Low penalties are an incentive for “unprincipled” employers to breach the Fair Work Act 2009 according to the Fair Work Ombudsman (FWO).
The Ombudsman says “The comparatively low penalties that currently apply for record-keeping contraventions arguably create a perverse incentive. An incentive to not keep accurate records [and] to conceal underpayment of wages,”
“If we truly want to stop this conduct, these operators need to believe that they will be caught. And that, when they are, the consequences will significantly outweigh the benefits of breaching the law. This means the penalties need to be set at an appropriate level.”
The Fair Work Ombudsman is seeing “more and more” cases where record-keeping is so bad it was impossible for Fair Work Inspectors to calculate what employees were owed.
In one case, a blueberry farmer’s records consisted of only first names and the number of buckets. So the agency knew employees were paid $6 a bucket but could not identify the workers, the hours they worked or what they were owed.
The Fair Work Ombudsman has called on the Turnbull Government to increase penalties for breaching the Fair Work Act 2009 by 10x, to $540,000 per breach.