On 21 February 2025, the Federal Court provided clarity with respect to the implications of sections 323 and 536 of the Fair Work Act (Cth) (‘the Act’) in the decision of Wollerman v Fortrend Securities Pty Ltd [2025] FCA 103.
The case involved a dispute between an employer and two employees following various contraventions of the Act, including instances where: –
- bonus payments were withheld from the two employees following their resignations;
- amounts were deducted from one of the worker’s salary for client entertainment costs; and
- The employer failed to provide timely pay slips or provided deficient pay slips to both employees.
Bonus payments
Section 323 of the Act provides that an employer must pay an employee amounts payable to the employee in relation to the performance of work in full, in money, and at least monthly.
The Court held that the employer was prohibited from withholding and/or forfeiting entitlements which the employees were already entitled to by virtue of section 323 of the Act. As a result, the Court found that the employment agreement was invalid to the extent which it purported to allow the employer to forfeit those entitlements. The employee succeeded in their claim and was awarded the sum of $38,032.43 for unpaid bonuses.
Salary Deductions
Section 324(1)(a) of the Act provides that an employer may deduct amounts from an employee’s salary in accordance with section 323(1) of the Act if the deduction is authorised in writing by the employee and is principally for the employee’s benefit.
Having regard to section 324(1)(a) of the Act, the Court turned its mind to the issue of the deductions from a worker’s salary, made by the employer, in the amount of $500.00 per month. The employer argued that it was entitled to make this deduction from the employee’s salary as doing so was in line with a policy which it had in place at the time. The Court held that the employer was not entitled to unilaterally reduce the employee’s contractual entitlements under those circumstances. In addition, the Court found that the employment contract contained no clauses which would permit a reduction in the employee’s pay, nor was there any evidence of the employee providing authorisation in writing for the deduction.
The Court concluded that the employer had committed a serious contravention of section 323(1) of the Act in respect of these deductions. The employee was entitled to recover $29,500.00 of wages invalidly deducted.
The employer’s managing director was also held liable as an accessory pursuant to section 550, for the breaches of section 323(1) of the Act, for unlawfully withholding bonus payment and making unlawful deductions from the workers salary. The managing director had direct knowledge of the salary matters, and his actions deliberately contributed to the breaches of the Act.
Failure to provide timely or sufficient pay slips
The Act imposes obligations on employers to provide a payslip to each of its employees within one (1) working day of paying an amount to the employee for the performance of work.
In this case, the employees in question gave evidence to the Court that they were not provided their payslip in line with the requirements of the Act, and, on several occasions, were not provided payslips at all. This was not disputed by the employer and the Court held that employer had contravened section 536(1) and (2) of the Act.
Consequences of non-compliance
Sections 323(1), 536(1) and 536(2) of the Fair Work Act 2009 (Cth) are civil remedy provisions. Where these civil remedy provisions are contravened, in addition to ordering the payment of unpaid entitlements, the Courts may also impose civil penalties for breaches of the Act. Contraventions of sections 323(1) and 536(1)-(2) are serious and can carry a maximum civil penalty of $495,000.00 for each contravention of the Act.
Employment law disputes involving employee entitlements can be complex and difficulty to navigate. To seek advice about an employment law matter, you can reach out to one of our lawyers from our Employment Team for expert advice on 07 4637 6300 or contact us.
