$160,000 in penalties for retailer who underpaid migrant employee

The Fair Work Ombudsman has secured more than $160,000 in penalties after a Sydney retailer blatantly underpaid a Chinese migrant despite having previously committed to fixing its compliance problems.

JPA Manchester Pty Ltd, which sells bed linen and homewares under the trading name of “Benson Australia” at retail outlets in Sydney and online, has been penalised $153,333 after underpaying the migrant worker $60,904 over a period of just under four years.

JPA Manchester initially claimed it had underpaid the worker less than $2000 and indicated it would contest the legal action – but the company eventually admitted the scale of the underpayment of the worker in Court.

The Court also ordered JPA Manchester to back-pay the worker in full, while its owner-operator Jia Ping Ou has been penalised an additional $8505 for his involvement in underpaying the worker’s annual leave entitlements and contraventions of record-keeping and pay slip laws.

The underpaid worker was a shop assistant at two Benson Australia stores between January 2012 and October 2015.  Inspectors found the worker was paid flat rates ranging from $9 to $19.05 per hour, resulting in her being significantly short-changed for the ordinary hours and regular overtime work she performed. Under the General Retail Industry Award 2010 at the time, the worker was entitled to rates of up to $18.99 for ordinary hours and up to $37.98 for overtime.

Inspectors also found that the worker was underpaid for a small amount of Saturday and public holiday work, and that her annual leave entitlements had not been paid.

In his judgment, Judge Justin Smith found that JPA Manchester had “displayed a significant disregard for workplace law” and said the vulnerability of the worker was a matter of particular concern.

Judge Smith noted it was concerning that JPA continued to underpay the worker in the latest matter even after entering into the EU with the Fair Work Ombudsman, and found that the contraventions that occurred after the EU took effect “must have been entirely deliberate”. He found that JPA Manchester and Ou had displayed “little or no contrition” and there was a need to impose penalties that deterred them and other retail industry employers from future contraventions.

“The respondents took advantage of a vulnerable employee and the Court must send a clear signal to both of them as well as to other employers in the retail industry that workplace rights will not be overridden without significant consequences,” Judge Smith said.

The Fair Work Ombudsman also secured Court Orders requiring JPA Manchester to commission an audit of its compliance with workplace laws and for Ou and JPA Manchester’s managerial staff to undertake workplace relations training.

“EUs can be an appropriate way for us to ensure a company that has had significant compliance problems rectified underpayments and pays its workers correctly in future, without the need for civil court proceedings,” said Fair Work Ombudsman Natalie James. “However, we expect businesses that have been the subject of a formal undertaking to take particular care to comply with the law in the future.”

Ms james also said the outcome of the legal action also sends a message that there are serious consequences for deliberately exploiting migrant workers.

“We treat cases involving underpayment of migrant workers particularly seriously because we are conscious that they can be vulnerable due to a lack of awareness of their entitlements, language barriers and a reluctance to complain.”

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