Legal

Businessman who took home big bucks fined a second time for failing to pay workers

Renee Thompson /

 

A businessman who previously failed to pay workers while paying himself and another director a combined total of about half a million dollars in wages has been fined again over employee underpayments in a different company.

Both instances involve workers going door-to-door to offer households free power boards as part of the Victoria Energy Efficiency Target Scheme, according to the Fair Work Ombudsman.

Claudio Locaso was fined in excess of $10,000 in July this year after the Federal Circuit Court found he and another director of his marketing and distribution business, Invivo Group, paid seven backpackers nothing while paying themselves at total of $500,000 between 2012 and 2013.

The Federal Circuit Court fined Locaso again last month, this time for allegedly short-changing four employees doing similar work through another company, The Syndicate Group Pty Ltd.

The underpayments in this case also stem back to 2013 and total $9622.

The Ombudsman said two of the four employees were paid nothing for around two or three weeks work respectively.

Locaso was fined $4845 while The Syndicate Group was fined $12,750 for the latest breaches.

The Ombudsman was forced to take legal action after compliance notices requesting back payment of the amounts were ignored, Fair Work Ombudsman Natalie James said.

“We are increasingly issuing compliance notices to try and resolve underpayment matters outside of the court – but we are prepared to commence legal action against employers which refuse to co-operate,” she said.

Federal Court Judge Norah Hartnett described the breaches as appearing to be part of a “broader pattern of conduct by Mr Locaso”.

Rachel Drew, partner at TressCox Lawyers, told SmartCompany this morning it is likely Locaso’s case took on more weight from the Ombudsman’s perspective given it is the second time it has had to investigate one of his companies.

“I think the Fair Work Ombudsman will have approached this matter in a more serious way because Mr Locaso is a repeat offender,” she says.

“It was probably more willing to commence prosecution because it knew in the past compliance notices were not followed.”

Drew says from the Ombudsman’s perspective, Locaso is a person who knew about the existence of workplace law and also knew the consequences of ignoring them.

“An employer ignores a FWO compliance notice at their own risk,” she says.

“It is very important to be open and honest with the Fair Work Ombudsman and if the Ombudsman has taken the step of issuing a compliance notice, employers will be better served by complying.”

Drew says the judge’s criticism of Locaso is also “quite serious”.

“It suggests that Mr Locaso was adopting workplace practices which were completely non-compliant with the law,” he says.

Drew says there are no excuses when it comes to non-payment of workers.

“All employers should be aware if they going to engage workers, they need to pay them,” she says.

“Refusal to pay them at all will be difficult to categorise as lack of awareness.”

Drew says it did seem inappropriate the directors’ wages were previously so high and at the same time workers were not being paid or underpaid.

“I think the primary lesson here is that first of all make an attempt to understand your workplace obligations,” she says.

“Even if you are ignorant, if the Fair Work Ombudsman knocks on your door, use it as a learning opportunity and don’t ignore it.”

SmartCompany contacted Locaso and The Syndicate Group but did not receive a response prior to publication.

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Renee Thompson

Renee Thompson is a former journalist at SmartCompany. Previously, she worked at Fairfax Media for the Bendigo Advertiser and at another regional Victorian media outlet.

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