Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 22 September 2018.

Gary sets-up a company with a view to running a business to provide first aid medical care at public events. Gary is the sole director, secretary and shareholder of the company.

The business accumulates a roster of casual employees to provide the first aid services. Each employee, most of whom are university students, are required to hold minimum certification in first aid.

After two years of operation, the Fair Work Ombudsman had received four complaints from former employees of the business, alleging they had been underpaid. The Ombudsman contacts Gary and requests evidence that he is complying with the requirements of the Modern Award and demands that any underpayments cease.

When Gary does not respond to the Ombudsman, proceedings are commenced in the Federal Circuit Court on behalf of the employees.

The Ombudsman alleges that over the two-year period, the business had underpaid seven casual employees a total of $13,715. It further alleges that the business continued to underpay the employees after being put on notice by the Ombudsman.

The Ombudsman seeks orders that the employees are back-paid and that penalties be imposed on both the company and Gary personally.

As the hearing date draws near, Gary cannot afford legal representation and the stress of the proceedings begins affecting his health. Gary obtains a medical certificate and requests the court adjourn proceedings for three months, however, the court dismisses his request.

When the hearing date arrives, Gary does not have legal representation and does not attend the court. The Ombudsman seeks “default” judgement. The court considers the evidence and ultimately orders the company to back-pay the seven casual employees in full.

The court also orders the company pay a penalty of $250,000 and Gary to pay a penalty of $50,000, personally.

If you would like Manny to address a particular legal issue, send your request to manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.