ACT Withholding pay for damages & restraint of trade

[Marko]

Hi, pretty stressed out right now. Situation is this. My wife was employed as a contractor in a beauty/massage business. One arvo she'd put a bit too much in a washing machine the business uses and being honest about things, let the boss know via text [restrospectivley not a smart thing to do]. The machine apparently had a meltdown. Now that my wife has left, they withheld her last pay check, a full day Sunday for Mother's day of all things, $600 worth. They also are asking her to pay another few hundred on top for damage to the linen, within 7 days.
Now, I've already previously contacted the manufacturer in anticipation of this, who said that it is impossible to overload the machine to the point it will fry. They also said that the model being used is domestic, not an industrial machine and should not be used in a business environment due to the duty cycle [several washes a day]. I'd say this is probably more reasonable as to why it melted down after 18 months of use.
Can they withhold pay for one and can my wife be held responsible for damages.

Secondly, now that she has just started her new job at another business across town, the email also "reminded" her of the obligations under the restraint of trade clause. Can they stop her working in her chosen profession in the same type of business, which is located in a completely different suburb? She has been very careful not to poach any customers in the last month, biting her tongue so as to not reveal her new work location, so as to satisfy this condition and all the others relating to confidentiality and so on.

Considering all this, you also need to know that her work contract was never signed and returned either, so is she bound by any of the conditions contained within it?

 

[Marko]

EDIT - Sorry, I should have also mentioned this is in the ACT and post the 7 days if we don't pay they have threatened to go to ACAT. Nice eh! No "please" or anything, just pay up or else.
Tempted to threaten them with a harassment lawsuit as initially it was the employer's partner who called my wife on Easter weekend and belittled her, spoke quite unprofessionally and in no official work capacity as he is simply another employee [lower in the hierarchy too]. Not his business to be making calls about the business.

 

[Rod]

They withheld her last pay check

Not allowed. Go to the Fair Work Ombudsman in the first instance.

The washing damages may likely be resolved in your favour if it goes to ACAT, and that is if ACAT will hear the matter. Not sure they are able to hear this kind of dispute.

re: Working in industry. Your wife is likely on safe ground based on your post.

 

[Marko]

Not allowed. Go to the Fair Work Ombudsman in the first instance.

The washing damages may likely be resolved in your favour if it goes to ACAT, and that is if ACAT will hear the matter. Not sure they are able to hear this kind of dispute.

re: Working in industry. Your wife is likely on safe ground based on your post.

Thanks for that. I already have the facts on the FW ombudsman and am putting that to the employer, along with a quotation of the penalties involved if they do not comply and are prosecuted under the act.
I think that because the machine is not a commercial one and they have told us they only expect it to last 3 years [instead of the general consensus of 10 years+] gives a lot of weight to the argument that it could have burnt out at that moment by sheer coincidence. I don't think they'd be able to get a repairer to say definitively that it was caused by overfilling. Employer providing incorrect equipment to carry out employee tasks is my conclusion and not the fault of the employee, regardless of whatever written or verbal instructions were given.

 

[Marko]

I'd just like to clarify if a "Service Provider" or contractor to the business has the same rights under Fair Work for non payment in this case. Seems the business owner doesn't think that clause applies to them.

 

[Rod]

In these kinds of cases most times people are employees. Not always, but mostly. The court looks at all factors. If it walks like a duck and quacks like a duck, a court will disregard a piece of paper written by the employer saying she is a giraffe.

 

[Marko]

Thank you Rod. That is reassuring somewhat and we are contacting the Ombudsman tomorrow to clarify some things before attempting any further banter with this person. The question still remains, how can they withhold payment if there is no evidence apart from their opinion that the fault lies with my wife. The phrase "gross negligence" is now being used to label her, when it was a completely accidental occurrence. Still no conclusive inspection report from an authorized repairer or anything. And, still no signed contract to bind anybody to the terms within it.Best get another bucket of popcorn ready..could be a long week

 

[Rod]

how can they withhold payment if there is no evidence apart from their opinion

Because they can. A close friend once told me a long time ago - "you cannot stop an unreasonable person from being unreasonable". The corollary is - Get help when dealing with unreasonable people, often a government department will assist, else a lawyer.

Question is are they entitled to do so? Probably not.

 

[PeanutLuver]

Thank you Rod. That is reassuring somewhat and we are contacting the Ombudsman tomorrow to clarify some things before attempting any further banter with this person. The question still remains, how can they withhold payment if there is no evidence apart from their opinion that the fault lies with my wife. The phrase "gross negligence" is now being used to label her, when it was a completely accidental occurrence. Still no conclusive inspection report from an authorized repairer or anything. And, still no signed contract to bind anybody to the terms within it.Best get another bucket of popcorn ready..could be a long week

Hi Marko,

For an actual employee

- Under the Fair Work Act he employer cannot withhold employee wages for such - it is unlawful not to pay the employee their full wages entitlements - a free wage complaint to FWO may be made using the FWO form. Technically his may not prevent the employer attempting to pursue an expense obey by other means as a seperate matter. But if she is a genuine employee and they already withheld wages then its unlawful and actionable via FWO. The employer is meant to keep time and wage payment records and provide a regular payslip. FWO will use such records to review wage claims and can order employers to pay employees etc.

If a worker was allegedly taken on as a so called "contractor"/"subcontractor" (eg on an ABN) its possible there is "sham contracting" and that workers may really be employees. The FWO is not keen on sham contracting and complaints about this may also be raised with FWO.

Report all of this in writing to FWO.

FWO may also audit the workplace to check what's going on there.

You may let the workplace/employer know it's been reported in writing to FWO.

"Restraint of trade" is also not usually permitted. Ask FWO about that too.

 

[Marko]

Thanks Peanutluver,
Waiting to see if ATO will make a decision as to if this is an employee arrangement or a legit contract. It is so much of a grey area because of the fact the employer "hires" the premises and equipment to her, making it more like a contract arrangement.
The sham contracting conditions aren't quite met, particularly because of this hire arrangement, but we will try to see if it applies anyway. The restraint of trade part is a no brainer as you can't stop a person earning a living doing the only thing they are qualified to do.