Hairdresser stung with $21,000 fine after ignoring Fair Work Ombudsman

A hair and beauty salon in Western Sydney has been fined $21,000 after ignoring the Fair Work Ombudsman’s request to back-pay a staff member.

The Federal Circuit Court imposed the penalty against Hair Industrie Mt Druitt and also required the company to back-pay the hairdresser in full.

The employee, aged in her 50s, was underpaid $4688 between July 2012 and February 2013.

In April 2014 the employer watchdog issued the salon with a compliance notice, requiring the business to rectify the underpaid wages, penalty rates and leave entitlements within 21 days.

However, Hair Industrie Mt Druitt did not respond to the notice or a follow-up letter.

As a result, the Fair Work Ombudsman took the matter to court.

In his judgment, Judge Nicholas Manousaridis said the salon had shown a disregard for the law by not responding to the employer watchdog.

“There is no evidence Hair Industrie has expressed contrition,” Manousaridis said.

“Nor is there any evidence it has taken any corrective action or has attempted to co-operate with the Fair Work Ombudsman.”

Fair Work Ombudsman Natalie James said in a statement the salon had an opportunity to rectify the matter prior to receiving the hefty fine.

“We often attempt to resolve matters such as this one outside of the courts through issuing compliance notices,” James said.

“But we are prepared to initiate legal action where notices are ignored and we believe it is in the public interest to do so.”

Warwick Ryan, partner at Swaab Attorneys, told SmartCompany $21,000 is a “fairly significant fine”. 

“One of the purposes of sentencing in a criminal context is deterrance,” Ryan says. 

“The imposition of a substantial fine would be directed towards that aspect. There would be a punitive aspect to it as well.” 

SmartCompany was unable to contact Hair Industrie Mt Druitt as the business no longer operates at Westfield Mt Druitt.

ASIC gave notice that it intended to deregister the company in October 2014.

A random audit of 858 hair and beauty salons by the Fair Work Ombudsman back in 2013 found 55% of businesses were breaching their obligations under workplace laws.