By Nicholas Parkinson, Lawyer
Under the Fair Work Act 2009 and the Fair Work Regulations 2009, Australian employers are required to keep records in relation to each of their employees, including on:
- Amounts paid to employees, including penalty rates and loadings;
- Overtime hours worked by employees;
- Leave entitlements; and
- Superannuation contributions.
Failure to comply with these obligations to keep accurate and up to date records, or to produce such records if requested, may leave employers exposed to financial penalties.
Recent amendments to the Fair Work Act 2009 make it even more important that employers comply with these requirements.
Section 557C of the Fair Work Act 2009 provides:
- if an employee brings a claim alleging that their employer has failed to pay them statutory employment entitlements; and
- the employer was required to keep, but did not keep, records of that entitlement,
the employer has the burden of disproving the employee’s claims.
For example, under the Fair Work Regulations 2009, if an employee is entitled to be paid penalty rates for working overtime employers are required to keep records of:
- the number of overtime hours the employee worked during each day; and
- when the employee started and stopped working overtime hours,
If an employee brought a claim against an employer alleging that they were not paid overtime pay under a Modern Award and the employer did not keep records of that overtime in accordance with the Regulations, the onus is on the employer to disprove the employee’s claims, for example, by providing evidence that the employee did not work overtime on the occasions that the employee alleges.
Further, the courts have recently indicated that they will prefer the evidence of employees over employers in cases of disputed entitlements where employers do not keep appropriate records.
In the Federal Circuit Court of Australia’s recent decision in Fair Work Ombudsman v Pulis Plumbing Pty Ltd & Anor  FCCA 3013, Riethmuller J said:
Given the statutory requirements upon employers with respect to record-keeping, it appears to me that, ordinarily, a Court would accept even the most slight and generalised evidence of an employee as to the hours of employment in circumstances where an employer does not produce appropriate records.
Given these developments, it is critical that businesses ensure that they have accurate, up to date employee records and systems.
MDC Legal assists business to understand and comply with their employment obligations, and to minimise their exposure to legal claims from employees. To discuss how MDC Legal may be able to assist your business, please contact our office on (08) 9288 4000 or visit our website.