The Case

Fair Work Ombudsman v Sona Peaks Pty Ltd and DA MLG (2016)

In 2015, the Fair Work Ombudsman (FWO) issued a compliance notice to Sona Peaks Pty Ltd (Sona) (now in liquidation), which traded as an Indian food restaurant in Victoria, for the payment of $5,037.34 to an employee for underpaying wages. The Federal Circuit Court imposed a penalty of $3,000 on the director for his involvement in the contraventions of the Fair Work Act 2009 (Cth) (FW Act).

Later in 2015, the FWO again successfully pursued proceedings against Sona and the director. This time, Sona was ordered to pay the employees a total of $11,201.17 in underpayment claims. The Court ordered the director pay a penalty of $23,715.

When the director failed to pay the penalties, the FWO again issued proceedings in the Court, this time to garnishee the director’s wages (by way of an attachment of earnings order) with his new employer Metro Trains Melbourne Pty Ltd (Metro) to pay the $26,715 penalties, plus interest.

The Verdict

The Court made the orders sought by the FWO. As such, Metro was ordered to deduct $500 (and $3 for its administration fee) from the director’s wages each pay period until the total penalty has been paid.

The Lesson

This case serves as a warning to employers that the FWO will pursue directors and other personnel who are involved in contraventions. It also shows a readiness by the courts to enforce penalties even in circumstances where the individual is no longer involved in the business or the business has been wound up. As such, winding up a business will not exclude an employer and its officers from liability.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.