Drafting error in AWAs costs employer over $70,000

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Drafting error in AWAs costs employer over $70,000

AWAs should have provided for a base salary or a ‘production bonus’ but, instead, provided for a base salary and a ‘production bonus’ — with the result being an order for over $70,000 (underpayment plus fine) in the Federal Magistrates Court.

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AWAs should have provided for a base salary or a ‘production bonus’ but, instead, provided for a base salary and a ‘production bonus’ — with the result being an order for over $70,000 (underpayment plus fine) in the Federal Magistrates Court.
 
Two employees succeeded against a WA timber trucking company in what the court called ‘opportunistic’ proceedings.
 
The employer had asked a friend who was an IR consultant to draft the AWAs to provide for an incentive payment system for their employees.
 
Federal Magistrates Cameron found that the poorly-drafted AWAs, drafted without input from a lawyer, required the employer to pay both the minimum amounts and bonus payments.
 
The company's directors and most of its employees had believed the AWAs required only either the minimum or bonus payment to be made at any one time. The two employees who brought the claims gave evidence that they did not understand the AWA that way. The Federal Magistrate found that the two employees may have acted opportunistically in making their complaints to the Workplace Ombudsman.
 
Underpayment
 
Notwithstanding the fundamental misunderstanding in the drafting of the AWAs, the employer had underpaid the two workers and breached the Workplace Relations Act 1996.
 
On penalty, the Federal Magistrate took into account that the employer had paid the employees the amounts owed under the AWAs — $28,552 and $19,027 respectively. He ordered the employer to pay a penalty of $22,500.
 
 
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