$43k penalty for exploitation of abbatoir workers

The Fair Work Ombudsman has secured $43,000 in penalties against the former general manager of a labour hire company over the deliberate exploitation of migrant workers at an abattoir in NSW.

The penalty has been imposed in the Federal Circuit Court against Zu Neng Shi, who was the general manager of labour-hire company Raying Holding Pty Ltd before it went into liquidation in 2015. Shi was responsible for placing 10 employees of Raying Holding at an abattoir in NSW that was operated at the time by Primo Australia.

The employees were all male overseas workers and migrants from China who spoke little or no English. Two of the workers, both full-time employees, were migrants who had become Australian citizens. The other eight workers, all casual employees, were in Australia on short-terms visas, including the 417 working holiday visa. They worked as entry-level labourers in the abattoir’s slaughtering, boning and despatch operations and were underpaid a total of $41,674 between March, 2011 and July, 2013.

When Fair Work Ombudsman inspectors investigated the matter, they found Raying Holding and Shi had paid the workers flat rates ranging from $15.50 to $24 an hour, despite them often working more than eight hours a day. This led to significant underpayment of their overtime rates, as under the Meat Industry Award 2010 at the time, some workers were entitled to rates of up to $33.05 an hour for some of the overtime work they performed.

The workers were also underpaid smaller amounts for ordinary weekday work and public holiday work, as well as casual loading. The largest individual underpayment was $10,257. Despite Raying Holding back-paying the workers in full, the Fair Work Ombudsman used the accessorial liability provisions of the Fair Work Act to commence legal action against Shi.

Shi claimed he was not knowingly involved in the underpayment of the workers because he was not aware of the applicable Award. However, Judge Cameron dismissed Shi’s claim, finding that “any ignorance on Mr Shi’s part of details of the Modern Award was the result of wilful blindness on his part. I infer that he chose not to inform himself because the knowledge gained would be inconvenient.”

Judge Cameron found that Shi had been involved in deliberate underpayment of vulnerable workers, saying the workers’ “limited grasp of the English language” contributed to making them vulnerable.

The judge also noted that Raying Holding had organised the workers’ accommodation and transport to and from the abattoir. “These matters suggest further isolation of the Employees from the Australian community as well as an element of practical control over them by Raying Holding and, by implication, Mr Shi,” he said.

Judge Cameron also found that Shi was involved in contravening sham contracting laws in relation to the two full-time employees being misclassified as independent contractors and told to obtain Australian Business Numbers (ABNs).

In addition, Shi was also involved in contravening record-keeping and pay slip laws, with the casual employees having received no pay slips for at least eight months. “The failure to keep proper records and to provide employees with pay slips strikes at the heart Australia’s industrial law system because it compromises employees’ ability to monitor their employers’ compliance with industrial laws and the regulator’s ability to investigate breaches of industrial laws,” Cameron said.

Judge Cameron noted that Shi had not displayed any contrition. “He gave no indication of any steps having been taken at his direction to ensure that contraventions of the sort seen in this matter were not repeated by Raying Holding or any other business in which he had managerial responsibilities.”

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