A caveat for businesses with foreign workers

Interim figures provided by the Fair Work Ombudsman (FWO) Directorate for Migrant Strategy & Engagement show that 73% of all litigation initiated in the first nine months of the 2015-16 financial year involved visa holders.

This astonishing figure gives further context to the FWO’s Calendar 2015 report which was released earlier this year, and included the following notable data:

  • The FWO received 1916 requests for assistance from visa-holders in calendar year 2015 (almost 13% of total claims)
  • Of this cohort, backpackers on Working Holiday visas continued to account for the highest level of pay disputes, with subclass 457 visa holders, foreign students, recent graduates, and at least 156 ‘unspecified visa holders’ comprising the balance.
  • More than $2.2 million in underpaid wages and entitlements was recovered for more than 500 visa-holders – an average of $4,317 for each claimant.
  • The majority of claims originated from the accommodation and food services sector, and the agriculture, forestry and fishing, and administration and support service sectors.
  • The FWO placed 24 matters before the Courts alleging underpayment of visa-holders and required 15 employers to sign Enforceable Undertakings aimed at addressing non-compliance and encouraging behavioural change.
  • Fair Work inspectors issued 157 formal letters of caution to employers, 145 infringement notices (on-the-spot fines) and 39 compliance notices.

Some businesses are unaware that both the Migration Act and the Fair Work Act can extend liability for contraventions of workplace laws beyond the direct employment relationship.  This means that an employer, referrer, recruiter or end-user of contracted labour can be held jointly and severally liable for the contravention. In addition, culpability can extend to Directors, HR Advisors, Managers (and beyond), under accessorial liability provisions.

In the string of cases that have followed last year’s landmark Choong Enterprises case, the Courts have signalled an increased readiness to impose heavy pecuniary penalties. It is therefore critical that best practice measures be put in place to mitigate the risk of significant civil penalties, reputational damage or even criminal charges.

In response to the interim FWO data, and a myriad of cases in recent months, FCB Smart Visa and FCB Workplace Law will co-present a series of Seminars to comprehensively address compliance issues for Australian businesses. This holistic approach to navigating industrial and immigration legal frameworks is made possible by FCB’s expertise in both practice areas.

Click here for details of the seminar series to be held in Brisbane, Sydney and Melbourne throughout September.

 

Source: www.fairwork.gov.au

Exploitation of Overseas Workers – A Summary of Recent FWO Decisions & Compliance Seminar Information

Student visa holders underpaid

Two international students have been found to have been underpaid thousands of dollars, during a random audit of a fast-food business by the Fair Work Ombudsman.

The two employees were each underpaid upwards of $3,000 and the business failed to issue payslips; under the Fast Food Industry Award, they should have been paid $23.74 for ordinary hours, $28.49 on Saturdays, $33.24 on Sundays and $52.23 on public holidays.

The business has now received a Letter of Caution that places it on notice that further breaches of workplace laws may result in enforcement action.

Tour operators underpay visa holders

A Japanese national working in the Australian tourism sector was underpaid approximately $10,000, and has been reimbursed following action by the Fair Work Ombudsman earlier this month.

The employee was paid sporadically for months, then not at all for her final five pay periods before she resigned; the employer said that the underpayments occurred because the business could not afford to pay wages on a regular basis.

“For an employer to simply shrug off their legal responsibilities to staff by saying they can’t afford to pay them is simply not acceptable,” Fair Work Ombudsman Natalie James said.

Court orders business owners to pay overseas workers

A business in Queensland that deliberately exploited vulnerable overseas workers has been penalised over $200,000 and ordered to pay former staff tens of thousands of dollars in back-pay.

The employees, paid as little as $10 an hour, were underpaid amounts ranging from $8,300 to more than $18,000 when they worked at the Japanese Sakuraya café in two different Queensland locations between 2013 and 2014.

The owners have been penalised $28,000, and the company has been penalised a further $140,000, including record-keeping penalties.

The Court further ordered that costs of more than $12,000 be paid to the Fair Work Ombudsman towards the cost of flying witnesses from overseas to Brisbane for the litigation; this is the first successful Costs Order sought by the Fair Work Ombudsman in relation to international witness travel for a trial that did not proceed.

Fair Work Ombudsman Natalie James said legal action was taken because of the employer’s refusal to rectify the back-payments and because one of the owners had previously been apprised of his workplace obligations following complaints from other employees of an associated entity of the business dating back to 2012.

Ms James says the penalty decision is a strong wake-up call to employers who think they can ignore their workplace obligations, and failure by vulnerable employees to complain about being underpaid is also no excuse for employers to continue to take advantage of staff, particularly when the employer has previously been apprised of its minimum wage responsibilities.

Korean backpackers underpaid

Two Korean backpackers working as cleaners in Sydney were underpaid thousands of dollars over the course of three months in early 2015.

Under the Cleaning Services Award they should have received a minimum of $18.01 an hour – rising to $27.02 on Saturdays, $36.02 on Sundays and $45.03 on public holidays. The two were paid a flat rates as low as $15 an hour.

The two were short-changed a total of $5,400 and $4,085 each between March and June, and have now been reimbursed fully after the Fair Work Ombudsman issued a Compliance Notice to the employer.

Employers need a robust approach to identify foreign workers and their visa conditions

“Anyone operating a business, including migrants, needs to ensure they take the time to understand the workplace laws applicable to their business,” Fair Work Ombudsman Natalie James said.

“Visa-holders can be vulnerable if they are not fully aware of their rights or are reluctant to seek help, so we place a high priority on taking action to ensure their rights are protected,” Ms James said.

Almost 75% of all FWO litigation is instigated by visa holders, with 13% of recent FWO decisions involving visa holders (July 2015 – March 2016).

This just goes to show how important compliance with both the Fair Work Act and the Migration legislation is. As the Fair Work Ombudsman has said on a number of occasions, visa holders are often the most vulnerable members of the work force, and it is therefore crucial that employers have a robust system to identify foreign workers and the conditions attached to their visas which relate to their work rights in Australia.

Ensuring regulatory compliance with foreign workers and contracted labour

With an increasing number of high profile cases in recent months, the concerns of our clients are growing. In response, FCB is bringing together workplace and migration experts from across our group (FCB Smart Visa and FCB Workplace Law) to co-present a series of seminars that will  comprehensively cover  all the compliance issues for Australian businesses where foreign workers are involved. This holistic approach to navigating both the industrial and immigration regulatory frameworks is made possible by FCB’s unique expertise in both practice areas.

Details of the seminar series to be held in Melbourne (15/16 September), and Sydney (19/20 September), and Brisbane (23 September) can be found here.

If you have any migration matters that you would like to discuss in the meantime, please call one of our migration professionals on 02 9922 5188.

Source: www.fairwork.gov.au