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Repeated Underpayments will not be tolerated by Fair Work Commission

Action taken by the Fair Work Commission in addressing underpayment claims has demonstrated that they will not tolerate employers who repeatedly fail to pay their employees the entitlements that are owing to them under an applicable modern award.

In ine case, Global mobile SIM card provider, Lycamobile Pty Ltd, were fined over $59,000 for having underpaid 13 employees in their Adelaide and Brisbane offices, many of whom were foreign nationals who may not have been fully aware of their workplace rights. Despite the financial penalties imposed on the company in relation to a 2013 underpayment, Lycamobile again facing court action being taken by the Fair Work Commission in 2017 for having failed to implement measures to prevent such an issue from reoccurring and again having underpaid a salaried employee who was based at their NSW Headquarters.

The administrative employee was engaged by the Lycamobile on a full-time basis to perform administrative duties for 40 hours per week, plus ‘reasonable additional hours’. During the 3 year period in question, the employee’s base salary ranged between $33,867 and $37,742 per year. In addition, payments referred to by the employer as being “allowances” and “arrears” were received by the employee periodically (in addition to her base salary) to compensate her for overtime worked. However upon reviewing the employee’s claim, the Fair Work Ombudsman determined that the additional allowance and arrears payments made by the employer were insufficient to satisfy the employee’s minimum entitlements for overtime work under the applicable modern award

The Fair Work Commission alleges that Lycamobile underpaid the employee for overtime hours that she had worked between 2012 and 2015, which included overtime hours having been worked across weekends. It was reported that during the period of her employment, the employee had worked a total of 604.67 overtime hours which would have entitled her to payment of $16,736 under the Telecommunication Services Award 2010. However, it was determined that Lycamobile had only paid the employee $11,472 for the overtime hours she had worked, resulting in an underpayment amount of $5,264.

Despite Lycamobile since having reportedly rectified this situation and having paid back the underpayment amount to the employee in full, the Fair Work Ombudsmen continued to proceed with taking legal action against the employer in the Federal Circuit Court. This action was pursued due to the organisation’s failure to establish and put in place adequate corrective processes in order to reduce the risk of future underpayments from occurring following the 2013 finding. In speaking on this matter, the Acting Fair Work Ombudsman, Kristen Hannah, stated that “it is of grave concern whenever we uncover allegations that an employer has failed to learn from past mistakes”.

Lycamobile Pty Ltd was penalised $25,000 for the underpayment in the Federal Circuit Court.

Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors such as government legislation changes, may not be up-to-date at the time of reading. It is not legal advice and should not be treated as such.

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