Workplace lawyers say the Fair Work Ombudsman (FWO) is stepping up efforts to pursue businesses underpaying migrant workers, following a $144,000 penalty levied against Davdot Facilities Services and director David Leslie Hinchcliffe.
The Federal Circuit Court has ordered the Melbourne-based cleaning operator to pay $119,000 over allegations it underpaid three casual employees, two of whom were migrant workers.
Hinchcliffe has been ordered to pay a further $25,000 penalty in what was the second FWO investigation into his business dealings since 2011.
The Court found Davdot and Hinchcliffe underpaid the employees a total of $10,428 between October 2015 and August 2016, with one South Korean worker on a bridging visa being underpaid $8,294 for work performed at two hotels in Melbourne.
Davdot rectified the underpayments after legal proceedings started.
The Court found the company failed to comply with a notice to produce records or documents, didn’t make or keep employee records, and didn’t provide payslips to the workers.
Fair Work Ombudsman Sandra Parker characterised the penalties as substantial.
The underpayment of overseas workers is particularly serious as they may be more vulnerable and unaware of their workplace rights, face language barriers or are reluctant to complain,” she said in a statement.
Judge Riethmuller said the underpayments were “very significant” to two of the employees, referencing their income levels.
Sending a “strong message”
Margaret Diamond, executive counsel at Harmers workplace lawyers, says the FWO is trying to send a message to other employers in the community.
“The FWO can’t investigate everyone’s entitlements, so where it does go to the trouble … it has to send a strong message,” she tells SmartCompany.
Diamond says the factors the Court considered in the case offer valuable insights for business owners across the country.
“Was it deliberate? Have they done it before? Were they in a position to know better?” she says.
The Court ordered Hinchcliffe and his company to sign up to the My Account portal, complete online courses for employers, and commission an external audit of its practices.
“It’s an educative function … if you are a person with your own business reading this case, [ask yourself] … how could I avoid this?” she says.
Chris McArdle, principal lawyer at McArdle Legal, which specialises in migration cases, says the penalty “seems like a lot”, but is a reflection on how common cases like these have become.
“It indicates to me that the Courts have decided to take a far more robust approach,” he tells SmartCompany.
McArdle says businesses that believe a lack of employment records will assist them in underpayment cases are mistaken.
“We have [other cases] … where the entire model is based on underpaying people,” he says.
SmartCompany contacted Davdot Facilities Services and David Leslie Hinchcliffe for comment but did not receive a response prior to publication.