A chain of Melbourne based hairdressing salons has been obliged to enter into an enforceable undertaking with the Fair Work Ombudsman to avoid prosecution after the agency uncovered widespread underpayment of employees.

In mid-2016 two former employees approached the FWO claiming that they had not been paid accrued annual leave on termination of employment.

One of the employees also alleged that penalty rates had not been paid for work on Sundays and public holidays.

The investigation the FWO conducted found that numerous employees had been underpaid a total of $88,000.00 over an eighteen month period.

The employer behind Best Cuts and Colours and What’s Up Hair agreed, as part of the enforceable undertaking, to write letters of apology to each of its underpaid employees and make a “contrition payment” to Monash Oakleigh Legal Service of $10,000.

Because the employer cooperated in the investigation the FWO thought that the best way of ensuring the underpaid employees received their correct pay was by having the employer enter the enforceable undertaking rather than prosecuting.

This case demonstrates the importance of employers knowing and complying with their obligations under a modern award.

If you are an employer who has had an inquiry from the FWO we have the lawyers who can advise you through the process.