A Melbourne business has been fined $184,000, and one of its company directors has been hit with $36,000 in penalties, for the underpayment of three migrant workers, with one legal expert warning fines for underpayment will keep increasing.
ACC Services (Aust) Pty Ltd, trading as Rapid Pak, was issued $184,000 in penalties by the Federal Circuit Court as a result of action by the Fair Work Ombudsman (FWO). Rapid Pak is a contract packing company based in Melbourne and operating in Australia since 1998.
One of the directors and part-owners of the business, Ingrid Hsi, was fined $36,960 for the underpayment of staff.
The court issued the penalties after the ombudsman launched legal action with claims three workers at Rapid Pack were underpaid a total of $23,479 due to insufficient hourly rates and being paid piece rates, where payment was determined by the number of items packed.
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Despite the total penalties exceeding $220,000 in this case, employment lawyer at TressCox Lawyers Peta Tumpey believes this is on the smaller end of what companies can expect over the coming years.
“Two years ago these fines would have been considered high, but I believe fines, especially against directors, will grow over the next year or so,” Tumpey told SmartCompany.
“It’s a real trend at the moment for the FWO to target individuals who [could be] profiting from the situation, and the only way to teach them a lesson is to hit their back pocket.”
“This is a wake-up call for company directors. Cooperate with the Ombudsman if you receive attention, don’t just pass it off and think it’s not a big deal.”
Previous FWO action taken against the company
All three employees in this case were foreign workers. Two were in Australian on 417 visas and another, a Chinese migrant, and all had limited English skills. Action was first initiated for the three workers in this case by the FWO in November 2015.
The company had also previously dealt with the FWO due to employee underpayment, leading to the company backpaying staff more than $60,000.
Director and co-owner of Rapid Pak Ingrid Hsi was criticised by Judge Grant Riethmuller of displaying a “considerable lack of empathy”. He also noted Rapid Pak was a “multi-million dollar business”, and criticised the underpayment on that basis.
“Given the disparity between the amount that the employees were underpaid and the profitability of the business, the conduct represents appalling greed and a considerable lack of empathy on the part of [Ms Hsi],” he said.
The judge also criticised HSi for falsely telling Fair Work inspectors there had been no previous interaction between the company and the Ombudsman.
Train all managerial staff to ensure compliance
As a result of the FWO’s action, the company has been ordered to train managerial staff on workplace laws, and Hsi has also received a court injunction preventing her from contravening National Employment Standards. Breaching a court injunction could make an individual liable for contempt of court.
Judge Riethmuller claimed the company still failed to display an appropriate amount of remorse.
“Whilst I accept the willingness of the Respondents to facilitate the course of justice, and their acceptance of wrongdoing and mitigating factors, I am not satisfied that they have expressed remorse or contrition in the context of this case,” Riethmuller said.
Tumpey believes the biggest takeaway for businesses is the need to comply with the Fair Work Ombudsman and to educate all managerial staff on appropriate labour laws.
“It’s not just payroll managers and company directors, anyone in management or supervisor positions have to educated on compliance,” she says.
“Implement some good training in your workplace at all levels.”
SmartCompany contacted Rapid Pak but did not receive a response prior to publication.