Labour-hire operator fined after paying off car debt before apprentice

By Admin on September 11th, 2017

Melbourne labour-hire operator Leonard Greenan has been referred to the Commonwealth Director of Public Prosecutions and fined $10,800 after failing to repay three months’ worth of wages to an apprentice mechanic after being ordered to do so by the Fair Work Ombudsman (FWO).

Federal Court Judge Joshua Wilson found that instead of paying the worker his wages, Mr Greenan issued invoices to the dealership “allegedly for [the worker’s] wages but in reality [was] for the progressive down payment of the purchase price for an expensive Peugeot motor vehicle”.

Following its initial investigation, the Fair Work Ombudsman (FWO) issued a Compliance Notice requiring Mr Greenan and his companies United Consulting and United Consulting Services to back-pay the worker a total of $7,066 in outstanding wages – but this notice was not complied with.

Under the Fair Work Act, business operators must adhere to Compliance Notices or make a court application for a review if they are seeking to challenge a notice. Failure to comply with a Compliance Notice can result in financial penalties of up to $27,000 for a company and $5,400 for an individual.

Bridging visa

The employee, aged 29, was in Australia on a bridging visa and had also obtained loans to pay $9,500 to Mr Greenan for a visa sponsorship service that he offered but did not progress.

Mr Greenan supplied the Pakistani employee to work as a mechanic at a car dealership in Richmond between January and March 2016, but failed to pay the worker any wages during this time.

The labour-hire operator issued invoices to the dealership “allegedly for [the worker’s] wages but in reality for the progressive down payment of the purchase price for an expensive Peugeot motor vehicle”.

Judge Wilson said Mr Greenan, “personally benefitted out of [the worker’s] service, rather than paying [the worker], wholly antithetical to his role in placing [the worker] and his obligations under the [Fair Work Act].” He said Mr Greenan’s “brazen attitude” and “appalling conduct” warranted the imposition of penalties.

“The respondent could have but failed to offer a repayment regime. He could have but failed to make any payments to [the worker],” he said.

“The only contrition exhibited by the respondent lay in his being caught. In my view, there was no real contrition in this case.”

Fair Work Ombudsman Natalie James welcomed the delivery of penalties, saying the decision showed that courts would not tolerate individuals ignoring a Compliance Notice.

“The conduct of the labour-hire employer in this case was particularly disappointing, with a vulnerable overseas worker being exploited by the very person he was reliant on and had paid for assistance,” she said.

“We know overseas workers can be more vulnerable to exploitation as they are often reluctant to complain, may have language barriers or are less aware of their rights, and we take the underpayment of these workers extremely seriously.”

The decision came just before the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 passed federal parliament earlier this month.

Increased penalties

Financial penalties have increased to a maximum of $630,000 and $126,000 for corporations and individuals respectively, for serious contraventions where an employer knew they were breaching their obligations as part of a systemic pattern of behaviour.

Penalties will also double for record-keeping and payslip breaches and triple in cases where workers have been given false or misleading payslips or employers provide false information to the FWO.

Ensuring that workers are compensated fairly for their time and receive their full entitlements can be challenging for many employers.

But a simple way to check this is through consulting Portner Press’s The Wages Guide – a 24-page eBook that provides a snapshot of current wages legislation in Australia.Written by employment law expect Charles Power, The Wages Guide will help ensure your employees are being paid fairly and that you are not breaching any workplace laws.

Get your copy today to avoid any possible breaches and hefty fines. It’s a small investment compared to the financial penalties for getting it wrong.

Related Articles:

Tags: , ,