The Fair Work Ombudsman has launched legal action against two businesses, one based in Tasmania and one in Victoria, for significantly underpaying two staff over a period of years.
The FWO claims Mildura Battery Company and its director Michael Marquick underpaid a worker more than $66,000 over a six-year period.
The Ombudsman alleges the employee was hired as a trainee in 2005 and paid an hourly rate that was below his minimum entitlements. This did not change for six years.
Acting Fair Work ombudsman Michael Campbell said the employee’s role as a trainee when the underpayments began and the length of time for which the underpayments occurred were key factors in taking the case to court.
The FWO is also pursuing ECFF, which trades as Dave’s Noodles in Launceston, and its owners Priscilla Lam and David Lam.
They are accused of underpaying a foreign chef almost $90,000 from 2008 to 2011.
The chef, who spoke limited English, was sponsored by the Lams through ECFF Pty Ltd to come to Australia on a 457 visa.
The FWO claims the chef’s weekly pay was based on a 38-hour week, despite regularly being required to work 60 hours a week.
Dave’s Noodles allegedly provided false time and wages records to Fair Work inspectors after the chef lodged an official complaint.
According to Campbell, the key factors in the decision to commence legal action were the significant amount of money owed to the worker and the failure of Dave’s Noodles to rectify the alleged underpayment.
Both employers have been accused of multiple breaches of workplace laws and face paying tens of thousands of dollars in penalties. The Ombudsman is seeking court orders for full back payment to the chef and for underpayments to the trainee to be rectified.
Although cases like these are routinely investigated by the Fair Work Ombudsman, it’s uncommon for them to end up in court, says Holding Redlich workplace relations specialist Charles Power.
“The FWO is very good at helping employers rectify breaches when they arise out of misunderstanding or ignorance. The prosecutions arise when the employer doesn’t fix up the breaches,” he says.
Power says there’s no excuse to be ignorant about minimum wage obligations.
“A lot of these cases have a sense of turning a blind eye and there’s an element of exploitation about it. The inspectors that are called in to these investigations have a sense of which [employers] are really making mistakes and the ones that are shafting employees,” he says.
Power says the FWO targets trainees and employees on 457 visas, who can be vulnerable to exploitations like these.
He says the Migration Legislation Amendment Act 2008 made it a sponsorship obligation to comply with minimum wage obligations and created a civil penalty regime and compliance framework for breach of those obligations separate from the Fair Work Act.
“It’s interesting that in the Dave’s Noodle’s case the breaches occurred before those laws came into effect, if that happened today the person would be liable for much greater penalties and would also struggle to sponsor another person,” he says.
Power says the risk associated with underpaying today is much greater than it was five years ago.
“The Fair Work Ombudsman is highly resourced and a vigilant enforcer of Australian industrial laws,” he says.