Non-compliance leads to high penalties for employers

1. Case Summary

The Fair Work Ombudsman (FWO) has launched legal action against the former operators of the café Six Ain’t Seven in North Parramatta over alleged breaches of the Restaurant Industry Award. 

The business, operated by Karl Haidenbauer and Mezzaco Trading Pty Ltd, is accused of underpaying two migrant workers between August 2022 and April 2023. One of the workers was on a working holiday visa; the other was an 18-year-old international student. 

After investigating, the FWO issued a Compliance Notice requiring back payment of wages. It is alleged that the business failed to comply with the notice and also did not issue pay slips to one of the workers. 

The case is now before the Federal Circuit and Family Court. The FWO is seeking financial penalties and an order for the business to rectify any outstanding entitlements, including superannuation and interest. 

2. Understanding Your Employer Obligations

Under the Fair Work Act 2009 (Cth), employers are legally required to: 

2.1 Issue Compliant Pay Slips 

• Pay slips must be provided within one working day of payment (even if the employee is on leave). 

• They must include specific details such as gross and net pay, hours worked (for casual or hourly workers), pay rate, superannuation contributions, and deductions. 

Failing to issue pay slips is a breach of the Fair Work Regulations 2009 and may result in penalties. 

Read more: Pay slips – Fair Work Ombudsman 

2.2 Comply with Compliance Notices 

• A Compliance Notice is a formal direction from a Fair Work Inspector to fix breaches such as underpayment.  

• A Compliance Notice is issued when a Fair Work Inspector reasonably believes that an employer has contravened workplace laws, instead of commencing court proceedings.  

• The notice may require employers to repay wages and provide evidence of compliance within a set timeframe. 

Failure to comply, without a reasonable excuse, is a breach of a civil remedy provision under the Act and can lead to penalties. 

Read more: Compliance notices – Fair Work Ombudsman 

3. Reminder

Cases like this highlight serious legal and financial risks for employers who fail to meet their workplace obligations. 

MBA ACT members should: 

• Audit pay slip processes to ensure they are issued within the required timeframe and contain all required details. 

• Keep thorough records, including time sheets, rosters, pay summaries, and superannuation evidence. 

• Train managers and payroll staff on Award obligations and record-keeping requirements. 

• Respond to any Compliance Notice before the due date.  

• If you do not agree with a compliance notice, you can apply for a review of the Compliance Notice before the due date.       

• If you fail to comply with a Compliance Notice within the due date without a reasonable excuse, the FWO can commence legal proceedings against you. You may also be personally penalised. The amounts can be up to: 

• $19,800 per breach for an individual. 

• $99,000 per breach for a company with less than 15 employees.  

• $495,000 per breach for a company with 15 or more employees. 

• Where the breach relates to an underpayment, the penalty may be 3 times the underpayment amount or $495,000 (whichever is greater) for a company with 15 or more employees. 

• This is in addition to any money owed to your employees. 

• Note: Acting on a Compliance Notice is not an admission of wrongdoing.  

Seek advice, sooner rather than later. Our Workplace Relations team is here to help. Contact us on workplace@mba.org.au and 02 6175 5900.