Business ordered to pay $240,000 to teenage worker in $8,000 wage-theft case

wage theft

A Melbourne small business owner has been hit with $240,000 in penalties for underpaying a 19-year-old worker just over $8,000 in wages and superannuation.

In a ruling Federal Circuit Court judge Riley said was designed to send a message to employers, AstroTurf installation firm Rhino Grass has been ordered to pay the fine on top of backpay within 30 days.

The teenage worker, who successfully argued for the hundreds of thousands of dollars in penalties to be paid to him personally, was underpaid for ordinary hours and public holidays and was not issued payslips during his almost 12-month tenure at the business, the court heard.

Finding Rhino Grass and its director engaged in 10 deliberate contraventions of the Fair Work Act, Judge Riley said the penalties, which were actually considerably short of the maximums, reflected a need for deterrence.

“It is important that employers understand that, if caught, it is very expensive to not properly pay workers,” Riley said.

The wage theft was not treated as a “serious contravention” of the Fair Work Act, and so recently introduced increased penalties, which could have spurred fines in the millions of dollars, were not applied.

Rhino Grass’ director will pay a $40,000 fine under the orders, while the business, which is solely owned by the director, was fined $200,000.

The worker’s case relied primarily on evidence of wage theft stemming from the underpayment of his ordinary and public holiday hours.

The business did not participate in the court proceedings.

Transcriptions of text message conversations between the worker, his parents and the director of Rhino Grass showed repeated complaints of wage theft were made to the business, leading the court to the conclusion the director was “well aware” of the wage and superannuation underpayments.

The worker also alleged he was essentially forced to resign after being subjected to verbal abuse and directions to operate a forklift without a licence by a manager.

The worker said his repeated complaints about underpayment, and the late payment of wages, had fallen on deaf ears, alleging that threats of reports to the Fair Work Ombudsman led the business to push him out the door.

However, while the court found the business “constructively dismissed” the worker, judge Riley was not satisfied it was for a prohibitive reason that would merit additional penalties.

SmartCompany contacted Rhino Grass for comment but did not receive a response prior to publication.

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