A Sydney IT company has been fined and ordered to make weekly repayments to its former employee who was underpaid by nearly $50,000.
The Federal Circuit and Family Court last week fined Pure Telecom, trading as VMCN Solutions, $7,000 and its sole director Steven Woods $1,400 after it was found that a man who was previously its only employee was owed more than $48,000 in back-pay, and the company had failed to comply with a Fair Work Ombudsman (FWO) order to repay him.
The court ordered Pure Telecom to repay the remaining $22,148 plus superannuation to the worker.
Pure Telecom is a Sydney-based supplier of ICT products and services, operating since 2009.
Howard Yang worked as its sole employee as a full-time IT professional from November 2014 to July 2021, on an annual salary of $55,000.
After receiving a request for assistance from Yang, the FWO issued a compliance notice to Pure Telecom, alleging it had underpaid his minimum wages and was not paid the full amount of his accrued but untaken annual leave entitlements.
Some of these amounts had been repaid to the worker, but the FWO found that more than $40,000 was still owed.
Judge Robert Cameron, who oversaw the case, said these underpayments were “significant”, compared to Yang’s salary of just $55,000.
This compliance notice required the company to calculate exactly what it owed to Yang and to make these repayments.
In late 2022 Pure Telecom responded and told the FWO what it believed to be owed to the employee, but this figure was incorrect.
Woods also told the Ombudsman that he would be unable to make these repayments, and asked what the “best and worst case scenarios might look like”, the court heard.
In early 2023 the Ombudsman commenced legal action against Pure Telecom alleging it had failed to comply with the compliance notice and had still not repaid its employee what was owed to him.
By the time of the hearings, some of the back-pay had been provided to Yang, but more than $22,000 was still owed.
A two-year payment plan
The judge found that Pure Telecom and Woods had failed to comply with the notice but there were “some extenuating circumstances” and they had an “overall cooperative attitude”, leading to a discount of 15 per cent on the fines applied.
“The system of compliance notices is a welcome innovation but its value is undermined if employment market participants do not act in accordance with such notices,” Cameron said.
“The court should, by penalties it imposes, discourage the respondents from repeating their contravening conduct and others from committing similar contraventions in the future.”
While finding that Pure Telecom was “not in a strong financial position”, the judge imposed a payment plan of $250 per week to repay Yang, running to February 2026. After these repayments are made, the company and Woods will be required to pay their own penalties to the Commonwealth.
Fair Work Ombudsman Anna Booth said the watchdog is actively targeting companies over back-pay failures.
“When compliance notices are not followed, we will continue to take legal action to protect employees,” Booth said.
“Employers who fail to act on these notices risk substantial penalties and back-pay orders. Any employees with concerns about their pay or entitlements should contact us for free advice and assistance.”
Similar case against WA tech firm
The Ombudsman is also taking Perth-based tech company My IT Partner, trading as My Info Tech Partner, to court over its failure to repay an employee.
The FWO issued a compliance notice in May 2023 alleging the company had underpaid a full-time IT helpdesk support worker from August 2019 to August 2022 and failed to pay them any wages at all in their last three weeks of employment.
The Ombudsman has also alleged the company did not pay the worker accrued but untaken annual leave entitlements at the end of their employment.
My IT Partner is now facing a penalty of up to $41,250.
