Sydney medical practice fined $36,000 for ignoring Fair Work Compliance Notice

The Fair Work Ombudsman (FWO) has identified healthcare as a priority industry for its compliance activities. This means that healthcare practices should expect increased regulatory scrutiny and treat compliance with workplace laws, including minimum rates of pay and other monetary and non-monetary modern award obligations, as a core business priority.

In a recent case, a Sydney medical practice and its sole director were ordered by the Federal Circuit and Family Court of Australia to pay penalties for deliberately failing to comply with a compliance notice requiring the calculation and payment of underpaid wages to a nurse.

Well Health Medical Services Pty Ltd operated a medical centre in Merrylands, New South Wales. After investigating the underpayment of a nurse employed by the practice and covered by the Nurses Award 2020, the FWO issued a compliance notice to the employer on 12 December 2023, requiring the practice to calculate underpaid wages, annual leave loading, and accrued leave, make payments due to the employee by 24 January 2024, and to provide evidence of compliance by 31 January 2024.

Despite multiple attempts by the FWO to engage with the practice through emails, phone calls, and a site visit, the company failed to take any action. The director of the practice made repeated promises to comply with the compliance notice but never followed through.

In 2025, the FWO commenced formal legal proceedings against the practice and its director for the continued failure to comply with the compliance notice.

The Court ordered the practice to pay a penalty of $30,000, representing 64% of the maximum penalty applicable at the time of the relevant contravention. The practice director was personally ordered to pay $6,000, representing 64% of the maximum individual penalty applicable at the time of the relevant contravention. The total penalties of $36,000 reflect the Court’s serious view of deliberate non-compliance with employment laws by the practice and its director.

These penalties relate solely to the practice’s failure to comply with the FWO compliance notice. In addition, the practice and director were ordered to make back payments to the relevant nurse employee to compensate her for unpaid monetary entitlements under the Nurses Award 2020. The Court has also ordered that the matter be listed for a further penalty hearing, at which additional penalties may be imposed for contraventions of the Fair Work Act 2009 (Cth) (FW Act) arising from the actual underpayment of the nurse.

The Court’s decision emphasises the following important points about compliance with workplace laws in Australia:

• Being a small medical practice does not excuse non-compliance with the FW Act. A business cannot “shirk” responsibilities imposed by law simply because they might be described as a small business or because the business is of a particular size. It is incumbent on all employers, regardless of their size, to comply with the requirements of the FW Act.
• Directors and managers cannot hide behind the corporate veil to avoid responsibility for non-compliance that happens on their watch. The practice’s sole director was held to be personally liable for his involvement in the practice’s contraventions of the FW Act and was required to personally pay a penalty the contravention of the FW Act.
• Compliance notices are mandatory and failure to comply will have serious consequences. Compliance notices are routinely used by the FWO to address workplace law breaches without litigation. Failing to comply with a compliance notice undermines the enforcement framework of the FW Act and will attract substantial penalties.
• The purpose of civil pecuniary penalties is to deter both the specific businesses and/or individuals involved in the relevant case and as well as other employers. As a result, penalties awarded must have a sufficient “sting or burden” and will not be set at a level that is regarded as just “a cost of doing business”.

Key lessons for business

• Compliance with workplace laws is mandatory for all businesses regardless of their size. Do not have a false sense of comfort that leniency will be applied because your business is a small business or because employment laws can be complex.
• All employers are required to comply with the FW Act, applicable modern awards or any enterprise agreement. For most medical and other healthcare practices, this includes the Health Professionals and Support Services Award 2020 for employees in administrative, cleaning or health professional roles, and the Nurses Award 2020 if your practice employs nurses.
• If you identify an actual or potential underpayment of wages, get expert employment law advice and act immediately to remedy the situation. Failing to take appropriate remedial action will increase your legal risk.
• Never ignore communications from the Fair Work Ombudsman or the Fair Work Commission (FWC). If you receive any correspondence from the FWO or the FWC, get expert employment law advice promptly. Failure to comply can have significant legal consequences for your business.
• Ensure your business has accurate and compliant employee records. Employers must maintain certain prescribed employee records, including records of wages, accrued leave balances and overtime worked by employees. Failure to maintain these records is a contravention of the FW Act and increases legal risk to a business, including in the event of an underpayment claim (as the business will not have the required records to demonstrate compliance).
• Run regular payroll audits to ensure your business remains compliant with the applicable minimum rates of pay and other monetary obligations under the FW Act, applicable modern awards or any enterprise agreement.
• Seek expert employment law advice if you do not understand your business’ obligations around minimum wages and other monetary entitlements, and as soon as you become aware of any compliance issue.

We can help you

Avant Law is a full-service commercial law firm specialising in the medical sector. To discuss these or other workplace matters, contact a member of the Employment & Workplace team at Avant Law. Alternatively, call 1800 867 113 or click here to organise a confidential discussion at a time that suits you.