The Fair Work Ombudsman has secured $139,860 penalties in court against a contract cleaning company in regional Western Australia after it underpaid employees more than $114,000 and falsified records.
The Federal Circuit and Family Court has imposed a $116,550 penalty against Carnarvon Cleaners Pty Ltd, based in Carnarvon, and a $23,310 penalty against the company’s sole director and shareholder, Margaret Herlysha Seaton.
The penalties were imposed after Carnarvon Cleaners and Ms Seaton admitted breaching workplace laws by underpaying 35 employees a total of $114,538 between November 2017 and November 2018.
The company and Ms Seaton also admitted breaching record-keeping laws, including knowingly making false or misleading records and providing them to Fair Work Inspectors.
Carnarvon Cleaners employed most of the underpaid workers as cleaners to service the premises of its clients in WA’s Gascoyne region. Some workers also performed gardening and trolley collecting duties.
The breaches occurred despite the FWO having previously made Carnarvon Cleaners and Ms Seaton aware of their lawful obligations after audits in 2010, 2013 and 2014 found that Carnarvon Cleaners had underpaid employees.
Fair Work Ombudsman Sandra Parker said employers that fail to address non-compliance problems after being put on notice will face significant consequences.
“The repeated underpayment of basic lawful minimum entitlements is unacceptable,” Ms Parker said.
“The seriousness of the conduct is compounded in this case by the use of false records. Employers who provide false records to Fair Work Inspectors will be found out and face enforcement action”.
“Employers also need to be aware that improving compliance in the contract cleaning sector is a priority for the FWO. Any employees with concerns about their pay or entitlements should contact us for free advice and assistance.”
The FWO investigated Carnarvon Cleaners as part of a national auditing campaign in 2018.
Fair Work Inspectors discovered that the company had underpaid employees’ minimum-engagement pay, casual loadings, part-time allowances, public holiday penalty rates, overtime rates, annual leave loading and broken-shift allowances owed under the Cleaning Services Award 2010.
Individual underpayments ranged from $69 to $16,303. All workers have been back-paid.
Judge Allyson Ladhams described the conduct of Carnarvon Cleaners and Ms Seaton as “negligent or careless” and found that there had been a “repeated pattern of failing to pay the appropriate employee entitlements”.
Judge Ladhams found that failure to pay the correct Award entitlements, particularly to employees who are vulnerable and in low income roles in a competitive service industry such as the cleaning services industry, warranted meaningful penalties.
Judge Ladhams said the falsification of records was “particularly serious” because it had the ability to “frustrate” the FWO’s investigation and that there was a need to impose penalties that were “sufficiently meaningful” to deter others from similar conduct.
“Ensuring compliance with the record keeping requirements under the Fair Work Act is essential to ensure that employees are remunerated according to minimum standards,” Judge Ladhams said.
Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance about their rights and obligations in the workplace. An interpreter service is available on 13 14 50.