How can Human Resources Consultants save your business thousands of dollars in FWA Fines
Human Resources Consultants could save your business thousands of dollars by advising you of your rights and obligations with your employees. Thereby, saving your business thousands of dollars in potential fines.
The following cases are examples of just how far the Fair Work Ombudsmen and Commission are prepared to go. Thereby, demonstrating their legal power to ensure businesses and their owners comply with their obligations to employees. Read about how Human Resources Management drives profits and how Insentra’s success as a small business started with good human resources practices.
Case 1. FWA Fines Human Resources Consultants would have saved Theo and Three Beans and a Chef $54,000
Ordered to pay a total of $54,000 for failure to pay compensation for originally unfairly dismissing an employee. The compensation for unfair dismissal the company and director had to pay in 2016, was a mere $6,200. However, the owner of “Three Beans and a Chef” Café at the time, Theo Sourlos, refused to pay the dismissed employee. A Human Resources Consultant at a cost of around $500 to $1000, would have resulted in no further costs. Because they would have advised Theo not to dismiss the employee in the first place.
As a Human Resources Consultant, we look at the evidence and way up the total situation considering fairness and the Law. Depending on the circumstances, we evaluate the options, advise on the best steps to rectify the situation and avoid any chance of an unfair dismissal or unfair procedures. We even let the business owners rant and carry on at us, instead of taking out their frustration on their employees. That alone, has got to be worth spending money on.
A HR Consultant would have told Theo he did not have sufficient reason to dismiss the employee. Further, the consultant would have told Theo how to follow a fair procedure to improve the situation with the employee. If he had chosen to ask a HR Consultant for advice he would have saved over $50,000 and a lot of time and bad publicity. Read the FWA Fair Work Guide
Case 2. FWA Fines Human Resources Consultants would have saved Amin and SHMAP Group a whopping potential fine of $1,022,000
Degani Café and its part owner and manager, Sajid Amin who also owns SHMAP Group will face maximum penalties of $54,00 per breach of underpayment and falsifying records. Further, Amin will have to pay up to $10,800 per breach. There were 15 employees underpaid a total of $12,506 over a nine (9) week period. That means, If the full penalties are sought, it will cost Amin and his company as follows:
15 x 54000 = $860,00
and a personal fine of 10,800,
so at a total potential cost of $96,800
to keep $12,506 from employees it is obviously not worth it!
A human resources consultant would have done the math for Amin. Further, they would have informed him of the pending investigation into franchises and the potential costs. Therefore, If he still chose to go ahead with underpaying the employees, he at least would have an idea of the potential risk and economic cost. Surely, he would see it would outweigh the benefit by far.
It is unlikely that Amin and his associated companies will recover from such a high cost of foolish actions to save a mere $12,506. Further, the publicity is not the type any business owner operator would want. Read the FWA Awards list.
Case 3. FWA Fines Human Resources Consultants would have saved $388,261 plus loss of time and operational expenses of going to court
There are multiple cases and businesses involved in a recent Fair Work Ombudsmen (FWO) campaign in Western Australia. The majority of issues were due to underpayments and noncompliance with record keeping, including pay slips. The campaign resulted in recovering $388,261 in back pay to local workers, including $300,00 after court actions. A total of 148 businesses were involved.
Each of these cases could have been avoided. The time involved in responding to FWO if records and pay slips are non-compliant would itself be a huge drain on the businesses operations. Further, the cost of making repayments and attending court would be significant. A simple consult with a Human Resources Consultant could have saved them all a lot of time and money.
If we consider, the $388,261 is just the back payment, then there is the cost of going through the audit process. Also the cost of down time to attend court proceedings and further costs to rectify the compliance issues. Each of the 148 businesses could have spent a few hours with a HR Consultant to ensure compliance on pay rates, pay slips and record keeping at a cost of a few thousand dollars and avoid FWA Fines. Consequently, far outweighing the costs experienced by these businesses during the FWOs campaign.
Case 4. FWA Fines Human Resources Consultants would have saved Leigh and Trek North Tours $84,956 and jail time
This is arguably the strangest and most ludicrous case of all; because the owner’s actions and lack of compliance has resulted in a jail term. On May 10th of this year, Leigh Alan Jorgenson the owner operator of Trek North Tours received a fine of $84,956 and sentenced to a 12-month jail term. He underpaid five (5) backpackers in 2013 and 2014. In 2015 the case went to the FWO which ordered Leigh to repay the backpackers in full, pay a personal fine of $12,000 and a company fine of $55,000.
The penalty, at the time, was light compared to what it could have been. However, Leigh did not comply with the orders. Instead, he refused, and apparently told Fair Work investigators the backpackers “would not get a cent”.
Apart from the ridiculousness of this case, it defies any logic. If Leigh had sought a HR Consultant in the beginning costing him as little as a few thousand dollars he would have known the correct amount of pay for the backpackers. Further, the HR Consultant would have informed him, the FWO has particularly strong views in cases of vulnerable workers being exploited. Therefore, it would be wise for him to ensure he was complying with his obligations in relation to the workers and any different actions would not be worth the resulting cost.
In Conclusion:
By spending a couple of thousand dollars with Human Resources Consultants each of these businesses would have saved thousands of dollars in FWA fines and a lot of time. Obviously, these are only summaries of the cases, and the details might shed some light on why the individuals responsible took the actions they did. However, in each instance a simple consult with a human resources professional could have prevented every one of them. At the very least it would have lessened the impact in each case. There is no excuse for anyone in business in Australia to act in an unlawful manner with their employees. Read the Fair Work Dismissal Code. Register for online training with FWO.
The Fair Work Act has been in place since 2009, it is now 2018, nine years is long enough. The Fair Work Ombudsmen and the Commission have been in the media alerting business owners and operators, so ignorance is no exuse. Every year they inform via the media, the extent they will go to ensure compliance with work place law. Therefore, it is sheer arrogance, ignorance or worse, deliberate mischief to try and get away with unlawful behaviour towards employees. If navigating the Fair Work site is too time consuming just consult a HR professional.
Further:
If any business owner/operator is unclear about their obligations under Fair Work a simple consult with a Human Resources professional could save the business thousands of dollars. It would also save a lot of time and anguish in the legal system. Most human resources consultants cost less than a lawyer and are highly skilled, trained professionals. Thereby, it is their business to know the Law when it comes to employment. Thus, they can give sound advice to prevent any future actions which could cost thousands of dollars.
It is not just the fines and back payments to consider, also the loss of reputation, operating hours in court preparation and attendance too. King Consulting HR are human resources consultants and specialise in supporting small and medium size business to drive profits through their employees. We also advise on compliance with work place law. We have saved our clients thousands of dollars in potential fines. If you own a business which employs others please have a HR Consultant check your compliance today. Save your business the risk of losing thousands of dollars as well as a damaged reputation. If you would like King Consulting HR and Recruitment Consultants to assist you with your business compliance with Australian workplace law please get in touch.
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√ Great Human Resources Management drives profits
√ The story of Incentra is a good example of how to operate as a business
great article with some good suggestions thank you
You are welcome Phyllis. I am glad you found it informative.