The Federal Circuit Court has awarded a quarter of a million dollars to a teenage worker who was underpaid $8,000.
The ruling is unusual because courts normally direct penalties to the state, and not to victims of wage theft.
Experts have praised the decision, and further, believe it will encourage more workers to make claims for underpayments.
Judge Heather Riley says the high penalties are necessary to deter employees who rip off their workers.
Court awards quarter of a million dollars to teenage worker
19 year-old Cameron Boyson worked in Melbourne company Rhino Grass’s warehouse from May 2018 until January 2019.
Mark Hastings is sole director of the company, which supplies and installs artificial grass.
Boyson did not receive proper wages in 10 out of 18 pay cycles over eight months, in addition to public holiday rates.
Furthermore, Hastings failed to pay untaken annual leave when the worker resigned and nor did he pay any superannuation.
Wage theft ‘flagrant and deliberate’
Boyson’s lawyer Andrew White acknowledged the dollar amounts are “not large”, even so, he described the underpayments as “flagrant and deliberate wage theft”.
The worker’s age aggravated the breaches, in addition to the failure to provide pay slips “thwart[ed] the vindication of his rights”:
“Boyson was a young worker, relatively naive in matters of workplace rights and objectively more vulnerable to exploitation by an unscrupulous employer.
“There was an element of opportunism to the employer’s conduct.”
Teenage worker repeatedly complained about underpayments
The worker told the court he and his father repeatedly raised underpayment concerns with Hastings.
Furthermore, they threatened to take the matter to the Fair Work Ombudsman.
However, Hastings refused to pay full wages, despite acknowledging the proper amount hadn’t been paid.
In addition, a manager directed him to drive a forklift, despite his protests that he didn’t have a licence.
Court says penalties necessary to deter employers
The Federal Circuit Court fined Rhino Grass $200,000 and Hastings $40,000 for refusing to pay the warehouse worker proper wages, in addition to the back-pay owed.
Judge Riley said the enormous penalties are needed to deter employers generally, in addition to the business, which failed to appear at the hearing.
“It is important that employers understand that, if caught, it is very expensive to not properly pay employees,” the judge said.
Penalty will encourage other workers to come forward
Industrial advocate Miles Heffernan from Industrial Relations Claims welcomed the penalties.
“Court ordered penalties should be paid directly to the worker, and not to the state, as they often are,” he said.
“Most workers don’t take legal action to recover stolen wages because the cost often outweighs the amount they are chasing.
“This ruling is ground breaking and is what we have been calling for since the Queensland wage theft inquiry in late 2018.
“Awarding penalties to the victims of wage theft will act as a strong deterrent to greedy bosses who rip off their workers.”
“COURT AWARDS PENALTIES TO SACK SECURITY GUARDS IN WIN FOR IR CLAIMS”
Employer failed to appear at hearing
Judge Riley found Rhino Grass constructively dismissed the worker as a result of its actions to:
“Save money by underpaying him his entitlements, and by making him, rather than a properly qualified and more expensive person, drive a forklift”.
The judge noted the penalties appear higher than other similar cases because there has been no discount for employer admissions.
This is because the business failed to appear at the hearing.
The fines multiplied because the judge found the underpayments are not just the result of one decision, but many incidents.
She ordered Rhino Grass back-pay the worker $8,088 in salary, interest and super.
In addition, Judge Riley found it appropriate the company and Hastings pay their penalties to the worker because:
“He has gone to the trouble of bringing these proceedings”.
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