Dodgy businesses put on notice with court ruling

Companies ripping off employees have been put on notice following court ruling against failed property management firm Macquarie Business Services

By Brad Gardner | May 4, 2011

Companies that wilfully rip off their employees have been put on notice following a court ruling against failed firm Macquarie Business Services.

The property management and brokerage business, which is now in voluntary liquidation, was fined $17,750 in the Federal Magistrates Court for refusing to pay wages, annual leave and superannuation to two of its employees over a fourth month period. It also failed to maintain employment records.

Federal Magistrate Denys Simpson slapped Macquarie Director Joseph Bernard Krawczynski with $4,000 in fines.

The court found Chen-Ting Chen and Miu-Han Julie Leung were owed $10,911.24 and $8,931.28 respectively. It ordered they be compensated and for 5 percent annual interest to be added on any unpaid entitlements starting from July 7 2008.

"I accept that the penalty in this matter must reflect the need for both general and specific deterrence," Simpson says in his written judgement.

He chastised the South Australian-based company and Krawczynski for "a flagrant disregard of their obligations".

"The breaches were deliberate not accidental or inadvertent," Simpson says.

Macquarie Business Services faced a maximum penalty of $291,500, while Krawczynski could have been hit with a $58,300 fine.

The court was told the breaches occurred between July and November 2008, at which point Chen and Leung resigned. Both lodged a complaint with the Fair Work Ombudsman, which launched legal action against Macquarie.

"They were obviously trusting of the respondents but, sensibly, resigned from their employment within a short period of time when their trust was abused," Simpson says.

"Neither respondent has demonstrated contrition nor is there any evidence that corrective action has been taken by either of them to ensure that further breaches do not occur."

The court was told Macquarie was in dire financial circumstances and racked up an operating loss of $43,403 in the year ending June 2008. Simpson says the company had assets of $10,051 and liabilities of $94,020.

The court action brought an end to a long-running investigation by the Fair Work Ombudsman, which says Macquarie ignored repeated requests from the two employees to be paid what they were owed.

Fair Work Ombudsman Executive Director Michael Campbell says failing to pay staff minimum entitlements is a serious matter.

"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," he says.

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