A Sydney childcare operator has been ordered to pay $54,752 to two migrant workers who were not paid for an entire year under the guise of “unpaid work experience”.
The Federal Circuit Court ordered the owner/ director Mr Jan Shang and the company Joys Child Care Limited to pay the two workers the wages owed to them for work performed at the centre.
The two individuals, both originally from China, responded to an advertisement offering a one year traineeship, which promised the job training through one hour of teaching each day. One is a permanent resident of Australia, while the other was a visa-holder when she worked for Joys Child Care.
On her first day, one of the workers was told to teach children. Promised classes through a local training institute did not eventuate, other than one first aid class.
In arguing why it had a “reasonable excuse” for not complying with notices issued by the Fair Work Ombudsman, the centre asserted the two workers were not employees but volunteers.
Fair Work Investigation
The Fair Work Ombudsman alleges that in return for unpaid work, Mr Shang and his company purported to pay for the two workers’ enrolment in a Diploma in Early Childhood Education at a training institute and provide the workers with practical experience and training to meet the work experience component of the Diploma.
The Fair Work Ombudsman considers several weeks of initial unpaid work performed by the two workers to have been part of a vocational placement that was a legitimate part of their Diploma.
However, the Fair Work Ombudsman alleges that the work the two workers performed at Joys Child Care went well beyond the work experience hours required under the course – and that the workers were lawfully entitled to be paid for the work performed when they were not undertaking a vocational placement.
The workers lodged requests for assistance with the Fair Work Ombudsman last year after their employment with Joys Child Care ended.
The Fair Work Ombudsman investigated and determined that because the two workers had performed productive work for Joys Child Care under little or no supervision, they had been employees of the company when they were not undertaking the vocational placement.
As such, the Fair Work Ombudsman alleged workers were entitled to the applicable minimum wage rates and annual leave entitlements under the Children’s Services Award 2010.
Non Compliance with FWO Compliance Notices
In November 20017, the Fair Work Ombudsman issued Mr Shang and his company two compliance notices requiring them to back-pay the workers in-full within 14 days.
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 Compliance Notice.
It was alleged Mr Shang and his company committed a breach of the Fair Work Act by failing to comply with the Compliance Notices.
Federal Court Decision
Judge Tom Altobelli agreed with the FWO that the duo worked at the centre and did not receive the training and instruction which they were promised. For all practical purposes, the workers were taken advantage of, he said.
“It was a completely unequal relationship. (The workers) gave everything and received nothing in return,” he said.
“It would seem that the respondents did everything they possibly could to disguise the arrangement that it had with Miss Bing and Miss Wang in ways that sought to avoid the impression of employment. But that is what it was in substance. This was neither a voluntary arrangement, nor was it an unpaid traineeship.
He said the fact that Mr Shang conducted a community based facility, was a not-for-profit company limited by guarantee, and was a registered charity, did not make the slightest difference to the reality of the situation.
“Neither their intentions, nor any altruistic motives, establish that the respondents had a reasonable excuse. Indeed, on the facts of this case, it would give offence to the notion of reasonable excuse to hold that noble intentions and altruistic motives justifies what happened,” he said.
Former Fair Work Ombudsman Natalie James took the legal action because workers had allegedly been denied basic lawful entitlements and the employer had refused to co-operate and resolve the matter outside of the courts by complying with the compliance notices.
The ombudsman is also pursuing financial penalties against the centre. Penalties of up to $630,000 per contravention for a company and $126,000 per contravention for an individual now apply in relation to serious exploitation of workers.