$124K fine for employment contract breaches

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$124K fine for employment contract breaches

A broking house has been fined $124,000 for multiple breaches of employment law, including no leave, super or base pay, in relation to how it managed an employee.

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A broking house has been fined $124,000 for multiple breaches of employment law, including no leave, super or base pay, in relation to how it managed an employee.

Judge Raphael in the Federal Circuit heard the finance broking house gave the employee only five payslips in six years and employed him on a commission-based agreement that it considered did not entitle him to a base salary, sick pay, annual leave and superannuation entitlements. 

[Full text of this case: W v Stratton Finance Pty Ltd [2014] FCCA 924 (9 May 2014)   ]

The court had earlier found his commissions had been underpaid: the employer had since repaid $146,291 to the employee.

Details of breaches


The court pointed to numerous breaches by the employer – including:
  • The employee was employed on a commission-only basis;
  • He was paid a percentage of gross commission on all deals settled and his weekly gross amount was adjusted by income tax and shortfalls in next month’s commission payment;
  • Deductions were also made for introduction fees;
  • Some agreements were subject to “clawbacks” where commission wwas repaid if a loan ended after a short period;
  • Clawbacks appeared on the employee’s commission sheet as deductions;
  • Payslips did not reflect commission statements; and
  • The employee was not paid for sick leave, public holiday leave, accrued but untaken leave, annual leave, leave loading or superannuation.
The bottom line: Blatant breaches of fundamental employment law provisions will be treated severely by the courts. The Fair Work Act provides a set of minimum standards, covering wages and conditions, to which an employer must adhere. “Commission-only” arrangements are not allowed to substitute for these provisions.

W v Stratton Finance Pty Ltd [2014] FCCA 924 (9 May 2014)
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