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FWO Imposes Record Penalties to Director Underpaying Security Guards

June 23, 2016

The Fair Work Ombudsman (FWO) declared the Director of security company ‘Step Ahead Security Services’ had deliberately underpaid eight casual employees hired as security guards by over $20,000 over a three-month period.

The Director was ordered to personally repay the employees as well as paying penalties of over $50,000 with the FWO hailing this case as a “precedent-setting” Federal Circuit Court ruling.

Judge Michael Jarrett imposed penalties of almost $260,000 to the security company for contravening sections in the Security Services Industry Award 2010 and the Fair Work Act. These penalties were the largest that had been imposed by the Federal Circuit Court until Monday 20th June when a 7-Eleven store surpassed this record. For more details, see our Newsflash.

The security company was found to have failed to provide employees with the minimum rates of pay, entitled casual loading, night span penalties, Saturday penalties, public holiday penalties, overtime penalties, broken shift allowance and meeting minimum shift time under the Security Services Industry Award 2010.

The Director of the company was the “controlling mind” of ‘Step Ahead Security Services’ and had previous dealings with the FWO for previous failed security businesses he operated that were under scrutiny for underpaying workers.

Judge Jarrett found the Director and the company showed no remorse or apologies to the underpaid employees. The Director was ordered to back-pay employees and was given 25% of his original penalty to be suspended in an effort to discourage further contraventions. However, if the Director was caught being involved in underpaying employees within the next five years it will be activated. An injunction was imposed to the Director restraining him from underpaying security industry workers in the future.

Judge Jarrett accepted the submissions from the Fair Work Ombudsman that Step Ahead Security and the Director demonstrated “calculated and deliberate conduct which plainly amounts to a blatant disregard for Australia’s workplace laws and the rights and entitlements of employees”.

This case serves as a timely reminder for all employers to ensure their employees are being paid in accordance with the minimum entitlements under the relevant Awards and the National Employment Standards.

For more information or to discuss your individual circumstances, members can phone the National Retail Association Hotline on 1800 RETAIL (738 245).

The full case can be read here.

Dominique Lamb, Director of Legal Services and Principal of NRA Legal

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