FWO brings injunction against former director of Kenny’s Cardiology for underpayment

A rare Fair Work Ombudsman (FWO) injunction application is underway seeking to restrain a retail operator from underpaying her employees.

Facing the injunction notice is Deborah Souris, who owned and ran Kenny’s Cardiology and Giftology stores in both Melbourne and Brisbane during 2014.

Since 2007, more than 40 employees of companies of which Souris has been a director have contacted the FWO. This injunction is specifically in regards to five employees.

Three Compliance Notices were sent out to Souris, requesting back-pay for five of her former employees amounting to $11,187.

It isn’t the first time Kenny’s management has been before the court, with former Kenny’s chief executive Anthony Underwood and former director of sales Randal Wilson accused of misleading and deceptive conduct by former franchisees.

Kenny’s Cardiology is now owned by WH Smith Australia Group.

This is only the second injunction case the FWO has sought in its 11 years in operation.

The FWO’s first case penalised a NSW hairdressing salon and its owner Nelvin Litesh Lal for underpaying staff to the amount of $162,000. Lal was also issued a restraining order from underpaying any hairdressing employees in the future.

“An injunction is an unusual step in a debt recovery case,” Anthony Massaro, of Russell Kennedy Lawyers’, told SmartCompany.

“When normal enforcement measures aren’t working, the FWO will consider alternative ways of getting an employer’s attention,” says Massaro.

Generally speaking, receiving one compliance notice is something to be taken seriously, let alone three.

Massaro normally advises clients that if they have a legitimate reason to fight the compliance notice then they should consider doing so, but if their business is in the wrong it’s best to pay up and move on.

“Most compliance notices are a result of genuine mistakes – an employer thinking an employee is covered by one award and the FWO saying it’s another, or a different classification” says Massaro.

With SME owners generally taking care of bookkeeping, Massaro says costly mistakes in calculating award rates are more likely to occur.

“If you contest the compliance notice and are wrong, you can be fined up to $51,000 as a business, $10,200 as an individual.”

SmartCompany contacted Souris but no response had been received before publication.