The underpayment of four migrant workers, and the falsification of payslip and roster records, over a period of two months, has resulted in more than $179,ooo in fines and penalties to two United branded outlets. Occuring before the new wage theft laws these breaches today would have resulted in penalties in the millions of dollars and possible jail time.
Case Review
The Fair Work Ombudsman made the case that the operators of United Petroleum Sandy Bay TAS and United Petroleum Kingston TAS underpaid four migrant workers in December 2020 and January 2021.
Despite being hourly workers, the employees were paid a flat rate of pay per week regardless of the high number of hours they worked. This flat rate also failed to provide for weekend, public holidays, and shiftwork penalties that the Vehicle Repair Service and Retail Award outlines as the minimum entitlements.
The underpayments were identified by the Fair Work Ombudsman in 2023 and the business back paid the workers.
Despite the back payment the Fair Work Commission later proved that the business illegally forced one of the workers to return the back payment amount that was paid to them in the form of a cash back.
Fair Work Ombudsman Anna Booth said underpayments of visa holders are treated particularly seriously.
“We condemn the underpayments of migrant workers in this case. We also have zero tolerance for unlawful cashback arrangements that attempt to hide underpayments,” Ms Booth said.
“Employers should be aware that taking action to protect vulnerable workers, like visa holders, is an enduring priority for the Fair Work Ombudsman.
“All employees in Australia have the same workplace rights, regardless of their visa status, and must be paid in line with Australia’s lawful minimum pay rates for all hours worked.
“Any employee with concerns about their pay or entitlements should contact the Fair Work Ombudsman for free advice and assistance.”
Ms Booth said providing false records is also serious and unacceptable conduct.
“Employers should be aware our experienced inspectors will test whether time and wages records are legitimate. If you use false records you will be found out and you risk being hit with substantial penalties,” Ms Booth said.
Judge Karl Blake found that KLM Foods and Mr Gupta had “blatantly disregarded” the terms of Awards and found that the breach concerning the worker being required to unlawfully repay wages was “particularly unpalatable”.
Judge Blake found that KLM Foods and Mr Gupta had shown no remorse for underpaying the workers and there was a need to impose penalties to deter them from future breaches.
Judge Blake said that some of the affected workers were “vulnerable workers” who had recently arrived in Australia and had little knowledge of their entitlements at the time.
Two of the workers, who came to Australia on student visas, gave evidence that the underpayments had a significant impact on their lives, including making it difficult to meet living expenses and impacting their overall well-being.
Noting evidence presented in court that the exploitation of migrant workers “remains a significant problem in the Australian community”, Judge Blake said: “There is a need to send a strong and clear message to ensure that the type of conduct disclosed in this case is not repeated.”
The Fair Work Ombudsman investigated the matter as part of a broader investigation into the United Petroleum network which commenced in response to concerns about non-compliance.
Learnings for all businesses
“Wage theft is wrong and it is a crime. It is as simple as that. Wage theft is a crime. There is simply no place for it and no excusing it.” explains ACAPMAs Elisha Radwanowski
“Dodgy businesses should be on notice that the regulator is coming for them. But at the same time honest operators should be aware that employment compliance is difficult and ignorance is no excuse for failing to get wages and entitlements right”.
“Honest mistakes are not Wage Theft, but wilful ignorance is not an honest mistake. Employers should take the time now to check in with a qualified, experienced and insured third party to ensure that they are meeting employment requirements”.
“The word ‘Audit’ is one that sends some business operators hiding under the covers, but ‘Audit’ or ‘Health Check’ it means the same thing – a check on the current systems and practices to ensure that the employees are receiving everything they are entitled to, and that the business is not at risk of prosecution”.
“All businesses should be engaging with their trusted advisers and the Registered Organisation in their industry (like ACAPMA) to not only investigate current systems and outcomes to ensure there is no issues, but to collaboratively develop appropriate resources to address any issues that are identified”.
“In the fuel retail and wholesale industry ACAPMA can provide a full assisted compliance audit that identifies issues and then delivers the advice, guidance and resources to address issues”.
“The time of self check, or the businesses usual accountant doing a check are done. The requirements in employment compliance are so detailed and shifting that expert advice, that is specific to the industry, is absolutely vital”, concluded Elisha.
For more on ACAPMA auditing services see; https://acapma.com.au/our-services/compliance-and-auditing/
Here to Help
Through the year ACAPMA Employment Professionals are available to assist members via employment@acapma.com.au.
This article is general in nature and covers things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by contacting one of ACAPMA Employment Professionals its free for members. ACAPMA membership is affordable at only $860 per year for a single site and valuable with sites gaining HR advice support and representation as well as a raft of other benefits and discounts.
Visit: https://acapma.com.au/membership/ to apply for ACAPMA membership.
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