Case study – wage theft
From 1 January 2025, intentional underpayment of wages by employers will become a criminal offence with large penalties applied to both a company and individual if applicable.
That does not mean to say that companies can relax till then and not have to answer to any authority as in the case of DTF World Square Pty Ltd. Court ordered penalties to the amount of $4 million were secured against former operators of three Taiwanese restaurants for intentionally and continually underpaying vulnerable migrant workers as well as using false records. These penalties were not just against the companies in question but also the General Manager and the HR Coordinator.
This was an amazing outcome secured by the Fair Work Ombudsman and was the second highest penalties payment ever secured by them. Fair Work Ombudsman Anna Booth could not underline enough the seriousness of the offences when she said:
“We welcome these penalties that demonstrate the serious nature of the offending by the respondents in this matter. Their actions resulted in vulnerable migrant workers being underpaid hundreds of thousands of dollars.”
It was found:
- the two companies intentionally underpaid employees under the Restaurant Industry Award Act 2010, including underpayment of casual loading and weekend/public holiday penalty rates
- provided false records to Fair Work Inspectors which understated hours worked and provided false rates of pay
With regards to the General Manager and HR Coordinator they were found:
- to have willingly set the unlawful pay rates
- were aware of and created false payroll records
- required workers to work unreasonable additional hours, an example given was an employee consistently working six days per week for long days without the correct rate of pay
The penalties secured in this particular case should be an indication that the Fair Work Ombudsman takes these matters very seriously and consequences will be applied to companies and individuals.
If you have any questions relating to entitlements under the awards or anything that has come up in this article, please do not hesitate to contact the WR Team on 07 3872 2264 or email us at workplacerelations@amaq.com.au