A recent Fair Work Commission case has highlighted a timely reminder for payroll professionals: your records may be your organisation’s best defence.
In this case, an employee alleged they had been underpaid and sought compensation for what they claimed was a breach of contract. However, the employer’s payroll records told a different story, and ultimately, they were believed.
The employee argued that their wage was to be paid in line with a specific award rate and claimed they were consistently short-changed over a period of months. But when the employer produced comprehensive payroll documentation showing that the employee had, in fact, been paid above the award, the Commission rejected the claim.
It was a simple yet powerful outcome. The case was not decided by complex legal argument but by evidence, specifically, accurate, detailed payroll records.
This outcome underlines a critical message we champion at Australian Payroll Association: you can’t improve what you don’t measure, and you certainly can’t defend what you haven’t documented.
Payroll’s role in risk mitigation
Payroll professionals are too often underestimated, yet they play a pivotal role in mitigating organisational risk. As Tracy Angwin emphasises in Profit from Payroll, best practice is not just about automation and accuracy, it’s about maintaining systems and processes that protect the organisation.
In this case, it wasn’t HR or Finance who saved the day, it was payroll. And that’s not unusual.
Robust payroll records are essential in:
- Responding to employee disputes,
- Demonstrating compliance with awards and agreements,
- Mitigating risks in Fair Work and wage underpayment audits.
Documentation is your professional insurance
Payroll professionals don’t have malpractice insurance like lawyers or doctors, what we have is our documentation. That includes payslips, timesheets, award interpretation notes, and audit trails. When stored securely and maintained diligently, these records are a payroll team’s strongest shield in any dispute.
In this case, the Commission accepted the employer’s evidence because it was structured, consistent and complete. That’s not a fluke. That’s the result of professional payroll practice.
A wake-up call for businesses
If your business is still treating payroll as a simple back-office function, this case is a wake-up call. It’s a reminder that payroll is a compliance engine, a risk management function and a key player in your people strategy.
As professionals, we must continue to elevate the function, by measuring, documenting, and constantly improving our systems. Because when issues arise, as they inevitably do, the integrity of your payroll data can be the difference between costly litigation and a quick, decisive resolution.
