A simple error to treat Christmas Day as a ‘shut down’ has resulted in a costly and inconvenient back payment being ordered against one Melbourne restaurant operator.

Approximately 250 workers across a dozen restaurants have been reimbursed a combined total $21,600 after the Fair Work Ombudsman discovered that the operator had failed to pay permanent staff for the public holiday. The largest individual underpayment was reportedly $181.

Under the Fair Work Act, an employee who is absent from work on a day that is a declared public holiday is entitled to be paid at their base rate of pay for their ordinary hours of work on that day. Although the Restaurant Industry Award 2010 permits an employer to direct employees to take annual leave as part of a close down of its operations, the Fair Work Act provides that an employee cannot take annual leave on a day that is declared a public holiday.

It is believed that the underpayment in this case was the result of a genuine mistake and the operator took steps to immediately rectify this error. Nevertheless, the Fair Work Ombudsman says that this case highlights the importance of taking the necessary steps to ensure that you understand the wage rates applicable to your workers, including penalty rates.

There are a myriad of reasons explain why underpayments can occur. There are undoubtedly some unscrupulous individuals who systematically underpay their workers and try to “get away with it”. But the vast majority of the claims are inadvertent and generally occur as a result of Australia’s complex workplace relations system.

Employee underpayment is being specifically targeted by the Fair Work Ombudsman. The obligation is on you to ensure that you are compliant.

For more information on employee entitlements and what this means for you, clients should contact the HR Assured team. If you’d like more information about the benefits of becoming an HR Assured client contact us today for a free initial consultation.