Ignore the Fair Work Commission at your peril

A recent case initiated by the Fair Work Ombudsman (FWO) has highlighted the importance of complying with the orders of the Fair Work Commission (FWC).

The FWO recently released a statement that they had commenced legal action in court against a Queensland business in the construction industry. The matter concerns an alleged breach of a Fair Work Commission order, that the respondent failed to pay compensation to an unfairly dismissed worker. ADADN Pty Ltd’s sole director and shareholder Steve Durmaz is now facing the Federal Circuit Court, with a directions hearing listed in the Federal Circuit Court in Brisbane for 12 February 2021.

Unfair dismissal case

In May 2020, the FWC found that in September 2019 ADADN Pty Ltd unfairly dismissed a carpenter it had employed for more than two years and ordered the company to pay the worker $34,590 compensation, plus $2,052 in superannuation entitlements within three weeks.

The employee, aged in his 60s, lodged a request for assistance with the FWO after the company allegedly failed to comply with the FWC order to make the payments. The FWO commenced an investigation and attempted to secure voluntary compliance before commencing legal action.

In its case to the Federal Circuit Court, the FWO alleges that ADADN Pty Ltd and Mr Durmaz breached the Fair Work Act by failing to comply with a Fair Work Commission order and is seeking a penalty against both the company and the director. The company faces a penalty of up to $63,000, and Mr Durmaz faces a penalty of up to $12,600. The FWO is also seeking a court order for the company and Mr Durmaz to pay the outstanding compensation and superannuation owed to the employee, plus interest.

History of claims against employer

This is not the only unfair dismissal case the company has had to deal with in 2020. This calendar year, six people have had cases decided in relation to the termination of their employment with ADADN Pty Ltd. Four of those cases resulted in orders against the company, amounting to $143,670.28. By failing to comply with the orders in the matter recently filed by the FWO, ADADN Pty Ltd now face legal costs, penalties and further payments that did not form part of the original orders of the FWC.

A 2019 case that named Adcon Group as the employer, ultimately identified that there was no legal entity named Adcon Group and that in that case, the applicant was never employed by Adcon Hire as alleged. Adcon Hire asserted that the applicant had been employed by ADADN Pty Ltd and performed work for Adcon Hire via a labour hire arrangement between Adcon Hire and ADADN Pty Ltd. However, the Managing Director and CEO of Adcon Group has been identified in one of the 2020 cases as being the company representative for the purpose of the Respondent’s involvement.

Employer’s failure to participate

Interestingly, the Respondent did not appear in any of the cases against them. Beyond Adcon Group filing jurisdictional objections in a couple of matters, the respondents did not submit the requested documents or participate in conciliations or hearings for any of the matters.

In one of the cases, the FWC identified that “although it was provided with every opportunity to do so, the Respondent played no part in the proceedings.” This left the FWC to determine the matter on the uncontested evidence of the applicants, finding that there was “no valid reason for the dismissal” of the employees in that case.[1] In that case, the Commissioner took the unusual step of making a statement that “The Respondent has demonstrated that it is an appalling employer. Nothing in its conduct towards the Applicants is redeeming.”[2] The Commissioner further noted that:

“Because the Respondent decided not to participate in the proceedings there was no evidence or submissions about what effect, if any, an order might have on the viability of the Respondent’s enterprise. Consequently, I am satisfied that an order for compensation will not have an effect on the viability of the employer’s enterprise.”[3]

By not participating in the matters before the FWC, the employer missed their opportunity to present evidence to defend their position or to mitigate the cost of any financial orders against them. By now failing to comply with the orders of the FWC in one of the cases, the employer has unnecessarily escalated their own costs further.

Do not ignore instructions from the FWC

The key take out from this group of cases is that, however inconvenient a claim against your business may be, there is no benefit in ignoring instructions of the FWC to participate in the various steps of an employee claim.

The vast majority of employee claims are resolved at the conciliation stage. By engaging early and making a genuine effort to resolve a claim, you can reduce the time and money spent on the matter; and you can return your focus to your business and remaining employees.

Refusing or failing to engage with the FWC could well result in substantial financial costs and possibly reputational harm to your business. It is only when the FWC has to make some decision about a matter your business is named in, that the situation becomes public knowledge. Having a decision against your business on record can affect your appeal to potential customers and employees.

If you are facing an employee claim or need to deal with an employee’s performance or conduct and there may be a risk of a claim against your business, we recommend you get legal advice about how to manage the situation, to minimise the costs and potential harm.

Our team are experienced in advising employers about and assisting with employment claims. If you are concerned that your business could be at risk, do not ignore those concerns. We encourage you to contact us on 07 3160 0000 or email us at reception@activelaw.com.au.

Links to the original decisions appear below:

https://www.fwc.gov.au/documents/decisionssigned/html/2020fwc2406.htm

https://www.fwc.gov.au/documents/decisionssigned/html/2020fwc6184.htm

https://www.fwc.gov.au/documents/decisionssigned/html/2020fwc5569.htm

https://www.fwc.gov.au/documents/decisionssigned/html/2020fwc5287.htm

https://www.fwc.gov.au/documents/decisionssigned/html/2019fwc6249.htm

[1] Anthony Evans-Marshall, Ahmed Aduhamadi and Mark MacDonald v Adadn Pty Ltd [2020] FWC 6184 at para [62].

[2] Above at para [54].

[3] Above at para [61].

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The material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.