Small Business Employer BEWARE!

- September 27, 2012 2 MIN READ


When it comes to applying workplace laws, it is easy to think you are too small to matter, or that it is too much effort to figure out what you should be doing (and you are just doing what everyone else in your industry does anyway).

Employees of small business are just as entitled to the minimum terms and conditions that employees of larger businesses are – and employers who fail to ensure their staff get what they are entitled to are leaving themselves open to significant fines, back payment of wages and other entitlements, and legal fees too.

In a recent case, Fair Work Australia fined an employer over $90,000 for underpaying two of its employees $115 a week (on average, over 9 and 14 months). The employer was a man who owned two cafés, and each café and the owner personally received a portion of that massive fine. The employees also received back-pay of over $10,000, and being prosecuted in two separate proceedings would also be a costly exercise – both in terms of legal fees and the time needed to participate in that process. The total bill for failing to pay loadings or overtime to just 2 employees is likely to have been significantly more than the $100k awarded against them.

This case is pretty extreme, and most employers (even those who have underpaid their employees) will not be punished like this man was – so long as they are sensible and address any issues as soon as they come to light. That said, it does go to show that even very small enterprises can and will be prosecuted for relatively small underpayments, and the fact that your competitors pay at the same rates you do is not enough to get you off the hook.

The message? It is worth the effort of figuring out what your obligations are, and if the Ombudsman comes knocking be nice and listen to what they say!


In employment law for the majority of her career, Danny brings a holistic and commercial approach to the practice of law in this area. Experience ranging from the largest firm in the country, micro-firms and working in-house, clients have the benefit of a tailored approach without the blinkered perspective common to lawyers who spend an entire career in just one type of practice – tending to either “think huge” or “think cheap”.