Two Sydney businesses have been let off the hook by the Fair Work Ombudsman, despite paying their workers as little as $6 an hour.
POSnet Pty Ltd and ECNEsoft Pty Ltd, and company Director, Mr Bum Soo Lee, have been offered the chance to enter into an agreement with the workplace regulator called an Enforceable Undertaking, instead of facing court.
Industrial relations specialist Miles Heffernan from Fair Work Act Claims described the agreements as “a joke”.
“The workplace regulator is funded by the taxpayer to enforce workplace laws, not offer cosy agreements and light slaps on the wrist to employers who steal wages from their workers,” he said.
The two businesses sell point of sale software and equipment to retailers and restaurants.
It employed the two Korean nationals, both aged in their 20s, and paid them flat rates of between $6 and $24, for more than 12 months between July 2016 and October 2o17.
Inspectors found that POSnet breached its annual leave pay obligations, as well as failing to provide pay in lieu of notice of termination.
POSnet also unlawfully engaged its underpaid worker as an intern for the first five months, and paid them flat hourly rates of between $6 and $11 during this period.
The POSnet worker, who was in Australia on a 417 working holiday visa, was underpaid $13,356.
The ECNEsoft worker, in Australia on a 485 temporary graduate visa, was underpaid $21,072.
Terms of the agreement
Under the Enforceable Undertaking, the two companies must engage an external auditor to check the pay and conditions of all employees, once in 2019 and again in 2020.
The two companies have also agreed to make a contrition payment of $5,000 to the Commonwealth Government’s Consolidated Revenue Fund.
Fair Work Ombudsman justifies Enforceable Undertakings
Fair Work Ombudsman Sandra Parker defended the use of an Enforceable Undertaking in this case, claiming it resulted in the underpayments being rectified and will ensure extensive future scrutiny for Mr Lee’s companies.
“A court-enforceable undertaking means that a company will not only have to pay back the money that is owed to their employees, but will also face ongoing close scrutiny by the FWO,” she said.
Agreements send wrong message
Mr Heffernan said Enforceable Undertakings send the wrong message to employers.
“These agreements basically say to bosses that you may as well go ahead and steal from your workers – because if you are ever caught by the regulator, it will simply ask you to pay back what you owe and promise not to do it again, and you get off Scot-free,” he said.
“The role of the regulator is to enforce workplace laws – so they should do more enforcing – and that means taking people like Mr Lee to court to face harsh penalties for stealing from his workers, rather than giving him a ‘get out of jail free’ card.”
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Fair Work Act Claims is a private advocacy and litigation firm, and has no affiliation with any government body, court or tribunal.