Employer fined $40,000 for underpaying overseas workers

A Melbourne-based training provider has been fined $40,000 by the Victorian Magistrates Court for underpaying eight Chinese student workers.

A Melbourne-based training provider has been fined $40,000 by the Victorian Magistrates Court for underpaying eight Chinese student workers.

The case comes just days after a survey of private companies by accounting firm KMPG revealed nearly 40% of companies are either hiring workers from overseas or are considering doing so.

The federal Workplace Ombudsman took legal action against Education Training and Employment Australia (ETEA) over its failure to pay correct hourly rates of pay and other allowances and for making illegal deductions from the employees’ pay.

The court heard that ETEA initially proposed to pay the eight Chinese students only $150 a week, but this was later increased to a flat rate of $439, irrespective of the hours they worked or when they worked.

The students were then sent to work as nursing attendants and personal care attendants at various aged-care facilities where they worked up to 68 hours a week, including shift work and on weekends and public holidays.

The employees’ services were charged out at up to $34.37 an hour.

Investigations by workplace inspectors found ETEA had underpaid the eight Chinese nationals more than $29,000 over a period of 10 months. The underpayments were not rectified for more than a year.

Magistrate Kate Hawkins yesterday described ETEA’s breach of the Workplace Relations Act as “extremely serious, not a mere oversight”.

Hawkins said the company had sought to justify its substantial underpayment of the Chinese students by saying it failed to read correspondence sent to it by government agencies.

“There can be no excuse for a defendant to avoid its lawful obligations by such wilful ignorance of lawful entitlement. There is no ‘mere oversight’,” she said.

Her judgement says a prudent employer would have engaged qualified, specialist advisers to ensure it was meeting its lawful workplace obligations.

“Such wilful blindness to the true state of the lawful obligations is inexcusable,” she said. “These employees were foreign nationals without a working knowledge of the Australian industrial relations system.

“They needed help in settling in to life in Melbourne. They were clearly not on a ‘level playing field’ with other Australian employees. They were vulnerable due to their cultural background and less than perfect English skills.”

Magistrate Hawkins said it was only after “numerous extensions of time and the threat of litigation looming large” that the company finally complied with the Workplace Ombudsman’s requests to correct the underpayments.

Workplace Ombudsman executive director Michael Campbell said the $40,000 penalty should serve as a warning to other recruitment companies bringing overseas workers into the country for training that they cannot be exploited.

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