Massage parlour fined nearly $1 million for exploiting, threatening migrant workers

The Federal Court has imposed a fine worth $966,890 against a Canberra massage parlour, whose director exploited and threatened the families of seven underpaid migrant workers.

The migrant workers from the Philippines were underpaid a total of $971,092 when they were employed by the Foot & Thai Massage Pty Ltd between June 2012 to February 2016.

In addition to being underpaid, these employees were also required to work extensive hours as massage therapists without receiving overtime pay or penalty rates required by the award.

Fair Work Inspectors who worked on the case also said six of the migrant workers had to return $800 of their wages per fortnight for more than eight months when the shop was doing poorly.

Threats against migrant workers

These migrant workers were barred from talking about their experience by their director, Canberra man Colin Kenneth Elvin, as heard by the court. The director - with the help of former supervisor, Filipino man Jun Millard Puerto - threatened to send the migrant workers back to the Philippines if they said anything about their arrangements.

They also threatened the workers that they would have their families in the Philippines killed if they came forward to authorities.

Fair Work Ombudsman Anna Booth said the matter is one of the "most shocking cases of exploitation" the FWO has ever encountered.

"The deliberate and calculated exploitation of vulnerable migrant workers has absolutely no place in Australian society," Booth said in a statement. "No visa holder worker should ever face employer threats to the safety of their family, or threats to be deported if they use their workplace rights to raise concerns about their employment."

Court decision on case

The Federal Court found that the conduct was deliberate and "extremely serious."

Justice Anna Katzmann said the case involved "systemic exploitation" of visa holders who were in a very vulnerable spot as their Australian residence depended on continuing employment.

According to Katzamnn, she had the "strong impression" from watching and hearing the migrant workers that their "suffering was ongoing."

As a result of the investigation, the court fined the Foot & Thai Massage Pty Ltd $778,100 for violations under the Fair Work Act.

Elvin was also fined $150,140, while Puerto was fined $38,659 for his involvement in some of the breaches. Overall, this is the third-highest total penalties collected by the FWO.

In deciding the penalties, Katzmann noted that Elvin made the choice to underpay the massage therapists and was the person who threatened them with adverse action if they reported to authorities.

She added that penalties were necessary against Elvin and Puerto as there was "no evidence to indicate that either man has learned anything from the Ombudsman's investigation or the proceedings."

It would also deter them and other employers from committing similar conduct in the future.

"These substantial penalties send a clear message that those who deliberately defy Australia's workplace laws and shamefully exploit vulnerable migrant workers will face serious consequences," Booth said. "The Fair Work Ombudsman will continue to ensure the full weight of the law is felt by those involved in such appalling conduct."

In addition to the penalties, the organisation was also ordered to pay the employees a total of $1.166 million in back-pay and compensation, plus interest, according to the FWO.

The company has since entered liquidation. But the court said if the back-pay and compensation are not fulfilled, the penalties can be distributed to the employees.