the company refused to participate in court proceedings, further demonstrating its unwillingness to meet its responsibilities under the Compliance Notice.

Citing the serious nature of the contraventions and the deliberate role of senior management, Judge Street imposed the maximum possible penalty of $41,250. He also highlighted the importance of Section 716 of the Fair Work Act 2009 (Cth), which is central to the FWO’s enforcement efforts. The judge said the continued operations of My IT Partner, alongside its blatant disregard for compliance, warranted the severe penalty. He also granted the FWO permission to take further enforcement measures should the company fail to pay the imposed fine.

Fail to comply? The consequences will be harsh

This case is a clear message from the courts: employers cannot ignore their obligations to address and rectify workplace underpayment claims. The imposition of the maximum fine, coupled with Judge Street’s call for reform, demonstrates a zero-tolerance approach toward employers who engage in evasive or dismissive behaviour when faced with legal claims. It’s also a timely reminder for businesses that compliance isn’t optional; it’s essential.

Do you conduct regular payroll audits? Citation HR can help

Whether you’re a small business or part of a franchise network, ensuring compliance is essential. And while most business owners don’t intentionally look to underpay their employees, mistakes can and do happen – this is where Citation HR can help. Our workplace relations experts can complete a thorough HR audit of your business – and the best part is that this service is included in our monthly, cost-effective subscription, which is designed to protect your business from costly risks.

If any of this information has raised any questions about your workplace compliance or you’ve got another matter you need assistance with, reach out to our experts via our 24/7 HR Advice Line.

Not a Citation HR client? To learn more about how Citation HR can support your business and streamline its people management practices, get in touch with our friendly team for a confidential, no-obligation chat.