When the Fair Work Ombudsman comes knocking

In recent case FWO v LROC Builders Pty Ltd, the court imposed $67,347 in penalties due to the builder’s failure to comply with the compliance notice.  The builder’s penalty is on top of his requirement to repay the outstanding amounts.

FWO investigates Victorian construction businesses

The FWO investigated two related construction businesses in Victoria for allegations of under payment of wages and entitlements for four of its carpenters. The FWO investigated after the impacted workers made complaints that they were underpaid minimum wages, overtime entitlements, fare-and-travel allowances, leave entitlements and public holiday pay.

The FWO found that there were underpayments and as a result issued compliance notices against both companies. The companies failed to comply with the compliance notices and the FWO subsequently referred the failure to comply to the Federal Circuit and Family Court.

The judge found the failure to comply with the compliance notices was “unhelpful, obstructive at times, and indicative of a failure to grapple with the responsibilities that inhere in an employer to pay employees in accordance with their lawful entitlements.” 

The court imposed $67,347 in penalties against the builders, split $53,625 against one of the businesses and $13,722 against the director and sole owner of the two related businesses. The court also ordered that part of the penalties be paid directly to the workers to cover their outstanding entitlements.

The court has also ordered that part of the penalties be paid to the affected workers to cover their total outstanding entitlements of $47,243.

The judge further noted that it was “… necessary and appropriate for the Court to impose a penalty that signals to employers in the building and construction industry that non-compliance with statutory notices will not be tolerated”.

Members should be aware that the FWO is looking closely at the construction sector, recovering nearly $16.5 million in unpaid entitlements for employees across the entire building and construction sector between 10 November 2022 and 30 June 2025.

HIA tools and guidance for members

HIA has resources available to members to better understand their employee payment obligations including:

• The latest wage sheets for the Building and Construction General On-site Award (Building Award), and other awards that often apply to employers and employees in the building and construction sector.
• Summaries of common entitlements like fares and travel allowance, ordinary hours and penalty rates under the Building Award.
• Information about the minimum entitlements for all employees under the National Employment Standards.

Our Contracts and Compliance team can help you determine which award applies to an employee and identify the relevant entitlements and protections, as well as provide guidance on employment matters from commencing an employee, managing them and ending the employment relationship.

To find out more, contact HIA's Contracts and Compliance team

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The above is intended to provide general information in summary form. The content does not constitute specific advice and should not be relied upon as such. Formal advice should be sought by members and customers with respect to particular matters before taking action.