Institute of Certified Bookkeepers

Overseas Workers and Working Holiday Makers

Fair Work Orders and Compensations

Serious Misconduct

Payroll Concerns – Accessory

Overseas Workers and Working Holiday Makers


FWO vs Bricklane British Curry House

Curry house operator faces Court over alleged unlawful, cash-back exploitation

The Case

A former Perth restaurant operator is facing Court for allegedly requiring a Bangladeshi worker to repay thousands of dollars of his wages, and then dismissing him because he lodged a workers' compensation claim after injuring his back at work.

The Fair Work Ombudsman has commenced legal action in the Federal Court against Perth man Sushil Kumar, who formerly owned and ran the Bricklane British Curry House in Leederville.

Bricklane British Curry House and its director, Sushil Kumar, are suspected to have paid cook Khondker Riyadh Hasan a flat rate of $1634 a fortnight, before making him withdraw cash and pay back $434.

The allegedly underpaid worker is a Bangladeshi man who was sponsored by Mr Kumar's company to work as a cook at the Bricklane British Curry House on a 457 skilled worker visa.

Apparently, the cook, aged in his late 30s, was contracted on an annual salary of $54,000 when he was recruited from Bangladesh in 2015. The cook generally, worked six or seven days a week, often performing more than 50 hours work per week.

Mr Hasan was unable to work from February 10 because of a back injury sustained at work, and was prevented from returning on April 4, after he recovered.

It is further alleged that the cook sent a workers' compensation claim to Mr Kumar in June last year, and Mr Kumar responded by dismissing him the following day. Mr Kumar allegedly then contacted the Department of Immigration and Border Protection to inform them that the cook's employment had been terminated. After being dismissed, the cook lodged a request for assistance with the Fair Work Ombudsman and an investigation was commenced.

It is alleged the dismissal contravened the Fair Work Act because it amounted to adverse action against the cook for exercising his workplace right to lodge a workers' compensation claim.

Apparently the unlawful cashback arrangement and the underpayment of contractual and other minimum entitlements led to the worker being short-changed a total of $38,822.

Update on Case

The Ombudsman claims Mr Kumar dismissed him for exercising his workplace right.

The Ombudsman also claims Mr Kumar, the director of parent company Bikaner India which is also facing the Federal Court, was aware of Mr Hasan's roster and rates of pay.

The Ombudsman has asked Mr Kumar to pay Mr Hasan $38,822 plus superannuation within 28 days. Mr Kumar faces penalties of up to $10,800 for each of the 13 contraventions and Bikaner India faces a fine of up to $54,000 per contravention.

References


FWC vs United Consulting Services for Ignoring Compliance Notice

Labour-hire operator, United Consulting Services, has been fined after paying car debt instead of paying apprentice.

The Case

Melbourne labour-hire operator Leonard Greenan has been referred to the Commonwealth Director of Public Prosecutions and fined $10,800 after failing to repay three months' worth of wages to an apprentice mechanic after being ordered to do so by the Fair Work Ombudsman.

Federal Court Judge, Joshua Wilson, found that instead of paying the worker his wages, Mr Greenan issued invoices to the dealership “allegedly for the worker's wages but in reality was for the progressive down payment of the purchase price for an expensive Peugeot motor vehicle.”

Following its initial investigation, the Fair Work Ombudsman issued a Compliance Notice requiring Mr Greenan and his companies, United Consulting and United Consulting Services, to back-pay the worker a total of $7,066 in outstanding wages – but this notice was not complied with.

Under the Fair Work Act, business operators must adhere to Compliance Notices or make a court application for a review if they are seeking to challenge a notice.

Failure to comply with a Compliance Notice can result in financial penalties of up to $27,000 for a company and $5,400 for an individual.

Bridging Visa

The employee, aged 29, was in Australia on a bridging visa and had also obtained loans to pay $9,500 to Mr Greenan for a visa sponsorship service that he offered, but did not progress.

Mr Greenan supplied the Pakistani employee to work as a mechanic at a car dealership in Richmond between January and March 2016, but failed to pay the worker any wages during this time.

Judge Wilson said Mr Greenan, “personally benefitted out of the worker's service, rather than paying the worker, wholly antithetical to his role in placing the worker and his obligations under the Fair Work Act.”

He said Mr Greenan's “brazen attitude” and “appalling conduct” warranted the imposition of penalties.

“The respondent could have but failed to offer a repayment regime.
He could have but failed to make any payments to the worker.

“The only contrition exhibited by the respondent lay in his being caught.
In my view, there was no real contrition in this case.” he said.


Hallmark Computers Darwin

The Case

Hallmark Computers has been slapped with a $516,000 fine by the Federal Court for underpaying workers.

In June, the Federal Court found the company had engaged in “deliberate, deceptive and systematic” abuse of workers employed under the 457 skilled visa scheme.

The court heard that Hallmark owner Ashok Alexander coerced employees from India and the Philippines into returning a significant pay packet every fortnight in cash under threat of losing their job and deportation.

This meant that employees' annual salaries were pushed below the minimum threshold for 457 visa holders, while appearing to the Immigration Department to be making legitimate wage payments.

Alexander previously claimed to CRN's sister title, iTnews, that he had reached an agreement with the workers to pay them $45,000 per annum – under the 457 threshold but in line with the salaries earned by organisation's local staff, he said.

The company and its owner were hit with fines at the top end of the sentencing threshold, which Judge Robert Buchanan said would ensure the risk of being caught breaking 457 rules is “not seen by those who commit civil penalty offences as an acceptable cost of doing business”.

Alongside the $516,000 fine, Hallmark and Alexander were also told to pay back the three 457 visa workers still employed at the company a combined $66,000, and the Commonwealth another $17,500 in taxes.

The Judgment

The court found that the breaches involved “calculated, systematic, repeated and callous infringements of the sponsorship conditions and the rights of the employees” and were “a cynical misuse and exploitation” of the company's position.

Hallmark was also ordered to pay more than $83,000 in restitution to the workers and its sole director, Ashok Alexander, was also personally penalised $86,000.

The court found that from October 2012 to November 2014, the company underpaid the 457 workers and also illegally recovered costs from them by requiring them to repay some of their monthly salary. One of the employees was also being told to work in different role from the position he had been sponsored to fill.

The court action followed an investigation by the Department of Immigration and Border Protection into the company.

References

Fair Work Orders and Compensations


FWO v Complete Windscreens (SA) Pty Ltd

Windscreens Company penalised for Exploiting Employees

The Case

In a recent judgment handed down by the Federal Court (Fair Work Ombudsman v Complete Windscreens (SA) Pty Ltd (No 2) [2016] FCA 1563), an Adelaide car windscreen business and its director have been fined nearly $85,000 for the underpayment of employees after a Federal Court decision ruled some of the company's conduct involved “an element of exploitation”.

The Federal Court handed down penalties of $73,425 to Complete Windscreens and $11,220 to the company's sole director and part-owner Lindsay Dean after the company was found to have underpaid seven employees over a four year period from 2007 to 2011.

Background

Fair Work inspectors found one of the company's employees had been paid a flat rate of $12.50 an hour over a period of 10 years. Three other workers aged between 18 and 20 were found to have been paid flat rates of between $12.00 and $21.62 an hour.

This resulted in various employees being underpaid their minimum hourly rates, casual loadings or penalty rates for weekend and overtime work. Meal allowances and leave entitlements were also underpaid and record-keeping and pay slip laws were contravened. The underpayments of the seven employees ranged from $1,308 to $17,990.

The Judgment

In handing down his findings, Justice Besanko found that Complete Windscreens and Dean must have known that the employee paid the lowest flat rate, was being underpaid. His Honour said: “His hourly rate was considerably lower than other employees who were both younger and less experienced. (He) was paid $12.50 per hour over 10 years and nearly every other employee was earning more than him, including the trainees with no experience.”

Justice Besanko rejected the company's argument that, as a family business, it was not as culpable as a large organisation with dedicated human resources and accounting advisers. He found Complete Windscreens made “… no or no adequate enquiries about the pay and conditions of the employees…” despite being a member of the Motor Traders Association of South Australia and having access to industrial advice.

Acting Fair Work Ombudsman Michael Campbell said the scale of the underpayments were a contributing factor in the decision to take the case to the courts.

Submissions

The FWO's submissions to the Court highlighted multiple breaches of Australian employment law:

Minimum wage (including unpaid work contraventions)

  1. The First Respondent contravened section 182(1) of the Workplace Relations Act 1996 (Cth) (Workplace Relations Act) by not paying Flynn at least the guaranteed basic periodic rate of pay in the Australian Pay and Conditions Scale (APCS) during the period 29 November 2007 to 30 June 2009.
  2. The First Respondent contravened Item 5 of Schedule 16 of the Transitional Provisions and Consequential Amendments Act 2009 (Cth) (Transitional Act) by not paying Flynn at least the guaranteed basic periodic rate of pay in the APCS in accordance with section 182(1) of the Workplace Relations Act during the period 1 July 2009 to 31 December 2009.
  3. The First Respondent contravened section 45 of the Fair Work Act 2009 (Cth) (Fair Work Act) by not paying Flynn at least the hourly rate for ordinary hours of work in accordance with clause 33 of the Vehicle Manufacturing Repair Service and Retail Award 2010 (Modern Award) during the period 1 January 2010 to 30 November 2011.

Casual Loading

  1. The First Respondent contravened section 185(2) of the Workplace Relations Act by not paying Moala, in addition to his guaranteed basic periodic rate of pay, the guaranteed casual loading percentage of 25% of the basic periodic rate of pay as provided for in item 1 of subsection 185(3) of the Workplace Relations Act during the period 12 February 2009 to 30 June 2009.
  2. The First Respondent contravened Item 5 of Schedule 16 of the Transitional Act by not paying Moala, in addition to his guaranteed basic periodic rate of pay, the guaranteed casual loading percentage of 25% of the basic periodic rate of pay provided for in item 1 of subsection 185(3) of the Workplace Relations Act during the period 1 July 2009 to 31 December 2009.
  3. The First Respondent contravened section 45 of the Fair Work Act by not paying Mathews, Priest, Moala and Waretini-Rewita, in addition to the hourly rate of pay for ordinary hours of work, the applicable casual loading in accordance with clause 41.1(b) of the Modern Award during the period 1 January 2010 until 30 November 2011.

Overtime

  1. The First Respondent contravened Item 3 of subsection 718(1), subsection 717(a)(iii) and section 727 of the Workplace Relations Act by not paying Flynn and Nakhoul the overtime rates when they were required to work outside their ordinary hours in accordance with clause 6.3 of the Vehicle Industry-Repair, Service and Retail Award 2002 (NAPSA) during the period 29 November 2007 to 30 June 2009.
  2. The First Respondent contravened Item 2 of Schedule 16 of the Transitional Act not by not paying Flynn and Nakhoul the overtime rates when they were required to work outside their ordinary hours in accordance with clause 6.3 of the NAPSA during the period 1 July 2009 to 31 December 2009.
  3. The First Respondent contravened section 45 of the Fair Work Act by not paying Flynn, Mathews, Nakhoul, Priest and Shaw the applicable overtime rates when they were required to work outside their ordinary hours in accordance with clause 28.2 of the Modern Award during the period 1 January 2010 until 30 November 2011.

Meal Allowances

  1. The First Respondent contravened section 45 of the Fair Work Act by failing to pay Moala and Priest the applicable meal allowance in accordance with clause 19.5(b) of the Modern Award during the period 1 January 2010 until 30 November 2011.

Saturday Overtime

  1. The First Respondent contravened Item 2 of Schedule 16 of the Transitional Act by not paying Moala at the rate of time and a half of his guaranteed basic periodic rate of pay when Moala worked ordinary hours on a Saturday in accordance with clause 6.5 of the NAPSA during the period 1 July 2009 to 31 December 2009.
  2. The First Respondent contravened section 45 of the Fair Work Act by not paying Mathews and Moala at the rate of time and a half of their hourly rate for ordinary hours of work when they worked ordinary hours on a Saturday in accordance with clause 38.2 of the Modern Award during the period 1 January 2010 until 30 November 2011.

Annual Leave

  1. The First Respondent contravened Item 3 of subsection 718(1), subsection 717(a)(iii) and section 727 of the Workplace Relations Act by failing to pay Flynn before going on annual leave, the guaranteed basic periodic rate of pay that Flynn would have received in respect of the ordinary time he would have worked had he not been on annual leave in accordance with clause 7.1 of the NAPSA during the period 29 November 2007 to 30 June 2009.
  2. The First Respondent contravened Item 2 of Schedule 16 of the Transitional Act by failing to pay Flynn before going on annual leave, the guaranteed basic periodic rate of pay that Flynn would have received in respect of the ordinary time he would have worked had he not been on annual in accordance with clause 7.1 of the NAPSA during the period 1 July 2009 to 31 December 2009.
  3. The First Respondent contravened section 45 of the Fair Work Act by failing to pay Flynn before going on annual leave, the hourly rate for ordinary hours of work that Flynn would have received in respect of the ordinary hours he would have worked had he not been on annual leave in accordance with clause 29.7(a) of the Modern Award during the period 1 January 2010 until 30 November 2011.

Annual Leave Loading

  1. The First Respondent contravened Item 3 of subsection 718(1), subsection 717(a)(iii) and section 727 of the Workplace Relations Act by failing to pay Flynn during a period of annual leave, a loading of 17.5% calculated on the guaranteed basic periodic rate of pay that Flynn would have received for ordinary time he would have worked had he not been on annual leave in accordance with clause 7.1 of the NAPSA during the period 29 November 2007 to 30 June 2009.
  2. The First Respondent contravened Item 2 of Schedule 16 of the Transitional Act by failing to pay Flynn during a period of annual leave, a loading of 17.5% calculated on the guaranteed basic periodic rate of pay that Flynn would have received for ordinary time he would have worked had he not been on annual leave in accordance with clause 7.1 of the NAPSA during the period 1 July 2009 to 31 December 2009.
  3. The First Respondent contravened section 45 of the Fair Work Act by failing to pay Flynn during a period of annual leave, a loading of 17.5% calculated on the hourly rate for ordinary hours of work that Flynn would have received for ordinary time he would have worked had he not been on annual leave in accordance with clause 29.7(a) of the Modern Award during the period 1 January 2010 until 30 November 2011.

Personal Leave

  1. The First Respondent contravened Item 3 of subsection 718(1), subsection 717(a)(iii) and section 727 of the Workplace Relations Act by not paying Flynn at least the guaranteed basic periodic rate of pay when he was absent from work on account of personal illness or on account of injury by accident in accordance with clause 7.2 of the NAPSA during the period 29 November 2007 to 30 June 2009.
  2. The First Respondent contravened Item 2 of Schedule 16 of the Transitional Act by not paying Flynn at least the guaranteed basic periodic rate of pay when he was absent from work on account of personal illness or on account of injury by accident during the period 1 July 2009 to 31 December 2009.
  3. The First Respondent contravened section 44 of the Fair Work Act by not paying Flynn at least his hourly rate of pay for his ordinary hours of work when Flynn took a period of paid personal/carer’s leave in accordance with section 99 of the Fair Work Act during the period 1 January 2010 until 30 November 2011.

Employee Records

  1. From 29 November 2007 to 30 June 2009, the First Respondent contravened Regulation 19.4 of the Workplace Relations Regulations 2006 (Cth) (WR Regulations) by not specifying the number of overtime hours worked by Flynn each day or when Flynn started and ceased working overtime hours in accordance with regulation 19.1(1) of the WR Regulations.
  2. On and after 1 July 2009, the First Respondent contravened section 535 of the Fair Work Act by failing to keep employee records in relation to Shaw and Waretini-Rewita that specified the number of overtime hours worked by them on each day or when they started and ceased working overtime hours in accordance with regulation 3.34 of the Fair Work Regulations 2009 (Cth).

Pay slips

  1. From 29 November 2007 to 30 June 2009, the First Respondent contravened Regulation 19.20 of the WR Regulations by not issuing pay slips to Flynn, Mathews, Priest, Moala, Shaw, Nakhoul and Waretini-Rewita (Employees), within one working day of paying remuneration to the Employees.
  2. From 1 July 2009 to 30 November 2011, the First Respondent contravened section 536 of the Fair Work Act by not giving pay slips to some or all of the Employees within one working day of paying an amount to the Employees in relation to the performance of work.

The Penalties

The Federal Court imposed the following penalty and compensation orders on the employer:

  • Pursuant to subsection 719(1) of the Workplace Relations Act and section 546 of the Fair Work Act, the first respondent is to pay a total penalty of $73,425 for its contraventions declared in paragraphs 1 to 25 above.
  • Pursuant to subsection 719(1) of the Workplace Relations Act and section 546 of the Fair Work Act, the second respondent is to pay a total penalty of $11,220 for his involvement in the first respondent’s contraventions, as declared in paragraph 26 above.
  • Pursuant to subsections 719(6) and 719(7) of the Workplace Relations Act and/or subsection 545(2) of the Fair Work Act that the first respondent pay the total underpayment underpaid to the employees to the applicant within 28 days of these orders, with the applicant to:
    1. within 14 days of receipt of the compensation, pay the employees the following amounts:
      1. Mr Flynn in the amount of $17,990.92;
      2. Mr Mathews in the amount of $2,220.92;
      3. Mr Moala in the amount of $12,652.63;
      4. Mr Nakhoul in the amount of $10,846.54;
      5. Mr Priest in the amount of $11,631.74;
      6. Mr Shaw in the amount of $3,317.98; and
      7. Mr Waretini-Rewita in the amount of $1,308.45;
    2. in the event that the applicant cannot locate any of the employees, pay the applicable amount due to each employee that cannot be located to the consolidated Revenue Fund of the Commonwealth within a further 7 days.
  • The first respondent pay all outstanding superannuation contributions arising from the contraventions outlined at paragraphs 1 to 21 above.
  • Pursuant to subsection 841(a) of the Workplace Relations Act and subsection 546(3) of the Fair Work Act, the total penalties set out in orders (28) and (29) above be payable to the Consolidated Revenue Fund of the Commonwealth within 28 days.
  • The applicant’s application is otherwise dismissed.

Previous action against Complete Windscreens

In 2013, the Fair Work Ombudsman launched action against Complete Windscreens for allegedly underpaying seven employees more than $100,000 over a period of four years, however, a spokesperson for the Fair Work Ombudsman said “the quantum of underpayment alleged by the Fair Work Ombudsman was revised after the matter was first filed in court”.

Complete Windscreens director Lindsay Dean said he planned to fight allegations of underpayment in court, calling the accusations “rubbish”. Regarding the current penalty, Dean said in a statement that the business believed it had been paying workers correctly:

“As a family-owned business in South Australia of more than 40 years, we insist on ethical and honest relationships with our employees. Our breaches of employment legislation were inadvertent, never wilful and largely arose from us not carefully monitoring an external payroll provider arrangement. The listed underpayments of award entitlements primarily stem from an inadvertent pay rate error.”

References


Stewart v Next Residential Pty Ltd: Annual Salary Precedent

The Case

Ms Stewart was employed as an administration coordinator under the Clerks Private Sector Award 2010 (Clerks Award) and was paid an annual salary of $78,000 per year. According to the contract, the annual salary was intended to be inclusive of “any award provisions/entitlements that may be payable under an award.”

On 28 January 2016, Ms Stewart lodged a claim against Next Residential Pty Ltd (Next Residential) seeking to recover $28,984 for money owed in overtime and lunch breaks that she worked as directed. Ms Stewart further claimed that she was entitled to this money as Next Residential did not comply with the requirements under clause 17 of the Clerks Award, namely that the company did not identify in writing the applicable provisions satisfied by the annualised salary and also did not specify the award that covered her employment.

Next Residential argued that the Ms Stewart was not directed to work overtime or work through her lunch breaks and that this was done on Ms Stewart's own initiative. In addition, Next Residential submitted that any additional hours worked by Ms Stewart were offset against early finishes, late starts and half days worked. Further, Next Residential submitted that Ms Stewart was paid an annualised salary in accordance with clause 17 of the Clerks Award, that the contract was explicit and intentions were clear that it was inclusive of all the provisions set out and payable under the Clerks Award.

The Judgment

The Court noted that clause 17 of the Clerks-Private Sector Award allows an employer to pay an annual salary in satisfaction of any or all of the following: minimum weekly wages; allowances; overtime and penalty rates; and annual leave loading. However, Clause 17 also also makes it very clear that where an annual salary is paid, the employer must advise the employee in writing of the annual salary and the specific provisions of the Award which have been included in that annual salary.

The employer's failure to specifically itemise the monetary entitlements included in the salary mean Ms Stewart is now entitled to claim back-pay, despite the fact her salary was approximately $30,000 more than Award rate.

References


FWO for the Cleaners

Awarded almost $40k Back Pay

The Case

“Future breaches of workplace laws will not be tolerated” says FWO, Natalie James.

The Fair Work Ombudsman has recovered $64,334 for 36 workers employed at various locations along the Great Ocean Road and Otway region of Victoria.

In Colac, 23 cleaners recovered $37,754 for underpaid shift and toilet cleaning allowances.

Under the Cleaning Services Award 2010, the full-time, part-time and casual employees should be receiving hourly rates of up to $23.08 for ordinary hours, up to $32.31 on Saturdays, up to $41.54 on Sundays and up to $50.77 for public holidays.

Cleaners are also entitled to a toilet cleaning allowance of up to $2.52 per shift, to a maximum of $2.39 per week, which the employer did not pay due to claiming no knowledge of this requirement.

Under the Award an employee engaged for the major portion of a day cleaning toilets must be paid an allowance of 1.766 per cent of the standard rate per week, or 0.359 per cent per shift.

Additionally, the workers were underpaid a penalty rate allowance of 15% of the ordinary hourly rate for early morning shifts that start prior to 6am and afternoon shifts that start after 6pm.

A formal caution has been issued to the business warning that enforcement action will be taken if breaches continue to occur.

Other Recent Recoveries in the Region

  • $13,191 for 10 hospitality workers in Beeac who were underpaid penalty rates for weekend work under the Restaurant Industry Award 2010.
  • $8209 for two casual labourers in Warrnambool who did not receive the appropriate pay rate for overtime hours under the Plumbing and Fire Sprinklers Award 2010.
  • $5178 for a bricklaying apprentice in Warrnambool who was underpaid the applicable base hourly rates under the Building and Construction General On-Site Award 2010.

Fair Work Ombudsman Natalie James said many businesses were overconfident when it comes to the intricacies of Australia's workplace laws and FWO will be taking an increasingly hard line with employers who cannot demonstrate that they made a diligent effort to understand their obligations.

“There has never been so much freely available information to assist employers to understand their workplace obligations. The time for excuses is over,” Ms James said.

References


Penalised for Sham Courier Contracts

The Case

The Fair Work Ombudsman has secured a total of $72,000 in penalties against two companies after deliberate sham contracting activity resulted in a bicycle courier in Melbourne being underpaid more than $7000.

Z Transport Pty Ltd and another company, Boxbay Pty Ltd, have each been penalised $36,000 in the Federal Circuit Court in Melbourne. Z Transport is owned by Vincent John Smits of Victoria while Boxbay is owned by Peter Maurice Fitzgerald of Queensland.

Z Transport specialises in delivering products for various clients and Boxbay provides services, including labour, to Z Transport pursuant to an agreement between the companies. The Fair Work Ombudsman investigated the companies after a bicycle courier, aged in his late 20s, lodged a complaint.

Fair Work Inspectors found that the courier was treated as a contractor, despite Z Transport and Boxbay being aware that his correct classification was as an employee.

The courier was paid a low contract rate based on the jobs he performed – but as an employee, he was entitled to receive employee entitlements under the Road Transport and Distribution Award, including minimum wages and leave entitlements.

This resulted in the courier being underpaid $7641 between February and November, 2013.

The Fair Work Ombudsman subsequently commenced legal action and Boxbay admitted in Court that it contravened sham contracting laws when it engaged the courier as a contractor to perform duties for Z Transport.

Z Transport admitted being involved in that contravention.

Boxbay also admitted underpaying the courier and contravening pay slip laws, and Z Transport admitted being involved in those contraventions.

The courier gave evidence that the underpayment had made it difficult for him to live week to week and resulted in him incurring significant credit card debt to cover everyday living expenses.

He was back-paid shortly after the Fair Work Ombudsman commenced legal action.

The Judgment

In his judgment, Judge Grant Riethmuller found that the contraventions were deliberate because in 2012, the Fair Work Ombudsman had provided Z Transport and Boxbay with “significant material” explaining that the correct classification for their bicycle couriers was as employees, not contractors.

“I am persuaded that the contravention in this case was deliberate and made in circumstances where the true position had clearly been provided to the respondents by the FWO in 2012,” Riethmuller said. “This is not a case where the events that transpired occurred either by accident, error, negligence or even recklessness.”

Acting Fair Work Ombudsman, Kristen Hannah, says the Agency has a low tolerance for employers who engage in sham contracting arrangements.

“Disguising an employment relationship by unlawfully classifying workers as independent contractors is a devious way to avoid providing employees with their correct entitlements,” Hannah said. “Employers ought to be warned that they cannot simply ignore our advice. We have a range of materials available in multiple languages and a dedicated small business helpline.”

Reference


Lycamobile vs Fair Work

“Global SIM card provider back in Court after alleged failure to get message”

The Case

The Australian arm of a global mobile SIM card provider that was penalised $59,400 for exploiting migrant workers is again facing legal action after the alleged underpayment of an employee at its NSW headquarters in Parramatta.

The Fair Work Ombudsman has commenced legal action for the second time against Lycamobile Pty Ltd in the Federal Circuit Court.

Acting Fair Work Ombudsman, Kristen Hannah, says the decision to take legal action was made because of the retail giant's alleged failure to put in place adequate corrective processes after the 2013 penalty decision, which related to underpayments to staff in Adelaide and Brisbane.

The latest litigation relates to allegations an administrative employee in Parramatta was underpaid for overtime hours worked between 2012 and 2015.

The Fair Work Ombudsman commenced an investigation into the matter after receiving a request for assistance from the employee.

The employee was engaged by Lycamobile to perform administrative work and was contracted to work 40 hours per week plus reasonable additional hours for a base salary of between $33,867 and $37,742 per year. It is alleged she frequently worked additional overtime hours, including on Saturdays.

The employee received periodic payments on top of her base salary, designated as “allowance” and “arrears”, that the Fair Work Ombudsman alleges were insufficient to satisfy the minimum entitlements for overtime hours under the Award.

It is alleged that during the employment period the worker performed 604.67 overtime hours and was entitled to between $25.71 and $38.20 per hour under the Telecommunication Services Award 2010, or $16,736 in total.

Lycamobile allegedly only paid the employee $11,472 for overtime hours, resulting in an underpayment of $5264. The alleged underpayment has now been fully rectified.

Ms Hannah says it is disappointing there is cause to initiate legal action against Lycamobile for a second time.

“It is of grave concern whenever we uncover allegations that an employer has failed to learn from past mistakes,” Ms Hannah said.

“We make it clear that while we understand oversights sometimes occur, we take a dim view of those who make repeated errors and will not hesitate to pursue serious enforcement action when we come across these allegations.”

The Judgement

The matter is listed for directions in the Federal Circuit Court in Sydney on February 2 2018.

Lycamobile faces penalties of up to $54,000 per contravention.

The Fair Work Ombudsman is also seeking orders requiring Lycamobile to provide workplace relations compliance training to its managers at its own expense, and undertake an external audit to identify other underpayments of its employees' wages and entitlements.

References

Fair Work vs Peter Jones

“Political party leader penalised for short-changing workers”

The Case

A political party leader who promised to pay workers $30 an hour to hand out how-to-vote cards but paid them nothing has been penalised in Court and criticised by a Judge for his “arrogant” attitude and lack of remorse.

Peter Jones, who was the secretary and lead upper house candidate for the No Land Tax Party at the 2015 NSW election, has been penalised $13,315 in the Federal Circuit Court. His party has also been penalised a further $67,575.

The penalties, imposed by Judge Tom Altobelli, are the result of legal action by the Fair Work Ombudsman. Jones and the No Land Tax Party recruited about 3600 workers to hand out how-to-vote cards for up to 10 hours on NSW Election Day in 2015 by offering to pay $30 an hour. The Fair Work Ombudsman investigated after being contacted by workers and commenced legal action after Jones and the No Land Tax Party failed to co-operate.

In Court, Jones and the Party admitted contravening workplace laws by failing to pay the workers but submitted that “it cannot seriously be accepted by the Court that not being paid approximately $300 for the day has had a material impact on their lives, well-being or finances”. Judge Altobelli labelled the submission “arrogant”.

The Fair Work Ombudsman's litigation focused on a sample of 21 of the underpaid workers who were short-changed a total of $6219. The sample included teenagers, students and people who were otherwise unemployed, among others.

Jones and the No Land Tax Party recruited workers by mailing flyers to homes around NSW, stating “your base pay is $30 an hour – you will get paid this regardless of what vote your local candidate obtains…” Additional bonuses up to $500 were also offered if candidates polled well. Jones also emailed many of the workers on Election Day, and on three separate occasions after the election, assuring them they would be paid.

However, Jones stated in Court that the No Land Tax Party was reliant on receiving public funding to meet the wages, with this funding to be received only if a candidate was elected to the NSW Parliament. Not one No Land Tax Party candidate was elected.

Jones and the Party also contravened workplace laws by failing to keep basic employee records and failing to comply with a Notice to Produce issued by the Fair Work Ombudsman during its investigation, submitting that the non-payment of workers was “a grave miscalculation that arose from blind optimism”. However, Altobelli accepted the Fair Work Ombudsman's submission that, when considered in its entirety, the contraventions of Jones and the Party were deliberate.

“The difficulty for the Respondents is that there is no evidence that satisfies the Court that they had a legitimate and considered expectation of winning one or more seats in the NSW Election on 28 March 2015,” Altobelli said. “Moreover, even if they had won, on their own evidence (or lack thereof) they could not have reasonably satisfied the requirements for payment from the Election Campaign Fund due to lack of records.”

The Judgment

Jones and the Party rectified underpayments of the 21 sample workers – who represent less than one per cent of all workers engaged – only after the Fair Work Ombudsman commenced litigation. There is no evidence that other workers have been back-paid.

Altobelli found that Jones and the Party “do not appear to take full responsibility for their contraventions” and that there had been “limited demonstration of contrition or remorse”.

Altobelli ordered the No Land Tax Party to audit entitlements owing to all workers it engaged on NSW Election Day in 2015 and to advise the Fair Work Ombudsman of the steps it will take to rectify identified underpayments.

References

Serious Misconduct


Ms. Heidi Cannon v Poultry Harvesting Pty Ltd

The Case

A Victorian chicken farm worker who was sacked after she was found asleep in a truck the morning after the Melbourne Cup has won her unfair dismissal bid and $7000 in compensation from the Fair Work Commission.

Heidi Cannon was dismissed from Mornington Peninsula-based Poultry Harvesting on November 5, 2014, following an incident where 50 to 60 chickens were run over or “smothered” while she was operating machinery.

Cannon, whose job was to move a large piece of machinery with an attached conveyor belt through a large shed to load chickens onto trays, started work at midnight after Cup day.

She admitted to drinking alcohol the day before, telling the commission she had three or four glasses of wine since noon.

Cannon denied she was intoxicated but said the wine had left her unable to drive to work, having gotten a lift to the farm in the morning.

“I didn't want to take the risk of having a breathalyser because I would have had it on my breath still which could make me over .05,” Cannon told the commission, maintaining that she thought she was still capable of operating the machinery.

Cannon's boss Matteo Geminian gave evidence he found her “passed out” in the truck, smelling like alcohol and said “50–60 birds got run over or smothered” by Cannon's actions.

Geminian told Cannon to go home and said her conduct would be reason enough to fire her, but said he would call her the next day to discuss her future employment with the company.

Cannon gave evidence Geminian dismissed her via a telephone call a few hours later.

Poultry Harvesting argued that it had a valid reason for Cannon's dismissal because she arrived for work intoxicated and her conduct could cause “serious and imminent risk to the health and safety of the person” or amounted to “conduct that caused serious and imminent risk to the reputation, viability or profitability of Poultry Harvesting’s business”.

But Commissioner Nick Wilson found Geminian had insufficient evidence that would allow him to form the view she was intoxicated to the point of being unable, or unsafe, to work and took no steps to objectively assess her condition.

He also found the company had not afforded her procedural fairness and was not provided with an opportunity to respond to the allegation.

The Judgment

After carefully considering the employer’s procedural failings during the dismissal process, Commissioner Wilson concluded:

“I find that the Applicant was dismissed and that it was unfair within the meaning of the Act.

I find that reinstatement is not an appropriate remedy in this case.

I find that compensation is appropriate.

The approach by the Fair Work Commission in these matters, and which I follow here, is to estimate the remuneration the employee would have received if they had not been dismissed (usually calculated by estimating how long the employee would have remained in the relevant employment but for the termination of their employment); deduct any remuneration earned by the employee since their dismissal until the end of the anticipated period of employment; deduct an amount for contingencies; consider the impact of taxation and adjust the figure accordingly; and assess the figure against the compensation cap set by s.392(5)

The evidence submitted on behalf of Ms Cannon includes that her average weekly wage in the period from 1 July 2013 to 30 June 2014 was $1453.46 per week, and that her earnings in the period after June 2014 were consistent with that amount. Accordingly the amount of $1453 will be used as the basis of calculating the compensation to be paid, in addition to which will be paid 9.5% superannuation, which is the superannuation guarantee percentage applicable from 1 July 2014.

In relation to the matter of contingencies, I find there are none that require being taken into account in this matter.

Having regard to the criteria established by s.392 of the Act, and the considerations established by the FWC, I find that compensation should comprise a payment by the Respondent to the Applicant calculated as follows:

My estimation of the amount Ms Cannon would have received or would have been likely to receive if her employment had not been terminated is $8,718 (calculated on the basis of $1,453 per week for six weeks). In addition to this amount will be a further payment of 9.5% payable as a superannuation contribution on Ms Cannon's behalf;

  • I deduct from the above amount sum of $1750 plus 9.5% in superannuation, being my estimation of the amount Ms Cannon earned vaccinating chickens prior to her injury;
  • I make no deduction for contingencies or for misconduct;
  • In respect of taxation, the order to be made will require the deduction of taxation according to law.

The result of the foregoing analysis requires a payment to Ms Cannon by Poultry Harvesting of $6,968, to be taxed according to law, plus 9.5% in superannuation. An order to that effect will be issued by the Commission requiring payment within 14 days of the date of this decision.”

References

Payroll Concerns – Accessory


FWO v Oz Staff Career Services Pty Ltd & Ors [2016]

The Case

The Federal Circuit Court has ruled that a recruitment and labour hire company, its director and HR manager knowingly falsified employment records and made unlawful deductions from the wages of cleaners working in Melbourne's Crown Casino and Federation Square.

Judge Philip Burchardt ruled that OzStaff Career Services Pty Ltd deducted an administration fee from 102 employees, took meal allowances from another 44 employees and falsified employment records provided to the FWO after a targeted audit in January 2012.

OzStaff's deduction of the administration fee and meal deduction infringed s323 of the Fair Work Act and were not permitted within the meaning of s324. The deductions — of at least $25 a week from each employee — were unlawful because they didn't benefit the workers, nor were they authorised.

The company also breached Regulation 3.44(1) of the Fair Work Regulations because it failed to ensure employee records were not false or misleading.

Judge Burchardt found that the evidence established that it was “more probable than otherwise” that the HR manager was well aware of the administration fee and meal deductions contraventions by OzStaff and its director. “He knew that the deductions were not lawful from his interrelationship with the Fair Work Inspectors he had met in 2012 and 2013.”

“He thus had knowledge of the constituent parts of the contravention, albeit that he may not have known which section of the FW Act, if any, was capable of being contravened,” he said.

The Judgment

The judge found the HR manager's knowledge sufficient to constitute ‘involvement’ within the meaning of s550(2)(c) of the Fair Work Act 2009.

He continued that it was clear OzStaff provided the FWO with a set of “false and misleading” records that omitted details of the administration fee and meal deductions.

Given OzStaff was “wholly the creature” of the director and there were no other directors, the judge rejected his claims he wasn't accessorily liable.

“[It] is clear in my view beyond doubt that the [director] was knowingly involved with the contravention in the provision of false and misleading pay records,” the judge said.

“I simply do not accept that the person running the human resources activities of [OzStaff] and intimately involved, as he clearly was, with award matters was not aware not only that the deductions were being made but that the records which were forwarded to [the FWO] not showing those deductions were false and misleading. He was clearly involved within the meaning of s.550 of the FW Act,” he said. A penalty hearing is set down for August.

References

Other Cases

  • Updated: 25th January, 2019
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