Business owner speaks out after being targeted by Fair Work Ombudsman for alleged underpayments

The Fair Work Ombudsman has launched legal action against a regional Queensland security business over an alleged $50,000 underpayment, but the employer says the security officer was “overpaid”.

Rodney Harris, the owner-manager of Bundaberg-based security business RPO Security, is facing court alongside his private business Bundaberg Security, for allegedly underpaying a casual employee a total of $51,733 between 2007 and 2010.

This is the fourth security company to be targeted by FWO this year, as it continues its crackdown on the casualised industry.

The FWO alleges the employee, aged in his 30s, was paid a flat rate of $900 a fortnight for work including security patrols, escorting people to cars and taking cash to a bank safe.

This supposedly resulted in underpayment of the employee’s minimum hourly rates, casual loadings, night shift allowance and penalty rates for Sundays, public holidays and overtime work.

Representing Harris is solicitor Geoff Ebert of Finemore Walters and Story, who told SmartCompany the FWO claims will be “defended strenuously”.

“Mr Harris and RPO have filed a defence to the claim saying no money is owed to the employee and, on the basis of the evidence, he was actually overpaid $12,000 under the award rate,” he says.

The case was in court yesterday and it was adjourned until November 18, 2013.

The FWO is seeking a court ordered back-payment and says the significant sum of money involved and the failure to rectify the underpayments led to the ombudsman pursuing legal action.

M+K Lawyers partner Andrew Douglas told SmartCompany if the ombudsman is seeking back-payment and not penalties, it generally means the business has been cooperating with the investigation, but failure to rectify the alleged underpayments means legal action was likely.

“You can almost always avoid penalties if you immediately agree to the back payment, but if the FWO see it as a course of deliberate conduct or if you unreasonably declined to back-pay the employee, then they will pursue legal action,” he says.

Douglas says in the last few years there have been a number of security companies caught by the FWO.

“The security industry is an industry where there is high casualisation and these industries have a huge risk of underpayment because the nature of the work is transient. When there are transient people working, there are opportunities for people to pay workers in cash,” he says.

Earlier this month Secom Australia was fined $66,000 for underpaying 19 employees $21,548, and the judge said ignorance of an employer’s obligation was “no excuse” for underpaying an employee.

In May the FWO took action against North State Security in central Victoria, claiming it underpaid four former employees nearly $90,000 between 2006 and 2011.

Douglas says if an employer is unsure of their obligations, they should consult the FWO website or contact their local accountant or lawyer.

“Even with this information it’s still a complex area to determine what people are going to get paid. Organisations like VECCI have a wage hotline, but people can still get it wrong because it’s just so complex.

“The legislation needs to be made simpler,” he says.