A Darwin business has been forced to back-pay 16 employees almost $40,000 after they did not receive night-shift penalty rates for three years.
The employees, who were trainees at the business, did not receive their full entitlements because their employer thought only qualified workers were entitled to penalty rates for working night shifts.
The business was sprung by the Fair Work Ombudsman earlier this month. However, it cooperated fully with Fair Work inspectors and promptly reimbursed all of the money it owed to its employees.
The incident was the largest recovery following a series of investigations conducted by Fair Work across Darwin and Alice Springs.
The operator of a caravan park in Alice Springs was also stung by the employer watchdog, agreeing to back-pay 26 reception and cleaning staff $13,000 for missing out on weekend penalty rates and their minimum hourly rates between 2013 and 2014.
Ten shop assistants at a Darwin sandwich bar also received back-pay from their employer after they missed out on $11,800 in minimum hourly rates and weekend penalty rates.
Overall, more than $94,000 in lost wages and entitlements was back-paid by more than six businesses in the recent crackdown.
Ben Tallboys, senior associate at Russell Kennedy Lawyers, told SmartCompany while there are exceptions – such as vocational placements – trainees performing work should be treated the same as qualified workers.
“An organisation should make sure they obtain advice before deciding to not classify a trainee as an employee, because the consequences of getting it wrong can be severe as this situation shows,” he says.
Sarah Lock, principal consultant at Workplace Law Specialists in Brisbane, agrees.
“As a trainee they get the same entitlements as other employees, such as annual leave, sick leave, public holidays and breaks under Modern Awards,” Lock says.
“Employers also need to know about entitlements for their training, like whether they get paid to attend training and who pays for the training fees. An employee can’t be paid trainee pay rates just because they are new to a job or are being trained in a new task.”
But Tallboys points out that the recent back-payments in the Northern Territory show the employer watchdog is willing to take a less adversarial approach for businesses unknowingly breaking the law.
“This is also another reminder that the ombudsman is focused on co-operative outcomes when dealing with employers who honestly get things wrong,” he says.
Fair Work Ombudsman Natalie James said in a statement she was confident the underpayments were “genuine mistakes” and it was pleasing that all of the employers have now put in place processes to make sure the underpayments are not repeated.
“When we find mistakes, our preference is to educate employers about their obligations and assist them to put processes in place to ensure future compliance,” she said.
“A small mistake left over time can easily result in a hefty bill for back-payment of wages – so it is important employers get it right in the first place.”
James pointed out that while a number of businesses in the Northern Territory were stung, the majority of employers do the right thing by their workers and “get it right” when it comes to complying with workplace laws.
“We find that most mistakes are due to a lack of awareness of workplace laws, rather than employers deliberately doing the wrong thing,” she said.
