The lesson from Mamak.
Australia has a significant history of industrial relations reform and active union engagement in industry across all commercial spectrums of Australia’s economy.
The legacy of this deep history is an engrained set of employee rights set firmly within every corner of Australia.
As an employer you have specific and significant responsibilities to your employees, and the most important thing in your engagement of employees is getting things right.
When do things go wrong?
1. Understanding the landscape of minimum wages for employees can be difficult at the best of times.
a. Firstly, you must be able to identify what jurisdiction you come under as an employer. If you are running a business of any kind you will be considered a National System Employer.
b. Secondly, the minimum wage is only effective when there is not an award covering that specific job title/task or role. You cannot rely on the minimum wage if an award covers the position your employees are hired to fulfill.
c. Thirdly, as a National System Employer, you are required by Federal Law to supply your staff with the 10 Basic National Employment Standards. These are not set in stone, however are a benchmark for your employees rights and your obligations.
Mamak is a popular Malaysian restaurant in the heart of Sydney. Mamak ignored the award wages as outlined for their staff and paid their staff a minimum wage which was below what the award allowed for.
The Fairwork Ombudsman prosecuted Mamak and successfully obtained close to $300,000.00 in fines from the restaurant. This included a personal directors fine of $36,000 for each of the directors of the company.
The Fair Work Ombudsman also announced publicly that they would be focusing their energies on small business operators who quite often slip through the cracks of detection.
When do these problems present themselves?
Nearly every complaint made to the Fair Work Ombudsman by an employee happens when the employee is no longer employed by the company they are complaining about. These complaints are what largely lead to prosecutions by the Fair Work Ombudsman.
Why does this happen?
Quite simply, end of employment enlivens additional entitlements for employees which are quite often ignored by small business employers. You must pay out these entitlements, namely any accrued annual leave, long service leave and a redundancy payment if relevant.
If you are running a small business and have employees, you should conduct an employee health check:
1. Check that you are paying the appropriate award wage or higher; and
2. Check that you have adequate record keeping of your employees entitlements as they accrue,
3. Check that you have an effective End of Employment policy.
We at Longton Legal have extensive experience in this field. If you would like us to conduct an Employee Health Check to ensure you are compliant and do not face significant consequences in the future, please call our office and we will arrange a consultation with you.