The sole director and owner of now-liquidated Adelaide-based IT software company, James Manning, has been fined by the Federal Circuit Court for underpaying five former staff $314,595.
He was fined $52,800 and ordered by Federal Circuit Court judge, Denys Simpson to pay the penalty to former employees within 60 days. Because the company is in liquidation, the penalty will return only about 17 cents in the dollar to what is owed to employees.
Manning’s IT computer training software company, Compliance & Competency Management, was placed into liquidation before court proceedings commenced, preventing action against the company.
Manning admitted numerous breaches of workplace law including failing to pay minimum wages; annual leave entitlements on termination; severance payment on termination; and superannuation contributions between 2010 and 2011.
The Fair Work Ombudsman discovered the alleged underpayments when it investigated complaints lodged by employees.
He also admitted to failing to pay workers for up to four months, despite employees raising issues about wages with him several times.
In one case an employee asked Manning before Christmas 2010 for at least $2000 to have some money for his family for Christmas. He failed to reply or make any payment.
Judge Simpson said Manning was ‘recklessly indifferent to his statutory obligations.'
“Manning could have minimised the losses incurred by the employees had he acted in a more reasonable and candid manner…..particularly in regard to his communication with the employees about its (the businesses) financial viability,” Judge Simpson said.
He also failed to comply with a Notice to Produce from the Fair Work Ombudsman, which required him to produce certain documentation for investigation.
Judge Simpson found that the contraventions of workplace law represented a ‘substantial failure by Manning to comply with fundamental obligations on employers.’
Fair Work Ombudsman, Natalie James, said the case would send a strong message that liquidating a company could not be a means to avoid penalty for contravening workplace law.
“The underpayments in this case were extreme and the employer’s lack of cooperation with Inspectors, or to respond to formal demands to produce documentation, were key factors in the decision to take this case to court,” James said.
“The majority of the Fair Work Ombudsman’s interactions with employers are cooperative, and identified underpayments are rectified voluntarily. Where that doesn’t occur, we won’t hesitate to take action to ensure as much money as possible is returned to workers who have clearly been exploited.”
Manning has more than 20 years experience managing and operating businesses and has held directorships in 27 different companies. Judge Simpson said there was no evidence that Manning had previously contravened workplace laws.