The Federal Circuit Court of Australia (“FCCA”) has ordered a Sydney business to pay $87,783 in underpayments to staff, with the director personally liable for $17,556.

The business, a labour hire company, provided employees to three companies between 10 February 2014 and 17 May 2015, before 19 disgruntled employees brought their complaints before the FWO.

The underpayments totalled approximately $45,000 and while rates varied by 15 per cent for work performed at different times of day and days of the week, Judge Smith felt it was clear the difference was “insufficient to meet the additional wage burden that might be incurred for overtime and weekend work”.

The director, Yan Hu, implemented a requirement the employees, mainly from Taiwan and Hong Kong, pay a $400 bond which would be returned to them on the condition they did not resign or, “were lazy or moved jobs or states” within a six month period. Judge Smith said in his decision that “negligent legal advice” and “collusion by the companies” may have contributed to the director’s actions, but concluded there was insufficient evidence to support this theory.

Comments displayed by the director during the course of the investigation were particularly damning, FWO submitted the following statements: “The employees get very greedy”, “The overseas workers are younger, cheaper and faster than locals who are old and slow. The locals just get Centrelink payments. I just pay the market rate, it is business and economics” and “Some people take advantage of the law. This law is not fair. The majority of small businesses in Australia do not pay people the minimum wage”.

This case highlights the importance of obtaining and regarding expert advice on minimum rates. Had this director called the Victorian Chamber of Commerce and Industry’s Workplace Relations Helpline and accessed the Victorian Chamber’s extensive wage information, these significant penalties may have been avoided.

Complete Members have unlimited access to the Helpline as part of their membership and the Workplace Relations Helpline offers general advice on a range of workplace issues, including:

• Award interpretation, classification and minimum entitlements
• Disciplinary processes, performance management and termination
• Personal illness and injury
• Parental leave and flexible working arrangements
• Redundancy
• Occupational Health and Safety and WorkCover.

For assistance on any aspect of your employment obligations, please call the Victorian Chamber Workplace Relations Helpline on (03) 8662 5222.