Current News

The Fair Work Ombudsman announced it is prosecuting the operator of a Perth business for allegedly sacking a 16-year-old because the boy's mother queried his pay.

Facing court are Port Kennedy-man Stephen Ashley and his Willetton-based private company West Coast Propellers Pty Ltd, which is engaged in repairing, servicing and selling aeroplane propellers.

Mr Ashley allegedly hired the teenager in November, 2010 and told him he would be paid $5.32 an hour.

Court documents claim the boy's mother contacted the Fair Work Infoline and received advice that the pay rate should be more than $7 an hour.

On her son's behalf, the woman subsequently met Mr Ashley during her son's first week at work to query the pay rate he had been offered.

After the meeting, Mr Ashley allegedly told the employee not to come to work until the matter was resolved - and then wrote to him telling him he was no longer employed.

Fair Work inspectors investigated the matter after the employee and his mother lodged a complaint.

Fair Work Ombudsman Nicholas Wilson said a decision to prosecute was made because the dismissal allegedly constitutes a serious breach of workplace law.

"Under the Fair Work Act, it is unlawful to dismiss or take any other adverse action against an employee for exercising a workplace right, such as querying or complaining about pay rates," Mr Wilson said.

Mr Ashley was allegedly involved in his company committing two breaches of workplace law. The maximum potential penalty per breach is $6600 for Mr Ashley and $33,000 for West Coast Propellers.

The case is listed for July 10 in the Federal Magistrates Court in Perth.

ASIC recently released policy documents discussing how it undertakes investigations and enforcement activity. The policy documents are:

• Information Sheet 151: ASIC's approach to enforcement (INFO 151). This discusses how ASIC approaches enforcement and why it responds to different breaches of the law in different ways.
• Information Sheet 152: Public comment (INFO 152) is about when ASIC may comment publicly on investigations and enforcement actions. It replaces the public comment policy in Regulatory Guide 47 Public comment (RG 47).
• Regulatory Guide 100 Enforceable undertakings RG 100) outlines what an enforceable undertaking (EU) is and when ASIC will consider accepting an enforceable undertaking.

ASIC Chairman Greg Medcraft said: "ASIC wants the public to understand how we use our enforcement powers and why we might pursue a particular type of outcome in a given case. We are improving the transparency of our enforcement approach to help people understand our enforcement role and what we want to achieve by using our enforcement powers."

To further increase transparency, ASIC said it shortly plans to publish a report on key enforcement outcomes finalised during the period from 1 July to 31 December 2011. It envisages issuing similar reports bi-annually.

The Fair Work Ombudsman announced it has launched a prosecution against a transport company in Victoria's Goldfields region for allegedly underpaying a truck driver almost $50,000.

Facing court is Foure Mile Pty Ltd, which operates a freight transport company based at Newstead.

Also facing court is the company's manager, sole director and part-owner, Malcolm Garry Leech.

Mr Leech was allegedly involved in Foure Mile underpaying a truck driver a total of $48,381 between November, 2005 and August, 2010.

Most of the underpayment was allegedly the result of the employee being underpaid the cents-per-kilometre rate he was entitled to.

The employee, a 53-year-old Harcourt man, was allegedly paid 17 to 23 cents a km but should have received 28 to 33 cents a km.

Court documents also allege the man was underpaid wages, annual leave entitlements, public holiday pay and wages in lieu of notice.

Fair Work inspectors discovered the alleged underpayment when they investigated a complaint from the employee.

Fair Work Ombudsman Nicholas Wilson said a decision to prosecute was made because of the significant amount involved and the employer's failure to rectify the matter.

Mr Leech was allegedly involved in Foure Mile committing several breaches of workplace laws. The maximum potential penalty per breach is $6600 for Mr Leech and $33,000 for the company.

The Fair Work Ombudsman is also seeking a Court Order for the company to rectify the alleged underpayment.

The case is listed for a directions hearing on May 29 in the Federal Magistrates Court in Melbourne.

The Fair Work Ombudsman announced it has launched a prosecution against a Queensland real estate agent for alleged sham contracting and paying a salesman just $100 for five months work.

Facing court is Lovers of Property Pty Ltd, which trades as the Burpengary-based agency Property Lovers, and company directors and part-owners William Nicholas Fraser and Diana Sylvia Cartwright, both of Morayfield.

Also facing court is ICS Real Estate Pty Ltd, a national company involved in contracting sales and marketing workers on behalf of real estate agencies.

Lovers of Property allegedly used the services of ICS Real Estate in 2010 to engage a salesman.

Lovers of Property allegedly classified the salesman as an independent contractor and paid him on a commission-only basis.

This allegedly led to the salesman, who was in his late 50s and had no prior experience in the real estate industry, performing five months work for just $100, which he received in recognition of his assistance in concluding a sale.

However, it is alleged the salesman's correct classification was as an employee.

It is alleged the salesman's assigned tasks included letterbox drops, door knocking, answering phone calls and offering free property appraisals and that his usual rostered hours were 8.30 am to 5 pm, Monday to Saturday.

It is alleged the salesman was not required to obtain an Australian Business Number or register his own business and that he believed he was an employee.

The salesman was allegedly also told he could not work for any other company.

The salesman was allegedly required to provide his own work laptop, mobile phone and a car of a make-and-model approved by Lovers of Property as projecting an acceptable image and standard of professionalism.

It is alleged that after the salesman left work early one day to attend a job interview with another agency and then resigned after securing the job, Mr Fraser told him: "That's fine, I was going to fire you anyway for leaving work without approval".

It is alleged the salesman was entitled to have been paid wages and annual entitlements of $12,440 for the five months of work he performed. The alleged underpayment has not been rectified.

Fair Work inspectors discovered the alleged breaches when they investigated a complaint the salesman lodged after he resigned.

Fair Work Ombudsman Nicholas Wilson said a decision to prosecute was made because of the significant amount involved and the seriousness of the alleged breaches.

"Where we suspect sham contracting is occurring, we look behind the often carefully drafted legal documents to determine what the correct classification for workers is under workplace laws," Mr Wilson said.

The Fair Work Ombudsman alleged ICS Real Estate, Mr Fraser and Ms Cartwright were involved in three breaches of workplace laws committed by Lovers of Property.

The maximum potential penalty per breach is $33,000 each for the companies and $6600 each for Mr Fraser and Ms Cartwright.

The Fair Work Ombudsman is also seeking a Court Order for Lovers of Property to rectify the alleged underpayment of the salesman.

Shadow Assistant Treasurer Mathias Cormann has claimed that the Government has failed to properly assess the impact of its Future of Financial Advice (FoFA) changes on businesses and consumers according to the Office of Best Practice Regulation.

He said that in evidence before Senate Estimates, the head of the Office of Best Practice Regulation (OBPR) gave a "damning assessment" of the FoFA legislation currently before the Parliament. Senator Cormann said OBPR head Jason McNamara said the Government's regulatory impact statements did not have enough information about the impact on businesses and consumers and the cost benefit of the contentious parts of FoFA for the government to make informed decisions.

Specifically, according to the OBPR, the Government had failed to properly assess the impact on businesses and consumers of its proposed changes in relation to:

• renewal requirements for on-going financial advice fees to retail clients (Opt-In);
• the treatment of paid commissions on insurance products within the superannuation and life insurance products outside of superannuation;
• the treatment of soft dollar benefits;
• access to advice;
• replacement of the accountant's exemption; and
  the carve-out of simple products.

Senator Cormann said the Minister for Financial Services must commission a proper Regulatory Impact Statement, which complies with the Government's own best practice regulation requirements before pressing ahead "with his flawed FoFA legislation". If he refuses, Senator Cormann said the Parliament should insist on a proper Regulatory Impact Statement before dealing with any of the FoFA Bills.