When Policies Fail: Fair Work Penalties for HR Failures in Australia

Australia’s Fair Work system doesn’t just rely on good intentions. When businesses fail to ensure their HR policies align with the law — or don’t follow through in practice — there are real consequences. From massive fines to company-directed court orders, recent cases show what can happen when HR policies are inadequate or ignored.

Fair Work Australia

Landmark Cases & Penalties

Commonwealth Bank & CommSec — failure of checks & indulgence of systemic underpayment. In one of the largest Fair Work penalties, the Commonwealth Bank of Australia and its subsidiary CommSec were fined $10.34 million in 2024 after underpaying employees over $16 million.

The breaches included not having adequate safeguards to ensure that Enterprise Agreements and Individual Flexibility Arrangements (IFAs) complied with minimum entitlements. HR policies or systems that should have caught these problems simply didn’t. Senior management had been warned, but the issue wasn’t addressed in a timely manner.

ABMENG Pty Ltd — ignoring leave entitlements and failing compliance notice

ABMENG Pty Ltd, an industrial equipment supplier, and its director were fined for failing to pay employees their leave entitlements.

The company had ignored a compliance notice issued by Fair Work in 2022 to correct underpayments and entitlement withholding. The Federal Court fined the company $56,000, and its director a further $11,000. The court characterized the conduct as “serious and deliberate.”

Real estate agency (Drew and Schofer) — underpayment of young worker & failing to comply with notice.

A small real estate company and its sole director were taken to court for failing to pay a full-time 18-year-old employee both wages and accrued annual leave. The alleged amount owed was modest (~$3,440), but failure to comply with a previously issued compliance notice escalated matters. The regulator is seeking penalties up to $41,250 for the company and $8,250 for the director, plus the owed entitlements.

Restaurants vs. the law — falsifying records and underpaying

Two restaurant companies, DTF World Square and Selden Farlane Lachland Investments, along with senior staff, were fined a total of $4 million+ for a calculated scheme to underpay employees and produce false records to hide the wrongdoing.

The case showed how poor record-keeping policies (or deliberate mis-use of policies) can exacerbate consequences dramatically.