Cleaning company penalised almost $140k for staff underpayment

The FWO has secured $139,860 in penalties against a contract cleaning company in regional Western Australia after it underpaid its employees more than $114,000 and falsified records.

As a result of the employee underpayments, Carnarvon Cleaners Pty Ltd had a $116,550 penalty imposed on it by the court along with a $23,310 fine against the company’s sole director and shareholder Margaret Herlysha Seaton.

The regulator investigated Carnarvon Cleaners in 2018 as part of a national auditing campaign after the firm was previously audited in 2010, 2013 and 2014, when the FWO found it had underpaid employees.

The inspectors found the company had underpaid employees’ minimum-engagement pay, casual loadings, part-time allowances, public holiday penalty rates, overtime rates and annual leave loading under the award.

The individual underpayments ranged from $69 to $16,303 and all workers have now been back paid.

The FWO said Carnarvon Cleaners and Ms Seaton admitted to underpaying 35 employees a total of $114,538 between November 2017 and 2018 and breaching record-keeping laws, including knowingly making false or misleading records and providing them to Fair Work inspectors.

Judge Allyson Ladhams said the conduct of the firm and Ms Seaton was “negligent or careless” and that there had been a “repeated pattern of failing to pay the appropriate employee entitlements.”

The judge said the falsification of records was “particularly serious” as it could hinder the FWO’s investigation and consequently there was the need to impose penalties that would deter others from similar conduct.

“Ensuring compliance with the record keeping complaints under the Fair Work Act is essential to ensure that employees are remunerated according to minimum standards,” said Judge Ladhams.

Fair Work Ombudsman Sandra Parker said employers must face non-compliance concerns or face significant consequences.

“The repeated underpayment of basic lawful minimum entitlements is unacceptable,” said Ms Parker.

“The seriousness of the conduct is compounded in this case by the use of false records. Employers who provide false records to Fair Work Inspectors will be found out and face enforcement action.”

“Employers also need to be aware that improving compliance in the contract cleaning sector is a priority for the FWO.”