Fair Work Ombudsman v Secom Australia (ACT) Pty Limited

The Fair Work Ombudsman (FWO) commenced proceedings against Secom Australia (ACT) Pty Limited (Secom) in the Federal Circuit Court of Australia. The dispute concerned Secom's alleged contravention of the *Fair Work Act 2009* (Cth) (the Act) by failing to pay its employees their entitlements under the relevant award and enterprise agreement, specifically in relation to overtime and penalty rates. The FWO sought declarations of contravention and pecuniary penalties.

The primary legal issue before the Court was whether Secom had contravened section 50 of the Act by failing to pay minimum rates of pay as prescribed by the *Security Services Industry Award 2010* and the Secom Australia Enterprise Agreement 2011. This involved determining whether the payments made by Secom to its employees were sufficient to meet their award and agreement entitlements, particularly concerning overtime and penalty rates, or if these payments were absorbed into a flat rate of pay.

Judge Neville found that Secom had contravened the Act. The Court reasoned that the enterprise agreement did not expressly or implicitly permit the absorption of overtime and penalty rates into a flat rate of pay. Secom's practice of paying a flat rate, which was higher than the ordinary hourly rate but did not account for the additional loadings for overtime and weekend work, meant that employees were not being paid their minimum entitlements. The Court applied the principle that for payments to be considered as absorbing award entitlements, there must be a clear intention demonstrated by the employer, which was absent in this case.

The Court ordered Secom to pay pecuniary penalties totalling $10,500 for the contraventions. Additionally, Secom was ordered to pay the FWO's costs of the proceedings.