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Your Employment Law Update – August 2018

The last few weeks saw some significant employment law cases decided, important decisions handed down which may impact your business.

· An employer in the Security Industry was personally fined heavily because of breaches of the Fair Work Act 2009 (the “Act”), which included underpayments and failure to pay penalties in accordance with the relevant industry awards and the failure to keep proper records.[1]

· A win for casual workers with a decision made in relation to workers in the mining and labour hire industries affecting all industry sectors. The decision by the Full Court defines the line between casual and permanent employment .

· A further significant change - the introduction on 1 August 2018, of family and domestic violence leave.

Employer Personally Fined for Underpayments and Breaches of the Fair Work Act.

This past week the Federal Circuit Court of Australia ordered the director, of a security company Mr Marcinkowski, to personal pay more than $115,000 for contravening several provisions in the Fair Work Act.[2]

The security company decided to pay their workers a flat rate, which did not include night span, overtime, public holiday and weekend penalties (which a report showed was standard practice in the industry).[3] The employer made unlawfully deductions from employee’s wages for uniform expenditures without reimbursements and the flat rate approach resulted in the employees’ wages being less than the relevant Award.

The employer did not act on directions from the Fair Work Inspector, highlighting the shortfalls of their employees engagement. The Fair Work inspector determined that the employees of the Security company were not better off overall on the flat rate arrangement.

The decision refers to a 2016 judgement highlighting exploitation of vulnerable workers and inadequate record keeping.[4]

The original Company was wound up during the proceedings and a new company was formed to take over the business of the first under a new name. This did not allow Mr Marcinkowski to avoid the penalty imposed by the Federal Circuit Court.

Implications for Employers

1. Flexible work arrangements outside of the award are allowable but the arrangement must pass the BOOT test and the employee must be Better Off Overall.

2. The Fair Work Regulations 2009 state the records an employer must keep include:[5]

(a) general records on the employer and employee (for example, commencement date, the type of employment… etc.);

(b) pay records;

(c) hours of work;

(d) leave records;

(e) superannuation contribution records;