Court fines former company director $28,000 for underpaying eight employees

A former company director has been fined $28,000 for underpaying eight employees in Adelaide and Sydney following action by the Fair Work Ombudsman.

The Federal Circuit Court in Adelaide fined the former majority owner and sole director of Ozone Manufacturing, Simon Forbes Oke, for the underpayments. The business went into liquidation in 2013.

The court ordered the penalty be paid to the eight underpaid employees, however the employees are still owned over $73,000.

The court found five manufacturing employees in South Australia were underpaid a total of $17,018, while three sales employees in NSW were underpaid a total of $56,036.

This comprised wages, annual leave and personal leave entitlements between January and October 2012.

The business created environmental control products such dust and fume control, and air and water purification. It had a manufacturing site at Woodville North in Adelaide and a sales operation at Balmain in Sydney.

It was found that Oke failed to comply with a Notice to Produce employment records when this was requested by Fair Work inspectors, under the Fair Work Act. The court found workplace laws relating to superannuation and frequency-of-pay were also breached.

Fair Work Ombudsman Natalie James said: “We do not apologise for taking legal action when employers dismiss the efforts of Fair Work inspectors to resolve these issues voluntarily.”

Workplace law expert Peter Vitale previously told SmartCompany it is up to the employer to be aware of correct payment procedures.

“Ignorance of these obligations, whether it’s deliberate or by omission, is unacceptable,” he said.

James said in this instance the penalty should serve as a reminder to other company directors that they can face personal liability for their actions.

K&L Gates partner in the Labour, Employment and Workplaces Serves Group, Christa Lenard agrees. She previously told SmartCompany directors of small businesses need to be aware that if they have hands-on involvement in all aspects of the business, they could be personally fined.

Lenard said in particular, small business owners could be liable if they are knowingly involved in payment breaches.