Nail salon operator faces Court for underpayments

The Fair Work Ombudsman has commenced legal action against the owner of a nail salon in Adelaide, alleging he failed to take appropriate action after being put on notice to pay employees correctly.

Facing Court is Albert Tran, owner of Citi Nails & Beauty in the Westfield Tea Tree Plaza at Modbury, and his company Hongyen Pty Ltd.

It is alleged that Tran and his company underpaid five employees who performed nail treatments at his salon a total of $7493.

The underpayments were allegedly the result of Hongyen paying two of the employees as trainees despite no registered traineeships being in place and classifying the other three at the wrong level under the Hair and Beauty Industry Award.

It is alleged that most of the underpayment relates to one worker who was underpaid $6346 as a result of being short-changed her minimum hourly rate and leave entitlements between July 2014 and June 2016.

The other four employees were allegedly variously underpaid minimum hourly rates, a casual loading and weekend penalty rates for shorter periods between August 2015 and June 2016.

The alleged underpayments were discovered during a follow-up audit conducted by the Fair Work Ombudsman. Tran and his company back-paid the employees last year.

Fair Work Ombudsman Natalie James says the decision was made to commence legal action because Tran and his company were put on notice to pay employees correctly in 2013 when a proactive auditing campaign identified non-compliance issues that resulted in Hongyen back-paying several employees.

“We are prepared to take action against employers who fail to take appropriate corrective action after we educate them about their obligations under workplace laws,” James said.

Hongyen faces penalties of up to $51,000 per contravention, while Tran faces maximum penalties of up to $10,200 per contravention.

The Fair Work Ombudsman is also seeking Court Orders for Hongyen to display a workplace notice detailing minimum employee entitlements and to commission workplace relations training for managerial employees and a professional external audit of its pay practices.

The Fair Work Ombudsman is also seeking an injunction restraining Tran and Hongyen from underpaying workers in future.

If the injunctions are granted, Tran and his company could face contempt of court proceedings for any further underpayment contraventions proven in court.

Inside Small Business

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