Fair Work Ombudsman commences legal action against NDIS plan management provider

March 9, 2022
FCB Workplace Law

Industry Focus

Health Care

A Melbourne based NDIS plan-management provider and its sole director are facing Court after failing to comply with a Compliance Notice issued by the Fair Work Ombudsman (FWO).

The FWO issued a Compliance Notice in July 2021 to Kukoon Pty Ltd (Kukoon) following a request for assistance from a former employee. The employee is believed to have been underpaid entitlements owed under the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) and the National Employment Standards (NES), including minimum wages, payment in lieu of notice, and accrued annual leave.

The FWO is seeking penalties which could be up to $33,300 for the Company and up to $6,660 for the director. Additionally, the FWO is seeking an order for the employer to comply with the Compliance Notice and rectify the alleged underpayments in full, plus superannuation and interest.

The commencement of proceedings by the regulator demonstrates the importance of complying with a Compliance Notice, or risk being taken to Court where lawful requirements are not complied with. FWO Sandra Parker has said “Where employers do not comply, we will take appropriate action to protect employees. A court can order a business to pay penalties in addition to back-paying workers.”

When Fair Work Inspectors engage with employers regarding a breach of workplace laws a Compliance Notice may be issued to fix the breach instead of starting legal proceedings. This allows the employer an opportunity to respond and in turn correct the error before an escalation to legal proceedings. It’s alleged that Kukoon failed to comply with the Compliance Notice without reasonable excuse.

Not only does this act as a reminder of the penalties that could arise should notices and directions from the FWO not be followed, but also as a reminder that businesses need to have a strong understanding of employee entitlements and their obligations under the Modern Award and the NES to avoid breaches of workplace laws in the first place.

We also know that interpreting awards can sometimes be complex but it’s something you can’t risk getting wrong. FCB’s Ageing, Disability, Health, and Human Services Team are experts in assisting businesses to interpret and ensure compliance with workplace laws, including the complex award and enterprise agreement terms.

There are several changes to the SCHADS Award coming into effect from 1 July 2022. These changes impact several conditions and entitlements for employees in the social, community, home care and disability services industries. Business must be across the changes to ensure compliance or risk enforcement or legal action by the regulator.

FCB is hosting a 45-minute online event on 30 March 2022, to provide an update on the upcoming changes to SCHADS Award and how they’re likely to impact businesses. If you’d like to hear from our industry experts on these changes, register for this exclusive event here.

This article has been authored by Tiarne Mitchell. Tiarne Mitchell is a qualified Workplace Relations Consultant at FCB. She regularly provides advice to our clients on a wide range of employment issues and management of complex workplace matters.