By Olivia Perry
A recent decision handed down by the Federal Circuit and Family Court has resulted in a $45,000 penalty being awarded against a former Gold Coast childcare centre, with an additional back payment order of more than $250,000.
This article explains this recent ruling and why businesses must comply with the Compliance and Infringement Notices that the Fair Work Ombudsman (FWO) issues.
The business, which formerly operated as Kids Academy Hope Island childcare centre, made numerous staff redundant following the closure of the centre but failed to pay the employees their minimum redundancy entitlements. As a result, the FWO investigated and imposed action upon the childcare centre following multiple requests from the employees.
Compliance Notices were sent to the company in February and March 2021 but were ignored. Fair Work Ombudsman, Ms Parker has advised that “when Compliance Notices are not followed, we are prepared to take legal action to ensure workers receive their lawful entitlements”.
The Court found that a $45,000 penalty was an appropriate amount, on top of the back payments for unpaid entitlements, due to the company failing to comply with Compliance Notices issued by the FWO. The company was also forced to rectify payments to an employee who was owed but didn’t receive payment in lieu of notice of termination.
This decision serves as a timely reminder of the hefty costs of non-compliance. If served with a Compliance Notice, all business operators should immediately act to comply with such Notices, or they risk the matter being taken further including by way of prosecution through the courts. This matter shows that the Court can and will impose penalties on top of back payments for failure to do so.
Redundancies and other employment entitlements can be complicated, so it’s best to seek advice before enacting. If your business has any questions about this process, or another workplace matter, please reach out to our workplace relations experts via our 24/7 Telephone Advisory Service.
Olivia Perry is a qualified Workplace Relations Consultant at FCB (our parent company) and HR Assured. She regularly provides advice to a large range of clients about workplace laws and the management of complex workplace matters.