Personal liability for Westside managers for underpayment of workers

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The Fair Work Ombudsman has commenced legal action against a major service station chain, Westside Petroleum, and its management for allegedly underpaying 22 employees at sites across regional NSW and Victoria.

Westside Petroleum and three of its management staff – including its general manager, company accountant and area manager ­– are each alleged to have been involved in the company’s breaches and are facing Court as a result.

The Facts

The FWO alleges that employees were underpaid at 12 petrol stations – including Adaminaby, Wagga Wagga, Finley, Gurley, Lismore (Victoria), Somerton, Temora, Tolland, Blayney, Glen Innes, Peak Hill and Cooma – for periods between July 2015 and May 2016. These particular sites are company-operated, the proceedings do not concern the franchisee-operated sites.

Two affected workers were visa holders with one employee on a 489 regional sponsored visa.

Underpayments range from $347 to $7,772. Four of the employees affected are aged 19 years.

It is alleged the company told employees they would be paid a net rate of $18 per hour, with payroll staff then paying gross weekly amounts generally equating to about $18 per hour net and that this led to underpayments of the employees’ casual weekday, weekend, public holiday and overtime rates under the Vehicle Manufacturing, Repair, Services and Retail Award.

Workers on adult rates under this Award were entitled to gross hourly wages of $25.05 on weekdays, $32.56 on weekends and public holidays and an additional $14.21 for overtime hours.

Key Learning

“It is unlawful for employers to pay their employees low, flat rates that undercut minimum Award wage rates, and those who rely on an unlawful ‘going rate’ can be left with a major back-payment bill and face significant penalties,” Ms Parker said.

The FWO has sited the vulnerable circumstances of some of these workers – based on age or migrant status – as justification for seeking penalties both against the company and its management.

The company faces penalties of up to $54,000 per contravention and each of Mr Riad, Mr Ieraci and Mr Khawaja faces penalties of up to $10,800 per contravention.

Orders are also being sought that will require Westside to provide information to its franchisees about the outcome of this legal action, the need for franchisees and franchisors to comply with the Fair Work Act and the Award, current Award rates, and the potential for civil penalties if they do not comply.

Migrant workers should be aware that, in line with an agreement with the Department of Home Affairs, they can seek assistance from the FWO without fear of their visa being cancelled.

The FWO notes that all employees have now been back-paid in full.

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