The workers were underpaid while working on farms, despite their owner being educated about minimum Award rates by the FWO in October 2015.
Young overseas backpackers recruited to work on mango farms near Darwin were allegedly underpaid almost $36,000 in just two months.
Some were allegedly paid nothing at all for weeks of work picking, weeding and pruning. Others, aged 19 and 20 at the time, were allegedly paid an average of $2 an hour.
Most of the backpackers were in Australia on 417 working holiday visas when they worked on the mango farms between September and November last year. They were from Germany, France, Italy, the Netherlands, the UK and Taiwan.
The Fair Work Ombudsman announced it is taking legal action in the Federal Circuit Court against Mr Vinai Chaipom.
It is alleged that Chaipom formerly ran a business trading as The Mango Shop, sourcing fruit from farms around Humpty Doo, and selling them via a roadside stall. The business was registered to a young Belgian backpacker who was in Australia on a 417 working holiday visa, but who is now an international student. The Fair Work Ombudsman alleges that Chaipom controlled the business and was the true employer.
The Mango Shop allegedly underpaid 11 overseas workers and one permanent resident from New Zealand a total of $35,630 for work performed on farms at Livingstone, Noomanah and Humpty Doo.
Most of the employees worked and camped on the mango farms, having been hired after they responded to online job advertisements or approached Chaipom for work.
Three of the overseas workers were allegedly paid nothing at all. The New Zealand citizen was also allegedly paid nothing for four days’ work. Others allegedly received wages of between $500 and $1000, the equivalent of between $2.68 and $4.76 an hour. As casual employees, however, they were entitled to be paid minimum hourly rates ranging from $19.45 to $21.61 under the Horticulture Award.
Individual underpayments allegedly range from $648 to $5119. Chaipom allegedly also failed to issue employees with pay-slips.
The Fair Work Ombudsman investigated after receiving requests for assistance from some of the employees.
In February 2016, the Fair Work Ombudsman issued the business with a contravention letter requesting that the employees be reimbursed all outstanding entitlements. However, the workers remain unpaid. Some have since left Australia.
The Fair Work Ombudsman alleges that Mr Chaipom was educated about minimum Award rates in October 2015 when inspectors visited mango farms as part of the Agency’s national Harvest Trail Inquiry.
Chaipom faces maximum penalties ranging from $5400 to $10,800 per contravention.
A directions hearing is scheduled for October 18.
Fair Work Ombudsman Ms Natalie James says the alleged serious exploitation of vulnerable workers and the fact that Chaipom had been put on notice of the need to pay lawful minimum rates were significant factors in the decision to commence legal action.
The Fair Work Ombudsman is also seeking a Court Order requiring Chaipom to back-pay the workers the money allegedly owed.
In November last year, the former operators of the Java Spice Café Emporium in Darwin – husband-and-wife Mr Peter and MS Moya Buckley and their company – were penalised $73,000 for underpaying two Taiwanese backpackers.
In his judgment on that matter, Judge Mr Stewart Brown said it was likely the exploited workers departed Australia “with a poor view of Australian employers or at least of employers in Darwin” and that the penalties should deter employers from conduct that could “tarnish Australia’s reputation.”
Inside Small Business