Fair Work Ombudsman
Citation: FWO-2022-04-14-spotless-penalty-media-release
At a glance
- Penalty
- $17,500
- Employees affected
- 3
What happened
Spotless Services Australia Limited terminated the employment of three workers at Perth International Airport in 2015 when contracts expired. The company failed to pay approximately $29,013 in redundancy entitlements to these workers. One worker was employed for 32 years, while the others were employed for about four and a half years. Spotless argued the 'ordinary and customary turnover of labour' exception applied, but the Federal Court disagreed. The Fair Work Ombudsman investigated and commenced legal action in 2017. The company did not admit liability.
What was decided
The Federal Court found Spotless contravened the Fair Work Act by failing to pay redundancy entitlements. The court imposed a penalty of $17,500. Justice Colvin found Spotless senior managers made a decision in 2014 to change the company’s approach to redundancy pay, without proper advice or analysis. The court noted the potential financial gains for Spotless from avoiding redundancy payments were considerable. The workers have now received the amounts they were owed.
What it means for employers
Employers must ensure they correctly assess whether redundancy entitlements are payable when terminating employment. The 'ordinary and customary turnover of labour' exception is narrowly applied. Decisions regarding redundancy pay should be based on proper advice and analysis, not solely on commercial interests. Failure to comply can result in significant penalties.
What it means for employees
Employees facing redundancy are entitled to redundancy pay if their job is made redundant. It is important to understand your rights and seek assistance from the Fair Work Ombudsman if you believe you have been unfairly denied these entitlements. The Fair Work Ombudsman will take action to protect workers’ rights.
Every statement above is drawn from the published decision. Read the original here:
https://www.fairwork.gov.au/newsroom/media-releases/2022-media-releases/april-2022/20220414-spotless-penalty-media-releaseWant more cases like this?
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This summary was drafted by AI 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 →