Workers robbed of $200,000 from Rockingham security company

Rockingham-based Sureguard Security Pty Ltd has be slapped with a fine and forced to back-pay workers as the result of legal action by the Fair Work Ombudsman. 

The company appeared in the Federal Court after it underpaid guards more than $200,000 in total and was handed an additional penalty of $81,270. 

The Judge said the company's claim that it thought overpaying in relation to minimum rates would “counteract” other rates of pay was a “lame excuse”.

Sureguard was also order to back-pay 22 security guards a total of $205,408 it underpaid them between December 2014 and January 2016 with individual workers paid a range from $227 to $20,174. 

A self-initiated audit of Sureguard Security in 2015 by the Fair Work Ombudsman showed records of underpayment.

Fair Work inspectors found that Sureguard guards, including 13 who performed permanent night work, were paid flat hourly rates of between $21.50 and $24 for static guard work and $25 for patrol work.

This led to the guards being underpaid their minimum hourly rates, casual loadings, overtime pay and penalty rates for night, weekend and public holiday work under the Security Services Industry Award.

Justice Michael Barker dismissed the company's submission that it thought paying flat rates above lawful minimum rates for ordinary hours would counteract the different rates of pay for other periods as “at best, a misunderstanding of the law, but a lame excuse”.

During his ruling Justice Barker accepted that there may have been no deliberate attempt to bend the law but found there was no real excuse for the poor actions of Sureguard. 

“[Sureguard’s] suggestion that its relevant employees were ‘not third world workers’ and so cannot be classed as ‘vulnerable workers’ is, in my view, only of passing relevance,” he said. 
 
“Fair work conditions are not created on the basis that an employer can opt out of complying with them if it considers it has a pliant workforce.

"There are a myriad of reasons why employees may not object to or make complaints about their terms and conditions and the satisfaction of award rates. It does not necessarily mean they are not vulnerable and are not concerned about under-award payments. In this case, casual employees were particularly at risk.”
 
Justice Barker also ordered Sureguard to commission workplace relations training for its managers.

Sureguard back-paid the guards after the Fair Work Ombudsman commenced legal action.

Fair Work Ombudsman Natalie James said the company's director had to sell personal assets to rectify the underpayments and did not liquidate the company to try to avoid having to comply with back-pay orders, as some employers have done in the past.

“In the past, we have made referrals to other enforcement agencies, such as the Australian Tax Office and the Australian Securities and Investment Commission, where we believe company operators have stripped company assets to avoid complying with Court orders, leaving workers being unable to recover entitlements owing to them,” she said. 

“We have not had to take such action in this case and credit is due for the director’s actions in paying the workers the money owed to them.”

Ms James said the case sends a message that ignorance of the law is no excuse for underpaying workers basic minimum entitlements.

“We have been highlighting the issue of payment of flat rates leading to underpayments of security guards for a number of years now,” she said. 

“The outcome of this matter sends a clear message to security industry employers that claiming ignorance of this issue as an excuse for underpaying workers simply won’t wash.”

Ms James said the case also served as another reminder that it is not possible for employers to ‘contract out’ of their obligation to pay an employee the minimum lawful rates that apply to their employment position.

She said improving compliance in the security industry will continue to be a focus for the Fair Work Ombudsman.