Sladen Snippet – Hefty fine incurred for failure to pay proper notice

Failure to pay to an employee proper notice resulted in a HR Manager and the company she worked for being fined in the Federal Circuit Court in Adelaide.

The employee was paid some notice, but not the whole of the notice period required by the Fair Work Act. This underpayment resulted in the employee being underpaid $181.66 (two days’ notice) as a result. 

The HR Manager conceded in the hearing that she knew of the requirements to pay proper notice, but the company claimed confusion had arisen as a result of the interaction of the provisions of the workers compensation legislation in South Australia regarding termination of employment and the Fair Work Act.  The Federal Circuit Court did not accept this as a reasonable excuse, stating the company should have paid the notice as provided by the Act.

The HR Manager was ordered to pay a civil penalty of $1,020 for her part in the underpayment, and the company received a civil penalty of $20,400. The Federal Circuit Court judge stated that she wished to send a message to employers regarding the importance of complying with “legislation to the letter”. 

These penalties serve as a serious reminder to employers regarding the need for strict compliance with the provisions of the Act, no matter how small the amount.

If you are considering terminating an employee’s employment, our Employment, Industrial Relations & OHS team can advise you on how to avoid inadvertent non-compliance with your obligations.

For any advice on employment, industrial relations or OHS, please contact:

Louise Houlihan 
M +61 409 835 809
T +61 3 9611 0144