03 February 2015 

A South Australian man took a sales position at a residential property company with an advertised potential salary of $120,000 or more - but quit 10 months later after earning less than $7000.

A second man also took a job believing he could earn more than $70,000 a year – but quit six months later after being paid nothing at all.

The company – Adelaide-based Longridge Group Pty Ltd, which designs, sells and builds new residential homes – has now been fined a total of $29,790 in the Federal Circuit Court in Adelaide.

The penalty follows legal action by the Fair Work Ombudsman.

The company admitted it had inadvertently breached workplace laws by paying the two employees on a commission-only basis in 2011-12.

This resulted in Longridge underpaying the pair a total of $24,956 in minimum wages and entitlements they were entitled to under the Miscellaneous Award 2010.

One of the underpaid employees, aged 59, had an MBA in sales and marketing and 22-years’ experience in commercial sales and marketing.

He secured the sales position with Longridge Group after responding to a newspaper advertisement that promised ‘an earning structure that doesn’t limit earnings – 120k++’.

However, he quit 10 months later after signing up only four customers to building contracts, earning commissions totalling $6704.

However, he should have been paid $20,013.  

The second salesman, 32, had qualifications in real estate and a certificate in building and construction, as well as some experience as a sales consultant in the building industry.

He gave evidence that he understood he would be able to earn between $70,000 and $80,000 a year from selling Longridge homes.

He quit after six months after not being able to sell any homes and not being paid anything at all.

He should have been paid minimum wages and entitlements totaling $11,647.

The Fair Work Ombudsman investigated after the workers complained.

When Longridge refused to back-pay the workers in full, legal proceedings commenced.

However, the company later admitted in Court that it had inadvertently breached workplace laws by failing to pay the employees’ minimum wages and entitlements. The company subsequently back-paid the workers in full. 

Judge Stewart Brown said the underpayments were significant for both employees and forced them to depend financially on their respective wives.

Judge Brown said the employees provided valuable services for the Longridge Group for which they were not remunerated.

“They manned (Longridge’s) display villages, they fielded inquiries from the general public, they acted as the public face of Longridge,” Judge Brown said.

 “The gentlemen in question worked for periods of months, rather than weeks or days, before they each threw in the towel (with Longridge) and sought alternative employment.”

Judge Brown found that Longridge was not aware that the Miscellaneous Award applied to the employees, but that the company must have been aware that “each was falling far short of the average level of wages enjoyed by other sales consultants”.

“The objective of the modern award system is that all employees should have available to them an appropriate safety net of minimum employment standards,” he said.

“The penalty must be sufficient to convey the message to other employers of the importance of adherence to applicable modern awards in their payment of employees.”

Judge Brown also found that Longridge’s failure to keep proper employment records was a serious breach, noting that the company conceded there was no reasonable excuse for it.

“The keeping of proper and accurate employment records enables regulators, such as the Fair Work Ombudsman, to carry out their statutory obligations effectively,” Judge Brown said.

Fair Work Ombudsman Natalie James says the Court penalty illustrates the importance of employers taking proactive steps to understand the laws applicable to their workplace.

Ms James says the Agency is working hard to build a culture of compliance with workplace laws in Australia with the objective of supporting compliant, productive and inclusive workplaces.

“We are providing practical advice that is easy to access, understand and apply.”

Employers and employees seeking advice or assistance can visit the website at www.fairwork.gov.au or contact the Fair Work Infoline on 13 13 94. A free interpreter service is available by calling 13 14 50.

Online tools include PayCheck Plus for calculating the correct wages for employees, fact sheets, Best Practice Guides and templates for pay slips and time-and-wages records.

Underpinning the Fair Work Ombudsman’s website tools and resources is its award-winning Small Business Helpline, where employers can get advice they can rely on with confidence.

Follow Fair Work Ombudsman Natalie James on Twitter @NatJamesFWO , the Fair Work Ombudsman @fairwork_gov_au or find us on Facebook www.facebook.com/fairwork.gov.au .

Sign up to receive the Fair Work Ombudsman’s media releases direct to your email inbox at www.fairwork.gov.au/mediareleases.

Media inquiries:

Ryan Pedler, Assistant Media Director
Mobile: 0411 430 902
ryan.pedler@fwo.gov.au