Underpayments and liability of managers

Public news

The Fair Work Ombudsman recently secured penalties against a major service station chain, Westside Petroleum, and three of its management staff, for underpaying employees at its sites in NSW and Victoria. As well as the company, the general manager, company accountant and area manager were each penalised.

The underpayments were as a result of Westside Petroleum generally paying employees a flat hourly rate. This resulted in underpayment of employee’s casual weekday, weekend, and public holiday and overtime rates under the Vehicle Manufacturing, Repair, Services and Retail Award.

This case is a warning to members about paying flat rates rather than applying the relevant Award. If any members have concerns about how they are calculating rates of pay for their employees, please contact the Workplace Relations team who can assist with advice or provide audit services.

It is also a timely reminder that the obligations to ensure that employees are correctly paid rests not only with the employers, but also with managers within the organisation, or even advisors such as accountants or payroll providers, who may be outside the organisation but assist the organisation with payroll services.

The court found that the underpayments were deliberate and not insignificant, and did not accept Westside’s submission that the underpayment was overlooked due to its rapid expansion at the time.

If you need workplace relations, industrial relations advice or assistance, contact the WR team on (08) 8291 2000 or via email by clicking here.