Employment and Migration Blog

Exploitation and underpayment of apprentice sees plumbing business in hot water with Fair Work Ombudsman

Posted by Stephen Booth on 9 Feb 2018

Assisted by Freya Booth

A plumbing business has been fined $100,000, and its director $21,500, after it failed to pay overtime to an apprentice and meet its record-keeping obligations.  The penalty was high, relative to the underpayment, because of the employer's dreadful treatment of a young apprentice.

The 20 year old second-year apprentice worked 201 hours of overtime for Pulis Plumbing, but was paid only $1,831 (an average of only $9.11 per hour, less than his ordinary rate of $12.18) and did not receive overtime payments.  After leaving the company, the apprentice requested payment of his entitlements, but was told by the director to "Stop doing my head in" and "Seriously, f**k off.  When I'm ready".  Once the Fair Work Ombudsman was involved, Pulis Plumbing admitted to, and rectified, the underpayments: the apprentice received $26,882 that he had been underpaid over the 3-month period worked.

The apprentice had been told that he would be engaged as an apprentice, but Pulis Plumbing failed to complete the apprenticeship documents, so his time worked did not count towards either the completion of his apprenticeship or his trade qualification.  And if he wasn't an apprentice, he should have been paid a higher rate as a labourer.  His willingness to work overtime, and not complain about the short payments, was because he was keen to get the apprenticeship and he didn't want to rock the boat early in his new job.

Judge Riethmuller described Pulis Plumbing's conduct as "outrageous exploitation of a young person".  He said "the conduct is worse than simply underpaying an employee who has had difficulty obtaining work elsewhere, as the respondents also held out the lure of an apprenticeship to this young man".

To calculate the underpayments, the court relied on the apprentice's diary wherein he had recorded the hours worked.  Pulis Plumbing was unable to produce any time records (i.e. they either did not have any records themselves, or were unwilling to help) and so couldn't challenge the apprentice's evidence.

Judge Riethmuller commented that it was fortunate that the apprentice did keep a record of his hours, after receiving advice to do so from his uncle and friends, but "in a case such as this, I would have been prepared to accept even generalised estimates from the employee as to his hours".

Under the 2017 Protecting Vulnerable Workers amendments to the Fair Work Act, the whole of the onus of record-keeping lies on the employer.  Although that legislation didn't apply to this case, the acceptance of the apprentice's evidence shows how this will work where employer's records are missing or inadequate.

Take-aways for employers: 

  • keep clear and consistent records and co-operate with the FWO when they investigate;
  • don't exploit young workers;
  • take apprenticeship obligations seriously, and deal with the paperwork promptly; and
  • deal with any problems that may arise quickly and efficiently.

If you require any assistance regarding your business' record keeping obligations or minimum rates of pay, please contact our Employment Law team.
 

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