The Fair Work Ombudsman has launched legal action against the operators of a NSW transport company, claiming three employees at Dubbo and Orange were underpaid a total of almost $250,000.
The FWO is bringing proceedings against Doble Express Transport and the company’s part-owner and manager, Graeme Doble.
The FWO claims a truck driver was underpaid $102,556, an administration officer was underpaid $60,111 and an employee who performed administration and truck driving duties was underpaid $86,314.
These underpayments are alleged to be largely the result of the employees being paid flat rates of $18 to $19 for all hours worked when they were entitled to be paid more than $35 an hour for some overtime work.
The alleged underpayment also excluded meal and travel allowances, casual loadings and annual leave pay.
Acting ombudsman Michael Campbell said the significant amounts involved and the failure to rectify the alleged underpayments were significant factors in the FWO’s decision to commence legal action.
Doble faces penalties of up to $10,200 per breach and Doble Express faces penalties of up to $51,000 per breach.
Employment and industrial relations lawyer Peter Vitale told SmartCompany businesses need to beware of paying employees a flat rate.
“With the complexity of the award system it’s an easy trap for employers to fall into. It’s certainly easier from an administrative point of view, but you ignore overtime and weekend penalties at your peril,” Vitale says.
Vitale says his clients frequently enquire whether they can pay staff a flat rate, not because they want to avoid their obligations but because they want to make the administration of their businesses easier.
“The first instinct for business is to try to keep it simple and the award system doesn’t allow this,” he says.
“Businesses need to understand that if they are uncertain about what their obligations to their employees are then they must seek advice, particularly if they have employees who frequently work long hours or on weekends or public holidays.”
Vitale warns long hours and working weekends can give rise to significant entitlements over and above base hourly rates and ignorance of those obligations is no excuse.
Businesses also need to be aware the FWO will pursue individuals as well as businesses as indicated by its claim against part-owner Doble.
“They have gone after the individual director, which indicates that corporate structures won’t necessarily protect individuals who have a close knowledge of the facts and circumstances surrounding underpayment,” Vitale says.
SmartCompany contacted Doble Express but the company declined to comment.
A directions hearing is listed in the Federal Circuit Court in Sydney on June 14.