Court fines “belligerent” director who failed to co-operate with the Fair Work Ombudsman

The Federal Magistrates Court has slammed a Perth company director who refused to provide staff employment records to the Fair Work Ombudsman.

Jack Garber is the sole director and secretary of Nerd Group Australia, which operates a computer retail and repair business in the Perth suburb of Malaga trading as the Nerd Shop.

The Ombudsman requested employment records from the Nerd Group in late 2009 following a complaint from a female staff member that she had not been paid for some hours worked.

The Nerd Group and Garber failed to produce the records and the FWO initially pursued Nerd Group Australia until it went into liquidation, when the Ombudsman turned its attention to Garber.

Federal Magistrate Toni Lucev found Garber’s conduct “stifled” the Fair Work Ombudsman’s ability to conduct a proper investigation into complaints by two of his employees.

The court found that Garber had shown “a consistent unwillingness to co-operate with the Fair Work Ombudsman.”

Lucev also noted Garber had “belligerently expressed threats of legal action” at the Fair Work Ombudsman and had shown no “credible regret or a real willingness to facilitate the course of justice”.

“Such conduct undermines the objects and purposes of the Fair Work Act,” Lucev found.

Under the Fair Work Act, employers must comply with requests from the Fair Work Ombudsman to provide employment records relating to employees and former employees.

In his written judgment, Lucev said “the failure to provide the records involved a course of conduct which was serious, deliberate and not limited in time, because the records have not been produced.”

Lucev noted deliberate conduct warranted a more significant penalty than conduct which was not deliberate, and observed that there had been a lack of contrition and corrective.

“This is an appropriate case for a meaningful measure of general deterrence insofar as employers ought not to be impressed with the idea that they can avoid the requirement to produce documents upon request by the Fair Work Ombudsman or fail to co-operate with Fair Work inspectors lawfully exercising powers under the Fair Work Act,” Lucev said.

A penalty of $5,280 was imposed on Garber, which is 40% of the maximum penalty of $13,200.

Andrew Douglas, principal at M&K Lawyers, told SmartCompany there is “no upside” in frustrating the FWO and it is important for businesses to work out very quickly whether they are in the right or the wrong.

“If you are in the right you need to deliver a very clear message to the Ombudsman supported by documentation but if you are in the wrong there is no point hiding it,” says Douglas.

“The quicker you make disclosure, and the more open you are, the more likely you are to avoid penalties.”

Douglas says the truth is that people are usually a bit right and a bit wrong and the first step is to always do a careful analysis of what has occurred.

He says ignoring the Ombudsman is not an option.

“You can’t win; they have coercive powers and Garber was fired because he failed to comply with the coercive powers,” says Douglas.

“You may as well just stand with a target on your back. All they will become is more aggressive in the pursuit of it.

“It just shows you can run but you can’t hide, in this case the business collapsed but the individual has still been pursued.”

SmartCompany was unable to contact Garber and Nerd Group Australia before publication.