The Federal Court of Australia has this month reaffirmed the requirement on employers to keep proper employment records.

The Fair Work Act provides that where employers do not keep proper records the employer has the burden of disproving any underpayment allegation made by an employee.

In 2017, two former employees of Karriview Management Pty Ltd commenced action in the Western Australian Industrial Magistrates Court alleging an underpayment of wages. Karriview was unable to produce employment records and despite the court finding that the employees’ evidence lacked credibility on the amount of hours claimed, accepted part of the claim awarding back pay totalling $10,165.

On appeal, the Federal Court noted that the issue was not whether the evidence was disputed i.e. if the employees worked the hours claimed, but whether the burden of disproving the allegations made had been discharged by Karriview. The Court found that it had not and awarded the employees $21,314.

Employers have a fundamental obligation to keep proper records and can face significant penalties if they fail to do so. Information on your obligations can be found on the ABCC’s website under Wages and entitlements.