Perth AU Feb 21 2018 A Perth security company that underpaid staff by more than $200,000 offered nothing but a “lame excuse” for its actions.
Rockingham-based Sureguard Security Pty Ltd received a $81,270 penalty in the Federal Court as a result of legal action by the Fair Work Ombudsman.
The company also back-paid 22 security guards $205,408 — wages that had been underpaid between December 2014 and January 2016.
Underpayments of individual workers ranged from $227 to a staggering $20,174.
Fair Work inspectors found Sureguard guards — including 13 who performed permanent night work — were paid flat hourly rates of between $21.50 and $24 for static guard work and $25 for patrol work.
This meant the guards were underpaid their minimum hourly rates, casual loadings, overtime pay and penalty rates for night, weekend and public holiday work under the Security Services Industry Award.
Justice Michael Barker dismissed Sureguard’s submission that it thought paying flat rates above lawful minimum rates for ordinary hours would counteract the different rates of pay for other periods as “at best, a misunderstanding of the law, but a lame excuse”.
Justice Barker said there was no real excuse for the underpayments, even if they were unintentional.
The company had argued the workers were not “vulnerable” and so nothing had prevented them from speaking up about the underpayments.
“[Sureguard’s] suggestion that its relevant employees were ‘not third world workers’ and so cannot be classed as ‘vulnerable workers’ is, in my view, only of passing relevance,” Justice Barker said.
“Fair work conditions are not created on the basis that an employer can opt out of complying with them if it considers it has a pliant workforce.
“There are a myriad of reasons why employees may not object to or make complaints about their terms and conditions and the satisfaction of award rates.
“It does not necessarily mean they are not vulnerable and are not concerned about under-award payments. In this case, casual employees were particularly at risk.”
Justice Barker also ordered Sureguard to put workplace relations training in place for its managers.
Fair Work Ombudsman Natalie James noted the company’s director had sold personal assets “of high sentimental value” to repay staff as the company was facing financial difficulties due to a loss of contracts, instead of simply liquidating the company to avoid paying up.
“Credit is due for the director’s actions in paying the workers the money owed to them,” she said.
But she said ignorance of the law was no excuse for underpaying workers.
“We have been highlighting the issue of payment of flat rates leading to underpayments of security guards for a number of years now,” Ms James said.
“The outcome of this matter sends a clear message to security industry employers that claiming ignorance of this issue as an excuse for underpaying workers simply won’t wash.”
The company has since increased the wages of remaining employees as well as introducing strategies to stop the problem happening again, such as employing a bookkeeper “to ensure that employment standards are met.”
The Fair Work Ombudsman’s online tools and resources can also assist employers to determine their applicable Award, as well as classification and pay rates, allowances, overtime and penalty rates.