Business owners can be personally liable when workplace laws are breached. Laurence McLean unpacks the lesson in this IGA underpayment case.
An IGA supermarket in regional New South Wales is facing Federal Court action over allegations that could cost its operators tens of thousands of dollars per breach, and workplace law experts say the case carries lessons well beyond the retail sector.
The Fair Work Ombudsman has commenced legal action against Kinsfolk Retail Pty Ltd, the franchisee behind IGA Narrandera in the state’s Riverina region. It’s alleged the company underpaid a Nepalese visa holder $93,257 between August 2021 and May 2023, while the worker restocked shelves and unloaded delivery trucks. The Fair Work Ombudsman also alleges the business breached record-keeping and pay slip laws, including by knowingly providing false records during its investigation.
Paying it back wasn’t enough
Kinsfolk Retail has rectified the alleged underpayment in full. The company’s sole director, Kavit Himanshu Parekh, and his brother, Ripple Himanshu Parekh, are also named in the action, with the regulator alleging Kavit was involved in all the alleged contraventions and Ripple in some of the underpayment and false record allegations. A directions hearing is listed in the Federal Circuit and Family Court in Sydney on 2 October 2026.
Kinsfolk Retail Pty Ltd faces penalties of up to $82,500 per breach, while Kavit Himanshu Parekh and Ripple Himanshu Parekh each face penalties of up to $16,500 per breach if the allegations are established in court.
Fair Work Ombudsman Anna Booth said the seriousness of the alleged conduct warranted legal action. “Allegedly significantly undercutting minimum Award rates and trying to cover it up with false records and pay slips is completely unacceptable conduct,” Booth said.
Laurence McLean, Director of Operations at Peninsula Australia, said the case is a useful, if uncomfortable, reminder for business owners of all sizes. “The Fair Work Ombudsman’s legal action against the operators of an IGA supermarket in regional New South Wales is an important reminder that employers need to be proactive when it comes to payroll compliance, record-keeping and workplace obligations,” McLean said.
“The allegations in this matter, which include underpayments and record-keeping issues, highlight the financial, reputational and legal consequences businesses can face when workplace compliance is not properly managed.”
McLean said the case also challenges an assumption many small business owners make about their own risk. “If established brands and larger employers can potentially get workplace compliance wrong, small business owners cannot afford to assume their own processes are up to date without regular review,” he said. “Businesses that employ migrant workers should be particularly diligent, as the Fair Work Ombudsman continues to closely scrutinise matters involving these vulnerable workforces.”
He pointed to two of the most common failure points he sees. “Common issues such as incorrect award interpretation and inadequate record-keeping can quickly escalate into significant compliance risks if left unchecked.”
McLean said payroll compliance is often misunderstood as a simple, transactional task. “Many business owners focus on whether employees are being paid, but compliance also relies on correctly classifying staff, interpreting awards accurately, maintaining proper records and ensuring payslips reflect the reality of hours worked and payments made.”
Why directors are exposed too
The bigger lesson, he said, is about who actually carries the risk. “Perhaps the most significant lesson for business owners is that they may be personally exposed when workplace laws are breached. Business owners and directors are sometimes surprised to learn that legal action may not be limited to the company itself. Australian workplace laws can allow individuals who are involved in alleged contraventions to face personal liability.”
“That means workplace compliance should be treated as a governance issue, not merely an HR or payroll responsibility. Whether a business employs one person or hundreds, now is a good time to review payroll practices, award classifications, time and attendance systems and record-keeping processes. Workplace laws continue to evolve, enforcement activity remains strong and the consequences of non-compliance can be significant both financially and reputationally.”
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