Court imposes penalty over underpayment of employee entitlements on termination

A former manager of a Brisbane company has been fined $13,200 over the underpayment of termination entitlements for four employees.

The Federal Magistrates Court has imposed the penalty against Brisbane man Gary Martin North, who formerly part-owned and co-managed refrigeration company Humidifresh Industries Pty Ltd, based at Acacia Ridge.

North admitted he was involved in underpaying four staff a total of $18,019 when their employment was terminated in 2009.

They included two apprentice refrigeration mechanics aged 20 and 21, a refrigeration mechanic aged 24 and a supervisor/project manager aged 48.

The company wrote to the employees to inform them that their services would no longer be required because of “slow economic times and a downturn in business”.

The workers were not paid any severance entitlements and two were underpaid wages in lieu of notice.

Fair Work inspectors discovered the underpayments when they investigated complaints lodged by the employees.

Initially, the Fair Work Ombudsman also commenced legal proceedings against Humidifresh Industries, however the company went into liquidation last year.

Fair Work Ombudsman Nicholas Wilson says the Court’s decision serves to remind employers that underpaying young workers and underpayment of termination entitlements are serious matters.

“Young workers are often not fully aware of their workplace rights and can be reluctant to complain, so we treat instances of young workers being underpaid particularly seriously,” Mr Wilson said.

“The underpayment of termination entitlements is also very serious conduct because these entitlements provide vital support for employees while they are looking for a new job and trying to get back on their feet.”

Employers or employees seeking assistance should contact the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au. A free interpreter service is available on 13 14 50.

Source: Fair Work Ombudsman, 20 September 2012