The employer allegedly exploited eight workers across several locations in Victoria
The alleged underpayment of workers selling toys has led to the Fair Work Ombudsman (FWO) commencing its first legal action under the serious contravention provisions of the Protecting Vulnerable Workers laws.
Melbourne man Eyal Israel and his company IE Enterprises Pty Ltd operated Uncle Toys pop-up stores in several locations in Victoria and are facing the Federal Circuit Court.
The Protecting Vulnerable Workers laws, which came into effect in September 2017, mean the maximum penalties that apply for serious contraventions are $630,000 per breach for a company and $126,000 for an individual - 10 times the penalties which would ordinarily apply.
The FWO alleges that Israel and his business paid eight workers unlawfully low rates (from as little as $6.70 an hour), and did not pay some employees at all for some hours worked.
Alleged underpayments of individual employees ranged from $395 to $5,041 reaching a total of $21,748. None of the underpayments have been rectified.
The employees impacted were mostly aged in their 20s and temporary visa holders from countries including Malta, the Netherlands and Korea.
They were also allegedly underpaid for between one and nine weeks of work performed between October 2017 and January 2018.
The FWO has received requests for assistance from former employees of IE Enterprises dating back several years.
The company was also previously issued with a letter of caution, education materials, pay guides and Notices to Produce employment documents.
Ombudsman Sandra Parker said the Protecting Vulnerable Workers laws were enacted in response to community concerns about the exploitation of employees in Australia.
“This is the first time the FWO will be relying on the new serious contraventions provisions in Court, which carry maximum penalties ten times higher than traditional contraventions,” said Parker.
“We’re arguing that five alleged contraventions are serious because Uncle Toys and its director failed to correct the non-compliance, despite extensive engagement with us.”
Parker added that they’re also utilising new reverse onus of proof provisions that require employers to disprove underpayment allegations in Court if they have failed to adequately comply with time-and-wages records and pay slip obligations.
“The FWO offers free workplace advice to employers and employees,” said Parker.
“We encourage anyone with concerns about their workplace rights or obligations to contact us.”
IE Enterprises Pty Ltd and Israel face maximum penalties of up to $630,000 and $126,000 per contravention, respectively, for the five alleged serious contraventions.
These related to minimum wages, failing to issue pay slips, failing to keep records, failing to pay employees in full and making an unlawful deduction.
Moreover, the FWO also alleges that Uncle Toys provided three of the employees with false or misleading pay slips that contained the wrong business name and an invalid Australian Business Number.
The FWO is also seeking a Court order requiring Israel and his company to back-pay the eight employees in full.
A directions hearing is listed for 2 August 2019 in the Federal Circuit Court.
