Security company facing prosecution for underpaying staff $62,000

A northern New South Wales security company is being targeted by the Fair Work Ombudsman for allegedly underpaying staff more than $62,000.

Summerland Security, based at Goonellabah near Lismore, is facing court prosecution for underpaying seven workers $62,616 between December 2006 and February 2011.

The FWO also alleges company director and majority-owner Raymond Bryant made multiple breaches of workplace laws.

Based on an FWO investigation, it is alleged the employees were underpaid their minimum hourly rates, weekend penalty rates, overtime rates and an allowance payable when called back into work after leaving for the day.

One employee was also potentially underpaid his fair entitlements for being required to carry a gun.

Fair Work inspectors discovered the alleged breaches when they investigated complaints lodged by workers at the company.

Since the investigation, Summerland Security has started back-paying staff, but has not fully rectified the payments.

Fair Work Ombudsman Nicholas Wilson said in a statement this failure to fully repay the staff promptly was a key factor in the decision to prosecute.

SmartCompany contacted Summerland Security but the firm said it had no comment.

Partner at M+K Lawyers Andrew Douglas told SmartCompany businesses who “drag their heels” are not looked upon kindly by the courts.

“It comes back to when you mistake you have to own it straight away, repay straight away and make sure the staff feel you’re acting to rectify the situation. It is not acceptable for businesses to be dragging their heels and the courts will act, because the employees don’t deserve to suffer,” he says.

Douglas says unless Summerland Security fully rectifies the payments, they might have to pay even more money in fines.

“It’s showing that you are putting your business interests before those of your employees,” he says.

Workplace law expert Peter Vitale told SmartCompany businesses should back-pay staff promptly.

“If there is an investigation by the FWO and the employer is satisfied that it doesn’t have any basis for arguing against the findings of the ombudsman, the best course is to make up any underpayments to employees as fast as possible,” he says.

Vitale says there are a number of factors the ombudsman takes into account before deciding to prosecute.

“The ombudsman guidelines indicate where there has been voluntary compliance by an employer, litigation would usually not follow, but this is not always the case.

“The fact is that the ombudsman takes into consideration the significance of the underpayment, number of employees and if they’re from a particularly vulnerable group. He also considers if there will be a more general deterrence to other employees by prosecuting,” he says.