The operator of six day spa centres in Sydney has agreed to back pay 13 workers $66,000 in order to avoid court action by the Fair Work Ombudsman.
Chris Barbour, director of Sea One North Pty Ltd, which trades as Endota Spa Sydney, has signed an Enforceable Undertaking with the workplace watchdog, after admitting to underpaying his employees their penalty rates and leave entitlements, in addition to making unlawful deductions from their salaries.
The Fair Work Ombudsman commenced an investigation into Endota Spa after receiving complaints from two skilled 457 visa holders, who claimed the company was making deductions from their pay to cover visa-related costs.
Fair Work inspectors found Mr Barbour was deducting $250 a fortnight from his workers’ pay and only stopped when the costs of their visa sponsorship process had been reached, which was as much as $7,000 for an individual employee.
Mr Barbour promised he would repay the workers once they had completed a specified employment term with Endota Spa Sydney.
Between May 2014 and February 2018, the unlawful deductions from 13 workers totalled $58,025.
In addition to the deductions, Mr Barbour also failed to pay the workers $7,914 in penalty rates and annual leave entitlements.
Deductions must benefit employee
Miles Heffernan, Litigation Director at Fair Work Act Claims, said employers can only make deductions from a worker’s salary in limited circumstances, and they must be principally for the worker’s benefit.
“An employer cannot dock a worker’s salary for uniforms, or accommodation or if they break something, or to make up any shortfalls in the till at the end of the day, and certainly not for their visa processing costs,” he said.
“The only time a deduction is lawful is if the employee agrees to it in writing, and only if the deduction benefits the employee – salary sacrificing for a laptop computer for example.”
The details of the Enforceable Undertaking
Under the terms of the Enforceable Undertaking, Mr Barbour has back paid all the workers in full.
He has also agreed to commission independent audits across his six New South Wales spa centres to ensure workers are receiving their proper wages and entitlements.
His company must ensure all managers complete workplace relations training.
He has also agreed to make a contrition payment of $10,000 to the Commonwealth Government’s Consolidated Revenue Fund.
Fair Work Ombudsman Sandra Parker said employers who make unlawful deductions will get caught.
“This significant back-payment bill should also serve as a warning to all employers that it is not acceptable to underpay migrant workers, or make unlawful deductions,” she said.
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