Follow the rules, and still get fined: Why this Chinese company was fined by Fair Work even after doing the right thing

A Chinese company which dismantled equipment at a former Mitsubishi workplace in Adelaide has been fined almost $15,000 for not paying workers quickly enough.

Businesses must pay workers within the timeframe stipulated by their industry award, experts warn in light of the case – generally this will be every month or every two weeks.

The Fair Work Ombudsman commenced legal action against China Sanan Engineering Construction Corporation after investigating information from the Department of Immigration and Citizenship.

Originally it had been thought the company was paying workers as little as $1.90 per hour until March 2010, but during court proceedings it was revealed the workers were paid the minimum wage requirements upon returning to Australia.

But while the business was cleared of underpaying its staff, it failed to pay workers on time.

This resulted in a $14,850 fine for breaches of workplace laws in relation to the frequency of payments.

Workplace law expert Peter Vitale told SmartCompany industry awards dictate the timeframe in which employees must be paid.

“A lot of agreements and awards actually impose penalties on employers for lack of payments within the specified time as well, this might include a payment for the number of hours the employee waits for payment at an overtime rate.

“There are a range of different obligations in relation to the frequency of payments which businesses need to abide by. This decision demonstrates how it’s important for employers to ensure they meet their salary obligations as and when they fall due,” he says.

SmartCompany contacted China Sanan Engineering Construction, but received no response prior to publication.

Federal Circuit Court judge Denys Simpson found in the judgment foreign companies must comply with Australian workplace laws.

“The penalty must send a clear message not only to the respondent but also to other businesses or individuals who wish to send employees to Australia to work: They must inform themselves about Australian industrial laws and fully comply,” he said.

Simpson rejected an argument by the business saying there shouldn’t be a penalty because the breach of the payment frequency was “technical”.

He also acknowledged difficulties with language translation and cultural issues did not justify “not taking steps to become informed” about Australian workplace laws.

M+K Lawyers partner Andrew Douglas told SmartCompany employees need to be paid regularly, and within a reasonable time period.

“It’s very common for people to pay weekly, fortnightly and sometimes monthly, but anything longer than that is not acceptable for award-based employees,” he says.

Douglas says businesses need to do three things: “Know what the terms and entitlements are and comply, be upfront about it with the employees so they know what their conditions are and on the paperwork side, make sure to get it right.