The former owner-operator of a Crust Gourmet Pizza outlet in Maroubra, Sydney, is facing court for allegedly failing to meet the requirements of a Compliance Notice from the Fair Work Ombudsman.
The Compliance Notice related to the alleged underpayment of eight delivery driver employees, totalling over $25,995. The FWO has commenced legal proceedings against Soitiros Theocharidis for allegedly failing to comply with the demand to back-pay the staff.
The alleged underpayments were discovered by Fair Work inspectors during an audit of the business, as part of its crackdown on the fast food sector.
The FWO issued a Compliance Notice to Theocharidis and his private company in September 2013 that required the underpayments to be rectified within 29 days. Theocharidis and his company allegedly failed to meet the requirements of the notice, and no application for a review of the notice was made.
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Fair Work Ombudsman Natalie James said the Fair Work inspectors made “extensive efforts to engage with this business operator to try to resolve the matter voluntarily but were not able to secure sufficient co-operation”.
Under the Fair Work Act, business operators must comply with Compliance Notices issued by Fair Work inspectors or make a court application for a review if they are seeking to challenge a notice.
James said employers must understand that compliance notices are designed to help recover wages that should already have been paid, and are not designed to be punitive.
Theocharidis faces a maximum penalty of $5100.
Swaab Attorney’s partner and expert in workplace relations Warwick Ryan told SmartCompany this morning the approach by the FWO to take action against the business for allegedly ignoring a Compliance Notice was designed to send a clear message that these notices need to be taken seriously.
He says it can be easier for the FWO to prosecute against a breach of a compliance notice rather than for underpayment.
“For an underpayment case you need to obtain rosters and perhaps evidence from the individuals concerned,” he says, explaining the background work is a lot more arduous.
He says the outcome is “relatively the same” in that a business or owner-operator can still face penalties and a clear message is sent that non-compliance won’t be tolerated.
Ryan says business owners need to be aware they are not immune to personal penalties if they are knowingly involved in underpayment, or do not attend to compliance notice requirements.
“Business owners probably don’t appreciate that they can be prosecuted,” he says.
He says if a company is issued with a compliance notice from the FWO they have two choices.
“They can apply to the FWO to challenge the notice… or they can offer to ensure compliance with the notice.”
Warwick says if there is a large underpayment figure, it could be possible to strike an agreement with staff concerned over a graduated repayment plan, which could be accepted by the FWO.
A hearing for the case is listed in the Federal Circuit Court in Sydney on April 16.