Ombudsman accuses servo of underpaying two employees $111,000: Blame placed on “shameful” award system

The Fair Work Ombudsman is pursuing the operators of a Melbourne service station, claiming they underpaid two employees, both recent immigrants, $111,874.

The Ombudsman has launched legal proceedings against Liquid Fuel, which operates a service station trading as BP on Clyde Road in Berwick.

Also facing court are service station managers Xin Zhang and his wife Linda Qu, and Liquid Fuel part-owner and director Nian Li, who is Qu’s father.

The FWO alleges two console operators employed at the service station were paid flat rates ranging from $10 to $17 an hour when they were entitled to receive up to $27 an hour for some work performed.

The Ombudsman claims this resulted in an underpayment of their minimum hourly rates, casual loadings and penalty rates for overtime, weekend and public holiday work. Record-keeping and pay slip breaches are also alleged.

The employees were Indian nationals who were both aged 28 and in Australia on visas when they commenced their employment. One is now a permanent resident in Australia and the other is now an Australian citizen.

The FWO only discovered the alleged breaches after complaints from the employees.

In the meantime, the employees have been back-paid individual amounts of $58,584 and $53,290.

Acting Fair Work Ombudsman Michael Campbell said the significant amounts and the involvement of vulnerable workers were key factors in the decision to commence legal action.

Xin Zhang, Linda Qu and Nian Li face penalties of up to $6,600 per breach and the company faces penalties of up to $33,000 per breach.

Andrew Douglas, a partner at M&K Lawyers, told SmartCompany it’s clear the FWO is targeting vulnerable foreign workers on visas.

“This is really common, particularly overseas kids coming over here are often paid below award rates and asked to work more than their visas allow them to,” he says.

“They are only allowed to work a certain amount of hours on their visas, but the cost of living is very high here and some employers are taking advantage of that.”

Douglas says while there are some unscrupulous business people out there the main problem is the complexity of legislation and regulation surrounding wages in Australia.

“Employers don’t know what the right wages are and our award system is so complicated, the average small business can’t understand the award ratings and loadings,” he says.

“Australia has to get it together, we can’t continue to have systems that are so complex that the largest group of employers in Australia, small business, is unable to understand what their obligations are, that is shameful.”

Douglas says many small businesses are likely to be unwittingly overpaying employees as a result.

“We don’t see prosecutions for overpayment, but I guarantee for every underpayment there are overpayments as well because the system is just too complex,” he says.

SmartCompany contacted Liquid Fuel for comment but did not receive a reply prior to publication.