Judge orders Sydney carwash to clean up its act over $177,000 in underpayments

A Sydney car wash has been fined $90,000 in the Federal Court in Sydney after a Fair Work Ombudsman investigation found it had underpaid hundreds of its workers.

The court found Crystal Carwash Café, which operates 14 outlets across Sydney, underpaid more than 350 young workers, mostly from non-English speaking backgrounds, more than $177,000.

Between January and September 2010, employees were paid a flat rate of $13 an hour, which was under the minimum hourly rate. They were also not paid overtime rates they were entitled to of more than $21 per hour.

Justice Buchanan found Crystal Carwash Café’s payment of a flat rate regardless of award entitlements was “deliberate and calculated”.

“I have accepted that the contraventions were deliberate and part of a pattern of conduct designed to avoid liability under workplace laws,” said Buchanan.

“I have also accepted that the respondents have shown a lack of remorse or contrition.”

In all, 11 of Crystal Carwash Café outlets were found to have made underpayments, including its cafés in Bondi, Brookvale, Chatswood, Coogee, Gladesville, Merrylands, Mosman, Northbridge, Rose Bay, Rushcutters Bay and Strathfield.

The company was also found to have not kept proper employment records.

Crystal Carwash Café attempted to minimise the seriousness of their conduct on the basis that the underpayments had been rectified. But Buchanan rejected the defence.

“I give that circumstance little weight,” he said. “The payments were only made after the applicant had commenced to investigate and when it must have been apparent that resistance was probably futile.”  

The company was fined $70,000, while director and part-owner Anthony Sahade was penalised a further $10,000 and another $10,000 penalty was imposed on the person upon responsible for the company’s payroll and administrative functions, Peter Khouri.

Employment lawyer Peter Vitale told SmartCompany the penalties were at the higher end of the available range the judge could have imposed.

“The judge has indicated there were no mitigating factors on which he should reduce the penalties,” says Vitale.

Vitale says the courts have recently made it clear they will substantially punish employers who are found to have deliberately breached the Fair Work Act, especially against vulnerable workers.

“There’s no doubt the courts are increasingly less tolerant of employers who are found to have deliberately avoided their obligations under law. They are showing an increasing wiliness to severely punish employers who take advantage of workers, particularly unskilled and venerable workers,” says Vitale.

SmartCompany attempted to contact Crystal Carwash Café but did not receive a response prior to publication.