Fair Work Ombudsman v the Respondent
Citation: [2015] FCA 313
At a glance
- Employees affected
- 4
- Awards cited
- MA000251
What happened
The Applicant operated as a subcontractor in the cleaning services industry. He engaged multiple employees but failed to pay them correctly. Four employees were underpaid between January 2010 and August 2011. They did not receive minimum weekly wages, penalty rates for shiftwork and weekends, public holiday penalty rates, or overtime rates in breach of the Cleaning Services Award 2010. The Applicant also failed to make superannuation contributions, provide annual leave entitlements, issue pay slips, or maintain employment records. Two other parties controlled companies that engaged the Applicant as a subcontractor and failed to take action to ensure his compliance.
What was decided
The Federal Court made default judgments against the Respondent and the Second Respondent as secondary contraveners. The court declared they contravened s.550 of the Fair Work Act for the Applicant's failures to pay minimum wages, penalty rates, and other entitlements. The court found that the second and third respondents knew the wage conditions were non-compliant and omitted to take effective action to ensure compliance. The declarations related to underpayment of four named employees across multiple award entitlements.
What it means for employers
Companies that engage subcontractors must ensure those subcontractors comply with award obligations. Failure to monitor subcontractor wage practices and failure to take action when non-compliance is known can result in the company being liable as a secondary contravener. Parents and related entities can be held liable for subcontractors' wage theft. Companies should require subcontractors to evidence award compliance.
What it means for employees
Employees engaged through subcontractors are entitled to full award wages and entitlements. If underpaid, the employee can pursue not only the direct employer (subcontractor) but also the company that engaged the subcontractor, particularly if the company knew of non-compliance. Wage theft claims can be pursued years later and may include penalties in addition to back-pay.
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https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2015/2015fca0313Want more cases like this?
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This summary was drafted from the published decision and reviewed before publishing. It is general information, not legal advice. For your specific situation, speak to the Fair Work Ombudsman (13 13 94) or a qualified lawyer. About these summaries & corrections →