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Darwin café owners fined $73,000 for staff underpayments

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By Brenton Allen, Law Graduate, MST Lawyers

Two former Darwin café owners have been forced to pay $73,000 in pecuniary penalties for underpaying two Taiwanese backpackers approximately $7,410.

The Federal Circuit Court (‘FCC’) handed down penalties against both the respondent employer ‘Java Spice Australia Pty Ltd’ and its two directors.

In handing down the penalties, the FCC held that “backpackers and the like are particularly susceptible to being exploited by unscrupulous operators in the hospitality industry”.

The FCC made further reference to a specific complaint made by one of the workers to the Fair Work Ombudsman (‘FWO’), that, “before leaving Australia, she wanted to be in a position to tell other backpackers that their rights would be protected in this country”.

In addition to underpaying the workers approximately $7,410 in wage and superannuation entitlements, the company also failed to comply with an FWO notice to produce records and documents related to the contraventions.

At the FCC hearing on 5 November 2015, it was held that the company and its directors, amongst other things, failed to:

  1. comply with a notice to produce;
  2. provide payslips;
  3. include information in payslips; and
  4. comply with the minimum wage obligations in the Restaurant Industry Award 2010.

In respect of the contraventions, the FCC imposed pecuniary penalties of $60,000 and $13,000 on the company and directors respectively.

In handing down the penalties, the FCC found that the company had paid no attention to the directions and advice provided to it by the FWO in respect of its employment obligations. Further, the company had not undertaken any steps to reimburse the monies owed to the underpaid workers.

The decision serves as a reminder of the significant penalties that can be imposed on employers who underpay workers and fail to comply with FWO investigations.

For more information, please contact our Employment Law and Workplace Safety team by email workplace@mst.com.au or by telephone +613 8540 0200.