Recent changes to South Australia’s Fair Work Act 1994 (SA) (Act) have created a new avenue for the South Australian Employment Tribunal (SAET) to fine employers who fail to pay workers their correct entitlements.
From 1 January 2026, public sector and local government employers are liable for fines of up to a maximum of $25,000 for each contravention.
The New Civil Penalties
Employers must pay workers the amount they are owed under the Act, an award or enterprise agreement. The amount must be paid in full, by money (such as cash, cheque or payment into a specified account) and at least monthly. These requirements extend to all payments arising out of the employment relationship including:
- wages;
- loadings;
- monetary allowances;
- overtime or penalty rates;
- leave payments;
- incentive-based payments and bonuses;
- superannuation contributions; and
- payments under work health and safety legislation in relation to the training and performance of duties as a health and safety representative.
Under the new laws, a civil penalty can be imposed on an employer who fails to meet these requirements. However, the failure must be deliberate and systematic. These laws are not intended to penalise employers who make genuine mistakes.
Deliberate conduct is conduct that is intentional or conscious. Accidental or involuntary conduct will not breach the new civil penalty provisions. Deliberate conduct by the Crown or a body corporate must be proved in one of two ways. Either through the conduct and state of mind of an officer, employee or agent or alternatively, by showing that the employer expressly, tacitly or impliedly authorised the conduct. Such authorisation by the employer could be given directly by an individual, or it could be given indirectly such as through its organisational culture, policies, procedures and practices.
However, the actions of an employee may not result in liability for the employer if the employer’s actions are considered and it can prove that it exercised due diligence to prevent the worker’s conduct.
Systematic conduct requires a recurring pattern of the same conduct or a series of coordinated acts over time. Conduct is more likely to be systematic if multiple breaches are occurring at the same time, breaches have been occurring for a prolonged period, multiple workers are affected, the employer has not responded appropriately to complaints made about a breach, and relevant pay slips are not given in accordance with the law.
Where an employer commits two or more breaches of these new laws arising out of a course of conduct, these are considered a single breach. An application for a civil penalty to be imposed on an employer can be made within 6 years of the relevant breach, and the SAET will order a civil penalty if it is satisfied that the employer committed the breach.
Prior to these changes, the Act only allowed for criminal penalties to be imposed on employers for breaching their payment obligations. The purpose of the new civil penalties is to further deter employers from engaging in behaviour which may lead to the underpayment of workers’ entitlements.
It is important to note that these new law changes do not create a new obligation for employers, but instead provide the SAET with another method to hold employers accountable for their existing obligations under the Act, modern awards, and enterprise agreements.
Key Takeaways
With these new changes now in effect, employers must ensure that workers are paid what they are owed, and the payments are made in full using money in the time period required.
Employers should also exercise due diligence in relation to their payment practices so that a workers’ failure to meet the requirements is not a result of the employer’s deliberate and systematic conduct. Additionally, employers should respond swiftly and appropriately to any complaint made about underpayments and should ensure that records and pay slips are accurate.