Keeping accurate and up to date employment records has always been important. However, the risks associated with not keeping such records are now much higher following the introduction of a reverse onus of proof for employers in applications for underpayment of wages.
Although the change in legislation took effect for post September 2017 conduct, the Fair Work Ombudsman (FWO) is only now pursuing the first prosecution under the new provisions.
The Acting Fair Work Ombudsman in relation to the use of the reverse onus of proof provisions has said:
“In the past some employers had avoided facing litigation by FWO because they had breached their record keeping obligations and we could not present sufficient evidence in Court to prove underpayments.”
“Employers should be on notice that this loophole is now closed and the FWO will make full use of the new laws…”
“Businesses who don’t meet record-keeping or pay slip obligations and can’t give a reasonable excuse need to disprove allegations of underpayments in Court”.
Having represented clients in other matters involving a reverse onus of proof, we can assure you that it is extremely difficult to disprove an allegation, particularly in the absence of accurate and up to date records. The most likely outcome of such claims is that the allegations will be upheld, not necessarily because they are true, but because the employer will not be able to disprove them. It puts employers at risk of inflated claims that they can not defend.
In the above FWO prosecution, in addition to the underpayment amounts to be paid to the employees, the company faces penalties of up to $63,000 per contravention. In addition to this, two of the company Directors face penalties of up to $12,600 each and one Director faces a potential penalty of up to $25,200.
The risks clearly do not outweigh the rewards. Keeping accurate employment records is imperative if an employer is to defend a claim for underpayment of wages. If you are unsure if your current record keeping is compliant, or if you wish to establish a new record keeping system to ensure compliance, we are here to assist you. Contact one of our experienced Consultants on email@example.com or 07 3218 3919.