The nail salon operators have been been penalised $130,000 for exploiting two young Filipino migrant workers and creating false records in an elaborate attempt to cover up underpayments.
Adelaide-based Minh Gia Le, former operator of a nail salon in Colobbades Shopping Centre at Noarlunga Centre, has been fined $30,000 and his company House of Polish Central Pty Ltd, which is currently operates the salon, has been fined a further $100,000, in the Federal Circuit Court.
The penalties are a result of legal action by the Fair Work Ombudsman.
The nail salon employees, as young as 20 and 21 at the time, were both Filipino migrants who were both underpaid a total of $53,021 between November 2014 and March 2016.
The nail salon company and its operator admitted to the underpayment.
An investigation by the Fair Work inspectors had been carried out after one of the employees lodged a request for assistance.
Fair Work inspectors found that the nail salon technicians were paid as little as $12 an hour, despite being entitled to $18.97 to $19.44 for normal hours and penalty rates ranging from $23.71 to $38.88 for weekend work under the Hair and Beauty Industry Award 2010 at the time.
The nail salon technicians were underpaid $35,680 and $17,339 respectively. The employees were back-paid in full in late 2016.
Le claimed in court that he believed the employees were apprentices but Judge Stuart Brown rejected his claim.
Judge Brown said Le must have been aware of his responsibilities as the Fair Work Ombudsman had drawn his attention to his obligations under the Award.
In 2015, a Letter of Caution was issued to Le by the Fair Work Ombudsman after a proactive audit of his salon revealed that an employee had allegedly been underpaid more than $2800.
“In my view, this offending was not inadvertent, particularly given the previous involvement of the FWO with the business,” Judge Brown said.
Judge Brown said the underpayment was a “very significant sum” which represented between 30 and 45 per cent of the entitlements of the two workers, who were vulnerable as they came from a non-English speaking background.
The nail salon and its operator breached pay slip laws and workplace laws by knowingly providing Fair Work inspectors with false and misleading records during the investigation.
Le claimed he had lost some records following a “cyber attack” and that he had recreated records in an effort to assist the Fair Work Ombudsman and provide a response to Notice to Produce issued by inspectors.
However, Judge Brown found that the false records Le created in response to the Notices were “an elaborate sham” which “grossly favoured him, by significantly understating the hours the employees had worked, creating an appearance that they had been paid much higher rates than was actually the case.
The Judge added that Le’s actions was deliberately and deceitfully motivated.
“Mr Le’s intent was, more likely than not to deceive [the Fair Work inspector] on the basis that he considered it highly improbable that he could be found out.”
According to Judge Brown the time records kept by employees were important in establishing the underpayments.
Le was also ordered to register with the My Account service and complete the employer courses in the Online Learning Centre, in addition to penalties.
Fair Work Ombudsman Natalie James said the outcome of the matter sends a message that deliberate exploitation of migrant workers and falsification of records are serious contraventions with significant consequences.
“The Fair Work Ombudsman had no hesitation in taking this matter to Court given the blatant exploitation and deceitful way in which employers engaged with Fair Work inspectors,” Ms James said.
“There is a group of employers in Australia who still need to get the message that it is not OK to pay migrant workers a ‘going rate’ that undercuts lawful minimum pay rates.
“This case reinforces what all reputable business operators know: the lawful obligations to pay minimum rates apply to all employees in Australia, including migrant workers, and they are not negotiable.”
Do you think you are underpaid?
If you think you are underpaid, here are some useful resources from the Fair Work Ombudman website.
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