Case issues underlining migrant worker exploitation problem in Australia
Two United Petroleum-branded outlets in Tasmania have been penalised with $179,221 for underpaying four migrant workers across two months.
The Federal Circuit and Family Court of Australia (FCFCOA) have imposed a penalty of $135,143 on KLM Foods Pty Ltd, the operator of the Sandy Bay and Kingston outlets.
Loveleen Gupta, the sole director of KLM Foods and a manager of Vizaan Pty Ltd, has also been fined $44,078 for his involvement in the operations of the outlets and the underpayment issues.
The penalties come after four migrant workers were underpaid a total of $20,230 for work done over two months at outlets in Sandy Bay and Kingston, according to the Fair Work Ombudsman.
The workers affected were all visa holders from India and Bangladesh, including a 19-year-old junior employee. They were paid flat hourly rates between $16 and $23 for their work, which failed to meet legal requirements under the Vehicle Repair, Services and Retail Award 2020.
The workers were also not compensated for overtime, weekend, public holiday, or afternoon-shift work, resulting in significant underpayments.
The breaches also included KLM Foods and Gupta issuing false pay slips and timesheets to the workers.
Furthermore, they violated laws regarding record-keeping and written agreements for part-time employees. One worker was forced to make an unlawful cashback payment of $6,353 to KLM Foods in June 2023, a breach which has since been rectified.
Judge Karl Blake, who presided over the case, described KLM and Gupta's conduct as a "blatant disregard" for legal requirements and noted the particular seriousness of the unlawful cashback payment.
Blake stated that the affected workers were "vulnerable workers," underlining the "significant issue" of migrant work exploitation in Australia.
"There is a need to send a strong and clear message to ensure that the type of conduct disclosed in this case is not repeated," Blake said in the decision.
Fair Work Ombudsman Anna Booth said employers should be aware that protecting vulnerable workers is an "enduring priority" for the FWO.
"All employees in Australia have the same workplace rights, regardless of their visa status, and must be paid in line with Australia's lawful minimum pay rates for all hours worked," Booth said in a statement.
Data from the Migrant Justice Institute last year revealed that wage theft is "widespread" across Australia. However, nine out of 10 migrants who knew they were underpaid said they did not take action.
"In 2022-23, among the hundreds of thousands of underpaid workers in Australia, only 137 small claims applications were filed in the FCFCOA across the entire country," its report read.
According to the institute, this comes as the "small claims" court system is not enabling migrant workers to claim the wages they are owed.
"As a result of the inaccessibility of this jurisdiction, hundreds of thousands of vulnerable workers who experience wage theft in Australia are left without recourse, and employers continue to exploit migrants and other vulnerable workers with impunity," the report read.
Since July 2024, the government introduced new laws to tackle migrant worker exploitation by deterring employers from using a person's migration status to exploit them. It covers the following situations where exploitation might happen:
Since July 2017, the Fair Work Ombudsman has filed 146 litigations involving visa holder workers, securing nearly $23 million in penalties.
Meanwhile, the Fair Work Ombudsman's investigation into KLM Foods was part of a broader review of the United Petroleum network, prompted by concerns about compliance.
The FWO is also pursuing ongoing legal action against other operators in the United Petroleum network, including Sai Enterprises Pty Ltd and Navaneeth Gogikar.
As part of this investigation, the FWO conducted audits across 20 United Petroleum-branded outlets in Tasmania, Queensland, New South Wales, Victoria, and South Australia.
The audits led to further enforcement actions, including compliance notices issued to eight operators and a total of $6,584 paid to 20 workers. Additionally, cautions were issued to five operators for failing to meet record-keeping and pay slip laws.
