In Fair Work Ombudsman v McCrystal Agricultural Services Pty Ltd [2025] FedCFamC2G 1478, Judge Vasta of the Federal Circuit and Family Court of Australia imposed penalties on McCrystal Agricultural Services Pty Ltd (MAS) and its director, Mr McCrystal, for making unlawful deductions from employees’ wages — breaching section 323 of the Fair Work Act 2009 (Cth).
MAS operated a sweet potato farm near Bundaberg and employed 66 Pacific Island and Timor-Leste workers under the Pacific Australia Labour Mobility scheme. The company made three types of unauthorised deductions:
- Overpayment of overtime – MAS deducted $2,548.60 from 28 workers’ next pay without written consent.
- Health insurance – MAS deducted $21 per pay instead of the actual $18.50 premium, resulting in $1,282.50 being overcharged.
- “Fines” for breaching the alcohol and drug policy – MAS deducted $500 from 29 employees’ pays for alcohol-related behaviour outside work, totalling $14,500.
Judge Vasta found that none of these deductions met the requirements of section 324 of the Fair Work Act, as they were not authorised in writing, not for the employees’ benefit, or otherwise not lawful.
Although the court accepted that the company had since reimbursed the money and that the situation was unlikely to recur, penalties were still imposed.
- MAS was fined $43,000, and
- Mr McCrystal personally fined $5,500 for his involvement.
What Employers Can Learn
Even well-intentioned deductions can breach the Fair Work Act if not handled correctly. Employers must ensure that any deductions:
- Are authorised in writing by the employee;
- Are principally for the employee’s benefit; and
- Are permitted under an award, enterprise agreement, or law.
Employers should never make automatic deductions — even for overpayments or misconduct fines — without clear, lawful authority. This case serves as a reminder that good intentions do not excuse non-compliance, and penalties can still apply even when errors are corrected later.
