The owners of two Melbourne retail kiosks have been fined more than $70,000 for exploiting young overseas workers and underpaying employees $34,915.
Husband and wife Haim and Rina Diamond have been penalised $30,600 and $40,000, respectively, for severely underpaying 10 employees at their Chadstone and Northland shopping centre kiosks between July 2014 and January 2015.
Employees at hair product retailer Corioliss Pty Ltd were paid between $7.86 and $14.90 per hour, leading to significant underpayments of their minimum hourly rates, weekend and public holiday penalty rates, casual loadings and minimum engagement pay.
The largest individual underpayment was $4,434.
At a hearing in December last year, the couple were ordered to pay outstanding amounts of $17,247 to 11 employees, mostly young, overseas workers on student or working holiday visas.
However, Corioliss went into administration and was not pursed in court.
An investigation and legal action by the Fair Work Ombudsman led to the penalties and back-pay orders imposed by Federal Circuit Court Judge Norah Hartnett.
Judge Hartnett said the contraventions were “clearly deliberate” and singled out Mrs Diamond for her lack of genuine contrition, and for threatening one of the workers.
The judge found Diamond had threatened to notify the Department of Immigration and Border Protection that one international student employee had been working more than the 20 hours per week allowed under her visa unless the student withdrew her complaint to the Fair Work Ombudsman.
In an email to the student, Mrs Diamond wrote: ‘Your limit of 20 hours work as a student was not kept as it should. I have to forward this information to the immigration unless the complaint will be cancelled by you’.
Judge Hartnett said the statement “exhibits a concerning awareness of the employee’s vulnerability and a willingness to exploit such vulnerability to the Respondents’ benefit”.
The Diamonds had been placed on notice of their obligations to pay minimum rates of pay to employees, with the Fair Work Ombudsman previously issuing a Letter of Caution as a result of earlier investigations.
When Fair Work inspectors received an underpayment allegation and investigated, Mrs Diamond further contravened workplace laws by knowingly providing inspectors with false and misleading records.
Fair Work Ombudsman Natalie James said the Court’s judgment serves as yet another warning that deliberately exploiting vulnerable workers is extremely serious conduct that will not be tolerated.
“We are deeply concerned by any allegation that someone would seek to prey upon the vulnerabilities of any member of the workforce for their own personal gain,” she said.
James said employers should be aware that the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 has now come into effect, increasing the maximum penalties for conduct including deliberate exploitation of workers and false records.
“The maximum penalties available for serious exploitative conduct that occurs today or in the future are now significantly higher than were available to be imposed in matters such as this one—and we will not hesitate to seek maximum penalties from the courts when it is in the public interest,” she said.
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