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Fair Work Act breaches; some are very sad

The Federal Circuit Court has imposed very significant penalties upon a small company and its effective owner for underpayment of wages and other statutory entitlements in a case brought on behalf of the employee by the Office of the Fair Work Ombudsman. The scene for the outcome was set when the judge referred in the decision to evidence give of a conversation between the employee and his boss in the following very sad passage;

“That night Saandeep and I went to dinner at an Indian restaurant in Paddington.  At dinner Saandeep said to me “I calculated 23 weeks of money.  I can’t give you back this much money.  I will deposit this money into your account and you have to withdraw the money and hand it back to me.  If you are not giving me back this money I’m going to cancel your visa.”

This shocked me and I didn’t know what to do.  I thought about my financial liabilities both in Australia and in India.  I owed money for my education loan in India.  I also owed money on my credit cards and had borrowed money from my family and friends when the Company had not paid me for such a long time.

I thought if Saandeep cancelled my visa I wouldn’t be able to pay back any of this, so I agreed to pay Saandeep the money because he said he would cancel my visa.”

The trial judge went on to explain his reasoning and the context in which the penalties were imposed.

“The respondents’ contraventions are serious and warrant a significant penalties because:

  1. a)           the underpayment contraventions were deliberate, occurring in the face of the respondents’ specific knowledge of their lawful obligations;
  2. b)           the second respondent caused the first respondent to create false and misleading records and provided those records to the applicant. The records were knowingly deceptive and intended to deceive the applicant and made it appear that the first respondent was complying with the Fair Work Actwhile operating with a disregard for Commonwealth workplace laws;
  3. c)           Mr Mathew was required to pay a significant portion of his wages under a threat of cancellation of his visa.  The respondents exploited Mr Mathew’s reliance on first respondent to remain in Australia;
  4. d)           there is a strong need for specific deterrence as the second respondent continues to be involved in employing others; and
  5. e)           there is a strong need for general deterrence to ensure the community is aware that employers cannot deliberately and blatantly exploit vulnerable employees and disregard Commonwealth workplace laws.

The total penalty for the first respondent is $150,900.  The total penalty for the second respondent is $   30,000.  In my view those penalties are an appropriate response to the conduct which led to the contraventions, which was, given the circumstances of this case, particularly serious.

On the evidence, particularly that of the second respondent, they are not oppressive or crushing but they are sufficient to mark the Court’s disapproval of the respondents’ conduct and serve as a warning to others that similar conduct can have serious consequences and ought not be repeated.”

FWA v Gaura Nitai Pty Ltd & Ano (2017) FCCA 1242 delivered13 June 2017 per  Jarrett J

FAIR WORK OMBUDSMAN v GAURA NITAI PTY LTD & ANOR [2017] FCCA 1242 (13 June 2017) (Judge Jarrett)

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