Wage theft penalties should go to the worker and not the Crown
Wage theft penalties should go to the worker and not the crown, employment law experts say.
Industrial advocate Miles Heffernan argued for penalties to be paid to wage theft victims during a recent inquiry.
Wage theft penalties should go to the worker
Earlier this year, the Federal Circuit Court awarded penalties to former security guard, Trevor Wehmeyer.
Wehmeyer’s employer refused to pay him $30,000 in accrued annual leave when they terminated his employment.
Judge Michael Jarrett subsequently ordered the employer back-pay the outstanding entitlements.
He also imposed pecuniary penalties of $4,000, which he ordered the employer to pay to Wehmeyer.
Penalties help pay legal costs
Meanwhile, Mr Heffernan, who represented the security guard, welcomed the unusual court order.
He said penalties can assist workers pay legal fees incurred when they take action to recover their wages.
“Judge Jarrett clearly understood the financial injustice Mr Wehmeyer suffered,” he said.
“We are therefore very grateful that he awarded the penalties to our client. It means Mr Wehmeyer can pay his bills and move on with his life.”
Mr Heffernan said it is unfair that workers are left out of pocket simply for attempting to recover what is owed to them.
“We hope other courts will follow Judge Jarrett’s lead and make this a regular practice when employers rip off their workers,” he said.
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What are pecuniary penalties?
Courts can make orders for employers who break workplace laws to pay a pecuniary penalty.
It serves as an extra form of punishment and also to serve as a deterrent.
Judges can then choose to award that money to the Crown – or to the worker.
Courts usually order pecuniary penalties paid to the Crown, leaving workers to fund their own legal action.
The Full Bench of the Federal Court has previously recommended courts award penalties to workers:
“Furthermore, it is not apparent to us why the receipt of a penalty should not operate as an incentive to an affected person to bring a prosecution like this under The Fair Work Act. This incentive to bring and maintain such a proceeding makes it more likely that the applicable provisions of the FW Act ‘will be more than just words on the statute book’.”
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