Stewarts Transport fined more than $60k as court dismisses excuse that company needed to underpay driver due to financial difficulties
By Brad Gardner | December 6, 2010
Underpaying staff to cope with financial difficulty is no excuse, a court has ruled, after a transport company was fined more than $60,000 for ripping off a truck driver.
The Federal Magistrates Court has issued three lots of fines to Stewarts Transport and Logistics and its two owners Rodney and Pamela Stewart for not paying Jonathan Howden casual loading, overtime and shift allowance.
Howden was owed $3228.46, with Stewarts Transport claiming the decision to underpay him was “an unconscious desire to minimise losses” because the business had not turned a profit in a number of years.
“I reject the argument that the…financial difficulties constitute any sort of excuse for the underpayments,” Federal Magistrate Heather Riley says.
“Companies that are not able to pay their debts as they fall due, including the proper amounts that they owe to their employees, are required to be wound up.”
Riley says large firms with more resources find it easier to comply with workplace laws than small businesses.
“However, compliance with all aspects of the law is not optional. It is essential,” she says.
The underpayment represented about 30 percent less than what Howden should have received, with Riley calling it “a very significant shortfall”.
The company was fined $43,500 for the underpayments and for failing to provide payslips or keep payment records. Rodney was fined $8000 separately, while his wife was hit with an $8700 penalty.
The company eventually paid the money owed to Howden, but did so after the deadline given to them by the Fair Work Ombudsman before legal action was launched.
Riley says the company’s decision not to issue pay slips or keep records made it hard to detect a breach and ensure Howden received his correct entitlements.
Fair Work’s predecessor, the Workplace Ombdusman, began investigating Stewarts Transport over the underpayments back in August 2007. It was given a final opportunity to pay the money on June 23 this year, but reimbursed Howden on July 27.
The Fair Work Ombudsman claims the ruling sends a clear message to employers that they cannot get away with underpaying workers.
“This employer tried to cut costs by short-changing an employee, but has now been saddled with significant fines on top of back-paying the employee,” Ombudsman Executive Director Michael Campbell says.
“Successful prosecutions such as this also benefit employers who are complying with workplace laws because it helps them to compete on a level playing field.”
A HISTORY OF UNDERPAYMENTS
The court was told Stewarts Transport had a history of underpaying drivers, with seven of 11 complaints over wages between 2001 and 2008 being upheld.
Furthermore, the Ombudsman is currently investigating another two incidents over wage complaints from those who have worked for the trucking company.
The seven complaints upheld have been dealt with and Stewarts Transport has paid money owed. However, Riley says the matters were only settled are they were brought to the attention of the workplace authorities.
“The fact that the respondents underpaid wages yet again can only mean that they either do not care about whether they paid Mr Howden wages he was entitled to by law, or they deliberately decided not to pay him the wages they were required by law to pay him,” Riley says.
“In all the circumstances of the case, I infer that the respondents deliberately decided not to pay Mr Howden the wages that they were required to pay him by law.”
Riley says the breaches happened over a period of two and a half months and that the Stewarts “showed a serious and deliberate disregard for their obligations towards Mr Howden”.
’I WOULD KILL’ HOWDEN: STEWART
During proceedings, a lawyer representing the Fair Work Ombudsman produced an affidavit detailing a telephone conversation she had with Pamela Stewart over the underpayments to Howden.
During the call, Pamela referred to the company’s employees as “all morons” and threatened Howden.
“If I ever saw him [Howden] again I would kill him – I would spit on him in the street,” she said during the call.
She complained that she “can’t make any money from trucks”, the Ombudsman was “all for the employees” and that she had “no f***ing rights”.
“There was no hint of an apology and no sign or regret,” Riley says.
She says the Stewarts have shown no contrition for their actions, while Pameal has displayed “considerable contempt” for employees and their lawful entitlements.
Rodney told the court Stewarts Transport had not made a profit for a number of years and is being wound up. He claims he and wife will probably face bankruptcy.
Riley rejected the claim the company is in liquidation because it is still trading. Stewarts Transport faced a maximum penalty of $148,500, while Rodney and Pamela could have been fined up to $26,400 and $29,700 respectively.