Record $660K Penalty Against Employer For Exploiting Refugee

Source: HRD

The former owner of a fruit market in Melbourne and his company have been handed a record fine of $660,000 after ignoring warnings by the Fair Work Ombudsman and allowing an employee on a refugee visa to go weeks without pay.

The substantial penalty is the latest in a series of crackdowns on underpayments and exploitation of migrant workers by the FWO, which has also included enforcement action against Uber, 7-Eleven and Pizza Hut.

Abdulrahman Taleb, who owned and operated the Sunshine Fruit Market in Sunshine, has been has been penalised $16,020 and his company Mhoney Pty Ltd (Mhoney) was penalised $644,000 in the Federal Circuit Court.

Background

The employee was an Afghani refugee who spoke little English. He was paid nothing for a number of weeks in early 2012. He was later paid a flat rate of $10 an hour to a maximum of $120 per day.

Under the General Retail Industry Award 2010, the employee should have been paid hourly rates of about $17 for normal hours, up to $35 on weekends and up to $43 on public holidays.

Moreover, the worker was not provided with the required meal breaks, despite sometimes working more than 12 hours a day. Mhoney also failed to pay un-taken annual leave or annual leave loading on the termination of the worker’s employment.

The Federal Circuit Court heard the company underpaid the worker a total of $25,588 for two periods of work, each of about two months, ending in April 2012 and January 2013.

Judge Philip Burchardt said the underpayments were so significant that “the total not paid to [the worker] was, in relative terms, enormous for such a short time”.

“I accept the submission of the [Ombudsman] that the way it worked out was that [the worker] was paid wages of between $3.49 and $9.29 per hour,” Judge Burchardt said.

“This was an egregious underpayment. It gave the respondents an unfair advantage in the competitive retail industry.”

What can your business learn from this?

Record penalties should serve as a warning to employers that those who exploit migrant workers face major financial consequences.

Vulnerable migrant workers such as refugees and young students or workers are often unaware of their minimum wages and entitlements however under Australian industrial relations law it is the employer’s responsibility to meet these requirements.

A statement by the Fair Work Ombudsman in relation to this case stated, “These new record penalties highlight how seriously the courts take unlawful behaviour which involves workers being taken advantage of and stripped of minimum wages and entitlements”.

The previous record penalties of $532,910 were secured by the FWO earlier this year against the former owner-operator of an Albury cafe and his company, Rubee Enterprises Pty Ltd for underpayment of migrant workers.

Need assistance with workplace compliance?

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Call us on (02) 8896 6056 or send us an email info@themigrationagency.com.au.

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