By Zaynab Aly

In 2021, Utility Five Pty Ltd was issued two Compliance Notices by the Fair Work Ombudsman (FWO), after it was found that two former employees had not received payments for accrued but untaken annual leave after the end of their employment. Under the National Employment Standards, employees are entitled to be paid out their accrued annual leave at the end of their employment.

Where employees have concerns about underpayment, including underpayment of penalties, overtime, entitlements, and wages, they can raise this with the FWO. The Ombudsman can commence an investigation into the issue, and where these claims are substantiated, the Ombudsman has several options. Employees are able to make an underpayment claim spanning the past six years, or longer at the direction of a Court.

In this article, I dive into what a Compliance Notice is, what happened to the Perth business in this case, and what employers must remember to pay out upon the cessation of an employee’s employment.

What is a Compliance Notice?

A Fair Work Inspector can issue a compliance notice where an employer has breached a workplace law. The effect of a compliance notice is to require an employer to fix the contravention. A compliance notice will inform an employer of:

  • what the breach is;
  • how to fix it, or provide evidence of compliance;
  • the timeframe in which to do so;
  • how to apply to have the notice reviewed and when this can be done; and
  • the consequences of a failure to comply.

The result

While a compliance notice may not seem as serious as litigation, the consequences of non-compliance can be severe. In the case of Utility Five Pty Ltd, the penalties imposed were in response to the company failing to comply with Compliance Notices. This resulted in a $30,000 fine issued against the company plus a $6,000 fine was issued against the company’s director personally too.

Employers should ensure that they understand what payments are due to employees at the time of termination in line with their Modern Award and the National Employment Standards. They should ensure that employees are being paid at the correct rates during their employment.

Protect yourself, your business, and your people: how HR Assured can help?

To help you with any workplace compliance questions you might have, we’d like to offer you a FREE HR Health Check for your business. Our experts will complete a thorough evaluation of your HR that’ll help uncover any hidden risks before they become problems.

If any of the information in this article has raised questions about HR compliance for you or you’ve got another workplace matter you need advice on, please reach out to our experts via our 24/7 Telephone Advisory Service.

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Zaynab Aly is a Workplace Relations Consultant at HR Assured. She has a particular interest in the retail industry and regularly provides advice on workplace matters to find solutions for clients.