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Your lack of employee records may come back to haunt you

In late 2017, the government amended the Fair Work Act 2009 to include provisions aimed at protecting vulnerable workers. These amendments went through without much publicity and, as a consequence, there is a general lack of awareness of the amendments amongst employers – despite the importance of the amendments. 

As a part of the amendments, a new section 557C was introduced into the legislation. The practical consequence of that amendment is this – if an employee brings a claim for say an underpayment of wages, annual leave, sick leave, or overtime, and employer did not comply with its obligations to keep employee records for these entitlements, the employer then bears the onus of disproving the employee’s claim.

This is exactly how it played out in one recent case.

Mr Pulis ran a plumbing business and employed an apprentice plumber on a “trial”. However, this employee was only an “apprentice” in title as the business did not lodge any forms with the relevant training authority in relation to the apprenticeship. The employee was required to perform considerable overtime for which he was not paid and was dismissed for alleged performance reasons after only 3 months.

After a lengthy investigation by the FWO, the employer ultimately agreed to contravening the Fair Work Act and accepted that it had underpaid the employee by $26,882.73.

Importantly, Mr Pulis did not keep any records of the overtime hours worked by the apprentice. As a consequence of the employer’s failure to keep records, and the effect of the reverse onus, the Court accepted the overtime records produced by the employee with little to no hesitation.

The Court ordered penalties in excess of $100,000 against the Company and Mr Pulis.

It is now more important than ever before for employers to keep accurate employee records and for the records to be kept in a manner that complies with the record keeping obligations set out in the Fair Work Act 2009.

Fair Work Ombudsman v Pulis Plumbing Pty Ltd [2017] FCCA 3013 

If you would like to know more about this case, please contact National Workplace Lawyers on (02) 9233 3989.


National Workplace Lawyers

Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.

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