$375,000 penalty for underpayment to South Asian migrant workers at waste management facility

“All are from migrant backgrounds and have limited to negligible written and verbal English skills.”

The Fair Work Ombudsman has secured a total of $375,515 in penalties in the Federal Court after five vulnerable migrant workers were underpaid almost $200,000 for work at waste management facilities in Melbourne.

The workers were underpaid a total of $194,249 over a period of just 20 months in 2018 and 2019 when they were employed to sort waste at facilities in Dandenong and Hallam then operated by Polytrade.

The five affected workers were on protection visas and bridging visas (pending approval of applications for protection visas) after arriving in Australia as refugees from southern Asia. They spoke limited English.

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Polytrade was one of the biggest recycling companies in Victoria at the time and held waste management contracts with a number of local government bodies.

The Federal Court has imposed penalties of:

  • $138,600 against Polytrade, now known as PT 349 Pty Ltd, for being an accessory in the underpayment of the workers.
  • $200,375 against PTES 928 Pty Ltd (formerly Polytrade Employment Services Pty Ltd) for directly underpaying the workers. PTES 928 Pty Ltd was set up as a labour provider, employing workers and supplying them to work at Polytrade on an on-hire basis.
  • $27,720 and $8,820, respectively, against Polytrade’s owners, husband-and-wife Mr Man Sang Chen and Ms Pui Shan Ho, for also being accessories in the underpayments. Ms Ho is also the owner of PTES 928 Pty Ltd.

PTES 928 Pty Ltd has back-paid the five underpaid workers in full – and has also made a further $2.2 million in back-payment to workers not involved in the FWO’s legal action who had been underpaid since 2012.

Acting Fair Work Ombudsman Kristen Hannah said blatant underpayment of visa holders in Australia was not tolerated.

“We treat underpayment of migrant workers particularly seriously,” Ms Hannah said.

“These workers can be vulnerable if they are unaware of their entitlements or reluctant to complain. But visa holders have the same workplace rights as all other workers.”

“Any employer that blatantly underpays migrant workers’ basic entitlements risks facing significant penalties. The five workers here were paid only slightly more than half of what they were entitled to.”

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

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FWO investigated after receiving a referral from the Australian Workers Union.

Fair Work Inspectors discovered that the five affected employees were paid a flat rate of $22 per hour regardless of when they performed work, despite being required to perform night, weekend and public holiday work. Some of the workers gave evidence in Court that they worked 12-hour shifts, usually six and sometimes seven days per week.

This resulted in underpayment of workers’ minimum wage rate; overtime rates; loadings for casual, night and shift work; and penalty rates for weekend and public holiday work, under the Waste Management Award 2010.

Laws relating to minimum engagement periods, advising employees of their terms of engagement, payment of superannuation entitlements, record-keeping and issuing pay slips in the required form were also breached.

Justice John Snaden said the contravening conduct was “wantonly naïve, at best. At worst, it involved a deliberate and cavalier disregard of important Award safety net obligations”.

The five workers “were paid between 53 and 58 per cent only of what the Award required that they be paid. On any view, those are damning figures”, Justice Snaden said.

Justice Snaden also said the contraventions were “made worse by considering the personal circumstances of the relevant employees”.

“All are from migrant backgrounds and have limited to negligible written and verbal English skills.”

Justice Snaden found that there was a need to impose penalties to deter other employers from similar conduct.

“The court must exact a heavy toll: not merely to ensure that [PTES 928 Pty Ltd] is brought to account for its obnoxious conduct; but also to serve as a warning to other employers who might be minded to ignore their own important Award and statutory obligations in the way that [PTES 928 Pty Ltd] did.”

Justice Snaden found that Polytrade and Mr Cheng “must pay heavy prices” for their active involvement in the contraventions,

“not merely to ensure that they are brought to account for what they did; but also to serve as a warning to others who might be minded to be similarly involved in egregious Award underpayments”.

The FWO filed 138 litigations involving visa-holder workers, and secured $15 million in court-ordered penalties in visa-holder litigations, in the six financial years to June 2023.

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