$124k penalty for cleaning company for underpaying two Nepali international students

The workers, both international students from Nepal, were underpaid between March and June 2019 after Green Clean misclassified them as independent contractors.

The Fair Work Ombudsman has secured $124,186 penalties in court against a Sydney-based cleaning services company and its former manager after they underpaid two visa holders and provided false records.

The Federal Circuit and Family Court has imposed a $105,840 penalty against Green Clean (Aust) Pty Ltd and a $18,346 penalty against the former manager.

The penalties were imposed after Green Clean and the former manager admitted breaching workplace laws by underpaying two casual cleaners and failing to issue pay slips, and were found to have knowingly or recklessly produced false or misleading documents to a Fair Work Inspector.

- Advertisement -

The workers, both international students from Nepal, were underpaid between March and June 2019 after Green Clean misclassified them as independent contractors.

It is the second time the FWO has secured penalties against Green Clean. In 2016, the FWO obtained a penalty of $9,450 against Green Clean for failing to comply with a Compliance Notice requiring the company to back-pay two Filipino international students it had employed.

Fair Work Ombudsman Sandra Parker said employers that repeatedly breach workplace laws will face significant consequences.

“Employers need to be aware that protecting vulnerable workers, like visa holders, is an enduring priority for the FWO. It is disappointing that we have again had to take court action and secure penalties against this company for underpaying international students,” Ms Parker said.

Representative image: Cleaners (Source: CANVA)
Representative image: Cleaners (Source: CANVA)

“Deliberately providing false or misleading documents to inspectors is also a serious breach of the Fair Work Act and will not be tolerated,” Ms Parker said.

“Any employees with concerns about their pay or entitlements should contact us for free advice and assistance.”

- Advertisement -

The FWO investigated after receiving a request for assistance from the affected workers.

Fair Work Inspectors discovered that the workers had been underpaid minimum wages, casual loading, broken-shift allowance, penalty rates and overtime entitlements, owed under the Cleaning Services Award 2010 and that Green Clean had failed to pay the workers amounts due to them within 7 days of termination. They were also not paid superannuation.

During the investigation, a Fair Work Inspector issued Green Clean a Notice to Produce that required the company to provide specified records or documents, including documents relating to terms of engagement.

The former manager, on behalf of Green Clean, provided the inspector with emails purportedly sent to the two affected workers in March and April 2019. Attached to the emails purportedly sent were ‘independent contractor agreements’ that set out terms and conditions of engagement by Green Clean.

The FWO discovered and Green Clean and the former manager subsequently admitted that the two emails were not sent to the workers on those dates, or at all during March or April 2019.

The Court found that the underpayment contraventions related to Green Clean’s purported engagement of the workers “as independent contractors when they were, in reality, casual employees and covered by the Cleaning Services Award and the respondents knew this.”

In imposing the penalties, Judge Brana Obradovic found that the breaches were serious in light of the vulnerability of international students who were “unlikely to be aware of minimum Australian labour standards.”

Judge Obradovic found this was “not the first time” that Green Clean had underpaid its employees on student visas, and that there was a need to deter it and others from breaches that “undermine the workplace relations system, and its enforcement, as a whole.”

“It is vital for the purposes of the Fair Work Act that the public is left in no doubt as to there being obligations to afford employees their minimum entitlements and to cooperate with statutory notices issued by FWO, such as a Notice to Produce,” Judge Obradovic said.

“A Notice to Produce seeks to allow the FWO to have enough information to properly investigate and ensure that employees are provided their minimum entitlements. Where a person provides false or misleading information in response to a Notice to Produce, it undermines the Fair Work Act’s enforcement framework and the very purpose of the Fair Work Act,” Judge Obradovic said.

Green Clean rectified the underpayments in February 2020 after receiving a contravention letter from the FWO.

The FWO has filed 126 litigations involving visa holder workers, and secured more than $13.4 million in court-ordered penalties in visa holder litigations, in the last five full financial years.