News & Insights

Employers be warned – the Fair Work Ombudsman has continued its crackdown on employers deliberately exploiting vulnerable workers.

In a recent Federal Circuit Court decision, Mr Simon Mackenzie, together with his company, Siner Enterprises Pty Ltd (Siner), have been ordered to pay penalties over $200,000 for non-payment of an employee’s wages and for unfairly dismissing the employee.

The Federal Circuit Court heard the employee (who was also, an Indian national hopeful of gaining visa sponsorship) was paid just $200 for two weeks of work. After the first two weeks of work, the employee worked seven hours a day, six days a week over a four month period without receiving any pay at all.

In addition to the employee not being paid, his employment was terminated after he took one day of personal (sick) leave.

On the day the employee took personal leave, he sent Mr Mackenzie a text message to advise of his absence from work. In a text message response, Mr Mackenzie told the employee “don’t come back” and later threatening to call the police on the employee if he didn’t return a key.

Judge Lucev found Mr Mackenzie and Siner:

1. took adverse action against the employee, by dismissing him from employment after taking a period of personal leave;
2. failed to pay the employee over a four month period; and
3. provided Fair Work Inspectors with false records regarding payments made to the employee.

The Court fined Mr Mackenzie over $34,000 personally and Siner was fined approximately $174,000 for the breaches. The employee was compensated $32,661 for outstanding wages and loss suffered as a result of his employment being unfairly terminated.

Lessons

This case demonstrates the importance for business owners to:

1. be aware of new legislation protecting vulnerable workers, “Fair Work Amendment (Protecting Vulnerable Workers) Act 2017” which has significantly increased the maximum penalties for misconduct against vulnerable workers;
2. be aware the FWO is taking a proactive approach in uncovering rogue employers by undertaking workplace audits and compliance campaigns; and
3. ensure steps are taken to rectify payment errors and measures implemented to prevent reoccurrences.

Macpherson Kelley has significant experience assisting its clients in meeting their legal obligations regarding the payment of wages, entitlements and record keeping. For more information, please contact our Employment, Safety and Migration.