1 June 2023 • 2 minute read
Record penalty a reminder of State-based employment obligations
The significance of employers' obligations under state-based legislation can be missed given that the majority of employment law in Australia is governed at a national level. It is important to keep in mind that responsibilities under state-based legislation are just as important and non-compliance can result in significant liability. consequences.
This is reflected in a recent decision of the NSW Local Criminal Court which found that a major fashion retail group breached its duties under the Long Service Leave Act 1955 (NSW) by underpaying long service leave entitlements to 223 of its employees due to payroll system errors.
This is the largest number of offences prosecuted simultaneously in NSW for long service leave underpayments, resulting in a record fine of AUD29,000 being imposed. The fine is in addition to the underpayment amounts. Although these underpayments were accepted to have been not deliberate and all entitlements were paid to impacted employees after the errors were identified, the court ruled that a penalty must be imposed due to the serious and widespread nature of the offences.
This decision has renewed the NSW Government's focus on compliance and has occurred at a time where the NSW Government is considering expanding long service entitlements through a portable leave scheme for gig, disability, homecare and other precarious workers, similar to what is already in place in the building and construction, and contract cleaning industries.
While this decision only relates to underpayments which occurred in NSW, each State and Territory across Australia has its own long service leave legislation. Employers, irrespective of their size and location within Australia, are encouraged to conduct regular internal compliance reviews to ensure they are paying long service leave entitlements correctly.
If you need any help understanding your obligations in relation to long service leave entitlements or any other employment law matters and their impact on your business, please reach out to one of our team.
This is reflected in a recent decision of the NSW Local Criminal Court which found that a major fashion retail group breached its duties under the Long Service Leave Act 1955 (NSW) by underpaying long service leave entitlements to 223 of its employees due to payroll system errors.
This is the largest number of offences prosecuted simultaneously in NSW for long service leave underpayments, resulting in a record fine of AUD29,000 being imposed. The fine is in addition to the underpayment amounts. Although these underpayments were accepted to have been not deliberate and all entitlements were paid to impacted employees after the errors were identified, the court ruled that a penalty must be imposed due to the serious and widespread nature of the offences.
This decision has renewed the NSW Government's focus on compliance and has occurred at a time where the NSW Government is considering expanding long service entitlements through a portable leave scheme for gig, disability, homecare and other precarious workers, similar to what is already in place in the building and construction, and contract cleaning industries.
While this decision only relates to underpayments which occurred in NSW, each State and Territory across Australia has its own long service leave legislation. Employers, irrespective of their size and location within Australia, are encouraged to conduct regular internal compliance reviews to ensure they are paying long service leave entitlements correctly.
If you need any help understanding your obligations in relation to long service leave entitlements or any other employment law matters and their impact on your business, please reach out to one of our team.