Fair Work Ombudsman cracks down on underpayment and mistreatment of foreign workers

The Fair Work Ombudsman has been on the prowl in the past few days, imposing underpayment fines and cracking down on the treatment of migrant workers.

The operators of a call centre in Nowra, New South Wales have been fined $107,500 and ordered to back-pay staff almost $200,000.

Federal Magistrate Rolf Driver found 33 staff were underpaid a total of $193,419 in 2009. The largest individual underpayment was $17,467.

And in another case of suspected underpayment, the FWO has announced this morning that 16 Sydney restaurants are facing further investigation for potential underpayment of wages after spot-audits were conducted in the past week.

Quincolli, which formerly operated the Nowra call centre for several NSW municipal councils and other organisations, has been fined $81,000, while the centre operator, Judith Potter, was personally fined $17,467.

M+K Lawyers partner Andrew Douglas told SmartCompany the fines imposed by the Magistrate’s Court were substantial.

“These are substantial fines and one of the things the cases represent is that individuals who breach workplace laws will be captured. In particular, underpayment cases like this are good examples,” he says.

The employees were underpaid minimum hourly rates, overtime rates, annual leave loadings and shift, weekend and public holiday allowances. Potter also breached workplace laws by failing to comply with a Fair Work inspector’s request to provide records and documents.

Magistrate Driver said Potter failed to provide basic and important entitlements under workplace relations legislation and the breaches needed to be taken seriously.

“The purpose of that legislation is to provide a safety net which ensures adequate minimum entitlements to employees, particularly those who are vulnerable or are on low income rates,” Driver said in his judgment yesterday.

Douglas says generally call centres aren’t known for underpaying their staff.

“The majority of call centres are fairly established clients and underpayment is not an issue that I commonly see. But with the amount of pressure on businesses now, many will do anything to cut costs,” he says.

At the end of January this year the penalty rates for individuals and corporations increased. Individuals can now be fined up to $10,200 per breach and corporations $51,000 (up from $33,000). This indicates Potter was fined for multiple workplace law breaches.

Meanwhile, the Ombudsman has been cracking down on underpayment in Sydney restaurants. The restaurants are predominantly Japanese and Korean, triggering further concerns over the treatment of migrant workers in the hospitality industry.

Ombudsman Nicholas Wilson said in a statement migrant workers were often not aware of their working rights.

“Recently arrived migrants may not always be fully aware of their legal entitlements in the workplace and can often be reluctant to complain.

Twenty-one city and inner-suburban restaurants, which employ about 150 mostly migrant workers, were audited by the FWO last week as a result of information received from community members about the possible underpayment of staff.

The restaurants facing further investigation failed to supply staff payment records when audited by FWO inspectors and have been ordered to supply them by March 1, 2013.

Four restaurants were handed on the spot fines of $550 for breaches such as failing to provide staff with payslips within one working day of payment.

Douglas says underpayment of migrant workers in the hospitality industry is common, but often it’s a matter of awareness.

“There are two things the FWO are currently really pursuing – the use of casual labour and industries most prone to using students and migrant workers.

“Many people in Australia who own hospitality businesses don’t speak English and these underpayment cases come down mostly to a matter of awareness. They are unaware of the laws here and don’t understand the implications.

“Our system is extraordinarily complex and for someone coming out of Asia, it would take years to understand it all,” he says.

The restaurants were located in the Sydney CBD, Crows Nest, The Rocks, Potts Point, Newtown, Haymarket, Randwick, Chatswood, Maroubra, Castle Hill and Surry Hills.