FWO First: Former Director still liable to pay penalties with his new wages

FWO First: Former Director to pay penalties through current wages

Fair Work Ombudsman v Sona Peaks Pty Ltd and DA MLG 933/2013

The Director of Sona Peaks Pty Ltd (in liquidation) (the Company) which traded as an Indian food restaurant in Victoria was recently ordered by the Federal Circuit Court of Australia (FCCA) to pay a total of $26,715 (plus interest) by way of an Attachment of Earnings Order to his wages with his new employer Metro Trains Melbourne Pty Ltd (Metro Trains).

In January 2015, the Fair Work Ombudsman (FWO) was successful in its proceedings against the Company for a penalty to be ordered against the Company and the Director for failing to comply with a Compliance Notice issued by the FWO for the payment of $5,037.34 to the employee for underpayment of wages. At the time, the FCCA imposed a penalty of $3,000.00 on the Director.

Later that same year, the FWO was again successful in proceedings against the Company and the Director for the underpayment of employees a total of $11,201.17. The FCCA ordered the Director to pay a penalty of $23,715 for his involvement in the contraventions of the Fair Work Act 2009 (Cth) (FW Act).

The FWO applied for an “Attachment of Earnings Order” against the Director for the repayment of the two penalties amounts. Earlier this month, the FCCA made the orders sought by the FWO. Accordingly, Metro Trains will be required to deduct $500.00 (together with $3.00 for its administrations fees) from the Director’s wages each pay period as payment for the total penalty.

In the past, the FWO has signalled its intention to hold directors and other relevant personnel who are involved in contraventions, such as underpayments. This matter serves as a warning to all directors and other relevant personnel that the FWO will pursue directors for outstanding penalties even if they are no longer connected with the business involved in the original contravention.

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