FWO crack down on employers for underpaying workers

The Fair Work Ombudsman (FWO) recently announced its intention to become more accessible to visa-holders from non-English speaking backgrounds who may be more vulnerable to underpayment or unaware of their workplace rights. The FWO has begun cracking down on employers, forcing them to fork out thousands of dollars in back-pay and penalty fines for underpaying workers.

In a recent incident, a farm in Queensland has landed itself in trouble for underpaying 93 Korean backpackers more than $16,000 for work sorting and packing carrots.

The workers were entitled to a minimum wage of $21.61 under the 2010 Horticulture Award however they were paid only $21.08 as a flat rate or occasionally piece-rates for the amount of product sorted. The employer was unaware of their obligation to have made a written piecework agreement at that rate with its employees prior to their employment commencing.

This confusion could have caused a hefty penalty from the FWO however the company was quick to sign an enforceable undertaking that they would back-pay the employees, send letters of apology and take steps to educate itself of its obligations.

However, innocent confusion among employers about their workplace obligations is not the only situation in which underpayment occurs. Another recent matter has led to the FWO describing a Queensland strawberry farm as “exploiting” workers on Holiday visas by underpaying them, despite previously being put on notice.

Six workers on this farm were under-paid by $2,601 over a short two-week period, a somewhat minor infraction. However, as the company had previously been in hot water in 2013 for the same issue, the FWO didn’t hold back its punishment. Both of the company’s Directors were individually found liable for $6,400 while the company itself copped a further fine of $56,000.

In a similar incident in the Northern Territory, the Federal Court stepped in to penalise a computer service company which sponsored its workers under 457 skilled visas. The case, Minister for Immigration and Border Protection v Hallmark Computer Pty Ltd [2016] FCA 678, involved a company Director who was found to have lied to the court and investigators about the conduct of his company which consistently underpaid its employees for overtime hours which they were forced to work. The company also forced workers to repay a portion of their wages and threatened them with the loss of their jobs if they complained.

The court made note that employers must be mindful of the number of hours employees work, as well as the minimum penalties for overtime work. The company was hit with a $430,000 fine whilst the Director was personally liable for $86,000.

These cases illustrate the importance of being aware of your obligations as an employer, particularly as the court and FWO may fine Directors personally if they fail to comply with employment legislation.

***

About Lisa Qiu:

Having an in-depth understanding of the legislation involved, Lisa is able to assist employers understand their legal obligations towards their employees, and to ensure those obligations are met. She can also help individual employees to understand their legal rights and offer guidance to those who may be facing issues with their employment. Lisa Qiu joined Coleman Greig Lawyers in 2015 as a member of the employment law team. She has experience in the jurisdictions of the Fair Work Commission and the Fair Work Ombudsman, and acts for clients in a range of employment matters.