Fruit and vegetable store hit with $166,000 fine

The operators of a NSW fruit and vegetable store have been slapped with a $166,848 penalty following a Fair Work Ombudsman investigation into sham contracting.

E. A. Fuller & Sons, which operates a fruit and vegetable store in Bellingen, has been fined $139,040 and company director and part-owner Eric Fuller has been personally fined a further $27,808.

The fines were imposed in the Federal Circuit Court in Sydney after Fuller admitted he was involved in the company underpaying five casual employees a total of $82,475 when they worked as shop assistants at the store between 2006 and 2010.

The employees were paid flat hourly rates, which led to underpayment of their casual loadings, annual holiday loadings and penalty rates for weekend, overtime and public holiday work.

The court found two employees were knowingly misclassified as independent contractors and one of them was underpaid $60,827 over the three-and-a-half years she worked at the store.

Judge Rolf Driver said Fuller and the company had been careless and disregarded their obligations.

"There is a need to send a message to the community, and particularly employers, that employers must provide their employees with the correct entitlements and steps should be taken to understand and comply with those entitlements," Judge Driver said.

"The court regards the sham contracting contraventions as particularly serious and recognises the damage that sham contracting can have to the Australian economy and other employers generally."

Fair Work inspectors discovered the underpayments and also record-keeping breaches when they investigated complaints lodged by employees. The underpayments were subsequently rectified.

Source: Smart Company, 22 April 2013