In a bizarre case of mismanagement, the Fair Work Ombudsman has ordered a retail worker be awarded more than $34,000 after discovering he was underpaid for nearly 15 years.
The case is the latest in a series of underpayment awards from the ombudsman, which usually begin after an employee sparks an investigation.
TressCox Lawyers partner Rachel Drew told SmartCompany the incident was “pretty shocking”, although said it’s a good lesson for SMEs to keep on top of their payrolls.
However, she points out such a long period of underpayment won’t be reflected in the $34,600 award.
“They’ll only be able to recover six years,” she says. “There are penalties available under the Fair Work Act too, but they’ll only go back to about 2006 as well.”
In a statement, the ombudsman said a worker in a Gold Coast retail business was underpaid annual leave entitlements and penalty rates between 1998 and 2012. The business cooperated immediately and paid the worker.
Neither business nor the worker was named in the statement.
Ombudsman Nicholas Wilson said the case shows why businesses need to constantly check staff are being paid.
“Even a small error, if left unchecked for a long period, can lead to a significant underpayment, as occurred in this case,” he said.
“That’s why it’s important that employers understand their obligations so they can ensure they get it right the first time around.”
Andrew Douglas, partner at M + K Lawyers, said the situation was “simply unacceptable”.
“There would have been a number of situations in which the business owner could have reviewed how much the employee as being paid.”
The ombudsman said it had recovered $8.6 million in backpay for 4,906 workers in Queensland last year.
More recently, the Fair Work Ombudsman has been cracking down on the mistreatment of foreign workers.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
