The Fair Work Ombudsman has intervened to secure the back payment of $52,000 to a truck driver in Northern Queensland.
The truck driver is aged in his 60s. He was employed at a transport business near Cairns and was underpaid the minimum hourly rate and travel allowance entitlements between January 2010 and September last year.
According to the Fair Work Ombudsman, Natalie James, the underpayment occurred because of a lack of awareness by the employer of its payment obligations under workplace laws.
“The underpayment was inadvertent and the employer has co-operated fully and promptly with Fair Work Inspectors, so no further compliance action has been necessary,” James said in a statement.
“This case illustrates that a small inadvertent underpayment per hour, left unchecked over time, can result in a business having to make a big back-payment it was not budgeting for, so it’s important employers make sure they are aware of the pay rates that apply to their staff.”
The underpayment follows several cases last year where the Fair Work Ombudsman prosecuted businesses underpaying truck drivers, including one instance where the owner of the business employing the truck driver was personally fined $42,000.
M + K Lawyers partner Andrew Douglas told SmartCompany risk of underpayment occurs when businesses rolled up payment rates.
“The reality is that people in small businesses with loyal people are inclined to pay what they see as a fair rate. They think it is above the award rate and that covers them, but it doesn’t cover other entitlements under the award like overtime or travel entitlements,” he says.
Douglas says this is a frequent problem and the manufacturing, logistics and retail sectors are particularly at risk.
“It really comes back to the issue of the system being so complex and people with the best intentions can often fail to comply,” he says.