In the first of the cases using the reverse onus of proof under the Vulnerable Workers provisions, a small, family run business has received double the penalty in a wage underpayment dispute because they did not keep timesheet or roster records. This doubling of the penalties occurred despite the presiding Justice acknowledging that the employees claims lacked credibility.
In the initial hearing the court noted that the employees both lacked credibility in their claims of the hours that they worked and were not remunerated for. The preciding Justice accepting that, despite their claims they likely worked no more than 18 hours per week. As such the claim for additional hours was rejected. However, in a recent appeal it was found that while the employees claims lacked credibility, the reverse onus of proof under section 557C of the Fair Work Act 2009, placed all of the burden to prove that the claims were false on the business, and due to the businesses lack of timesheet or rostering records, a simple statement of the lack of credibility of the employees (even when acknowledged by the courts) does not rise to the level of “proof” that the claims were incorrect. As such the finding was made in favour of the employees resulting in a doubling of the penalty on the small family business to $21,314.
In discussing the reverse burden of proof Justice Colvin outlined that the provision requires detailed record-keeping as an employer obligation and “states expressly that the defaulting employer bears the burden of disproving the allegation”, of the employee.
“If the evidence adduced by [the business] did not rise to the level necessary, on the balance of probabilities, to affirmatively prove that [the cook] and [the guest services worker] did not work the hours that they claimed, then the effect of s557C was that those claims were to be upheld,” Justice Colvin continued.
“In that context, it was not enough that there may be reasons to question the credibility of the account given by [the cook] and [the guest services worker].
“Even if their evidence was not accepted, [the business] would not have thereby disproved the allegation made by them as to the hours that they worked.”
The take-home for businesses of this case is clear, record keeping is important. It is not simply enough to pay staff correctly for the hours they work. It is essential that the record of those hours be retained, or a case such as this could arise where an employee claims that they worked an additional 30h a week that they did not receive payment for. If the business does not have rosters or timesheets showing the actual times worked, then it will be almost impossible to prove that the claims of the employee are false and as such they will, even if they defy logic or lack credibility, be upheld, and penalties awarded.