Employer slapped with record $500k+ fine for ‘exploiting vulnerable workers’

by John Hilton06 Dec 2017
A total of $510,840 in penalties has been secured in the Federal Circuit Court against a cleaning company in Perth, with a Judge slamming them for their “deliberate”, “repeated” and “systematic” exploitation of overseas employees.

Mark Povey - who was once worth $40 million - was penalised $72,240, his wife Catherine Paino-Povey was fined $77,400, and their contract cleaning company, Commercial and Residential Cleaning Group Pty Ltd, has been penalised $361,200.

They are the highest penalties secured by the Fair Work Ombudsman in a legal action in WA and the third highest penalties secured by the Agency in any case nationally.

Moroever, the FWO secured $343,860 in penalties in 2013 against Paino-Povey and another cleaning company she operated with Povey for deliberately exploiting local and overseas workers.

The three overseas workers exploited in the most recent case were all Taiwanese women in Australia on 417 working holiday visas.

Judge Antoni Lucev said that the exploitation of workers in both cases “demonstrate similar circumstances and a similar mode of operation”.

“It is open to infer that the Respondents’ actions towards the employees formed part of a deliberate business strategy to engage vulnerable employees, refuse to pay them during their first few weeks of employment, refuse to pay them their full entitlements when they fell due… and then refuse to pay outstanding wages owed to the employees on the termination of the employment relationship,” said Judge Lucev.

“Beyond the inherent seriousness of the Respondents' failure to afford the employees basic minimum employment entitlements in the form of regular wages and entitlements, there are significant aggravating factors in this case, including the deliberate and repeated nature of the respondents' conduct, the prior similar conduct and the vulnerability of the employees.”

The three workers were underpaid a total of $11,511 for various periods of cleaning work performed between June, 2012 and April, 2013.

One worker was paid just 34% of what she was entitled to for two months’ work, and she gave evidence that she had to borrow money from a friend and only ate one meal a day to be able to pay her rent.

Another worker was paid nothing for three days’ work despite being lawfully entitled to a minimum of $569. She gave evidence that she needed the money to pay for her rent and expenses and felt she had been taken advantage of as an overseas worker.

The third worker was paid only about half of what she was entitled to over a three-month period, resulting in a total underpayment of $5836.

The underpayments remain outstanding and, in addition to the penalties, Judge Lucev has ordered full-back-payment of the workers.

Judge Lucev also found that they had shown “no contrition” and displayed “no evidence of corrective action” and “no cooperation with the Court or the regulator”.

“The Respondents have failed to show any form of contrition or intention to alter their behaviour which suggests a lack of responsibility for their actions, and that the likelihood of further contraventions is high,” said Judge Lucev.

Fair Work Ombudsman Natalie James said it is “extremely frustrating” to encounter such callous, recidivist exploitative conduct in the community.

“The outcome of this case sends a clear message to operators that there are serious consequences for exploiting vulnerable workers. Lawful minimum pay rates apply to all employees in Australia and they are not negotiable,” said James.

“Those employers who think they can profit from blatant exploitation of vulnerable workers need to get the message that we are committed to pursuing you to the full extent of the law to ensure you receive the punishment you deserve.

“It is clear that others share our frustrations with the courts increasingly ordering larger penalties, particularly in cases involving the exploitation of vulnerable workers.

“Now that the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 has come into effect, penalties available for serious conduct are now significantly higher than were previously available to be imposed in matters such as this one - and we will not hesitate to seek maximum penalties from the courts when it is in the public interest.”


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