The Fair Work Ombudsman won a total of $69,552 in fines in court against the operator of a women’s health clinic in Melbourne who withheld government-funded parental leave payments from an employee.
The Federal Circuit and Family Court imposed a fine of $58,590 on The Pagoda Tree (Vic) Pty Ltd, which operates The Pagoda Tree Clinic in Albert Park, and an additional fine of $10,962 on the sole director and owner of the company, Natalie Jade Kringoudis.
The worker concerned was working as a Chinese medicine practitioner at the clinic when she took parental leave in 2018 and gave birth.
After the employee successfully applied for the Commonwealth Government’s Paid Parental Leave scheme, the Department of Social Services (now known as Services Australia) transferred $12,948.30 to The Pagoda Tree Company between December 2018 and January 2019.
Under the Paid Parental Leave Act, The Pagoda Tree was required to transfer the funds to the employee in a series of installments ending in March 2019, but broke the law by transferring less than half of the funds to the employee. employee during her period of paid parental leave. to leave.
The company also violated the Fair Work Act by underpaying the employee a total of $10,296 in annual leave, casual charges, and Saturday charges between 2016 and 2019, and by violating dress code laws. registers.
Fair Work Ombudsman Sandra Parker said the significant penalties send the message that illegal misuse of government payments by an employer is a serious matter.
“We are prepared to take enforcement action to protect the integrity of programs funded by the Commonwealth Government and designed to help parents,” Ms Parker said.
“Paid parental leave funds benefit new parents directly, not employers, and we will act to ensure they are passed on in full, as required by law. Any worker with concerns should contact us.
Judge Alister McNab found that after the Department of Social Services transferred the parental leave funds to The Pagoda Tree, the funds were transferred to Ms Kringoudis’ personal accounts and from there it appeared that the funds were used to pay for daily living expenses, restaurant meals and alcohol.
Although the employee concerned told Ms Kringoudis in April 2019 that her “savings were almost exhausted” and that she was “in a very bad situation”, judge Alister McNab concluded that Ms Kringoudis had “dodged [the employee] over a long period of time”.
After the employee complained to the Department of Human Services, the matter was referred to the Fair Work Ombudsman for investigation. After the FWO contacted The Pagoda Tree, the company released the unpaid parental leave funds to the employee in May 2020, more than a year after they were due. The company rectified the unpaid Fair Work Act underpayments by September 2020.
Judge McNab said: “I have no doubt that if the FWO had not become involved and pursued the case on behalf of the employee, she would not have been paid without incurring her own legal proceedings.”
Justice McNab said it was important to impose a penalty that “clearly demonstrates the importance of meeting the minimum standards under the PPL Act and the FW Act” and to “deter an employer from abusing the rights funded by taxpayers such as the PLP”.
“The fact that the respondents received funds provided to them for the purpose of giving them to an employee to assist her during her maternity leave and then used these funds for their own purposes is to be deplored” , Judge McNab said.
“Any failure by an employer to transfer parental leave payments to an employee essentially amounts to an employer misappropriating Commonwealth funds.”
This is only the second time the Fair Work Ombudsman has won sanctions against an employer for failing to transfer paid parental leave funds to an employee. the first case was finalized in 2018.